Outlaw financial conflicts of interest for Trump, Pence and Congress


The ascension of Democrats to control of the House of Representatives in 2019 should bring renewed attention to the financial conflicts of interest that have plagued the Trump presidency for the past two years. Prior to Donald Trump, every other president in the modern era divested investments that conflict with official duties and placed personal assets in conflict-free investments or a blind trust. Trump has refused to do so. Rather, he insists on holding onto his hotels, clubs, and real estate and licensing interests around the world. The result so far is more than 1,400 known conflicts of interest.

President Trump’s response to his critics is telling. He says “the president can’t have a conflict of interest,” an attitude more fit for a king than a president.

But the United States is not a monarchy, and nothing in our Constitution or laws would support such a characterization of presidential immunity from conflict of interest. In fact, we have a republican form of government that was designed specifically to avoid this royal approach. Our leaders are supposed to represent the people who elect them. And any of them, including the president, can have a conflict of interest if their financial interests put them in a position where they could be tempted to put their own personal interests ahead of those of the republic. 

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Even if Trump’s moral argument on conflicts of interest is vacuous, however, he does have at least part of a legal argument. There is no specific law that directly prohibits the president from owning any assets — whether real estate or anything else — that conflict with his official duties. The Constitution’s original anti-corruption provisions, the emoluments clauses, do prohibit the president from receiving profits and benefits (emoluments) through his businesses from foreign governments or from the federal government or the states.

Trump currently has three lawsuits pending against him over unconstitutional emoluments; two of these lawsuits have survived motions to dismiss, the third is on appeal, and a government watchdog said Wednesday that federal officials were wrong to ignore constitutional issues when they determined Trump as president could continue to lease a historic federal building for his hotel. The House should also pick up on Trump’s emoluments problem and investigate foreign government money in the Trump organization.

But private foreign money (even money belonging to foreign oligarchs who are personally and politically close to foreign rulers) is not covered by the emoluments clause. Neither are profits and benefits from investments in the United States, or anywhere else in the world that do not involve foreign (or domestic) governments. So a lot of the Trump Organization’s profits are not prohibited under the emoluments clause.

Presidential conflicts would be crimes for others 

But these interests still create massive conflicts of interest. The conflicts are so serious that if Trump were in any other executive branch position (other than president or vice president), it would be a criminal offense for him to participate in government matters affecting these financial interests. A long-standing provision of the United States criminal code specifically states that it is a crime for a federal employee to participate “personally and substantially” in any “particular matter” affecting his or his spouse’s financial interest, whether it is a company he holds stock in, a hotel or golf club he owns, or any other financial interest.

A Treasury secretary thus may not own Goldman Sachs stock while regulating Wall Street. A Health and Human Services secretary may not own health care stocks; an Energy secretary may not own oil company stocks; an Education secretary may not own for-profit education stocks — unless each of them recuses from any and all government matters that have a predictable effect on those stocks. Otherwise they risk a federal law violation and perhaps even jail. Given that risk or the prospect of having to recuse from a wide range of important matters, most government officials choose to sell the stocks and put the sale proceeds in diversified mutual funds, other conflict free assets or a blind trust prior to serving.

But this statute curiously does not apply to the president, the vice president or members of Congress.

This must change. The groundbreaking ethics legislation currently pending in the House  includes many far-reaching and welcome reforms, but it does not include the one anti-corruption provision that could put an end to Trump’s specious argument that “the president cannot have a conflict of interest.” H.R. 1, the For The People Act, needs to include a ban on financial conflicts of interest of the president, vice president and members of Congress that is as strong as the current law for all other federal employees. Indeed, that very law could be amended to simply include all of those elected officials in the definition of federal “employee”.

What would this mean for Congress? Members of Congress would have to sell most of their stocks, and ask spouses to sell most of their stocks, in industries affected by the work of Congress.

Congress must make conflicts of interest illegal 

Any significant stock portfolios owned by members would have to be liquidated and the sale proceeds invested in diversified mutual funds, other conflict free assets, or placed in a blind trust. A member of Congress would have to do the same thing as any Cabinet secretary or other government official who participates in a matter that could affect the financial interests of individual companies.

What would this mean for the president? Under the same criminal statute that now applies to all of his subordinates, Trump would be required to divest from conflicts of interest. He would have to do what every other modern president before him did voluntarily — sell off conflicted assets and put the money in conflict-free assets or a blind trust. That means if Trump wanted to continue serving as president, he would have to sell all or most of the Trump Organization businesses. He would no longer have a legal argument to support his spurious claim that “the president cannot have a conflict of interest.” And never again would we have to put up with a president, a vice president or any member of Congress who has such an attitude.

Right now this critically important policy is not in H.R. 1.

But the time for special exemptions from financial conflict of interest rules is over. No person — president, vice president or member of Congress — is above the law. Congress should act quickly and decisively to include all government officials, including the most powerful, in the definition of a federal “employee” covered by conflict of interest laws. They are, after all, the employees of the American people who elect them, and it is our interests that they should put first, not their own. Everyone in our government should be required to act For The People.

Richard Painter, a board member of Citizens for Responsibility and Ethics in Washington, was chief ethics counsel during the George W. Bush administration. Noah Bookbinder is the executive director of CREW. Follow them on Twitter: @RWPUSA and @NoahBookbinder


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