George W. Bush’s Ethics Lawyer: Trump Will Be in Violation of Constitution on Day OnePosted: 2017-01-01
Could Donald Trump be in violation of the Constitution on his first day in office? That’s the conclusion of some leading constitutional law experts. The Constitution prohibits officeholders from accepting “any present, emolument, office, or title, of any kind whatever, from any king, prince, or foreign state.” Law experts say many of Trump’s businesses are already benefiting from his presidency. Kuwait, for example, recently moved its National Celebration Day from the Four Seasons in Georgetown to the Trump International Hotel instead. According to ThinkProgress, Kuwait faced political pressure from the Trump camp to move the location. Other diplomats have reportedly been urged to hold events at Trump’s hotel. Trump and his family also have holdings or projects in Argentina, Brazil, Georgia, India, Ireland, Japan, Philippines and Turkey. In addition, Trump’s businesses owe hundreds of millions of dollars to foreign banks, including Deutsche Bank, UBS and Bank of China. We speak to Richard Painter, professor of corporate law at the University of Minnesota. He was the chief White House ethics lawyer for President George W. Bush from February 2005 to July 2007.
This is a rush transcript. Copy may not be in its final form.
AMY GOODMAN: On the international front, Donald Trump broke protocol by speaking to Taiwan’s president, marking the first communication between leaders of the United States and Taiwan since 1979. The call came after representatives of the Trump Organization recently traveled to Taiwan to explore possible deals, including building luxury hotels near Taiwan’s main airport. Trump and his family also have holdings or projects in Argentina, Brazil, Georgia, India, Ireland, Japan, Philippines and Turkey. Trump’s businesses also owe hundreds of millions of dollars to foreign banks, including Deutsche Bank, UBS and Bank of China. Earlier this month, protesters gathered in front of Trump Hotel in Washington, D.C., to express concerns about Trump’s alleged conflicts of interests. This is Paul Ryan of Common Cause.
PAUL RYAN: We’re here today because President-elect Trump owns or has a controlling interest in more than 500 businesses, both foreign and domestic. We don’t even know the nature of his financial holdings. We don’t even have a clear picture, due to a lack of transparency of exactly what businesses he owns. What we do know is these businesses pose a massive conflict of interest. Exhibit A, the Trump Hotel. This is a building that is owned by the federal government. On the day that President-elect Trump is sworn in, he will be serving as both the landlord and the tenant in federally owned property.
AMY GOODMAN: Last month, Donald Trump announced he would be holding a major news conference on December 15th to discuss his plans for his businesses, but that press conference was later canceled. For more, we’re joined by Richard Painter, professor of corporate law at the University of Minnesota. He was the chief White House ethics lawyer for President George W. Bush from February 2005 to July 2007. Professor Painter, welcome to Democracy Now!
RICHARD PAINTER: Thank you.
AMY GOODMAN: Can you start off by explaining what are the laws, rules and norms that govern the issue of conflict of interest?
RICHARD PAINTER: Well, there are several laws. I think the most important, for purposes of President-elect Trump, is the Emoluments Clause of the Constitution, which is one of the most critical conflict of interest provisions for all U.S. government officials. Nobody holding a position of trust with the United States government can receive payments from foreign governments, whether gifts or a salary or profits. And that’s what emoluments are, profits or benefits. It comes from the Latin root emolumentum, which refers to profits and benefits. And so, if you have somebody who’s making profits from dealing with foreign governments or companies controlled by foreign governments, that person must dispense with those profits, cannot receive that money, while holding any position of trust with the United States government. That applies to every U.S. government employee, including the president. And so, what this means is that, for Donald Trump, if he’s going to hold onto these business enterprises, which present a whole range of other conflict of interest problems, to satisfy the Constitution, at a bare minimum, what he’s going to have to do is get the foreign government money and money from foreign government-controlled corporations out of his business enterprise. And this includes foreign diplomats staying at the hotels at government expense, foreign governments having big parties in his hotels and canceling reservations at the Four Seasons, going over to the Trump Hotel, to curry favor. All of that is unconstitutional. Also, he has bank loans outstanding, I believe, from the Bank of China, which is controlled by the government of China. And some foreign government-owned banks are leasing space in Trump office buildings. All that has to be dealt with before January 20, or we could have a violation of the Constitution. And that’s a very important provision, because the founders did not want U.S. government officials to be beholden to foreign powers. France and England, Russia, Austria, Hungary—they were the most powerful countries at the time of the founding of the United States. Their governments were a lot richer than ours. There’s no point having a revolution and fighting for American independence if European powers, through payments to U.S. government officials, could accomplish that which they cannot accomplish militarily on the ground, which is to subjugate the United States to foreign domination. So, the founders were very cognizant of this problem of foreign governments trying to manipulate our political system. And lo and behold, here in 2016, we have concerns about foreign governments intermeddling in American politics. And at least the Emoluments Clause is there. Bottom line: no payments from foreign governments to United States government officials. And now we have a whole range of other conflict of interest rules, ranging from bribery and gratuity statutes, which are criminal, and that would come into play if anyone started mixing discussion of Trump business with U.S. government business in a way that implied, “Well, if you do this, I’ll do that.” And the problem is, the president is going to be responsible not just for his own conduct, but all the people working for him in the U.S. government and, if he chooses to keep these business enterprises, over in the Trump Organization. And anybody starts going around the world trying to cut deals for the Trump Organization, implying that they might get some favor for somebody from the U.S. government if the deal gets done, that’s exactly the type of thing that could lead to an investigation of bribery, a solicitation of a bribe and an accusation that someone is soliciting a bribe on behalf of the president of the United States, even if the president didn’t want any of that going on at all. And that’s going to be one of the risks if he holds on to these business enterprises.
JUAN GONZÁLEZ: And, Professor—Professor Painter, what if the—if Donald Trump divests, but maintains the ownership of his current empire under one of his children, who does not get appointed to some kind of government position? Would that be sufficient, in your eyes, to eliminate the legal requirements in terms of any potential conflicts of interest or the Emoluments Clause?
RICHARD PAINTER: Well, by “divest,” if you mean giving it to his children or selling ownership to his children, I believe that would solve the Emoluments Clause issue. I mean, there’s some debate about whether the government official could receive the emolument through his children. But if it’s really his children’s business, and they own it, and they operate it, and they are receiving the payments from dealing with foreign governments, probably the Emoluments Clause would not apply. But they need to own the business, not just operate the business while he retains ownership. And that’s critically important. In order to give it to them, he’d have to pay to the gift tax. I’m not sure he wants to pay the tax. And he could sell it to them, but that might have to be done through a leveraged buyout. So there are a range of different options that could be explored with the children, particularly for the hotels. Or he could sell the hotels to a third party and then simply keep the cash and put it in conflict-free assets. I do think he needs to turn a lot of this business enterprise, if not all of it, over to an independent trustee, who would function as a blind trustee, under the Office of Government Ethics rules. That’s what—past presidents have done it, and I think that would be very effective here.
AMY GOODMAN: Well, let’s talk about his children. And when you say “his children,” I think it sounds very innocent. But, I mean, very clearly, his children are adults who are his business partners. As you talked about, well, if he handed things over to his children, but are—his children are playing a key role in the government. You know, he has said that Ivanka Trump would take over the first lady’s quarters in the West Wing, and then said the first family would take over those quarters. A lot of controversy around Trump’s children attending a meeting Trump held with tech executives. And it’s not only tech executives. They are attending and vetting Cabinet picks, Professor Painter.
RICHARD PAINTER: Yes. I think they need to figure out who in the Trump family, who on Team Trump, is going to be playing for the U.S. government side and who is going to be involved in business enterprises. Those who are going to be with the U.S. government need to be subject to the ethics rules that are bonding on all other people in the United States government. They should be appointed to formal positions. Now, there’s an issue under the nepotism statute as to whether the president can do that. And the problem is, if the president decides to allow them to carry out governmental functions without a formal appointment, that is much worse than a violation of the anti-nepotism statute, as I interpret it. The problem is, you cannot have people who aren’t government employees, who don’t have the conflict of interest requirements of government employees, running around setting policy, influencing other people in the United States government. I have the same concern, by the way, about Carl Icahn and some other people, who may be advising this administration without becoming government employees. And that’s an end run around the ethics rules and the conflict of interest statutes. That should not be permitted. So, with respect to the children, figure it out: Who’s going to play on the U.S. government side and be subject to the same rules as everyone else, and who’s going to be involved in the business world, doing business deals, whether for the Trump Organization or anything else? But it’s one way or the other. And there’s been a lot of confusion on that. I don’t think that’s helpful.
JUAN GONZÁLEZ: Well, one of the—it’s shocking to me that, given the amount of time that Donald Trump spent running for president, that nobody in his—in his campaign thought to think these things out before the election, because this is a very complicated entanglement of this empire that they now have to figure out what to do with in just a few weeks.
RICHARD PAINTER: Well, I think most of us thought he was going to lose this election. And I don’t know how confident he was he was going to win the election. I believe they made some preparations for a transition. But I think it’s starting to dawn on him and on the family that he will indeed be president of the United States on January 20. And this is a fundamental change in his life. He’s been a businessman, a successful businessman, all his life. He’s 70 years old. He is now going to have to walk away from much of that success. He can keep the money, but there’s going to have to be some divestment and other major changes so he could become president of the United States. He’s got a new job to do. It’s a career transition at age 70. But he, like many other Americans, can go ahead and do it. But he needs to make absolutely sure that he divests himself from the businesses that create conflicts of interest, or we’re going have four years of controversy surrounding all these businesses, whether it’s these types of investigations I’m talking about, the bribery and gratuity laws. Plaintiffs’ lawyers are going to be nipping at his heels, and state attorneys general. We’ve seen, even in New York, he wants to close down the foundation, and the state attorney general is saying, “Well, not until I finish my investigation.” And we’re going to have more and more of that type of thing, unless he divests of businesses. I think he did absolutely the right thing on the foundation and the charitable solicitation. Shut that down. Focus on being president.
AMY GOODMAN: Professor Painter, just in our headlines today, Donald Trump tapped his company’s top lawyer, Jason Greenblatt, to fill the newly created position of special representative for international negotiations. He is an expert in real estate law. He has little foreign policy experience. And he’ll be advising on all international negotiations. Does that raise concern for you?
RICHARD PAINTER: Well, we’ll see how he does in that. We’ve had many people coming out of the business world go into government positions that are really unrelated to what they’ve done in business, and have been quite successful. We’ll see how that works out.
AMY GOODMAN: But this goes to him being the lawyer for his real estate empire, now dealing with trade. So, in the lede into this, we said that Kuwait, for example, recently moved its National Celebration Day from the Four Seasons in Georgetown to the Trump International Hotel in D.C. instead. According to ThinkProgress, Kuwait faced political pressure from the Trump camp to move the location. Other diplomats have reportedly been urged to hold events at Trump’s hotel. And then, of course, on the international front, a number of different examples—for example, that first conversation he had with the Taiwanese president, as the Trump Organization wants to build one of the largest development projects in Taiwan.
RICHARD PAINTER: All that’s got to stop. It’s going to create lots of conflicts of interest, lots of controversy, big distractions for the president for the next four years. That has to stop. And Mr. Greenblatt and anyone else working for the United States government is going to be subject to the conflict of interest rules, which means complete divestment of any interest that he might have in the Trump Organization, any client relationships with the Trump Organization and any other client relationships that create conflicts of interest. But those types of transactions with foreign—whether they’re foreign business leaders or foreign government officials, all of that has to stop, or these businesses need to be sold to somebody else who could engage in those transactions and not have to focus on the duties of being president. But you can’t have the president of the United States or other people on behalf of the president of the United States running around, trying to cut deals all over the place. Imagine if in World War II, in 1941, President Roosevelt had had a Roosevelt Tower in Berlin and Frankfurt and several hundred million dollars outstanding from Deutsche Bank. How would we have responded to the crisis in Europe? We cannot have a president who is conflicted by his own holdings outside the United States. Critically important. And that’s the point of the Emoluments Clause. At least the foreign government payments are unconstitutional. But the rest of it also creates serious conflicts of interest, and prompt steps need to be taken to deal with that. And maybe Mr. Greenblatt and others can help President-elect Trump, when he becomes president, quickly move toward divestment, so he can focus on being president.
AMY GOODMAN: And, Professor Painter, we do not know—we don’t have Donald Trump’s tax returns. The significance of this—I mean, breaking with 40 years of tradition of releasing these tax returns, where he’s getting his money from, even knowing the basics?
RICHARD PAINTER: We need to get the—I think the president should disclose his tax returns. Every other president has disclosed tax returns. And if he hasn’t paid a lot of tax because of a tax loophole, just come on out and say, “Well, look, here’s a loophole. I took advantage of it this way.” And it’s fair, it’s not; if it’s not fair, let’s close it. But let’s be up front about it. He needs to disclose his taxes so the American people could see where he’s been making money around the world or in the United States. That’s critically important. We do not see, from the financial disclosure form that the president files and other government officials file, the geographic source of the income. It may flow into, for example, in New York, a limited liability partnership that has dealings in—you know, in Turkey or some other country. We need to have that information. He should disclose the tax returns. And I hope he will.
AMY GOODMAN: And even the Trump name on buildings around the world—does the U.S. government now have to protect those buildings?
RICHARD PAINTER: Well, I think we should take the Trump name off of buildings, at least in those countries that have a significant terrorism risk. But we’ve seen significant terrorism risk in Paris and in many Western cities, as well. So, it’s of serious concern. You don’t put the name “President Obama”—you don’t put “Obama” on top of a tower in downtown Johannesburg or Paris or someplace, and then worry about protecting it. And the problem is, the foreign governments might have to protect it. And that brings back in the issue of the Emoluments Clause. Is this a subsidy of a Trump business by a foreign government that has to protect the building? But, of course, if they don’t protect the building, we could have a tragedy on our hands, and we don’t want that. So, that is a very important step, to get the Trump name off of these buildings outside the United States where there’s a terrorism risk.
AMY GOODMAN: And Donald Trump’s relationship with banks, what’s owed, where his debt is?
RICHARD PAINTER: Well, many real estate people have significant debt on the buildings that they own. And I don’t think Donald Trump is an exception to that. Some of the debt you’re going to see on the financial disclosure form. That’s the debt he personally owes. But there’s going to be a lot more debt at the corporate level that you do not see on the financial disclosure form, because he doesn’t owe it, it’s owed by a corporation which owns a building. And the problem here is, it’s going to be difficult for the president to regulate and supervise the regulation of the financial services sector and the banking, the lending practices—much of the lending is secured by real estate. It’s going to be very difficult for him to deal with those issues if he, himself, is indebted to the large banks. So I think it’s going to be very important for him to try to deleverage, sell off the buildings, pay down debt, or figure out some other way where he’s not going to be carrying large loans from the banks while his administration is supposed to be regulating the banks.
AMY GOODMAN: And his hotel in Washington, D.C., it violates the lease that he is both the landlord and the tenant, and it says that cannot be. You cannot be a public official and have the lease to this hotel, which is a government building.
RICHARD PAINTER: Yeah, I think he’s got another place to live in Washington, D.C., for the next four years, so it’s a good idea for him to give that hotel to his children or, better yet, find a buyer for the hotel. The president of the United States is not an innkeeper. He doesn’t need to hold onto that hotel. He’s got plenty of other things to do. And it’s unnecessary. It’s going to create a lot of problems with respect to the Emoluments Clause of the Constitution because of the foreign diplomats. We have the problem under the lease with the GSA and all sorts of other problems. So, I think he should just sell the hotel or give it to his children or somebody. He really shouldn’t be holding onto that property.
AMY GOODMAN: Richard Painter, we want to thank you for being with us, professor of corporate law at the University of Minnesota. He was the chief White House ethics lawyer for President George W. Bush.
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