Local experts discuss the legal hurdles and issues facing President-elect Donald Trump in his first 100 days in office. This week, the President-Elect Trump and conflicts of interest.
Even before the election, lawyers and ethicists on both sides of the aisle raised questions about the potential conflicts between President-elect Donald Trump’s far-reaching business empire and his pursuit of public office. Since his election, those questions have turned to calls for Mr. Trump to completely divest from the Trump Organization and to place his assets in a blind trust under the control of an independent trustee.
At a press conference, Trump correctly asserted that the federal conflict-of-interest laws that apply to other elected officials do not apply to the president. Nonetheless, he claimed that he was handing over control of his business to his sons and announced a number of other steps to address perceived conflicts.
The Office of Government Ethics (OGE), an independent agency created to monitor conflicts of interest within the executive branch, along with others, called Trump’s actions inadequate. Walter Shaub Jr., who runs the OGE, labeled Trump’s plan as “meaningless” and beneath “the standards that the best of his nominees are meeting and that every president in the last four decades has met.”
Like Trump’s business empire, the conflict-of-interest controversy is difficult to untangle. There are two primary issues: What is legally required or prohibited and what may not be legally required but is ethically appropriate.
Is Trump violating federal law?
Federal conflict-of-interest laws attempt to identify what is acceptable conduct within government service. When an individual chooses to hold public office he or she becomes a steward of the public trust and is required to put the public’s interest before his or her own. By requiring the public official to limit real or perceived conflicts of interest, the laws maintain the public’s trust in the integrity of governmental decision-making processes.
Under the law, federal executive branch employees are barred from participating in matters in which they have financial interests. To meet this requirement, employees routinely place their investments and other assets in blind trusts to avoid even the appearance of impropriety. With a true “blind” trust, an independent trustee controls and manages all the assets, and the public official is shielded from any knowledge regarding their disposition.
But Congress explicitly exempted the president from these conflict-of-interest laws. As Trump noted, he could continue to run his business from the White House without violating federal law.
Should Trump do more?
Although the federal law does not apply to Trump, it does not mean that he is free from potential conflicts of interest. By his own accounts, he has a vast business empire that spans the globe. Because Trump has not released his tax returns, his total assets and liabilities remain uncertain. Nonetheless, there are concerns about the potential for self-dealing as well as the potential for blackmail or bribery.
As president, Trump will control administrative agencies that regulate his businesses. Numerous agencies exercise oversight over his hotels and golf courses. For example, Trump will appoint three of the five members to the National Labor Relations Board that will hear labor disputes involving his hotels. The Environmental Protection Agency and Army Corps of Engineers are often at odds with golf course owners over water issues. Will President Trump allow agencies to act without interference even if it undermines his family’s business?
Similar concerns have been raised about Trump’s foreign business ties. Trump has properties stretching from Qatar to Argentina and financial entanglements with foreign entities. For example, in 2008 Donald Trump Jr. reported that “Russians make up a pretty disproportionate cross-section of a lot of our assets. . . . We see a lot of money pouring in from Russia.” Will President Trump make decisions that are in the best interest of the American people but may hurt his family’s business?
As promised, Trump could act scrupulously to avoid any self-dealing. But to maintain the public’s trust in the integrity of his decision-making, some have argued that Trump should do what past Presidents have — adhere to the conflict-of-interest laws that govern their fellow executive branch colleagues.
Next week: “Is President Trump violating the Emoluments Clause?”
Santa Barbara and Ventura Colleges of Law (COL) Dean Jackie Gardina’s experience in higher education includes both academic and administrative positions.
Established in 1969, COL, an accredited nonprofit institution was founded to expand opportunities and broaden access to legal education. For more information, visit www.collegesoflaw.edu.