Donald J. Trump’s extensive business holdings both at home and abroad have thrust the United States into uncharted territory when it comes to the potential for conflicts of interest for the president-elect once he’s sworn into office next month. While federal law doesn’t prevent him from taking actions that could benefit him or his family financially, at least one obscure provision of the Constitution could pose a challenge for Trump in regard to his dealings with foreign companies.
Michael Meltsner, Matthews Distinguished University Professor of Law at Northeastern, weighed in on the thorny issue for the president-elect, saying that perhaps it’s Trump himself who poses the biggest conflict of all. Meanwhile, sociology professor Daniel Faber, who heads the Northeastern Environmental Justice Research Collaborative and studies political economy and crisis theory, echoed Meltsner’s sentiment, describing Trump’s reluctance to avoid conflicts of interests as “very disturbing.”
Q: The New York Times writes that Trump’s “global business empire will create an unprecedented number of conflicts of interest for a United States president.” What do you see as some of the most glaring conflicts of interest he faces now?
Meltsner: There is no one “glaring” conflict. With business interests in over 20 countries and huge amounts of debt on one side of the equation and enormous presidential power over foreign relations and trade policy on the other, there are simply too many to count. But if you must have one conflict to rise above all the others, it derives from the man himself. It’s pretty clear from his business record that he is constantly thinking about making a profit from his activities. That may be a hard trait to discard.
Faber: Trump has some potentially very serious conflicts of interest that must be resolved. As president, he will have the power to influence U.S. government agencies and policy to benefit his vast business empire. Unfortunately, presidents are not bound by the same conflict of interest rules as all other government employees. In order to avoid these types of conflicts, past presidents have put their investments in blind trusts to avoid an appearance of impropriety. Trump has been extremely reluctant to do so, and this is very disturbing.
Trump has a strong knowledge of how the Trump business empire operates, and so even placing his adult children in charge of it is not sufficient. As close family members, they do not have enough distance from Trump directly. He would really need to turn over the management of his holdings to a trustee with whom he has no contact. He has indicated that he may take additional steps on Dec. 15, so we’ll have to wait and see. Trump should really liquidate his business holdings if he is serious about avoiding the appearance of conflicts of interest. Or he could do what Barack Obama did in 2008 and diversify his holdings so broadly that acting to benefit any one company would be much less consequential.
But if you must have one conflict to rise above all the others, it derives from the man himself. It’s pretty clear from his business record that he is constantly thinking about making a profit from his activities. That may be a hard trait to discard.
—Michael Meltsner, Matthews Distinguished University Professor of Law
Q: How would you describe Trump’s potential conflicts of interest?
Faber: There are too many potential conflicts of interest for me to address them all. I think there are three broad categories where there are multiple conflicts. The first involves areas where the government does business directly with Trump businesses or directly reimburses them for services. For instance, the Trump organization leases the Old Post Office Building from the General Services Administration for the Trump Hotel in Washington, D.C. The lease bars any federal employee, including elected officials, from profiting from contracts with the government. Trump should end the lease, especially if foreign diplomats and lobbyists believe that they must book very pricey rooms at the hotel as a way to gain influence with the administration. It is possible that Trump could also make money off the Secret Service by staying in Trump Tower and flying with his family in his private jets. In both cases, American taxpayers will have to pay rent and airfare to the Trumps.
The second area centers on making appointments to government positions that will impact the bottom line of the Trump business. For instance, the National Labor Relations Board has ruled that the Trump International Hotel in Las Vegas violated the law by refusing to bargain in good faith with the hotel workers’ union. More disputes involving the hotel are before the board, and Trump is going to be able to appoint two seats right away on the five-person board as president. Perhaps the most serious conflict of interest involves Deutsche Bank, which has lent Trump billions of dollars. The Justice Department is negotiating a $14 billion settlement with the bank over its predatory lending practices. Trump will again be appointing officials that will have jurisdiction over this case.
If Trump fails to adequately address these potential conflicts of interest, he runs the risk of losing his legitimacy as president for the people.
— sociology professor Daniel Faber
The third area involves courting favor among foreign leaders for his business dealings overseas. Trump’s companies operate in at least 20 countries. However, the emoluments clause in the Constitution prevents the president from accepting gifts or payments of any kind from a foreign nation. So, any government that granted tax breaks to any of Trump’s businesses would constitute a violation of the clause. He will be in violation of the law as soon as he becomes president. Furthermore, Trump could cut policy deals with various foreign governments that would curry favorable treatment for his companies.
Q: Trump has said he will be leaving his “great business in order to fully focus on running the country,” but some potential conflict still exists with his children running his businesses. The Office of Government Ethics has said that only a divestiture of his financial stake in his real estate business would relieve him of a conflict of interest. What do you expect Trump will do?
Meltsner: Predicting what Trump will do is like picking a yearling who will win the Kentucky Derby. If I were an ethics maven, I’d be more concerned with what happens in the future than what he says will happen in the future. I think he should totally divest but that’s not likely.
The Times’ Andrew Ross Sorkin suggests he should voluntarily appoint a corporate monitor “who will provide regular reports to the public about any possible instance of conflicts.” That sounds like a good idea if the monitor is totally independent and impartial, but one thing is sure: to have any credibility, Trump must keep his family out of the business.
Q: If Trump doesn’t fully extricate himself from his businesses, what impact could those potential conflicts have on his governance? On the country as a whole? On the world?
Meltsner: For a guy who built his campaign on charging his opponent with both unethical and criminal conduct, you’d think Trump would be potentially open to charges of hypocrisy should he profit from the presidency, but his supporters so far don’t seem to care about his wealth or his gold-plated lifestyle. Whether that will still be the case in the future is anybody’s guess.
Faber: If Trump fails to adequately address these potential conflicts of interest, he runs the risk of losing his legitimacy as president for the people. He will instead be seen as self-serving by broader sectors of American society, and could even risk impeachment if it appears that he knowingly acts in such a way to enrich himself by abusing the powers of his office. It is a potential minefield for Trump, and he best tread lightly. Otherwise, if one of these mines does explode, it could cripple his presidency.