The White House’s new communications director, Anthony Scaramucci, has some significant loose ends to tie up related to his personal business interests. Like Scaramucci, President Donald Trump came into office with substantial personal wealth; instead of fully divesting or putting his assets in a blind trust, Trump handed the Trump Organization over to his two sons and placed his business in a trust that only he can access and pull money from at any time, without disclosing it to the public.
Scaramucci has yet to fully divest from his hedge fund, SkyBridge Capital, as he waits for the sale of the fund to Chinese investment conglomerate HNA Group to officially close. He initially struck up the deal to sell SkyBridge in January, as he was preparing to taking on a job in the White House as assistant to the president in the Office of Public Liaison, a role that was eventually filled by Omarosa Manigault, but not before Scaramucci told reporters at the World Economic Forum in Davos that he had secured the job. At Davos, Scaramucci, still at SkyBridge Captial at the time, met with the head of a Russian sovereign wealth fund that was sanctioned by the U.S. in 2015.
Ultimately, Scaramucci’s job at the White House fell through after media reports about concerns over the Sky Bridge buyers. HNA Group is one of several Chinese firms that have recently spent billions on overseas acquisitions motivated by debt, intricate deal structures and dubious ownerships. On Monday, HNA Group revealed the extent of their ownership, which concerns some world governments.
Now that Scaramucci, the former Goldman Sachs executive, has officially taken a position in the White House, many ethics experts are waiting for him to fully divest his business interests. The deal with HNA Group was expected to close in June, but Scaramucci is facing one final hurdle: the deal is still pending regulatory approval by the Committee on Foreign Investment in the United States (CFIUS), chaired by Treasury Secretary Steven Mnuchin, a former Goldman Sachs executive. CFIUS reviews acquisitions by foreign entities to make sure there are no national security risks involved with accepting the deal. Review of the SkyBridge deal is likely taking longer than expected because deals made with countries not considered allies of the United States are likely to produce more scrutiny under CFIUS. A representative for SkyBridge said they are “confident” the sale will close this summer.
According to a Bloomberg report, Scaramucci is anticipating a large tax break as a result of the sale. Federal law allows new employees in the executive branch to defer capital gains taxes on assets they’re forced to sell in order to avoid any conflicts of interest. Unfortunately for Scaramucci, however, he may not qualify for the tax break because he entered the deal to sell off SkyBridge in January and didn’t officially take a government job in the White House until July.
“Even if the sale of SkyBridge Captial hasn’t closed yet, it would be hard to argue that the government forced [Scaramucci] into the deal to resolve conflicts of interest with the White House Director of Communications job,” the former head of the Office of Government Ethics, Walter Shaub, said on Twitter.
At his first White House press briefing, Scaramucci told reporters he is working with the Office of Government Ethics to remove himself from any conflicts of interest. “My start date is going to be in a couple of weeks so that it’s 100 percent totally cleansed and clean. And I don’t see an issue with it,” he said.
Shaub resigned as head of the Office of Government Ethics in early July, after multiple clashes with Trump over his own conflicts of interest and failure to divest himself from his business empire. “The current situation has made it clear that the ethics program needs to be stronger than it is,” he told NPR on the day of his resignation. Shaub’s replacement, David Apol, is more lenient on rules regarding conflicts of interest. Shaub has described Apol’s approach to ethics as “loosey-goosey.” Whether or not Scaramucci is granted a tax break will be one of the first tests of just how loosely Apol interprets government ethics law.