Since his election, an ever-increasing level of attention has been paid to the unprecedented conflicts of interest that President-elect Donald J. Trump seems likely to bring with him when he assumes office. His responses to the concerns have been varied and, at times, contradictory. His first statement on the subject, which came via Twitter, suggested that he would make little effort to avoid entangling his business and his office, and would instead attack those who point that out:
A few days later, in a conference with the editorial staff of The New York Times, he appeared similarly defiant, asserting, “The law’s totally on my side, the president can’t have a conflict of interest.”
The president-elect’s public stance since the election has been inconsistent at best and contradictory at worst. In an early-morning tweetstorm on November 30, Trump announced that he would be “holding a major news conference” on December 15 about a plan “being crafted which take[s] me completely out of business operations,” although he stressed again that he is “not mandated to do this under the law.” As the date approached, his spokeswoman announced that he would be delaying the press conference until January. Soon after, Monica Langley of The Wall Street Journal reported that the Trump Organization will not be selling off its global real-estate holdings; instead, Trump will be stepping down from his leadership role in his business empire and leaving it to his adult sons. However, as long as the president-elect retains a financial stake in the company, the move does not mitigate his many conflicts of interest. As such, several Senate Democrats, led by Elizabeth Warren, have drafted legislation aimed at forcing Trump to divest or face impeachment.
So far, the only indication that Trump may actually be distancing himself from his financial holdings is that, on December 6, Trump and his spokesman Jason Miller announced that Trump had sold off his stocks in June. However, neither provided any evidence of the sale, and considering the president-elect’s history of questionable or downright false statements regarding his finances—see, for example, David Fahrenthold’s months-long, exhaustive debunking of Trump’s claims regarding his charitable giving and namesake foundation—the claim remains suspect. Until proof of the transaction has been established, such as by releasing broker records, this article will proceed based on his FEC filings, which remain the most recent documentation of his financial holdings.
Central to the discussion is that, as Trump has repeatedly pointed out, the president and vice president are exempt from the Office of Government Ethics’ rules preventing conflicts of interest within the executive branch. More recently, attention has shifted to the Emoluments Clause, a relatively obscure section of the Constitution barring the chief executive from receiving gifts from foreign governments, which numerous experts say Trump might violate if his properties receive preferential treatment from other world leaders. However, case law on the clause’s possible application is sparse.
At any rate, legality does not imply propriety. Unless Trump acts to put appropriate distance between himself and his business ventures, these questions are likely to continue throughout his time in the Oval Office. Below is an attempt to catalogue the more clear-cut examples of conflicts of interest that have emerged so far; the most recent entries appear at the top.
- Those Indonesian Politicians
- That Emirati Businessman
- That Virginia Vineyard
- That Las Vegas Labor Dispute
- That Kuwaiti Event
- Those Certificates of Divestiture
- That Carrier Deal
- That Blind-Trust Issue
- Those Fannie and Freddie Investments
- That Phone Call With Taiwan
- That Deutsche Bank Debt
- That Secret Service Detail
- That Property in Georgia (the Country)
- That Phone Call With Erdogan
- That Hotel in Washington, D.C.
- That Argentinian Office Building
- Those Companies in Saudi Arabia
- That British Wind Farm
- Those Indian Business Partners
- That Envoy From the Philippines
Those Indonesian Politicians
Despite President-elect Donald Trump’s assurance that he has stopped pursuing deals since the election, his namesake organization is currently moving forward with a pair of projects in Indonesia. According to The New York Times, the two properties that will bear the Trump name, one overlooking a Hindu temple in Bali and the other abutting a theme park in West Java, presented ethical problems even before the election.
To begin with, through his Indonesian partner on the projects, the billionaire media mogul Hary Tanoesoedibjo (known in Indonesia as Hary Tanoe), Trump has forged relationships with several top Indonesian politicians. One such leader is Setya Novanto, the speaker of the country’s House of Representatives who temporarily lost his post for trying to extort $4 billion from the American mining company Freeport-McMoRan (a company which counts Carl Icahn, who will be serving as a special adviser in Trump’s administration, among its largest shareholders, and which has been frequently criticized by labor advocates and environmentalists). Trump had lunch with Novanto and several other Indonesian politicians during the campaign in September 2015 to discuss the Trump Organization’s planned expansion into Indonesia. At a post-luncheon press conference, Trump pulled Novanto in front of the cameras, calling him “an amazing man” and “one of the most powerful men” and asserting, “we will do great things for the United States.” (It is unclear exactly whom Trump meant when he used the word “we.”) Trump then asked Novanto to confirm that “they like me in Indonesia,” which Novanto did.
Another of the politicians who attended the lunch with Trump is Fadli Zon, the vice chairman of Indonesia’s House of Representatives, whse district includes one of the cities in which one of the Trump-branded properties will be built. According to the Australian Broadcasting Corporation, Zon is associated with a political movement seeking to unseat and jail the current governor of Jakarta, Basuki Tjahaja Purnama, also known by his nickname, Ahok, and has spoken at rallies against Ahok. The anti-Ahok movement is rooted partly in centuries of ethnic tension within the country: Ahok is both Christian, which has made him the target of attacks by hardline clerics claiming to represent Indonesia’s Muslim majority, and a member of the country’s historically oppressed Chinese minority, which was the target of a massacre in 1998. Aside from an interim governor appointed half a century ago, Ahok is the first governor of Jakarta to fall into either category, and is currently on trial for blasphemy for allegedly insulting the Koran, although Ahok’s supporters claim that it is Ahok’s accusers who are guilty of blasphemy for denigrating Ahok’s Christianity.
Both Trump’s question to Novanto and Zon’s presence at the meeting underscore another difficulty the president-elect introduces into the United States’ relations with Indonesia. Indonesia is both the largest predominantly Muslim country in the world and the nation with the largest population of Muslims. Novanto received significant blowback for his statement that, yes, Indonesians do like Trump, because it turns out that, no, many Indonesians don’t like Trump, in large part because of his on-again, off-again proposal to ban Muslims from immigrating to the U.S.; in fact, faced with mounting criticism, Novanto’s party apologized not only for Novanto’s statement but also for his mere attendance at the luncheon. Since Trump’s victory, both Novanto and Zon have stood up for the president-elect, arguing that Trump’s hardline stance toward Muslim immigration was merely campaign rhetoric and not actually reflective of the president-elect’s own beliefs, something Novanto claimed Trump personally assured him was the case.
Regardless, it is clear that the Trump Organization’s planned expansion into Indonesia—which, again, is the reason Trump met with Novanto and Zon in the first place—could introduce major complications into the relationship between the president-elect and the political leaders of the world’s largest Muslim country, not to mention a significant trade partner and an important ally in the South China Sea region.
As if that weren’t enough, Tanoe himself has shown increasing interest in becoming involved in Indonesian politics. In 2014, Tanoe publicly supported the retired general Prabowo Subianto in the nation’s presidential election; Subianto lost to the country’s current leader, Joko Widodo. Then, in 2015, he helped found a new political party, the United Indonesia Party, or Partai Perindo, which intends to field candidates for national office in the near future, including Tanoe himself: Shortly after The New York Times reported on the project, Tanoe told the Australian Broadcasting Corporation that, “If there is no one I can believe who can fix the problems of the country, I may try to run for president.” If Tanoe does so, it will create the possibility that Trump will be dealing with a head of state with whom he has shared business interests, which, as Richard Painter told The New York Times, “makes it impossible to conduct diplomacy in an evenhanded manner”—especially considering that, after Trump’s election, stock in Tanoe’s company rose significantly. Moreover, Tanoe, like Ahok, is both Christian and ethnically Chinese, which some insiders consider an obstacle to his electoral chances, although Tanoe argues that it is not Ahok’s religion but his lack of firm leadership that has led to the large-scale protests against the governor. Nevertheless, if Tanoe does choose to run for office, it is difficult to see how his race, religion, and business partnership with a president-elect many see as blatantly Islamophobic could do anything other than create further difficulties both within Indonesia and in the country’s relationship with the U.S..
That Emirati Businessman
Though the biggest controversy over the New Year’s Eve celebration at Mar-a-Lago, Trump’s Florida estate, was apparently whether or not Joe Scarborough could accurately be described as having “partied” there, video footage taken by a guest and obtained by CNN the next day brought renewed scrutiny to President-elect Donald Trump’s own presence at the event. During a 10-minute speech given in front of the party’s 800-odd attendees, Trump praised his Emirati business partner Hussain Sajwani and Sajwani’s family, saying, “The most beautiful people from Dubai are here tonight, and they’re seeing it and they love it.” CNN identifies Sajwani as a “billionaire developer in Dubai” who has “paid Trump millions of dollars to license the Trump name for golf courses in Dubai.” Trump’s spokeswoman, Hope Hicks, defended the remarks by clarifying that the president-elect and Sajwani “had no formal meetings of professional discussions. Their interactions were social.”
Whether or not Hicks’s statement was true, Trump’s commendation of Sajwani is part of a pattern in which the president-elect praises his business partners in ways that suggest he has little interest in extricating himself from his company’s interests. Previously, he has name-dropped business partners in Turkey and Argentina while on official calls with the countries’ leaders; he also met, and took photos, with associates from India shortly after the election. Moreover, as with several of the countries in which Trump-branded buildings are located, the United Arab Emirates has a questionable record on human rights; Human Rights Watch specifically states that the nation “uses its affluence to mask the government’s human-rights problems.”
By singling out Sajwani, Trump also runs headlong into accusations that he and his family are selling access to his administration through their organization and family foundations. According to Politico, tickets to celebrate with the president-elect at Mar-a-Lago, went for upwards of $500; the stated attendance of at least 800 people means that the Trump Organization made at least $400,000 off of ticket sales for the event. (There is no indication that the party was a fundraiser for any outside organization, such as a charity or campaign fund, as is often the case when politicians attend such an event.) Whether or not the president-elect sees it as such, the event offered attendees the opportunity to be in the same room as Trump and bend his ear for a price. This follows consternation regarding an auction for a face-to-face meeting with Trump’s daughter, Ivanka, and a charity event that offered a reception with the president-elect and a hunting trip with his two sons, both of which have since been cancelled, as well as ongoing speculation that foreign entities will attempt to curry favor with Trump by booking rooms and events at his hotel in Washington, D.C. That Trump singled out Sajwani at the New Year’s Eve party lends credence to these concerns—it’s an instance of someone receiving the president-elect’s attention simply by buying a ticket to one of his events.
That Virginia Vineyard
Among the dozens of properties President-elect Donald Trump owns is Trump Vineyard Estates and Winery in Charlottesville, Virginia, the source of his namesake wine. Since Trump was elected, the property has requested temporary H-2A visas for six foreign workers, according to The Washington Post. The visas, which are administered by the Citizenship and Immigration Services wing of the Department of Homeland Security, allow businesses to temporarily hire foreign, unskilled workers provided that the employer proves that there are not enough domestic candidates to fulfill a one-time or seasonal shortage and that the hiring will not depress wages for U.S.-born employees. Trump, of course, will be in charge of appointing a new Secretary of Homeland Security once he assumes the presidency, which gives Trump authority over the very department responsible for deciding whether to grant the visas that the vineyard has requested. His current nominee, retired general John Kelly, has a relatively scant track record when it comes to immigration, leaving open the question of how much influence Trump himself will have over the DHS’s policy on the matter.
On top of the fact that Trump will soon be able to influence the outcome of the request, that his organization has continued to request visas after his election underscores a tension in the president-elect’s stance on immigration. From the moment that he announced that he would be running for president, Trump made antagonism toward immigration the central aspect of his campaign, arguing that both legal and illegal immigrants are taking jobs that should be filled by native-born Americans and depressing wages for others. Though he did not specifically single out the H-2B visa, the president-elect has on multiple occasions spoken critically about the H-1B program, which enables employers to temporarily hire foreign workers for skilled jobs like those in the tech industry.
But the Trump Organization has long been a beneficiary of immigrant labor. For example, according to a Reuters report from August 2015, nine companies of which Trump is the majority owner have requested at least 1,100 foreign visas since 2000. The majority of these requests were from Trump’s Mar-a-Lago Club in Florida, which has requested at least 787 foreign visas since 2006, including 70 applications in 2015. (Meanwhile, The New York Times reported that, since 2010, only 17 of the nearly 300 domestic applicants for positions at the Mar-a-Lago have been hired.) The Trump Organization also famously may have benefited from illegal immigration: There is significant evidence that many of the Polish construction workers at the Trump Tower construction site in New York in 1980 were in the country illegally. In other words, Trump’s track record includes not just taking advantage of the very visa process he claims to abhor but also actually subverting existing law for his own profit. Now, by applying for visas for his vineyard, Trump is signaling that he expects that his business will continue to be able to profit from one of the very immigration programs he continually denounces.
That Las Vegas Labor Dispute
On top of owning various properties and enterprises, Trump and his company employ roughly 34,000 people, according to an analysis by CNN. On December 21, several hundred of those workers resolved a labor dispute against the president-elect—one in which, had it continued for even a few weeks more, Trump would have had the unprecedented power to make appointments to affect its outcome.
Here’s the situation: In October 2015, several hundred employees, primarily housekeeping staff, at the Trump International Hotel in Las Vegas voted to join the local branch of the Culinary Workers Union. Trump Ruffin Commercial LLC, which owns the hotel and is itself owned by Trump and the casino magnate Phil Ruffin, contested the vote, first by enlisting an anti-union consulting firm (for whose services it paid $500,000) and then by filing complaints with the National Labor Relations Board (NLRB). Shortly before the election, the NLRB not only rejected Trump and Ruffin’s complaints but also found that, because the pair had refused to negotiate with the nascent union, they had violated federal law and their hotel was operating illegally. Trump and Ruffin have since appealed to the U.S. Court of Appeals for the District of Columbia.
On December 21, more than a year after the hotel’s workers first voted to join the union, the workers announced that they arrived at their first first collectively-bargained contract, achieved, according to an employee quoted in ThinkProgress, despite significant pressure from ownership that attempting to unionize would cost workers their jobs. According to the union, the new agreement “will provide the employees with annual wage increases, a pension, family health care, and job security” comparable to that of other Las Vegas hotels. Moreover, the Culinary Workers Union’s parent organization, UNITE HERE, has reached an agreement to represent workers at Trump’s recently-opened hotel in Washington, D.C.
Although this dispute has been resolved, it is included here because it exemplifies the type of situation in which Trump’s business interests are likely to overlap with his duties as president. Once he assumes office, Trump will be tasked with appointing members to fill current openings on the NLRB, the very body that ruled against him shortly before the election and will be tasked with resolving any future disputes between the hotel’s owners and its employees. Moreover, as Slate noted, the chief justice of the D.C. Court of Appeals is none other than Merrick Garland, whose nomination to the Supreme Court has spent months languishing in the Republican-controlled Congress and will likely be withdrawn once Trump becomes president. Finally, if disputes of this nature go beyond the Court of Appeals, the case would go to the Supreme Court, to which Trump will be appointing a justice once he assumes office, which is expected to tip the balance decisively in a more conservative (and likely anti-union) direction. In other words, no matter how far up the chain future disputes of this nature go, Trump’s presidency will give him new power to influence the results.
That Kuwaiti Event
According to an anonymous source and documents obtained by ThinkProgress, representatives from the Trump Organization pressured the ambassador of Kuwait to hold its embassy’s annual celebration of the country’s independence at the Trump International Hotel in Washington, D.C. The event, held annually on February 25, was originally scheduled to take place at the Four Seasons Hotel in Georgetown; the location was allegedly changed after members of the Trump Organization contacted the country’s ambassador. ThinkProgress’s source “described the decision as political,” suggesting that the embassy chose to relocate the event in an effort to curry favor with the president-elect. The Kuwaiti ambassador has since disputed the report, telling The Washington Post that he had not been contacted by the Trump Organization and that the move “was solely done with the intention of providing our guests with a new venue.”
If ThinkProgress’s account is correct, Kuwait’s decision represents an escalation of a situation that has been developing since Trump’s election. The Trump International Hotel has been the subject of continual scrutiny for the conflict of interest it poses, in part because its lease explicitly bars elected officials from holding it, but mainly because Trump’s ownership of the hotel will almost definitely result in a violation of the Emoluments Clause, which prohibits the president from receiving payments from foreign powers—something that will arguably be happening any time a foreign government books a room at the hotel. Already, the hotel has begun advertising itself as a destination for diplomats and dignitaries, and the embassies of Azerbaijan and Bahrain have both scheduled events in the building. However, before the ThinkProgress report, there was no evidence that the Trump Organization had individually reached out to a foreign government in hopes of getting it to relocate an event to the hotel.
Those Certificates of Divestiture
In addition to the many possibilities for President-elect Trump to pursue his financial interests in office, the unique makeup of his cabinet also creates a new set of financial motivations. While Trump’s own fortune automatically makes his administration the wealthiest in history, he has also surrounded himself with an unprecedented collection of billionaires and multi-millionaires whose investments are likely to also come under scrutiny.
Unlike the president-elect himself, those who are up for Trump’s cabinet, such as his proposed Secretary of the Treasury Steven Mnuchin and Secretary of Education Betsy DeVos, will be legally obligated to divest from any holdings which may pose a conflict of interest. However, as The Washington Post noted, even selling off their holdings offers an opportunity for Trump’s cabinet members to enhance their fortunes.
A federal program known as a “certificate of divestiture” allows executive-branch appointees and employees to avoid capital-gains taxes when selling their assets. The program has existed since 1989, and most recently received attention when President George W. Bush appointed Hank Paulson, then the chief executive of Goldman Sachs as his Treasury Secretary in 2006. Paulson was forced to sell off $700 million in shares of the bank; the certificate of divestiture enabled him to avoid a potential $200 million in capital-gains tax liability. According to The Washington Post, the Office of Government Ethics is currently researching whether the president-elect himself would qualify for the tax break; even if he doesn’t, the unprecedented wealth of Trump’s cabinet promises to push this provision, and the financial incentives it creates, to the limit.
That Carrier Deal
One of President-elect Donald Trump’s first major economic moves as president-elect was the deal that he and Vice President-elect Mike Pence struck with the air-conditioner manufacturer Carrier, which had planned to move 2,100 jobs from its Indiana plant to Mexico. Finalized on November 29, the compromise kept 730 of the plant’s jobs in Indiana in exchange for $7 million in tax breaks over 10 years. The deal immediately attracted praise and criticism on both sides of the aisle, with much of the scrutiny going toward the tradeoff between jobs and tax breaks and Trump’s idiosyncratic, ad-hoc negotiation techniques.
An additional detail soon emerged regarding the deal: According to his FEC filings (which, despite Trump and his spokesman Jason Miller’s unverified statements that the president-elect sold off his stock in June, remain the most recent public record of the president-elect’s finances), Trump holds stock in Carrier’s parent company, United Technologies. In 2014, his investment in the company was between $100,001 and $250,000, while in 2015, the stock is listed as worth less than $1,001, which could indicate that he sold some or most of the stock; each year, his holdings earned him between $2,500 and $5,000.
The paucity of information in the FEC filings makes it difficult to ascertain why his holdings appear to have decreased; regardless, the investment is not only one of several hundred but also a relatively minor one among Trump’s many holdings, some of which are worth over $5,000,000. As a result, it’s difficult to know how much, if at all, Trump may have considered the stock, particularly considering that he didn’t appear to remember his initial promise to save the Carrier plant. Additionally, Trump does not have stock in the next company he called out on Twitter, Rexnord Corporation (which is also based in Indiana), or its parent company, The Carlyle Group. Still, Trump’s deal with Carrier demonstrates the unprecedented challenge the president-elect’s conflicts of interest create: Unless he either puts his holdings in a truly blind trust or divests completely, a significant number of the decisions he makes will involve some level of financial incentive for himself as well as for the country.
Over the past few months, a number of experts have called for President-elect Donald Trump to either sell off his business holdings or, if the illiquidity of his assets prevents him from doing so, to put as much as possible into a blind trust managed by a lawyer or other trustee with whom he will have no contact. Pursuing one of these two options is seen by many as an important step to distancing himself from even the appearance that he will be considering his own financial prospects in addition to those of the nation while in office. In response, Trump repeatedly said during the campaign that he intends to cede control of his business to his three adult children, Donald Jr., Ivanka, and Eric, although, as has been previously noted, doing so would barely even create the appearance of a blind trust given how his children are close advisers, members of his transition team, and, well, his children. (Trump has also alluded on Twitter to an upcoming press conference in which he intends to more fully explain his plans, although doubts remain that the arrangement he proposes will actually create the necessary barriers between Trump and his business.)
Moreover, even if one does take take the president-elect at his word that his children will be entirely separate from his administration, events since his election strongly suggest otherwise. All three have been seen in contexts that significantly diminish the appearance of separation Roughly two weeks before the election, Donald Jr. met with a pro-Russian group in Paris to discuss his father’s policy toward Syria and, according to Politico, was involved in his father’s search for a Secretary of the Interior; he was also spotted hunting in Turkey shortly after his father’s phone call with Turkish President Recep Erdogan in which the president-elect praised a Turkish business partner. Eric, meanwhile, appeared in photos with his father and a group of Indian businessmen mere days after the election. Officials within the State Department have begun to express frustration with the optics of the Trump family’s current system.
Much of the focus, though, has been on Ivanka, whom many consider to be among her father’s most trusted advisers, and the various ways she has indicated that she will remain a part of both the family business and her father’s administration. Ivanka also appeared in the photos with the family’s Indian business partners, and she and her husband Jared Kushner—also one of Trump’s advisers—sat in on a meeting between the president-elect and Japanese Prime Minister Shinzo Abe; reports later emerged that, at the time, Ivanka was in negotiation with the Japanese apparel company Sanei International, whose parent company is owned in large part by the Japanese government. A number of outlets have reported that, while Melania Trump will be the official First Lady, Ivanka plans to assume a policy portfolio akin to that of previous first ladies; one issue she apparently plans to take on is climate change, on which she recently met with her father and former Vice President Al Gore. Even the optics of physical distance are diminishing: According to CNN, Ivanka and Jared plan to move from New York to Washington, D.C. once the Trump administration begins. That the president-elect’s children appear involved in both the Trump administration and the Trump Organization presents a major threat to the long-established norm that presidents should distance themselves from business interests that could interfere with their official duties.
Finally, removing himself from day-to-day operations will do little to change the fact that Trump will retain substantive knowledge of the illiquid assets involved in his business, such as the numerous buildings and other products that bear his name, especially if he remains in frequent contact with his children. Even assuming that Trump does separate himself from any consideration of his holdings, his children will still likely be major players in the family’s organization, which will still bear at least the Trump name—arguably one of their most valuable properties, as much of the family’s wealth derives from licensing the name to third-party companies. Given the family’s oft-touted brand-consciousness (Ivanka, for example, briefly appeared to be distancing herself from the campaign, and several properties considered rebranding under the name “Scion” when it appeared Trump would lose), the situation epitomizes the way Trump’s, and his family’s, business interests may very well prove inextricable from his actions as president.
Those Fannie and Freddie Investments
After railing against elites during the campaign, Trump has so far stocked his prospective cabinet with an array of billionaires whose policy positions seem likely to significantly benefit those who are also doing very well. Trump’s putative treasury secretary, Steven Mnuchin, is no exception: His resume includes stints as a banker at Goldman Sachs, a Hollywood producer, and the operator of a bank that has been described as a “foreclosure machine” and once foreclosed on a homeowner over a 27-cent discrepancy.
One of Mnuchin’s apparent beliefs is that the government should cede control of the mortgage guarantors Fannie Mae and Freddie Mac, which the government acquired during the 2008 financial crisis. The two financial institutions’ stocks rose by more than 40 percent after Mnuchin stated that he believes the Trump administration “will get it done reasonably fast.”
Doing so would be broadly compatible with Trump’s general antipathy toward regulation of the banking industry. However, The Wall Street Journal identified an additional wrinkle to the story: When Fannie Mae and Freddie Mac’s stocks rose, one major beneficiary was John Paulson, an adviser to the Trump campaign and a business partner of Mnuchin’s. Paulson’s hedge funds include significant investments in both Fannie and Freddie. Trump himself has invested between $3 million and $5 million across three of Paulson’s funds, according to his filings with the Federal Election Commission (which remain the only available window into the president-elect’s financial holdings). In other words, as Fannie Mae and Freddie Mac’s stock prices increase—and they have so far more than doubled since the election on the expectation that the
That Phone Call With Taiwan
When news first emerged that the president-elect spoke on the phone with Taiwanese President Tsai Ing-wen on December 2, the immediate reaction was uproar over his apparently impetuous breach of decades of U.S. protocol toward China and Taiwan. As my colleague David Graham explained, since 1979, the United States has participated in the “artful diplomatic fiction” of officially recognizing the mainland People’s Republic of China as the only legitimate Chinese government while maintaining loose, unofficial recognition of—and significant economic and military ties to—Taiwan. That Trump would speak to the president of Taiwan, especially before doing the same with Xi Jinping, the president of the PRC, flies in the face of a diplomatic tradition that has undergirded almost 40 years of U.S.-China relations.
Amid the days of dissembling that followed the phone call, an additional worrisome detail came out: The Trump Organization has apparently been exploring expansion into Taiwan. Soon afterwards, the Trump Organization denied that it planned to do so; however, even before the controversy arose, the mayor of Taoyuan, Taiwan, the municipality in which the Trump Organization allegedly wants to build, described in a televised interview a meeting with a representative of the Trump Organization in September to discuss prospective real-estate projects, and at least one Trump employee was found to have posted on Facebook that she was in Taiwan at the time on a business trip.
The phone call, and the many statements that have followed, are of particular interest because of the extent to which they dovetail with some of the biggest concerns about Trump’s approach toward governance. In the ensuing 48 hours, Republican officials offered several, sometimes entirely contradictory, explanations of what initially appeared to be an impulsive move by Trump; depending on who was speaking, the phone call was actually initiated by Ing-wen (which, if technically true, ignores that it was Trump’s staff who arranged the conversation), was just “a courtesy,” or manifested a policy shift weeks in the making—although, regardless, it was made without first consulting the White House or State Department. The defense of the move, and the questions it creates regarding conflicts of interest, have largely hinged on the belief that, since voters apparently don’t mind, the reaction was overblown.
On this issue, though, whether or not voters care is immaterial to the central question. The president-elect of the United States breached decades of international protocol created to preserve a precarious balance of power. That decision raised not only the possibility that Trump was blundering into a potential international incident but also that he may have done so in part out of consideration for his business prospects.
That Deutsche Bank Debt
Though he often brags about leveraging corporate-finance law to become “The King of Debt,” Trump’s numerous bankruptcy filings have left most large Wall Street banks reticent to lend to him, according to The Wall Street Journal. Among the few exceptions is Deutsche Bank, which “has led or participated in loans of at least $2.5 billion” to the president-elect since 1996, with at least another $1 billion in loan commitments to Trump-affiliated companies; more than $300 million of those loans have come since 2012.
The president-elect’s indebtedness does not itself pose a conflict of interest, but Deutsche Bank’s ongoing legal troubles very well might. The Justice Department is currently negotiating with Deutsche Bank regarding a preliminary settlement of $14 billion to resolve probes into allegedly misleading predatory lending practices in the leadup to the 2008 financial crisis; while it is believed that Deutsche Bank will push back against the sum, there has been no public news regarding negotiations since the initial figure was reported in September. Trump will soon be naming many of the officials with jurisdiction over this and other deals, prompting several House Democrats to send a letter to federal financial agencies calling for close scrutiny of how Trump may seek to influence the settlement through his appointments—although doing so would be just as in keeping with his general stance toward financial regulation as with active protection of his pocketbook. Other Democrats have called for the proactive appointment of independent prosecutors to avoid any appearance of conflict if the case is not resolved before Trump takes office.
Fears that Trump may unduly consider his indebtedness to Deutsche Bank in deciding his administration’s policy toward the financial sector go beyond general anxiety about deregulation. Deutsche Bank is undergoing a period of struggle that may have it on the verge of failure already. Its stock valuation has dropped by more than half since July 2015; in January, it posted its first full-year loss since 2008; and one of its many tranches of bonds—one specifically designed to be a high-risk, high-reward safety valve in times of trouble—has recently begun to crash. In June, the International Monetary Fund called Deutsche Bank “the most important net contributor to systemic risks” among globally important financial institutions. If the bank were to fail, it could have major consequences for not only Trump’s businesses, which would lose their sole remaining lender, but for the global economy as well.
Arguably, the $14 billion fine the Justice Department is seeking to impose has exacerbated rather than alleviated these struggles. Based the company’s market capitalization—the number of shares multiplied by their price— of roughly $16 billion, the sum would leave Deutsche Bank critically low in liquid assets with which to absorb future troubles. although the institution’s own self-valuation of $68 billion argues otherwise. But given the complexity and potential volatility of the situation, it is important for any decision to be free from outside influence, something Trump’s outstanding debt threatens to jeopardize.
That Secret Service Detail
During the election, the Trump campaign put no small portion of its funds toward paying for use of the candidate’s own properties; perhaps the most notable of these expenditures was the nearly $170,000 the campaign spent in July on rent for its headquarters in Trump Tower. These expenses raised the possibility that, as Trump predicted in 2000, he “could be the first presidential candidate to run and make money on it.” Now that he will be president, he may be able to profit off of the Secret Service by virtue of the fact that he and his family will live in Trump Tower and fly in his private jets—which requires the agents tasked with guarding them to pay him rent and airfare.
The first way Trump could monetize his own protective detail is by having family members travel in his two planes and three helicopters. This is not so much speculative as foregone: Over the course of the campaign, the Secret Service, which traditionally pays for its own travel during elections, spent $2.74 million to fly on a plane owned by one of Trump’s own companies. Once Trump takes office, he will fly exclusively on Air Force One, while Mike Pence will be riding Air Force Two. However, their families may still be flying on Trump’s private planes—along with their protective details, which would effectively direct even more money to Trump. (Previous first families have flown with a detail, whose legal purview covers “the immediate family members,” but none have done so on planes they themselves own.)
A bigger question regards Trump Tower in New York, where the president-elect appears likely to spend a significant amount of time. For the past few decades, it has been common practice for the Secret Service to provide protection for the president and vice president’s non-White House residences, which sometimes entails paying rent to the officeholder. (Joe Biden, for example, received $2,200 per month when the agency rented a cottage he owned near his home in Delaware.)
But Trump Tower is a unique case, as it’s not in Delaware but the middle of Manhattan. Already, pedestrians and tourists are chafing at the increased security around the building, Trump’s frequent use of which has required closing a block of 56th Street and multiple lanes of Fifth Avenue; with multiple outlets reporting that Trump’s wife Melania and 10-year-old son Barron are expected to stay at Trump Tower for at least part of his term, it appears that the consternation will continue, with an enormous price tag for taxpayers: According to the New York Post, it could cost as much as $3 million a year to rent out two of the building’s vacant floors, meaning that Trump will be making money off of his own security detail. Meanwhile, Reuters has reported that the city of New York is calling for federal funds to reimburse the costs of keeping up a security detail around Trump Tower.
This system creates an unusual set of conflicting interests for Trump regarding his own travel and residences. Though presidents as disparate as Dwight Eisenhower and Barack Obama have evoked partisan ire over time spent away from the White House, whether on the golf course or on vacation in Hawaii, only Donald Trump will actually have gained from his and his family’s travels. And if, while in office, Trump visits properties he owns other than Trump Tower—his buildings in other U.S. cities like Chicago and Miami, for example, or his golf course and resort in Scotland, or one of the many international hotels bearing his name—he stands to gain from the stays for which his security detail (and, by extension, taxpayers) may be paying. Moreover, the more his family members fly on his planes, whether they are running his business on his behalf or running interference with foreign leaders, the more the Secret Service will end up paying for seats alongside them.
In fact, there are already signs that the Trump Organization has no qualms about making money off of the New York tower’s new security arrangements in more ways than one. According to Politico, just five days after the election, a prominent New York real-estate firm invoked Trump Tower’s new secret-service detail as a selling point for a $2.1 million condominium, which it described as “The Best Value in the Most Secure Building in Manhattan.” Though the flier was issued by an outside agency, the president-elect’s corporation still stands to benefit from increased traffic through processing and other service fees, making the advertisement a clear example of how Trump stands to benefit off of his new position.
That Property in Georgia (the Country)
Trump’s election has had the effect of speeding up development on a number of his branded properties, even when the president-elect appears not to be pulling any strings himself. As occurred with Trump Tower Buenos Aires, the completion of an embattled Trump-branded building in the former Soviet republic of Georgia is no longer on hold now that Trump has won. The project, which has been in the works in the seaside resort city of Batumi since 2010, was initially scheduled to break ground in 2013, but has been in stasis for several reasons, possibly including the 2013 electoral defeat of President Mikheil Saakashvili, a friend of Trump’s and a supporter of the deal.
According to a report in The Washington Post, the green-lighting of the Trump property in Batumi has not been linked to a specific conversation with Georgian leaders, and a U.S.-based partner on the project has suggested that it has moved forward without any nudging from the government. However, numerous public statements in the days since suggest that Trump’s election was a major factor, including an interview with a real-estate entrepreneur who said, “Cutting the ribbon on a new Trump Tower in Georgia will be a symbol of victory for all of the free world.”
That the property seems to be moving forward solely because Trump was elected suggests his various business interests around the world may play a role not only in his foreign policy but in how other countries seek to deal with the U.S. as well. America’s relationship with Georgia is largely shaped by concerns about Russian influence and potential aggression in the region, most recently manifested in Russia’s 2008 seizure of two regions of Georgia, South Ossetia and Abkhazia. With controversy already swirling over Trump’s admiration for Putin and Russia’s alleged role in the U.S. election, some in the foreign-policy community have expressed trepidation that Trump’s potential deferential attitude toward Russia
would prove deleterious for the continued independence of former satellite nations like Georgia. So, if Georgia has an ulterior motive behind the approval of Trump’s property in Batumi, it would be to keep Russia at bay and maintain the status quo in the region. It’s alarming that a country like Georgia may be giving Trump’s businesses favorable treatment (whether he asked for it or not) in an attempt to influence his foreign policy.
That Phone Call With Erdogan
One of the worries regarding Trump’s many conflicts of interest is that they may influence policy towards countries whose relationships with the U.S. are currently strained. Such is the case with Turkey, whose president, Recep Erdogan, has been cracking down significantly on civil liberties and democratic institutions within the country after a failed coup last summer. Though Turkey has in the past been a vital U.S. ally as a bulwark against Islamic terror, Erdogan’s authoritarian turn and combative stance toward Europe have led to some reevaluation of that relationship.
Thus, it was troubling news that when Erdogan phoned Trump earlier this month—it was one of the first calls Trump received after his victory—Trump used the opportunity to plug his business partners in Istanbul. According to the Huffington Post, while on the line with Erdogan, Trump relayed praise for the leader from Mehmet Ali Yalcindag, whose father-in-law, Aydin Dogan, owns the holding company that operates the Trump Towers in Istanbul. Dogan has previously drawn Erdogan’s ire by criticizing the leader; in recent years, however, Dogan’s companies, most notably CNN Turk, have shown support for Erdogan’s regime, including broadcasting his first message after the uprising in July.
Trump’s conversation with Erdogan is also worth noting because of a number of Trump’s previous statements regarding the Turkish president. Though Erdogan briefly called for Trump’s name to be removed from the Istanbul property due to his proposed ban on Muslim immigration, Erdogan dropped the demand when, after the overthrow attempt, Trump praised Erdogan for “turning it around” and essentially dismissed concerns over Erdogan’s crackdown on civil liberties by bringing up domestic problems. Michael Flynn, who was recently named Trump’s national security adviser, wrote an election-day op-ed in The Hill arguing against offering asylum to a Muslim cleric whom Erdogan has accused of orchestrating the uprising, which some have interpreted as a diplomatic overture. Erdogan has also bristled at post-election protests in the U.S. and the description of both himself and Trump as part of a “ring of autocrats.” That the two are now talking about their countries’ relationship as in the same conversation as Trump’s business interests further complicates Trump’s strangely effusive comments about Erdogan.
It’s worth noting that Trump himself considers his hotel in Istanbul a potential conflict of interest. In a December 2015 interview with Stephen Bannon, at the time the chairman of Breitbart News, Trump said as much, telling Bannon, “I have a little conflict of interest ‘cause I have a major, major building in Istanbul. It’s a tremendously successful job.” That he chose to discuss the towers with Erdogan, albeit obliquely, through his references to his business partners when he has already acknowledged the impropriety of doing so simply reinforces the perception that he may prove unable to separate his business from his official duties once he assumes office.
That Hotel in Washington, D.C.
The White House is not the only new Trump property in Washington, D.C.; there’s also the new Trump International Hotel, which opened in October and is located just a few blocks away in what was formerly known as the Old Post Office Pavilion. Previously, the hotel played a role in the campaign as the site of the event at which Trump recanted (sort of) his belief that Barack Obama was not born in the United States. Now, the hotel is at the center of speculation as a symbol of how inextricable Trump’s presidential role may be from his personal interests.
First and foremost, Trump does not own the location outright; instead, he leases the building from the federal government’s General Services Administration, an agency whose next administrator Trump will soon be appointing. The GSA has explicit regulations prohibiting contracts with government employees to prevent conflicts “that might arise between the employees’ interests and their Government duties, and to avoid the appearance of favoritism or preferential treatment.” The Trump Organization’s 60-year lease on the property likewise states, “no … elected official of the Government of the United States … shall be admitted to any share or part of this Lease, or to any benefit that may arise therefrom.” According to House Democrats, the GSA has ruled that Trump “will be in breach of the lease agreement the moment he takes office” and must divest from the property before he does so.
As if its location didn’t pose enough of an ethical question, the hotel has already hosted at least one promotional event specifically aimed at enticing foreign diplomats to stay at the establishment while in town on official state business. On the one hand, direct influence will likely be difficult to prove: The establishment is, after all, a five-star hotel that would have been likely to attract high-class clientele even if Trump had lost the election, a fact to which Trump and those who surround him may well point in order to maintain a patina of respectability around their dealings. Still, the meeting’s proximity to the election reinforces that it will be worth watching the comings and goings at the hotel closely for signs that Trump, who so often accused his opponent (often without evidence) of pay-for-play, may be using his position as president to promote his businesses.
Trump himself acknowledged that his presidency is likely to increase traffic to his Washington, D.C. property. Speaking to The New York Times, the president-elect noted that the property is “probably a more valuable asset than it was before” and that his brand is “hotter” since the election. However, he went on to insist that there was nothing even potentially problematic about his unprecedented situation and that he sees no reason why he couldn’t run both the presidency and his business without conflict.
Multiple events since the election have made Trump’s lease on the hotel a central focus of discussions of his conflicts of interest, including among Democrats in the House. On November 29, Bahrain—a country whose donations to the Clinton Foundation Trump and his campaign decried during the campaign—announced that it would be celebrating the anniversary of its king’s ascension to the throne at the hotel. Other events announced since the election include a Hannukah celebration co-hosted by the Embassy of Azerbaijan and the Conference of Presidents of Major American Jewish Organizations and a reception for the conservative think tank the Heritage Foundation featuring Vice President-elect Mike Pence as its keynote speaker. Numerous ethics experts, many of whom are calling for Trump to generally divest his business holdings, have singled out the building’s lease, which will likely be breached the moment Trump takes office even if he does transfer his company to his children. And on November 30, mere hours after Trump stated on Twitter that “legal documents are being crafted which take [him] completely out of business operations,” Buzzfeed reported that Trump and the federal government were closing in on a tax subsidy for the property that could be worth as much as $32 million. As a result of the increasing scrutiny, the hotel and his handling of the commotion about it have become emblematic of the broader issues surrounding Trump’s conflicts of interest.
That Argentinian Office Building
According to a report by the prominent Argentine journalist Jorge Lanata, the president-elect’s first phone call with his Argentine counterpart Mauricio Macri included a discussion of the permit issues currently holding up construction of a new Trump-branded office building in Buenos Aires. Both Macri and Trump quickly denied the report; according to a statement from the Embassy of Argentina, “The subject both leaders talked about was the institutional relationship, and they briefly mentioned the personal relationship they have had for years.”
As summarized in a tweetstorm here, Trump’s relationship with Argentina’s government and business elites—and the story so far on his property there—is already long and convoluted. The phone call with Macri was apparently set up through Felipe Yaryura, one of Trump’s longtime associates whose company, YY Development Group, is in charge of Trump Tower Buenos Aires. The day after the phone call, the PanAm Post reported that YY Development Group had been approved to break ground in June 2017; evidence has since emerged that the permitting process is not, in fact, finished, although Trump’s business associates are moving ahead as though it is.
Those Companies in Saudi Arabia
Even as Trump was running for president, his company was continuing to operate and open new properties. While the most memorable openings may have been that of his hotel in Washington, D.C., and his golf course in Turnberry, Scotland, the Trump Organization was continuing to work on projects in other countries, including, according to a report the Washington Post, registering eight new companies in Saudi Arabia during the 16-month campaign.
The organization’s endeavors in Saudi Arabia are notable not only because they may further complicate the shaky relationship between the U.S. and an oil-rich gulf state notorious for human-rights abuses but also because of how they relate to Trump’s campaign rhetoric. One of his criticisms of Hillary Clinton was that her charitable foundation had accepted donations from governments with questionable records on human rights, most notably Qatar and Saudi Arabia, always with the implication (or direct accusation) that they were doing so to curry favor with Clinton when she was secretary of state. That Trump was continuing to level this criticism while his namesake organization was actively pursuing new projects in Saudi Arabia not only bodes ill for his ability to separate his personal and presidential interests but also further calls into question the honesty and transparency of his campaign.
That British Wind Farm
As he indicated when he stopped there during the campaign, President-elect Trump takes enormous pride in his recently opened golf course in Turnberry, Scotland. The day after the British public voted for Brexit—over intense Scottish opposition—Trump spoke at the property’s opening, proudly touting how the decision’s deflationary effect on the pound would benefit his business.
However, Trump also has a second golf course in Aberdeen, where it appears Trump has attempted to intercede in the interest of his own pocketbook.* According to The New York Times, Trump had a post-election meeting with Nigel Farage in which he “encouraged Mr. Farage and his entourage to oppose the kind of offshore wind farms that Mr. Trump believes will mar the pristine view from one of his two Scottish golf courses.” Hope Hicks, a spokeswoman for the president-elect, denied that the two had discussed the subject, only for Trump to later confirm that the topic had, in fact, come up in their conversation.
Those Indian Business Partners
It didn’t take long after the election for President-elect Trump to be seen in public with international business partners. According to a November 19 article in The New York Times, Trump took a break from his transition schedule to meet with three Indian real-estate executives who are currently building a Trump-branded apartment complex in Mumbai. According to both Trump and the Indian businessmen, the meeting was essentially congratulatory in nature; a picture posted by one of the executives on Twitter shows the four men smiling broadly and giving a thumbs-up to the camera. However, that the meeting happened in the first place suggests that Trump does not currently have any qualms about forestalling official state business for personal business.
On top of that, the meeting raises questions in the blind-trust realm as well. The president-elect himself was not the only member of his family there; two Facebook photos show that Ivanka and Eric Trump both attended the meeting as well. Their presence serves as a reminder that their father seems so far uninterested in maintaining even the nominal separation between himself and his assets that he repeatedly said he would create during the campaign.
That Envoy From the Philippines
One leader with whom Trump already has an advantage over President Obama is Rodrigo Duterte, the similarly brash president of the Philippines. Duterte, who has threatened to “break up with America,” told Obama to “go to hell,” and called the president a “son of a whore,” expressed admiration for Trump, noting that, among other similarities, they both enjoy swearing.
Duterte’s affinity for Trump apparently goes beyond vulgar word choice. Late in October, Duterte appointed a longtime business associate of Trump’s as a special envoy to the United States, an announcement that became public shortly after the election. This appointment in particular raises questions because it is just as open to exploitation by Duterte as it is to Trump, as the Filipino president could intend to use his new envoy’s relationship with Trump to strengthen the Philippines’ hand. Whichever side the appointment does eventually benefit, however, the situation is nevertheless fraught with conflicts between the three men’s personal and political interests.