You are here: Home » International » US Elections » News
Business Standard

We may not know if Trump's foreign business deals violate the constitution

President-elect Donald Trump doesn't have to detail his business holdings in federal financial disclosures until May 2018

Derek Kravitz 

Donald Trump
Donald Trump

The question of whether President-elect Donald will run afoul of federal conflict-of-interest rules or the because of his extensive foreign investments has been the subject of intense scrutiny among legal and ethics scholars.

Legally, his foreign licensing deals could violate the Constitution. An example: During his presidential run, Trump's name was used to market a never-finished luxury hotel in Azerbaijan, built by the billionaire son of the country's transportation minister. The deal earned more than $2.8 million between January 2014 and May 2016, according to financial-disclosure filings he filed as a candidate. (See his 2015 and 2016 reports here.)

If this type of deal occurs during his presidency and fetches anything above what's considered fair market value, it would almost certainly violate the Emoluments Clause, a provision of the ­­­­­­meant to head off conflicts between the national interest and presidents' self-interest. The clause, in Article 1, Section 9, of the Constitution, prevents the president from accepting "any present, Emolument, Office, or Title, of any kind w­­­hatever, from any King, Prince, or foreign State." A more stringent interpretation of the clause — which has never been tested in the courts — would bar a president from receiving any payment from a foreign government entity. A violation of the could result in impeachment proceedings.

But how will we know if is violating the clause? Because of limited financial-disclosure requirements, we might not.

There are two reasons for this: One is that the disclosures required from presidents are limited. The other is that has refused to voluntarily release his tax returns or other details, a significant break from presidential administrations dating back to Jimmy Carter.

"You can't grasp all the potential conflicts and issues that the empire poses by just looking at a personal financial disclosure," said Matthew T. Sanderson, an attorney at Caplin & Drysdale who has served as legal counsel on three Republican presidential campaigns.

And won't have to file a comprehensive annual report of his assets, income, gifts and stock portfolio until May 2018, according to Office of Government Ethics requirements. (has so far refused to release his federal or state tax returns; three pages of his 1995 New York state tax return obtained by The New York Times showed he declared $916 million in losses but few other details.)

Organization executives and lawyers did not respond to ProPublica's requests for comment.

As a presidential candidate, filed two financial-disclosure reports detailing his private companies and assets. More than 100 of the companies listed have licensing or management agreements in other countries, including China, India, Saudi Arabia and the United Arab Emirates. Among his most prized assets: 12 golf courses, three more in Ireland and Scotland, and two underway in the United Arab Emirates, along with a 30 percent stake in two office towers in New York and San Francisco.

Organization officials have said the president-elect's empire will be overseen by his three adult children—Donald Jr., Eric and Ivanka. (Former Presidents Carter, Ronald Reagan, George H.W. Bush, Bill Clinton and George W. Bush all put their assets into blind trusts during their terms; Obama's portfolio in Treasury bills and index was not seen as a conflict.)

But hasn't heeded calls from ethics and legal experts (and others including the Wall Street Journal editorial page) who say his foreign assets should be sold off en masse and his businesses be placed in the hands of an independent trustee during his presidency. addressed the issue on Twitter, saying it was "well known that I have interests in properties all over the world" and arguing that "only the crooked media makes this a big deal!"

The potential for Trump's decisions as president to impact his holdings loom large. "What happens if there are federal activities in the proximity of these golf courses or hotels that positively or negatively impact their value," said Lawrence Wright, a professor of economics at New York University's Stern School of and a former federal antitrust regulator. "He's got a zillion things going on and I don't see how he can effectively disengage."

Barring more disclosures, an outside review of Trump's activity is difficult. In the days following his election, at least five Trump-affiliated holding companies, most of them long inactive, have been dissolved in Delaware and New York, ProPublica has found. But it's unclear if is consolidating his empire before he takes office or simply shuttering dormant companies.

And getting an accounting of how much he's profiting, or losing, from his dealings is near impossible. Shortly after the election, met with three Indian partners who are building a Trump-branded apartment complex in Pune, just outside of Mumbai. In his 2015 financial disclosure, noted several foreign licensing deals, including the one for the 23-story Pune towers.

reported between $100,000 and $1 million in from the deal in his 2015 disclosure. The next year, he reported no from the deal. The estimated value of the contract in both years, according to the financial disclosure: between $1,000 and $15,000. (Federal disclosures rules only require a range of amounts for things like stock dividends, rent and royalties.) To put this incongruity in context, Trump's licensing deals typically fetch between $5 million and $10 million.

Meanwhile, a 75-story Mumbai skyscraper currently under construction by the Lodha Group is also reported in the filings. The royalty from that deal reported in 2016 is in line with previous deals: between $1 million and $5 million. The Mumbai deal's valuation was one of several listed that was deemed "not readily ascertainable."

As president, will be required to file both annual and periodic financial-disclosure reports under the Ethics in Government Act of 1978. But unlike a balance sheet or an audit, the financial disclosures are limited and don't provide a complete picture of Trump's businesses. "They are the very, very tip of the iceberg," said Richard W. Painter, an outspoken critic of Trump's conflicts who served as the White House's chief ethics lawyer under George W. Bush. "They don't get at the second and third layers." Among the things excluded from the disclosures: tenants in Trump-owned buildings and their rents, along with debts owed to government-owned sovereign wealth funds.

And if he makes any errors in his filings, it's generally up to the White House counsel's office — a appointee — to decide what action to take.

will have some additional disclosure requirements as president that he didn't have as a candidate: He will have to list all gifts he's received and any transactions within 45 days of a purchase or sale of a stock. Obama Commerce Secretary Penny Pritzker, a Chicago billionaire who started five companies and who has served on the boards of several Fortune 500 firms, routinely files such disclosures; So far in 2016, she has filed 17 of them.

But company liabilities are exempt from federal reporting requirements. owes Deutsche Bank, his largest lender, roughly $300 million in loans against his recently opened hotel in Washington, D.C., and a resort in Doral, Florida. But it's unclear what his companies might owe and to whom. And presidents aren't subject to federal laws prohibiting members of Congress from government dealings that overlap with their own financial interests.

The extent of Trump's potential conflicts is unique, but he's one of many elected officials and executive branch appointees to grapple with such issues. Hank Paulson was forced to sell off nearly $600 million in Goldman Sachs stock before taking over as Treasury Secretary in 2006. Lyndon B. Johnson's wife, Lady Bird Johnson, purchased a radio station, KTBC-AM in Austin, in 1943 and, when her husband was in the Senate, directly approached an official at Federal Communications Commission about a regulatory review.


The original article was published at ProPublica. You can read it here.


We may not know if Trump's foreign business deals violate the constitution

President-elect Donald Trump doesn't have to detail his business holdings in federal financial disclosures until May 2018

President-elect Donald Trump doesn't have to detail his business holdings in federal financial disclosures until May 2018
The question of whether President-elect Donald will run afoul of federal conflict-of-interest rules or the because of his extensive foreign investments has been the subject of intense scrutiny among legal and ethics scholars.

Legally, his foreign licensing deals could violate the Constitution. An example: During his presidential run, Trump's name was used to market a never-finished luxury hotel in Azerbaijan, built by the billionaire son of the country's transportation minister. The deal earned more than $2.8 million between January 2014 and May 2016, according to financial-disclosure filings he filed as a candidate. (See his 2015 and 2016 reports here.)

If this type of deal occurs during his presidency and fetches anything above what's considered fair market value, it would almost certainly violate the Emoluments Clause, a provision of the ­­­­­­meant to head off conflicts between the national interest and presidents' self-interest. The clause, in Article 1, Section 9, of the Constitution, prevents the president from accepting "any present, Emolument, Office, or Title, of any kind w­­­hatever, from any King, Prince, or foreign State." A more stringent interpretation of the clause — which has never been tested in the courts — would bar a president from receiving any payment from a foreign government entity. A violation of the could result in impeachment proceedings.

But how will we know if is violating the clause? Because of limited financial-disclosure requirements, we might not.

There are two reasons for this: One is that the disclosures required from presidents are limited. The other is that has refused to voluntarily release his tax returns or other details, a significant break from presidential administrations dating back to Jimmy Carter.

"You can't grasp all the potential conflicts and issues that the empire poses by just looking at a personal financial disclosure," said Matthew T. Sanderson, an attorney at Caplin & Drysdale who has served as legal counsel on three Republican presidential campaigns.

And won't have to file a comprehensive annual report of his assets, income, gifts and stock portfolio until May 2018, according to Office of Government Ethics requirements. (has so far refused to release his federal or state tax returns; three pages of his 1995 New York state tax return obtained by The New York Times showed he declared $916 million in losses but few other details.)

Organization executives and lawyers did not respond to ProPublica's requests for comment.

As a presidential candidate, filed two financial-disclosure reports detailing his private companies and assets. More than 100 of the companies listed have licensing or management agreements in other countries, including China, India, Saudi Arabia and the United Arab Emirates. Among his most prized assets: 12 golf courses, three more in Ireland and Scotland, and two underway in the United Arab Emirates, along with a 30 percent stake in two office towers in New York and San Francisco.

Organization officials have said the president-elect's empire will be overseen by his three adult children—Donald Jr., Eric and Ivanka. (Former Presidents Carter, Ronald Reagan, George H.W. Bush, Bill Clinton and George W. Bush all put their assets into blind trusts during their terms; Obama's portfolio in Treasury bills and index was not seen as a conflict.)

But hasn't heeded calls from ethics and legal experts (and others including the Wall Street Journal editorial page) who say his foreign assets should be sold off en masse and his businesses be placed in the hands of an independent trustee during his presidency. addressed the issue on Twitter, saying it was "well known that I have interests in properties all over the world" and arguing that "only the crooked media makes this a big deal!"

The potential for Trump's decisions as president to impact his holdings loom large. "What happens if there are federal activities in the proximity of these golf courses or hotels that positively or negatively impact their value," said Lawrence Wright, a professor of economics at New York University's Stern School of and a former federal antitrust regulator. "He's got a zillion things going on and I don't see how he can effectively disengage."

Barring more disclosures, an outside review of Trump's activity is difficult. In the days following his election, at least five Trump-affiliated holding companies, most of them long inactive, have been dissolved in Delaware and New York, ProPublica has found. But it's unclear if is consolidating his empire before he takes office or simply shuttering dormant companies.

And getting an accounting of how much he's profiting, or losing, from his dealings is near impossible. Shortly after the election, met with three Indian partners who are building a Trump-branded apartment complex in Pune, just outside of Mumbai. In his 2015 financial disclosure, noted several foreign licensing deals, including the one for the 23-story Pune towers.

reported between $100,000 and $1 million in from the deal in his 2015 disclosure. The next year, he reported no from the deal. The estimated value of the contract in both years, according to the financial disclosure: between $1,000 and $15,000. (Federal disclosures rules only require a range of amounts for things like stock dividends, rent and royalties.) To put this incongruity in context, Trump's licensing deals typically fetch between $5 million and $10 million.

Meanwhile, a 75-story Mumbai skyscraper currently under construction by the Lodha Group is also reported in the filings. The royalty from that deal reported in 2016 is in line with previous deals: between $1 million and $5 million. The Mumbai deal's valuation was one of several listed that was deemed "not readily ascertainable."

As president, will be required to file both annual and periodic financial-disclosure reports under the Ethics in Government Act of 1978. But unlike a balance sheet or an audit, the financial disclosures are limited and don't provide a complete picture of Trump's businesses. "They are the very, very tip of the iceberg," said Richard W. Painter, an outspoken critic of Trump's conflicts who served as the White House's chief ethics lawyer under George W. Bush. "They don't get at the second and third layers." Among the things excluded from the disclosures: tenants in Trump-owned buildings and their rents, along with debts owed to government-owned sovereign wealth funds.

And if he makes any errors in his filings, it's generally up to the White House counsel's office — a appointee — to decide what action to take.

will have some additional disclosure requirements as president that he didn't have as a candidate: He will have to list all gifts he's received and any transactions within 45 days of a purchase or sale of a stock. Obama Commerce Secretary Penny Pritzker, a Chicago billionaire who started five companies and who has served on the boards of several Fortune 500 firms, routinely files such disclosures; So far in 2016, she has filed 17 of them.

But company liabilities are exempt from federal reporting requirements. owes Deutsche Bank, his largest lender, roughly $300 million in loans against his recently opened hotel in Washington, D.C., and a resort in Doral, Florida. But it's unclear what his companies might owe and to whom. And presidents aren't subject to federal laws prohibiting members of Congress from government dealings that overlap with their own financial interests.

The extent of Trump's potential conflicts is unique, but he's one of many elected officials and executive branch appointees to grapple with such issues. Hank Paulson was forced to sell off nearly $600 million in Goldman Sachs stock before taking over as Treasury Secretary in 2006. Lyndon B. Johnson's wife, Lady Bird Johnson, purchased a radio station, KTBC-AM in Austin, in 1943 and, when her husband was in the Senate, directly approached an official at Federal Communications Commission about a regulatory review.


The original article was published at ProPublica. You can read it here.


image
Business Standard
177 22

We may not know if Trump's foreign business deals violate the constitution

President-elect Donald Trump doesn't have to detail his business holdings in federal financial disclosures until May 2018

The question of whether President-elect Donald will run afoul of federal conflict-of-interest rules or the because of his extensive foreign investments has been the subject of intense scrutiny among legal and ethics scholars.

Legally, his foreign licensing deals could violate the Constitution. An example: During his presidential run, Trump's name was used to market a never-finished luxury hotel in Azerbaijan, built by the billionaire son of the country's transportation minister. The deal earned more than $2.8 million between January 2014 and May 2016, according to financial-disclosure filings he filed as a candidate. (See his 2015 and 2016 reports here.)

If this type of deal occurs during his presidency and fetches anything above what's considered fair market value, it would almost certainly violate the Emoluments Clause, a provision of the ­­­­­­meant to head off conflicts between the national interest and presidents' self-interest. The clause, in Article 1, Section 9, of the Constitution, prevents the president from accepting "any present, Emolument, Office, or Title, of any kind w­­­hatever, from any King, Prince, or foreign State." A more stringent interpretation of the clause — which has never been tested in the courts — would bar a president from receiving any payment from a foreign government entity. A violation of the could result in impeachment proceedings.

But how will we know if is violating the clause? Because of limited financial-disclosure requirements, we might not.

There are two reasons for this: One is that the disclosures required from presidents are limited. The other is that has refused to voluntarily release his tax returns or other details, a significant break from presidential administrations dating back to Jimmy Carter.

"You can't grasp all the potential conflicts and issues that the empire poses by just looking at a personal financial disclosure," said Matthew T. Sanderson, an attorney at Caplin & Drysdale who has served as legal counsel on three Republican presidential campaigns.

And won't have to file a comprehensive annual report of his assets, income, gifts and stock portfolio until May 2018, according to Office of Government Ethics requirements. (has so far refused to release his federal or state tax returns; three pages of his 1995 New York state tax return obtained by The New York Times showed he declared $916 million in losses but few other details.)

Organization executives and lawyers did not respond to ProPublica's requests for comment.

As a presidential candidate, filed two financial-disclosure reports detailing his private companies and assets. More than 100 of the companies listed have licensing or management agreements in other countries, including China, India, Saudi Arabia and the United Arab Emirates. Among his most prized assets: 12 golf courses, three more in Ireland and Scotland, and two underway in the United Arab Emirates, along with a 30 percent stake in two office towers in New York and San Francisco.

Organization officials have said the president-elect's empire will be overseen by his three adult children—Donald Jr., Eric and Ivanka. (Former Presidents Carter, Ronald Reagan, George H.W. Bush, Bill Clinton and George W. Bush all put their assets into blind trusts during their terms; Obama's portfolio in Treasury bills and index was not seen as a conflict.)

But hasn't heeded calls from ethics and legal experts (and others including the Wall Street Journal editorial page) who say his foreign assets should be sold off en masse and his businesses be placed in the hands of an independent trustee during his presidency. addressed the issue on Twitter, saying it was "well known that I have interests in properties all over the world" and arguing that "only the crooked media makes this a big deal!"

The potential for Trump's decisions as president to impact his holdings loom large. "What happens if there are federal activities in the proximity of these golf courses or hotels that positively or negatively impact their value," said Lawrence Wright, a professor of economics at New York University's Stern School of and a former federal antitrust regulator. "He's got a zillion things going on and I don't see how he can effectively disengage."

Barring more disclosures, an outside review of Trump's activity is difficult. In the days following his election, at least five Trump-affiliated holding companies, most of them long inactive, have been dissolved in Delaware and New York, ProPublica has found. But it's unclear if is consolidating his empire before he takes office or simply shuttering dormant companies.

And getting an accounting of how much he's profiting, or losing, from his dealings is near impossible. Shortly after the election, met with three Indian partners who are building a Trump-branded apartment complex in Pune, just outside of Mumbai. In his 2015 financial disclosure, noted several foreign licensing deals, including the one for the 23-story Pune towers.

reported between $100,000 and $1 million in from the deal in his 2015 disclosure. The next year, he reported no from the deal. The estimated value of the contract in both years, according to the financial disclosure: between $1,000 and $15,000. (Federal disclosures rules only require a range of amounts for things like stock dividends, rent and royalties.) To put this incongruity in context, Trump's licensing deals typically fetch between $5 million and $10 million.

Meanwhile, a 75-story Mumbai skyscraper currently under construction by the Lodha Group is also reported in the filings. The royalty from that deal reported in 2016 is in line with previous deals: between $1 million and $5 million. The Mumbai deal's valuation was one of several listed that was deemed "not readily ascertainable."

As president, will be required to file both annual and periodic financial-disclosure reports under the Ethics in Government Act of 1978. But unlike a balance sheet or an audit, the financial disclosures are limited and don't provide a complete picture of Trump's businesses. "They are the very, very tip of the iceberg," said Richard W. Painter, an outspoken critic of Trump's conflicts who served as the White House's chief ethics lawyer under George W. Bush. "They don't get at the second and third layers." Among the things excluded from the disclosures: tenants in Trump-owned buildings and their rents, along with debts owed to government-owned sovereign wealth funds.

And if he makes any errors in his filings, it's generally up to the White House counsel's office — a appointee — to decide what action to take.

will have some additional disclosure requirements as president that he didn't have as a candidate: He will have to list all gifts he's received and any transactions within 45 days of a purchase or sale of a stock. Obama Commerce Secretary Penny Pritzker, a Chicago billionaire who started five companies and who has served on the boards of several Fortune 500 firms, routinely files such disclosures; So far in 2016, she has filed 17 of them.

But company liabilities are exempt from federal reporting requirements. owes Deutsche Bank, his largest lender, roughly $300 million in loans against his recently opened hotel in Washington, D.C., and a resort in Doral, Florida. But it's unclear what his companies might owe and to whom. And presidents aren't subject to federal laws prohibiting members of Congress from government dealings that overlap with their own financial interests.

The extent of Trump's potential conflicts is unique, but he's one of many elected officials and executive branch appointees to grapple with such issues. Hank Paulson was forced to sell off nearly $600 million in Goldman Sachs stock before taking over as Treasury Secretary in 2006. Lyndon B. Johnson's wife, Lady Bird Johnson, purchased a radio station, KTBC-AM in Austin, in 1943 and, when her husband was in the Senate, directly approached an official at Federal Communications Commission about a regulatory review.


The original article was published at ProPublica. You can read it here.


image
Business Standard
177 22

Upgrade To Premium Services

Welcome User

Business Standard is happy to inform you of the launch of "Business Standard Premium Services"

As a premium subscriber you get an across device unfettered access to a range of services which include:

  • Access Exclusive content - articles, features & opinion pieces
  • Weekly Industry/Genre specific newsletters - Choose multiple industries/genres
  • Access to 17 plus years of content archives
  • Set Stock price alerts for your portfolio and watch list and get them delivered to your e-mail box
  • End of day news alerts on 5 companies (via email)
  • NEW: Get seamless access to WSJ.com at a great price. No additional sign-up required.
 

Premium Services

In Partnership with

 

Dear Guest,

 

Welcome to the premium services of Business Standard brought to you courtesy FIS.
Kindly visit the Manage my subscription page to discover the benefits of this programme.

Enjoy Reading!
Team Business Standard