Trump and Conflicts of Interest.

Trump is organizing his administration but he is facing another crisis.

The Wall Street Journal is giving him painful and unwelcome but good advice.

He must liquidate the family business.

One reason 60 million voters elected Donald Trump is because he promised to change Washington’s culture of self-dealing, and if he wants to succeed he’s going to have to make a sacrifice and lead by example. Mr. Trump has so far indicated that he will keep his business empire but turn over management to his children, and therein lies political danger.

Mr. Trump has for decades run the Trump Organization and during the campaign said if he won the Presidency he’d turn over the keys to Donald Jr., Eric and Ivanka, all of whom are now serving on the Trump transition. A company spokesperson says the family business is “in the process of vetting various structures” and that the ultimate arrangement “will comply with all applicable rules and regulations.”

Some of Mr. Trump’s lawyers have called the plan a “blind trust,” which past Presidents have used to protect their assets from the appearance of conflicts-of-interest. But that set-up typically involves liquid assets like bonds and stocks, not buildings or a branding empire. Mr. Trump will know how any given decision will affect, say, the old post office property in Washington, D.C. that he’s leasing from the federal government (another conflict). By law blind trusts are overseen by an independent manager, not family members.

The Journal is correct. I don’t know how Trump is going to do this but he has to.

Dick Cheney divested himself of millions of dollars in assets but was still vilified by the left.

Halliburton’s business with the military has grown substantially since Mr. Bush and Mr. Cheney took office. The company rose to seventh-largest military contractor in 2003 from 22nd-largest in 2000.

The contracts did not prove to be as profitable as executives had hoped, however, and accusations of political favoritism led to a public relations nightmare. On Thursday, Halliburton said it was considering selling its subsidiary that holds the contracts in Iraq.

Mr. Cheney’s financial disclosure statements from 2001, 2002 and 2003 show that since becoming vice president-elect, he has received $1,997,525 from the company: $1,451,398 in a bonus deferred from 1999, the rest in deferred salary. He also holds options to buy Halliburton stock.

Mr. Cheney’s critics concede that there is no concrete evidence that he has pulled any strings on Halliburton’s behalf. But he has refused to answer a request from Democrats in Congress that he provide an accounting of any communications he and his staff have had with Halliburton or actions they have taken on Halliburton contracts.

Trump will face this squared.

He needs to face the reality of Democrat dishonesty and do the prudent thing.

I have no idea how he will accomplish this.

Elijah Cummings, the ranking Democrat on the House Oversight Committee, is already calling for hearings about all of this. Trump and his party don’t need to worry much about that given how favorable the 2018 map is, but as we just found out last week, anything can happen in politics. If a nasty recession hits next year and Democrats end up winning back the House or Senate, all of these conflicts will be explored at length in congressional inquiries in 2019.

Cummings is despicable but those are the people who will harass Trump and try to destroy his presidency. He must anticipate this.

Mr. Trump’s best option is to liquidate his stake in the company. Richard Painter and Norman Eisen, ethics lawyers for George W. Bush and President Obama, respectively, have laid out a plan, which involves a leveraged buyout or an initial public offering.

Mr. Trump could put the cash proceeds in a true blind trust. The Trump children can keep the assets in their name, and he can transfer more to them as long as he pays a hefty gift tax. Finally, Mr. Trump should stipulate that he and his children will have no communication about family business matters.

He needs to have someone working on this.

23 thoughts on “Trump and Conflicts of Interest.”

  1. He should do nothing. The WSJ is opposed to Trump and we can assume is not giving out advice in a spirit of friendship. This is just one way to hurt him, demanding he abandon his lifes accomplishments. Small and petty, but there you go. This is Pre-Trump thinking, when republicans apologised to the media for their existence. Handing off control to his family is perfectly adequate and he should continue to manage his business interests if and when necessary, within the acceptable ethical bounds. The left will attack him regardless of what he does. The left would slander Jesus if he was a republican. The answer is not to retreat and try to become a vanilla imitation of a real person, the answer is to fight. I hope Trump tells them to shove their opinion.

  2. Trump’s assets of hotels, golf courses, and media properties is not a significant conflict of interest. Trump should divest any contracts he has with the government and refrain from any new such contracts. That is all.

    The onerous requirement of divesting active assets of all types is a hypocritical attempt to disuade business people from running for President. “Win the presidency and exit your life’s work”. If we want any younger presidents with assets, say aged 50, then we should not have a rule which requires them to exit their former life. That is exactly the life we want them to go back to, not a career of inluence peddling.

    The real conflicts arise from what Hillary did. She used the decision power of the Secretary of State to get contributions to her wholly owned supposed charity.

    Congressmen and Senators currently: can front-run the real-estate decisions of the government; can trade stock on insider knowledge; and can arrange informal earmarks for their districts, even when these earmarks improve the value of their real estate holdings, business interests, and family member’s business interests. They all hope for a lucrative career peddling influence after leaving office.

    Put Bill, Hillary, Huma, John Podesta, et al in jail for their true, active roles in arranging income for government favors. Trump’s ownership of hotels is not significant if he is watched by an active press, as he should be. And, he should not be able to set up his own, private, hidden, communications system, as Hillary did.

    Michael Kennedy: “Dick Cheney divested himself of millions of dollars in assets but was still vilified by the left.” So, what use is the requirement for divestiture, when Trump will be villified by the left regardless of his investments or non-investments?

  3. Many months ago the economist magazine ran an article on his holdings and they were surprisingly Manhattan centric. In fact most of his wealth is simply a few miles radius around Trump tower. Perhaps that is an exaggeration but that was the gist of the article I got.

    As long as he puts it in a blind trust I don’t see any problem.

  4. This is pure faux-pious horsespit. There has to be some legal mechanism whereby he can yield management and personal ownership of any property or money of his that might run afoul of our apparently-no-longer-enforced conflict-of-interest laws. God knows neither Teddy Roosevelt nor the Clintons had to give up control of anything we know about, and they and every other moneyed clan to come into the White House were loaded.

    And even if he doesn’t, even understanding what precedent it may set, I don’t frigging care.

  5. Tony Blair and his wife set up a purported Blind Trust for his spell as PM. It was (of course) quite bogus. It turned out that his wife was instructing the trustees which investments they should make, including buying a flat for her son to live in. Blair was such a crook that financial crookedness was probably the least of his sins.

    It would surely be wonderful if Trump could turn the wealth issue, on which as you say he should act with propriety, against the Clinton and Obama Foundations.

  6. I’m sure he has a whole legal team working on this and will follow their advice. I doubt that he will simply sell everything. He wants his name on things as his, his father’s, and his family’s legacy…..and deservedly so.

  7. “Trump should divest any contracts he has with the government and refrain from any new such contracts. That is all.”

    I think the issues raised by the Journal, which I still think valid, have to do with Bank of China and Deutsche Bank loans.

    “I’m sure he has a whole legal team working on this and will follow their advice”


  8. Chris Wallace was just talking about this topic with Mike Pence on Fox News Sunday.

    I don’t think it will go away if Trump just tells the Democrats he is doing nothing about the issue.

    I agree that businessmen and women have an issue on how to deal with this.

  9. The suggestion of the WSJ would force Trump to liquidate his investments in a “fire sale” atmosphere – patently unfair. I have no idea in what type(s) of entity structure(s) he holds his investments, but suspect that it’s all far more complicated that just saying “liquidate it.” He may hold his interests jointly with others in the family and/or with independent third parties. If held with others, then altering the ownership allocations at such a time and in such a way that the value of others’ holdings might be affected would be unfair to those other owners, as well as to him.

    I guess I’d be kind of surprised if Trump still, before his campaign, participated in day-to-day operations, or even directly negotiating bank loans — he’s got people (his kids?) to do that, although [pure speculation, here] I can see him probably taking an interest in how things are going & being given regular reports. He won’t have time for any of that as president.

    Why should he be treated any differently than prior presidents? Appoint an independent third party with experience and credentials to oversee the investments in which he has a direct and/or indirect interest, and call it done. I’m sure it all will receive far more scrutiny than have the Clintons’ foundation issues…, and any improprieties discovered will for sure be headlined in the WSJ.

    Mr. Garland, the fourth paragraph of your comment should itself be printed as the WSJ masthead, as it cannot be repeated often enough: “Congressmen and Senators currently: can front-run the real-estate decisions of the government; can trade stock on insider knowledge; and can arrange informal earmarks for their districts, even when these earmarks improve the value of their real estate holdings, business interests, and family member’s business interests. They all hope for a lucrative career peddling influence after leaving office.”

  10. I agree with Mike, if he doesn’t there will no end of hostile press speculations about the relationship between administration decisions at all levels and the effects on his holdings. The lame stream may ignore the Hildabeast’s dealings which were obviously corrupt, but they will feast on any alleged self-enrichment connections of government actions and the Trump family. Like Mike, I don’t see a way out of this which would end this line of attack.

    Trump can take some pro forma actions to move himself out of the day-to-day operations of his business affairs, but the family connections will no doubt remain a big issue. Given his affection for his business, I’d guess he will count on just ignoring the issue for the most part and publicly attacking his detractors. I don’t think this is going away anytime soon. If one thought the drum beat of “Bush lied” was deafening, whatever the equivalent for Trump will register geometrically higher. While it might not convince a solid majority that he is corrupt, it will further polarize our country and make governing much more difficult for him and congress.


  11. Trump has a problem divesting, because unlike everyone else, he actually owns STUFF.

    Which USED to be a requirement to even vote, now it’s a detriment to serve.

  12. He owns so much stuff that he can be significantly benefited or harmed by a multiple of government actions in this age of the government as first resort. This expansive government is also the source of the rise and power of special interests in the political process as these interests seek decisions to their benefit and or to the detriment of their competition. In a sense Trump is potentially his own special interest.


  13. “they will feast on any alleged self-enrichment connections of government actions and the Trump family.”

    The foolish woman who now runs the “Center for American Progress,” named Neera Tanden was on Meet the Press being horrified that Trump could make a profit ! I’m not sure how he would do so as president but she was horrified.

    Podesta will probably go back and take it over again unless he goes to prison as part of the Clinton Crime Family.

    Maybe Trump should have Romney appointed as some sort of master of the trust. It would take someone with Romney’s smarts to figure the thing out, I expect.

  14. The founders never thought to dissolve their business’ when elected, because they new they would return to them after SERVING the country.
    It’s time we returned to that way of thinking, starting with term limits; Trump should NOT in any way discard his accomplishments.

  15. He should tell the WSJ and the MSM to shove it. No matter what he does, it will not be acceptable to them. He could give everything to Black Lives Matter and they would still criticize him. He needs to protect himself and his family’s future and the pundits be damned!

  16. Of course Trump’s not going to sell off his business. Handing them over to his kids should be good enough. And probably some sort of agreement that they won’t seek or accept any government contracts while he is president, which shouldn’t be an issue, I wouldn’t think.

    The danger to him of course is that the GOPe will gladly impeach him if given any excuse at all.

    I fully expect the NY AG to indict Trump for something or other sometime in the next 12 months.

  17. A Silly suggestion to liquidate his business, and obviously a Prog Idea. Trump is working for $1.00 a year as president. And now to the main question, How is a president going to get illegally rich manipulating world affairs to benefit a golf course or hotel? Sheesh! And with a net worth of 10 billion does any of this make any sense? Well maybe to a money grubbing Clinton.

  18. He should place any interest with a government contract above reproach,then say to hell with it, and his critics. This conflict demonstrates the exact problem we face and must change: the pervasiveness of government in every single aspect of our lives.

  19. The founders never thought to dissolve their business’ when elected, because they new they would return to them after SERVING the country.

    That would make a very good response for Trump. I think there will be a considerable effort by the left to portray this as the equivalent of the Clinton Crime Family,

    Some cosmetic separation will be necessary. He needs Kushner to help him govern. The children, especially the Trump brothers, should run the business.

  20. Did Washington sell off Mount Vernon? Jefferson, Monticello? Madison, Montpelier? LBJ, the LBJ Ranch or KLBJ radio station?

    I didn’t think so. Owning a real business, esp. one based on real estate, is fundamentally different from just being a speculator in fungible financial instruments.

    The Trump Organization should move to cancel or assign any contracts with the Federal govt and make clear it will not attempt to secure any federal contracts while Trump is President or for a year or 2 after he leaves office, nor will it undertake to secure any property rights from the federal govt for future projects. Trump may also issue an Executive Order prohibiting government employees from staying at Trump Organization or Trump-branded properties or scheduling conferences or events at same when suitable alternatives are available. Given the pricing a Trump’s hotels, this should not be a stretch, anyway.

    Maybe have Eric and Donald, Jr. run the business and not discuss business strategy with other family members.

    Beyond that, meh. He made a tremendous sacrifice in time, money and energy, to run for office, he should not have to sell his life’s work at fire sale prices.

    And the WSJ is clearly pursuing an anti-Trump agenda.

  21. “And the WSJ is clearly pursuing an anti-Trump agenda.”

    I’m not sure that is what is going on. I’m sure Democrats will try to use his business as a comparison to the Clinton Crime Family but one is open (although the tax returns might not be) and the Clintons are deep in corruption. Hillary’s brother might be an interesting choice for investigation since he seems to be deep in Haiti scandals.

    The Journal is no friend of Trump but they seem to be using the old playbook when we have obviously moved on as Taranto recognizes if not the whole editorial board.

    The Hill reports that Stephen Moore, an economic adviser to President-elect Trump, “surprised” some GOP lawmakers last week “when he told them they should no longer think of themselves as belonging to the conservative party of Ronald Reagan.” Instead Moore said, in the reporter’s paraphrase, that “they now belong to Trump’s populist working-class party.”

    In an interview, Moore (a former member of The Wall Street Journal’s editorial board) elaborated:

    “He wants to spend all this money on infrastructure,” Moore said, referring to Trump’s potentially trillion-dollar infrastructure package. . . .
    “I don’t want to spend all that money on infrastructure,” Moore said. “I think it’s mostly a waste of money. But if the voters want it, they should get it.”
    “If Trump says build a wall then he should build a wall. If Trump says renegotiate TPP [the Trans-Pacific Partnership trade deal], he should renegotiate TPP.” . . .

    Moore gets it. A lot of infrastructure can be built with private money. I drive on toll roads all the time since California quit building roads.

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