Perhaps seeking to quell a flood of reporting on potential conflicts of interest in a Donald Trump administration, the President-elect announced Wednesday that he would soon separate “in total” from the business conglomerate that bears his name.
Yet in the series of tweets publicizing this upcoming move, Trump said only that he would remove himself from the Trump Organization’s “business operations,” leaving open the possibility that he would retain a financial stake in the company while in the White House. His advisors suggested that he still plans to hand management of the company over to his three adult children in what he refers to as “blind” trust that ethics experts argue defies the definition.
Those experts say there are certain steps Trump can take now to dispel the cloud of impropriety already looming over his administration, though, like ditching his Washington, D.C. hotel lease and removing his children from his presidential transition team.
Steven Schooner, who served in the Office of Federal Procurement Policy under Bill Clinton and is now an expert on federal contract law at George Washington Law School, believes the place to start is the Trump International Hotel in Washington, D.C.
In 2013, Trump signed a 60-year, $180 million lease with the General Services Administration, which owns the Old Post Office Pavilion building that houses the hotel. That document explicitly states that no elected U.S. official may be involved in negotiating the lease or benefit from the arrangement.
“He needs to walk away from his contract in its entirety,” Schooner, who has written extensively about the conflicts surrounding the hotel lease, told TPM. “It shouldn’t be difficult for Trump and GSA to find another hotel operator to take over and manage the property.”
Schooner noted that the Marriott Corporation, for example, is headquartered in the D.C. metro area and could easily assume the lease before Inauguration Day.
“There’s no way that the president of the United States can have a lease with the GSA where the president appoints the head of the agency and that person serves at the president’s pleasure, and then employees of that organization are going to negotiate with that person’s children,” he said.
It’s critical to defining the exact roles that Ivanka Trump, Eric Trump, and Donald Trump Jr. will play both in the Trump Organization and as advisers to their father as president.
For the past four decades, every President has made use of a true blind trust to avoid any conflicts of interest, taking the personal holdings they had before their election and placing them in trusts controlled by independent parties. Transferring control of the company to his children does not pass the smell test for separation between Trump’s private and political interests, ethics experts agree.
“The relationship is too close—particularly when the family has been tapped to play a prominent role in government such as serving on the transition team or later in an advisory capacity,” Hana S. Callaghan, director of government ethics at Santa Clara University’s Markkula Center for Applied Ethics, told TPM in an email. “It also strains belief that the children would never speak about the business with their father, thus causing doubt as to whether the children would be truly independent.”
“TrumpNation” author Timothy O’Brien noted that the President-elect’s real estate empire is actually limited to some 16 properties, a handful of hotel and real estate partnerships, and licensing deals that pay a fee for use of the Trump name. O’Brien contends that selling those interests or turning them over to a third party would not be as difficult as Trump has argued.
Yet Trump seems set on handing control of his business empire over to his children. Noah Bookbinder, the executive director of watchdog group Citizens for Responsibility and Ethics, said that if Trump does so, he should at the very least relinquish all ownership interest.
“Rather than just saying they’re going to manage it for the time he’s in the White House but he’s going to retain his ownership interest, he could sell it to his children or he could renounce his interest by completely divesting himself of any benefit,” Bookbinder told TPM. “I don’t think that solves everything because he’d still have an interest to do things that help his kids, but it’s better.”
Bookbinder also recommended the implementation of a “very formal ethics firewall” to limit the flow of information between the Trump administration and the Trump Organization.
“He needs to have a clear, written agreement that whoever is running the business, and even more so if it’s his children, are not under any circumstances to speak to him about either business matters or presidential matters,” he said. “And that they and others in the business are not to speak to anyone in the administration other than a designated person or set of people at the office of general counsel who could vet any possible communications and determine whether there’s a conflict.”
Ethics experts said Trump should start that process by removing his children from his White House transition team and refraining from inviting them to meetings with foreign dignitaries. Eyebrows were raised when Ivanka Trump was photographed with Japanese Prime Minister Shinzo Abe during a recent visit with the President-elect at Trump Tower.
“That would demonstrate that he’s beginning to get the idea that there are distinct ethical standards for the conduct of government business,” Kathleen Clark, an expert on legal ethics at Washington University in St. Louis, told TPM.
Though the federal conflict of interest statute does not apply to the president and vice president, Clark said that Trump could “set an example for federal employees” by offering to comply with it.
She added that Trump should “recuse himself from participation in any matter that would affect his own financial interest.”
Trump has thus far displayed little concern about the optics of remaining involved with his company after he assumes office, telling The New York Times last week that “the president can’t have a conflict of interest.”
If he declines to take the steps ethics experts recommend, Bookbinder said it will be up to watchdog groups, the press and Congress to monitor his business interests.
“We all are going to have to keep close tabs on what his business interests are, what his family’s business interests are, and where those could intersect with public policy,” he said. “Whether this Congress is actually going to do those things is another question. But that is something that ought to happen if he’s not willing to do it himself.”