NEW YORK: Experts on government ethics are warning President-elect Donald Trump that he’ll never shake suspicions of a clash between his private interests and the public good if he doesn’t sell off his vast holdings, which include roughly 500 companies in more than a dozen countries. They say just the appearance of conflicts is likely to tie up the new administration in investigations, lawsuits and squabbles, stoked perhaps by angry Oval Office tweets.
“People are itching to sue Donald Trump and stick him under oath,” said Richard Painter, chief White House ethics lawyer for George W. Bush.
In an interview with the New York Times on Tuesday, Trump insisted that the “law’s totally on my side,” and ethics experts agree that federal conflicts of interest rules don’t apply to the president so he can run his business pretty much the way he pleases while in office. His company, the Trump Organization, had no comment on the conflicts issue, other than a statement reiterating its plans to transfer control of the company to three of the president-elect’s adult children.
Painter doesn’t think that goes far enough. In a letter to Trump last week, he joined watchdog groups and ethics lawyers from both Democratic and Republican administrations in predicting “rampant, inescapable” conflicts that will engulf the new administration if the president-elect does not liquidate his holdings.
A look at five areas where conflicts may arise:
New hotel
For use of the government-owned Old Post Office for his new Washington hotel, Trump agreed on annual rent to the government in a contract that was signed more than three years ago.
So what possibly could be the problem now?
Plenty, according to Steven Schooner, a professor of government procurement law at George Washington University who has studied the contract. In addition to base rent, the president-elect agreed to additional annual payments based on various financial measures of how well the hotel is doing. Schooner says such payments typically require drawn-out negotiations each year.
“How can anyone expect a government employee to negotiate with the Trump family at arm’s length and treat the Trump family like any other contractor?” Schooner asks.
Schooner thinks Trump should terminate the contract because, even if the Trump family acts honorably, the appearance of a conflict will spread doubt throughout the contracting system. Federal rules prohibit government employees and elected officials from striking contracting deals with the government for just this reason, though the president is exempted.
As president, Trump will have the authority to appoint a new head to the General Services Administration, the federal agency that signed the lease with Trump and will negotiate the rent each year.
Business at the hotel could get a lift if foreign dignitaries decide to stay at the new hotel to curry favor with the president.
Foreign affairs
Trump’s extensive operations abroad raise the possibility that his foreign policy could be shaped by his business interests, and vice versa. Trump has struck real estate deals in South Korea, the Philippines, Indonesia, Uruguay, Panama, India and Turkey, among other countries.
Trump lender
One of Trump’s biggest lenders is Deutsche Bank, a German giant in settlement negotiations with the Department of Justice on its role in the mortgage blowup that triggered the 2008 financial crisis. The hit to Deutsche could be substantial, with the government reportedly demanding $14 billion.
Will a Justice Department under Trump go easy on the bank? It’s not clear anyone will know. Trump will nominate the head of that agency, too.
Tax audit
The odds that the IRS will rule against Trump may be no different than before he was elected, but it’s difficult to know for sure. Trump has cited a long-running audit by the Internal Revenue Service in refusing to release his tax returns. If he is under scrutiny, it’s not surprising. In his Oct. 9 debate with Hillary Clinton, Trump confirmed he used a $916 million loss in 1995 to avoid paying federal taxes for years.
The president nominates the commissioner of the IRS who, assuming the Senate approves, serves for five years.
Trump will also get to make appointments to the National Labor Relations Board, which rules on labor disputes. In July, the board ruled against Trump in a case involving workers trying to unionize at the Trump Hotel Las Vegas.
Flurry of lawsuits
Trump said Friday that he agreed to pay $25 million to settle three lawsuits alleging fraud at his Trump University so he could focus on preparing for his presidency. But this could also bring problems, as Trump himself has acknowledged.
“When you start settling cases, you know what happens?” the president-elect said earlier this year. “Everybody sues you because you get known as a settler.”