“I love China!” President-elect Donald Trump proclaimed an eon ago, when he was still just an easily mocked reality show host announcing a quizzical bid for the White House.
“The biggest bank in the world is from China,” Trump continued. “You know where their United States headquarters is located? In this building, in Trump Tower.”
Trump was referring to the Industrial and Commercial Bank of China, which is controlled by the Chinese government. Although the bank is a publicly traded company, only a minority of its shares are held by ordinary investors; the Chinese government has a majority stake.
And the bank does, indeed, have an office at 725 Fifth Avenue in New York City — Trump Tower.
For the moment, there’s no evidence of corrupt dealing between Trump and this Chinese bank. Landlords are allowed to rent their property for others to use, even if those landlords are short-fingered racists with little knowledge of American governance. And tenants are allowed to rent those properties, even if they are controlled by a foreign government.
Also, it’s unlikely the Chinese bank could have predicted on the day it signed its lease that the owner of Trump Tower would someday become what used to be called the Leader of the Free World.
But this relationship between Trump and an entity controlled by the Chinese government raises a potentially unique opportunity for corruption that the framers of the Constitution anticipated and forbade. Article I of the Constitution provides that “no person holding any office of profit or trust under” the United States “shall, without the consent of the Congress, accept of any present, emolument, office, or title, of any kind whatever, from any king, prince, or foreign state.”
Federal officials aren’t allowed to accept gifts or employment from foreign powers, and they aren’t allowed to for a pretty obvious reason. Direct bribes from a foreign government are a great way to buy favor from federal officials — including the president — and to convince those officials to shape policy in ways that benefit a foreign power.
As a white paper published by the Defense Department explains, “in general, business corporations owned or controlled by foreign governments are considered part of a foreign state for purposes of the Emoluments Clause.” It’s fairly certain that the Industrial and Commercial Bank of China qualifies as part of the Chinese state, especially if Chinese government officials direct the bank to act as a conduit for payments to Trump.
What that means is that, at the very least, Trump should take significant steps to ensure that his relationship with the Chinese bank does not become a conduit for bribery. The most obvious option is that Trump could simply sell his companies, thus eliminating any possibility that they would allow foreign nations (or interested individuals) to influence the president by funneling money to him.
Absent that, according to Richard Painter, a former chief ethics counsel to President George W. Bush, Trump could take expensive steps to assure the nation that he is not being bribed.
Simply doing business with a foreign nation is not a violation of the Constitution, according to Painter. “If I own a Rolls Royce, I can sell it to the Queen of England,” Painter told ThinkProgress, apparently putting himself in the shoes of a government official like Trump. The catch is that it must be sold for its fair market value. Trump can sell a $200,000 Rolls Royce to the Queen (or to the Chinese government, for that matter) for $200,000. But if he sells it for $250,000, that’s a problem.
When Trump’s businesses deal with foreign governments, the question is whether the deal is “so favorable to Trump that it could constitute a gift.”
That means that Trump’s arrangement with the Chinese bank is probably kosher so long as a preexisting lease remains in effect. Once that lease expires and needs to be renegotiated, however, Painter says that “any tinkering with the terms would be a very bad idea.”
If Trump does decide to re-up the lease once it expires, he could “get an outside fairness opinion from a banker” stating that the new lease constitutes an ordinary deal renting a property at a fair market value, but such an opinion would be expensive.
It also likely be difficult for a bank to conduct such an evaluation. Trump Tower was a unique property even before it became the crown jewel in the American president’s real estate empire. If the sitting president’s company negotiates a much higher rent with the Chinese bank, that could constitute a bribe, but it also could simply be the market’s reaction to the property’s enhanced prestige. It’s not like there are many comparable properties that can be studied to determine what the appropriate price is to rent space in Trump Tower.
And even if Trump does enter into a corrupt bargain with the Chinese government, it will be at least as difficult for government watchdogs to evaluate whether the Chinese bank is paying fair market value as it is for an independent bank.
That also assumes that news of such a corrupt deal becomes public. It’s not like Democrats control a congressional committee they can use to subpoena Trump’s financial records. Or like congressional Republicans have covered themselves in glory with their courageous willingness to stand up to Trump.
Nor, for that matter, is Trump’s arrangement with the Chinese bank the only way a foreign power could funnel bribes to him through his companies. A foreign government could offer an exclusive tax break to a Trump property. It could lodge its diplomats in his hotels — at inflated rates. It could make exceptions to zoning laws, or give the Trump Organization favorable treatment in what is supposed to be a competitive bidding process.
And so long as Trump’s financial records remain secret, it’s far from clear how any of these activities could ever come to light.