How Trump can keep his company – Politico
Time is running out for Donald Trump to get away from his entangling business interests, and he finally signaled Wednesday morning he’ll try to avoid his administration being mired in endless scandal.
Turning to his preferred medium for making news, the president-elect on Twitter said legal documents “are being crafted which take me completely out of business operations.”
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“The Presidency is a far more important task!” he said, adding plans to hold a formal news conference on Dec. 15 with his children in New York to discuss the new arrangement.
Exactly what strategy Trump will deploy to end his business conflicts is unclear. But what he isn’t lacking for are options to put at least some of his unprecedented ethical challenges to rest.
As Trump and his top aides pick Cabinet nominees and map out their early first-term agenda, they’ve also been urged to consider a range of piecemeal solutions that prominent lawyers, financial advisers and even major news organizations say will let the president-elect hold on to parts of his previous life’s work while insulating himself from his most problematic holdings, especially overseas.
Many of the ideas are far from simple and they won’t be easy to manage, like renegotiating Trump brand license deals in global hotspots, or selling his company to his children, a move that would shield him from large tax penalties but comes with the catch that he’d need to boot his family, including son-in-law Jared Kushner, from the West Wing when it comes to official government business.
Trump has dismissed suggestions he sell everything, and his aides had stayed mum beyond issuing an official statement that his three oldest adult children and a “team of highly skilled executives” will soon be in command of the official Trump Organization. While a patchwork approach is certainly more complicated, and it might still result in litigation and bad headlines, political, business and legal experts told POLITICO it’s also the price Trump must pay if he’s serious about making the leap from international entrepreneur to president of the United States.
“He’s not ever going to be in the position of President Obama, which is to have a bunch of T bills and index funds and that’s all,” said Matthew Sanderson, an attorney who has advised former GOP presidential candidates including John McCain, Rand Paul and Rick Perry. “That just isn’t in the cards. This is about putting Trump in the best possible position and not be bogged down with the continuous drip, drip, drip of conflict stories.”
The clock is ticking for Trump to act.
Former White House attorneys are warning that once Trump is sworn in as president, he could be immediately vulnerable to violations of the Constitution’s Emoluments Clause that bans U.S. government employees from accepting payment by foreign countries or the companies they own. It’s a scenario that could even open the window to impeachment proceedings, especially if Democrats ever gained control of Congress. On more immediate terms, Trump’s new luxury hotel in a historic building a few blocks from the White House operates under a lease with the U.S. government that includes a provision that procurement experts say must be terminated by Inauguration Day because the government can’t be in contract with federal employees.
Politically, the conflict story threatens to keep Trump on defense as he launches his new government. Questions about ethical challenges dominated his sit-down interview last week with the New York Times, where the Republican acknowledged he’d talked with British leaders in a post-election meeting about his opposition to windmills that would mar the views at his two Scottish golf courses. The conflict questions resurfaced again on Tuesday as POLITICO reported the kingdom of Bahrain had booked a reception for next week at Trump’s flagship hotel in Washington. Democratic oversight is also itching to go on offense, with requests already piling up for record disclosures, inspector general reports and investigations into the Trump appointees who soon will take control of agencies where the possibilities for conflicts will be ripe.
“There’s a real danger to undermining his presidency and the standing of the U.S. government by not having good disclosure,” said Rep. Katherine Clark, a Massachusetts Democrat who recently introduced legislation offering Trump one out: mandating the president and vice president put all their assets in a certified blind trust or disclose to the Office of Government Ethics and the public when they make decisions affecting their personal finances.
Calls for Trump to restructure his financial dealings are bipartisan. Democrats, of course, see a political payoff from hammering the new president on the issue, but they also insist they don’t want the opportunity for policy progress on mutual interests poisoned from four years of scandal. While senior Republican lawmakers have avoided discussing Trump’s business conflicts, some of the party’s stalwarts, including former White House veterans, have spoken up about the ethical challenges ahead if Trump does nothing.
“It’s going to be a hindrance to him being a good president if neutral people think he’s doing things for the wrong reasons,” Ari Fleischer said last week on CNBC during an interview where the former George W. Bush spokesman urged Trump to cease comingling his business and government discussions with foreign officials.
One approach Trump has acknowledged he’s considering is handing his company over to his children. But C. Boyden Gray, the former White House counsel under George H.W. Bush, said the president-elect would be better off selling his business to his kids and not merely letting them run it. Trump could name any price, and he’d get favorable tax treatment because he sold his company to avoid a conflict of interest, as opposed to gifting or bequeathing all his assets.
But Trump would also need to make a big concession that runs against the grain of his early transition maneuverings. He’d essentially have to boot his children, and son-in-law Kushner, from the White House for any official business. That means no more of the sit-downs, phone calls or other conversations involving foreign dignitaries, business partners and government briefers that have driven some of Trump’s roughest headlines since he won the presidential election.
In an interview, Gray said he’s circulated an op-ed he published last week in The Hill that described his divesture suggestions with key Trump transition team members, and he expects it to be in the mix amid a range of other suggestions under review by incoming White House counsel Donald McGahn.
“I’m sure he’s pulling together all these ideas and trying to figure out what’s the best thing, and engaging in discussions with Trump himself obviously as to what Trump is willing to accept or not accept,” Gray said.
Since many of the president-elect’s domestic holdings don’t present inherent conflicts with his government, such as his golf courses, some experts suggest Trump should prioritize first on his international businesses, selling off assets and renegotiating any branding contracts located in troublesome countries, including Azerbaijan, Turkey and, according to a 2008 account from Donald Trump Jr., even Russia.
By dividing up his businesses by their location, it can be easier to pinpoint where the more important and immediate changes need to be made, said Kenneth Gross, an ethics lawyer and former enforcement official at the Federal Election Commission.
“When you look at something as a whole it seems almost insurmountable and insoluble,” Gross said. “The closer you get to it the more manageable it comes in terms of taking action.”
For properties that Trump does not own but that rent his name, Sanderson recommended renegotiating the licensing deals for a fixed payout, removing any windfall for Trump if he tries to use his power to benefit those businesses. But if such talks fall through, Trump could buy an insurance policy to flatten out the payments, similar to how Vice President Dick Cheney handled his deferred compensation from oilfield services giant Halliburton before he took office in 2001.
“No credible charge could be leveled that Cheney was actually enriching himself,” said Sanderson, an attorney with Caplin & Drysdale. “That’s what I would do. It’s not ideal, but it is a way Trump can lock this down.”
Trump also has another option, an approach endorsed by the Wall Street Journal editorial page and most frequently peddled by former Obama White House ethics chief Norm Eisen and his counterpart from the George W. Bush administration, Richard Painter. They say it’s perhaps the simplest and most comprehensive option for Trump to sell his company, via an initial public offering. While it may be the most painful, it’s also the approach that would lessen the risk of anyone having too much sway with the president. Trump would then put the proceeds in a blind trust or conflict-free assets like mutual funds and U.S. government bonds.
The sale would include the right to use Trump’s name, but the president would no longer have anything to gain from helping the brand once he has cashed out. And to address the Emoluments Clause, they suggest auditing the companies and turning over any payments from foreign governments to the U.S. Treasury.
Painter told POLITICO he pitched their approach directly to Trump adviser Kellyanne Conway. He said she replied politely but did not indicate a view.
The Painter-Eisen approach has plenty of critics, including many who say it’s politically unrealistic and fails to account for the short time-frame Trump is operating under before he takes office. An IPO can’t be prepared that fast. In addition, it would entail Trump cutting out his children from an enterprise he’s built over decades.
“That’s asking a lot of any parent who has brought their kids into the family business,” Gray said.
No matter what Trump does with his financial arrangements, GOP campaign finance lawyer Jan Baran warned that the president should be ready for criticism.
“You think of all these solutions and how they’re supposed to work effectively and you conclude they don’t eliminate problems. In fact, many of them create more problems.” Baran said. “He’s going to have to make a decision about how he’s going to go forward with the knowledge that that no matter what he does he’s going to be criticized or potentially attacked for anything he’s doing.”