If the presumptive Republican nominee Donald Trump wins the presidency this November, it will be a historic result for many reasons. In addition to being the first self-proclaimed billionaire and the oldest first-term president elected, he could also be the first president of the modern era to use the office to make money for his companies and himself.
Every employee of the executive branch is required by law to avoid taking part in decisions that might directly affect their economic interests. But these laws do not apply to the president or the vice president. In practice, previous presidents have followed those rules anyway, putting their major holdings in blind trusts to avoid any real or perceived conflict of interest.
But Trump has said he will take a different approach: keeping his scores of companies and investments, but turning over day-to-day control to his three oldest children, Donald Trump Jr., Eric Trump, and Ivanka Trump. In a January debate, Trump suggested that this approach would work because he simply wouldn’t care about his own wealth. “I know I built a very great company,” he said. “But if I become president, I couldn’t care less about my company. It’s peanuts.”
After telling his children to “have a good time” running the company, he assured Fox Business host Maria Bartiromo, “I wouldn’t ever be involved because I wouldn’t care about anything but our country, anything.” The Trump campaign did not respond to a ThinkProgress inquiry about how he would avoid conflicts of interest as president.
Stuart C. Gilman, a longtime employee at the Office of Government Ethics (OGE) who now advises countries around the globe on anti-corruption efforts, said that the only analogous situation he has seen is disgraced former Italian Prime Minister Silvio Berlusconi. But even Berlusconi’s efforts to appear above-board were more substantive than what Trump has proposed. “He’d owned all of the private media in Italy, became prime minister, and then controlled public media,” Gilman said. “Initially, his senior judicial adviser came to the U.S. Office of Government Ethics about what can be done to resolve conflict of interest. We recommended he get a true blind trust.”
Having a president whose personal wealth could be impacted by his policy decisions presents a huge potential problem, according to Noah Bookbinder, executive director of Citizens for Responsibility and Ethics in Washington (CREW). “Public officials need to be making decisions that are in the public interest, that are in the best interest of the American people,” he said. “Not decisions that are in their own financial interests.”
While Trump has not released his tax returns since 1981, he has filed a mandatory personal financial disclosure statement, listing his current holdings and estimating their value. The 104-page document identifies hundreds of Trump-run companies — foreign and domestic — and scores of businesses in which he owns stock.
These hundreds of entities pose nearly endless conflicts. In a Trump presidency, every government contract not awarded to his companies could be litigated, environmental regulations that affect his businesses could be instantly repealed, and long-fought banking regulations could be dismantled at the drop of a hat. And that’s just from looking at his financial disclosure form; because Trump refuses to release his tax returns, scores of conflicts of interest remain unknown.
Here is just a small sampling of how, with the power of the presidency, Donald Trump could manipulate policy and enforcement to directly benefit his own financial holdings.
Trump could favor government contractors in which he owns stock.
Trump is president of Trump Place Condominium in New York City. According to USASpending.gov, the U.S. Department of Homeland Security paid more than $26,000 to the company in fiscal year 2016 to lease or rent equipment and similar amounts in previous years. Convinced that his properties are “the best,” it is not a stretch to imagine he would want to steer more contracts to them.
But with significant stock investments in companies that rely heavily on government contracts, even companies Trump didn’t own outright could be problematic.
Gilman pointed out that Trump’s disclosure notes he holds at least $50,001 in the Boeing Company, which has received billions of dollars in government contracts. “If the United States government gives a contract to Boeing to build a series of new aircraft,” he said, a President Trump would have a clear financial interest. “His children are his representatives, he has full knowledge of where his interests and holdings are. If I were [competitor] Lockheed [Martin], I’d sue the hell out of them.”
With holdings in pharmaceutical companies like Celgene, tech giants like Microsoft and Google, and supply companies like Borg Warner, his holdings — and the conflicts they would present — could permeate a wide array of federal contracts.
Gilman believes that virtually every federal contract could be challenged in court and that Trump himself could be subject to an unending stream of civil suits, exponentially higher than the 3,500-plus lawsuits he has already faced.
“The civil litigation he’s been involved with is really small potatoes,” Gilman said.
Trump could direct the IRS to stop auditing people like him.
Both the Treasury secretary and the commissioner of the Internal Revenue Service are appointed by the president and are part of the executive branch. The IRS commissioner serves at the pleasure of the president and is required to “administer, manage, conduct, direct, and supervise the execution and application of the internal revenue laws or related statutes and tax conventions to which the United States is a party.”
In his campaign, Trump has emerged as a critic of the IRS, an agency that he and his attorneys claim has audited him annually since 2002. Though the likely Republican nominee has bragged that he pays “as little in taxes as possible,” Trump previously attributed these “very unfair” audits to his religion. “Well, maybe because of the fact that I’m a strong Christian, and I feel strongly about it and maybe there’s a bias,” Trump told CNN in February (though he later contradicted this theory).
Regardless of the true reason for this alleged targeting, a Trump-appointed IRS commissioner could direct the agency to scale back on audits — allowing him to avoid any scrutiny at all for his tax compliance.
Trump could unilaterally repeal environmental regulations that affect his businesses and investments.
As president, Trump would have unprecedented power over environmental protection. Regulations governing air pollution, water pollution, use of public lands, and climate change would be within his purview.
Trump has already pledged to unilaterally repeal a number of existing environmental regulations. These include the Obama administration’s rules limiting carbon emissions from power plants in order to fight climate change, and the Environmental Protection Agency’s Clean Water Rule, which added protections to 60 percent of the streams, wetlands and other waterways that supply drinking water for 117 million Americans.
It’s not hard to see how Trump’s businesses could be affected by some of these regulations. He owns, for example, 12 golf courses across America, according to his personal financial disclosure. All of these golf courses have small waterways — streams or ponds — running through them.
Any of these could be impacted by the EPA’s Clean Water Rule, which extended federal protections to small streams. Mark Squillace, a professor of Natural Resources Law at the University of Colorado Law School, said Trump’s business interests could be at odds with enforcing the rule.
“The point potentially is that [Trump] has a conflict of interest in arguing against the Clean Water Rule if in fact he has been at loggerheads with the Army Corps of Engineers over getting permits,” Squillace said. “He shouldn’t be someone talking about that policy if he has a direct interest in the outcome of the policy.”
In addition, Trump’s financial disclosure forms show investments in individual stocks of fossil fuel companies, such as Occidental Petroleum and Chevron. Environmental regulations cost fossil fuel companies money, therefore Trump would have a financial interest in repealing them.
Trump could alter winery regulations to favor Trump Vineyard Estates and/or harm his competitors.
Charlottesville, Virginia is home to the University of Virginia, Thomas Jefferson’s Monticello, and James Monroe’s Ash Lawn-Highland. It also is the location of Trump Winery, a 1,300-acre estate that claims to be Virginia’s largest vineyard. Though the winery itself is now owned by his son Eric, Donald Trump owns the Trump Vineyard Estates property on which it is situated and receives hundreds of thousands of dollars in rent annually.
“I think this will be one of the great wineries anywhere in the world,” the senior Trump predicted at the winery’s 2011 opening.
Much of the regulation of the wine industry is handled by the Alcohol and Tobacco Tax and Trade Bureau, part of the U.S. Department of the Treasury. Their decisions on things like tasting rooms, transfers of unlabeled bottles, wine type designations, and labeling could all be set in ways that favor the Trump family wine industry — or disfavor its competitors.
Trump could push tax laws that benefit himself and his family.
Figuring out how exactly Trump could personally benefit from changing the tax code is complicated — mainly because the presumptive nominee is refusing to release his tax returns. But according to CREW’s Bookbinder, there is an inherent conflict of interest when someone paying myriad corporate taxes is advocating for major changes in the corporate tax code, as Trump is.
“We don’t know what provisions he’s benefiting from and how that’s affected by his different business holdings,” said CREW’s Bookbinder. “Not only are there potential conflicts, but we don’t really know what they are, because we don’t know what benefits he’s getting or what costs he’s paying. So it’s hard to know how his own financial interests could be affected by any particular policies.”
While Trump’s positions on taxes have run the gamut throughout his presidential run, at the moment, he’s advocating for lowering the top corporate tax rate to 15 percent, and wants to simplify the corporate tax code by “eliminating loopholes.” He also wants to “eliminate the marriage penalty, alternative minimum tax, and the estate tax for individuals,” according to Motley Fool.
Trump can’t do these things unilaterally — he would need to advocate for or propose legislation, which would have to be passed by Congress. But Bookbinder argued that President Trump’s power of persuasion on tax matters would be enough to pose a conflict. “That’s a core piece of what the president does, propose and push legislation,” he said. “It’s absolutely an area where conflicts can be very significant.”
Trump could dismantle the post-meltdown Wall Street banking reforms to aid his own real estate financing.
Trump has long relied on big banks to loan him funds for his real estate deals. A Wall Street Journal analysis last month found that he owes at least $250 million to various banks, large and small, and that some of his previous loans have proven a challenge to repay.
After risky loans by Wall Street banking giants caused the infamous 2008 economic meltdown, Congress passed the 2010 Dodd–Frank Wall Street Reform and Consumer Protection Act to better regulate lending and protect consumers. It created the Consumer Financial Protection Bureau, a regulatory agency with the authority to supervise financial institutions and enforce the law. Congressional Republicans have sought to kill the bureau and for months blocked the appointment of its first director.
Trump has vowed to “absolutely” eliminate the reform law in its entirety. “Under Dodd-Frank, the regulators are running the banks,” he argued in an October inverview. “The bankers are petrified of the regulators. And the problem is that the banks aren’t loaning money to people who will create jobs.”
Even short of a full repeal, Trump could appoint — and, if he finds “inefficiency,” could remove — the director of the bureau to ensure that banks are free to loan his companies as much money as they see fit.
Trump could intimidate banks to make risky investments for him.
In addition to having the power to ensure banks can loan his companies a lot of money, Trump could also use the power of the presidency to intimidate banks into making riskier investments for his companies. And Trump has a history of making risky investments — in fact, Deutsche Bank is “the only bank with a big Wall Street presence that continues to lend to him,” according to the Wall Street Journal.
This particularly concerns Richard Painter, the former chief ethics lawyer for President George W. Bush. Painter told ThinkProgress that, because the president is going to be critical to regulating the banking industry, bankers might want to walk a careful line with the president’s businesses — especially when it comes to a president with an unpredictable nature like Trump’s. “Picture this: You’re a bank; Trump’s the president of the U.S.,” Painter said. “He has enormous power [over] agencies that regulate banks and deal with foreign countries that regulate the banks. You’ve got a multibillion [dollar] banking business — do you mind putting a couple million dollars at risk for Donald Trump to give him what he wants? No. Because if you don’t, he could do some things you don’t like.”
Trump could influence foreign policy and tourism rules to benefit international hotels and golf courses.
Trump’s International Golf Links resort in Doonbeg, Ireland brought in more than $10 million in golf-related revenue last year. His Turnberry resort and Aberdeen golf course in Scotland brought in more than $23 million, combined. With rental properties in Saint Martin (which is under the control of France), land holdings in the Dominican Republic, and a soon-to-open hotel in Rio de Janeiro, Brazil — as well as management arrangements and/or naming royalty deals with Trump-branded properties in Azerbaijan, Canada, India, Indonesia, Panama, the Philippines, Turkey, the United Arab Emirates, and Uruguay — Trump gets millions annually from foreign countries.
Foreign policy, which is heavily determined by the executive branch, will have a huge impact on how those foreign companies do in the future. For example, a tit-for-tat struggle over fees between the U.S. and Brazil has reportedly slowed the visa process for Americans hoping to travel to South America’s largest country. A president with a large hotel there could approach those negotiations differently that one who did not.
On the other hand, Trump lit into Scotland’s first minister after the Scottish government failed to help him block offshore wind farms near his Aberdeen golf resort. With the power of the U.S. government at his disposal, he could easily transform angry words into action to retaliate for the perceived injury to his business interests.
John Wonderlich, interim executive director at the Sunlight Foundation said that his holdings could complicate foreign policy in many other ways. “It’s hard to imagine complex diplomacy — how that would be complicated and altered by massive personal financial conflicts of interests being present at the same time?” he said. “People have only begun to grapple with what that means, through our sense of presidential service. Our foreign policy history is only a weak guide.”
Wonderlich added that as Trump’s brand “is built on self-interested business decisions,” these concerns are real.
‘Difficult, but not impossible’ to erase the conflicts.
So what could a President Trump do to solve the problems presented by his numerous business interests?
According to Stuart Gilman, the lawyers at the Office of Government Ethics could likely find a way. “It’d be difficult, but not impossible,” he said, and “there are very bright lawyers at OGE that do this for a living.”
One option would be to transfer full ownership of all of his companies and assets to one or more of his children. The tax implications of such a move would likely be a significant disincentive, and even though conflict of interest laws generally apply only to one’s minor children, any move Trump made that appeared to aid his former companies could have the appearance of impropriety.
“There’s always been a sense that something that benefits the interests of your children creates just as much of a conflict as something that benefits you,” said CREW’s Bookbinder.
Another option would be a true blind trust. For this to really work, Gilbert said, “OGE would come up with a list of three or four blind trustees who are acceptable,” and the president would pick one. The trustee would decide which properties to buy and sell and the only information the president would receive during his tenure would be a summary of the information needed to fill out annual tax forms.
The trustee would probably need to sell the current holdings, or else it would not really be blind. The University of Minnesota Law School’s Richard Painter likened a less rigid blind trust to “putting a diamond ring in a shoebox and pretending you don’t know what’s in the shoebox.”
Instead, he suggested, Trump could “get rid of the real estate holdings, put them in a holding company, do an IPO of that company, and get rid of it all, covert it to cash, pay the capital gains tax, and maybe get a certificate of divestiture which lets [him] postpone the capital gains tax.”
While all of the ethics experts ThinkProgress spoke with agreed that Trump’s plan to keep his holdings under his children’s management would present unprecedented conflicts of interests, Painter suggested that there could be a possible bright side: Trump’s financial interests could stop him from implementing some of the worst policy ideas he has proposed. With a business empire built heavily on his name and America’s economy, ruining the nation could ruin his business.
“The irony may very well be that the policies he’s talking about could be devastating to the economy and global trade, and that could be devastating for his own financial interests as well as others,” Painter said. “The only silver lining is that he has a financial interest in not doing what he says he wants to do… If he does half of what he says he’s going to do, he’ll destroy his own wealth. He’ll go down with the ship.”
Cory Herro contributed to this piece.