President Trump’s personal and business holdings in the United States and abroad present unprecedented conflicts of interest. Indeed, President Trump has admitted he has conflicts of interest in some cases. For example, the Trump Organization has licensing deals with two Trump Towers in Istanbul, and has received up to $10 million from developers since 2014.  President Trump admitted recently that “I have a little conflict of interest, because I have a major, major building in Istanbul.” 
Crucially, some of these business arrangements violate the U.S. Constitution’s Foreign Emoluments Clause, which provides: “[N]o Person holding any Office of Profit or Trust under [the United States], shall, without the Consent of the Congress, accept of any present, Emolument, Office, or Title, of any kind whatever, from any King, Prince, or foreign State.” The purpose of this provision is to prevent foreign influence or corruption. “Emoluments” from foreign governments include “any conferral of a benefit or advantage, whether through money, objects, titles, offices, or economically valuable waivers or relaxations of otherwise applicable requirements,” even including “ordinary, fair market value transactions that result in any economic profit or benefit to the federal officeholder.”
Many of the Trump Organization’s extensive business dealings with foreign governments, businesses owned by foreign governments, and other foreign leaders violate this ban. A recent legal analysis by Prof. Laurence Tribe of Harvard Law School, Ambassador (ret.) Norman Eisen (former chief ethics counsel to President Barack Obama), and Professor Richard Painter (former chief ethics counsel to President George W. Bush) concluded that Mr. Trump would be violating the foreign emoluments ban from the moment he took office, due to “a steady stream of monetary and other benefits from foreign powers and their agents” deriving from his existing business arrangements. As a result, since he did not divest his business operations before inauguration, he has been violating the Foreign Emoluments Clause since the moment he took office.
Examples of existing business arrangements that constitute violations of the Foreign Emoluments Clause include:
- Trump’s business partner in Trump Tower Century City (Manila, Philippines) is Century Properties. (Trump is not the developer; he has a brand licensing contract.) The head of Century Properties is Jose Antonio, who was just named special envoy to the United States by the president of the Philippines. Payments from a company owned by a foreign government official are foreign emoluments.
- China’s state-owned Industrial and Commercial Bank of China is the largest tenant in Trump Tower. It is also a major lender to Trump. Both its regular rent payments, and its ongoing extension of credit, are foreign emoluments.
- Foreign diplomats have already begun shifting their D.C. hotel and event reservations to Trump International Hotel, to curry favor or at least avoid insulting the president. Indeed, the Embassy of Kuwait was reportedly pressured by the Trump Organization to change an existing reservation and reschedule the event at the Trump International.Payments by foreign diplomats for lodging, meeting space, or food at the hotel are foreign emoluments.
Similarly, the Constitution’s Domestic Emoluments Clause (also known as the Presidential Compensation Clause) provides: “The President shall, at stated Times, receive for his Services, a Compensation, which shall neither be encreased nor diminished during the Period for which he shall have been elected, and he shall not receive within that Period any other Emolument from the United States, or any of them.” This provision, which is not waivable by Congress, is designed to prevent corruption, as Alexander Hamilton explained:
“Neither the Union, nor any of its members, will be at liberty to give, nor will he be at liberty to receive, any other emolument than that which may have been determined by the first act. He can, of course, have no pecuniary inducement to renounce or desert the independence intended for him by the Constitution.”
President Trump has chosen to continue owning businesses that receive government subsidies and tax breaks in violation of this provision. For example, since 1980, Mr. Trump and his businesses have “reaped at least $885 million in tax breaks, grants and other subsidies for luxury apartments, hotels and office buildings in New York.” As President, federal and state subsidies and tax breaks violate the Domestic Emoluments Clause.
Furthermore, as noted above, “emoluments” are not limited to monetary payments; they also include economically valuable favorable regulatory actions. President Trump’s control over the vast modern powers of the executive branch means that regulatory action affecting his businesses favorably constitutes an “Emolument from the United States.” For example, President Trump’s ongoing lease of Washington, D.C.’s Old Post Office, in which the Trump International Hotel is located, violates an explicit clause in the General Services Administration lease contract providing: “No . . . elected official of the Government of the United States . . . shall be admitted to any share or part of this Lease, or to any benefit that may arise therefrom . .. .” In late November, members of Congress wrote the GSA requesting information about the “imminent breach-of-lease and conflict of interest issues created by President-elect Donald Trump’s lease with the U.S. Government for the Trump International Hotel building in Washington, D.C.” The GSA responded in mid-December that it could not make a determination “until the full circumstances surrounding the president-elect’s business arrangements have been finalized and he has assumed office.” His business arrangements have been announced (not including any divestment of the hotel) and he has assumed office, but the GSA is not pursuing any legal action to enforce the provision. That favorable regulatory treatment provides President Trump a significant financial benefit from the federal government above and beyond his federal salary.
Finally, the Committee should also investigate whether President Trump is violating the Stop Trading on Congressional Knowledge Act of 2012 (STOCK Act). The STOCK Act is one of the few federal ethics statutes that specifically includes the President. Among other provisions, it prohibits the President from (1) using nonpublic information for private profit, and from (2) intentionally influencing an employment decision or practice of a private entity solely on the basis of partisan political affiliation.
Footnotes [ + ]
|1.||↑||Drew Harwell & Anu Narayanswamy, A scramble to assess the dangers of President-elect Donald Trump’s global business empire, Wash. Post, Nov. 20, 2016, http://wpo.st/KCmP2.|
|2.||↑||Michael Keller et al., Tracking Trump’s Web of Conflicts, Bloomberg, Dec. 13, 2016, http://bloom.bg/2jamDUu.|
|3.||↑||U.S. Const., art. I, § 9, cl. 8. This ban is located within a clause addressing both titles of nobility and foreign payments, and is variously called the Titles of Nobility Clause, the Foreign Corruption Clause, or the Foreign Emoluments Clause.|
|4.||↑||Norman L. Eisen, Richard Painter, & Laurence H. Tribe, Brookings Governance Studies, The Emoluments Clause: Its Text, Meaning, and Application to Donald J. Trump, http://brook.gs/2i1i3Ht (Dec. 16, 2016), at 2.|
|6.||↑||See Norman L. Eisen & Richard W. Painter, Trump Could Be in Violation of the Constitution His First Day in Office, The Atlantic, Dec. 7, 2016, http://theatln.tc/2i0ApY4; see also Richard W. Painter et al., Emoluments: Trump’s Coming Ethics Trouble,The Atlantic, Jan. 18, 2017, http://theatln.tc/2jwtwNr.|
|7.||↑||Libby Nelson, All of Donald Trump’s known conflicts of interest in one place, Vox, http://bit.ly/2gJbaXa (last updated Jan. 3, 2017).|
|8.||↑||Jonathan O’Connell & Mary Jordan, For foreign diplomats, Trump hotel is place to be, Wash. Post, Nov. 18, 2016,http://wpo.st/VemN2. The motivation is obvious: “‘Why wouldn’t I stay at his hotel blocks from the White House, so I can tell the new president, “I love your new hotel!” Isn’t it rude to come to his city and say, ‘“I am staying at your competitor?”’ said one Asian diplomat.” Id.|
|9.||↑||See Judd Legum & Kira Lerner, Under political pressure, Kuwait cancels major event at Four Seasons, switches to Trump’s D.C. hotel, Think Progress, Dec. 19, 2016, http://thkpr.gs/1f204315d513.|
|10.||↑||See Richard C. Paddock et al., Potential Conflicts Around the Globe for Trump, the Businessman President, N.Y. Times, Nov. 26, 2016, http://nyti.ms/2jwr1L1.|
|11.||↑||U.S. Const., art. II, § 1, cl. 7 (emphasis added).|
|12.||↑||The Federalist No. 73 (Alexander Hamilton) (Clinton Rossiter ed., 1961 (emphasis added).|
|13.||↑||Charles V. Bagli, A Trump Empire Built on Inside Connections and $885 Million in Tax Breaks, N.Y. Times, Sept. 17, 2016,http://nyti.ms/2cXa60i.|
|14.||↑||Steven L. Schooner & Daniel I. Gordon, GSA’s Trump Hotel Lease Debacle, Gov’t Executive, Nov. 28, 2016,http://bit.ly/2k4VNcG.|
|15.||↑||Letter from Hon. Elijah E. Cummings et al. (Nov. 30, 2016), available at http://bit.ly/2k56NqN.|
|16.||↑||Allan Smith, Federal agency responds to letter from Democratic lawmakers claiming it said Trump must fully divest himself of his DC hotel, Business Insider, Dec. 14, 2016, http://read.bi/2k4WYZM.|
|17.||↑||See Pub. Law 112–105 (2012), §§ 9(a), 18.|