On Wednesday, President-elect Trump is scheduled to give his first press conference since the election — in fact, his first press conference in 168 days.
While the focus of the conference remains unclear, Trump has previously hinted that he’ll use the platform to unveil his ethics plan for his time in the White House, a crucial step given the tangled — and largely opaque — web of problems that his business empire presents. It’s also the first time since the election that a pool of reporters will be able to ask Trump about how he plans to deal with his conflicts.
No other modern president has entered the Oval Office carrying the same level of financial baggage as Donald Trump.
As the head of a luxury hotelier, Trump accepts money through his hotels from foreign diplomats and their governments. As a business magnate, he sells his name to properties around the world — properties now stamped with the name of the U.S. presidency that may become targets. A foreign bank holds millions of dollars of his debt.
As president, Trump will frequently be faced with decisions that could impact the empire he spent his life creating, decisions that could leave him richer or poorer. The potential for corruption is vast, and the appearance of conflicts is near-assured.
The Office of Government Ethics has staunchly and repeatedly counseled that the only solution to Trump’s ethical quandary is for him to fully divest from his holdings and place them in a blind trust, like every other modern president.
That leaves the public with a lot of important questions to ask the president-elect.
Will you continue to receive payments from foreign governments?
“The founders did not want any foreign payments to the president. Period,” Norman Eisen, Chief Ethics Counsel for Barack Obama, previously told ThinkProgress in an email.
In the Constitution, this is principle is laid out in what is known as the emoluments clause, which bars the President from receiving presents, payments, titles, or offices “of any kind whatever” from foreign governments or their leaders.
As the head of an international luxury hotel chain, however, Trump profits from a business seemingly designed to take money from foreign state actors and foreign governments. While it’s less obvious than handing Trump a wad of cash, or the King of France handing Benjamin Franklin a diamond-encrusted snuffbox (one of the scandals that inspired the emoluments clause), foreign diplomats choosing to pay for a stay in one of Trump’s pricey suites still represents money in Trump’s pocket.
Diplomats are already flocking to Trump’s new downtown D.C. hotel, some in a professed attempt to endear themselves to the president-elect. The property has hosted or is planned to host multiple events for foreign embassies that were previously scheduled to be held in other venues.
In addition to hotels, the Trump organization also builds office buildings all over the world — buildings that governments could rent, again sending a stream of money into Trump’s pockets.
Then there’s the matter of interactions between his existing business abroad and foreign governments, such as tax treatment, government regulations, and permitting. Governments could grant Trump favorable tax rates, or expedite approvals in an attempt to engender goodwill.
In Dubai, for example, Trump will be opening his first golf course in the Middle East in February. All services to the property come at the discretion of the government — meaning that a Trump business is at the mercy of a foreign government for electricity, water, roads, a liquor license.
Meanwhile, the Trump presidency will be grappling with the same government over international matters, such as the response to Syria. Trump has previously suggested he intends to make wealthy gulf states, like the United Arab Emirates, take on the burden of responding to the crisis.
Unless Trump fully divests from his holdings, a violation of the emoluments clause is inevitable, according to ethics lawyers from both sides of the aisle. Violation of the emoluments clause is grounds for impeachment.
How will your overseas property be secured?
Trump’s properties worldwide pose another problem. One of Trump’s primary business is licensing — selling the “Trump” name to development companies worldwide to display prominently in branding and architecture.
But once Trump is the president, that could make these buildings a symbol of the United States — and thus a security risk.
“A building branded with the name of an American president — any president, but perhaps especially Mr. Trump — would be a tempting target for terrorists and other enemies of the United States,” Richard Painter, Chief Ethics Counsel for George W. Bush, wrote in a New York Times op-ed.
In New York City, taxpayers are footing an enormous bill to fortify Trump Tower, where Melania Trump will continue to live with 10-year-old Barron Trump after the inauguration. Questions remain, however, as to who will foot the bill should extra security be required at Trump properties abroad.
“Will the Trump organization hire a security firm to do the job, or will the American taxpayer be on the line for the bill? Will foreign governments offer to pay to secure the properties — a subsidy of the Trump organization that would probably violate the Emoluments Clause?” writes Painter.
These properties also represent points all over the world that could be used to draw the U.S. into a conflict abroad.
How will your conflicts impact international relations?
Aside from security issues, Trump’s international empire also has him entwined with business and legal dealings with foreign governments all over the world.
In his most recent financial disclosure form, Trump listed 564 businesses, corporations, limited partnerships, or limited liability companies (LLCs) in which he has some stake or owns. These entities have business dealings in at least 25 countries. And this could be just the tip of the iceberg — because Trump did not release his tax returns, the true shape of his businesses and of his finances is unknown, and largely opaque to the public.
If Trump remains the owner of his company, and it runs afoul of, say, financial regulations in India, will the Indian government support prosecution of a company tied to the President of the United States?
Is a foreign government likely to impose steep taxes on a company bearing the name of President Trump? If two companies bid to develop a property — one of which is represented by the sons of the President of the United States, will a foreign government be likely to risk offending the U.S. by turning down that bid, or is it likely to try to use approvals as a point of pressure on the President?
Already, these questions are more than hypothetical. In Brazil, the Trump Hotel Rio de Janeiro is currently embroiled in a criminal investigation, creating a rift point that could hang over international relations between the two — or a pressure point on Trump himself.
In Ireland and Scotland, Trump the businessman previously railed against environmental protections that conflict with his golf courses — such as a proposed offshore wind farm that Trump will ruin the view. In his one of his first meetings after becoming President-elect, Trump encouraged British politician Nigel Farage to oppose such farms.
In Turkey, Trump’s name adorns the Trump Towers Mall, a two-towered structure in a wealthy Istanbul district. After Trump proposed banning Muslims from the U.S., Turkish President Erdogan called for Trump’s name to be stripped from the towers — calls which stopped after Trump praised Erdogan’s brutal response to an attempted coup.
And after the election, the Turkish president — currently seeking extradition of Muslim cleric and personal foe Fetullah Gulen from Pennsylvania — arrested a member of the wealthy business group that is Trump’s Turkish partner on extremely thin evidence provided by a direct business rival. Shares of the Dogan group, Trump’s partner, plummeted, and analysts speculated that Erdogan’s purpose was exactly to give himself a bargaining chip with the new U.S. administration.
How will the Trump organization stop making new deals?
Trump, in response to questions about his vast dealings, has tweeted that he plans to lay the issue to rest by pursuing “no new deals” while president. And since Trump’s election, the organization has announced that it was pulling out of a few projects, such as ventures in Georgia, Brazil, and Azerbaijan.
Presidency. Two of my children, Don and Eric, plus executives, will manage them. No new deals will be done during my term(s) in office.
— Donald J. Trump (@realDonaldTrump) December 13, 2016
But there are some indications this promise will be broken.
In Argentina, for example, where a regulatory obstacles to a long-stymied Trump project cleared up immediately after the election, Eric Trump told Argentine newspapers that the company would “like to find” a new venture to pursue in the country. “We’ll find a project,” he said.
And Trump’s business partner in Dubai, Hussein Sajwani, told NBC News that he was eager to expand their partnership, and that he didn’t think there would be any meaningful obstacle — especially with the Trump children still in charge. And, Jared Kushner, who will be one of Trump’s advisers in the White House and was a major force on his campaign, closed a major Chinese deal for his own real estate holdings shortly after the election.
Nobody outside the Trump organization has a clear picture of his deals and which ones may be ongoing or moving forward. We don’t even have a clear picture of where Trump and his organization are already engaged in “deals.”
On Wednesday, Trump insisted on Twitter that he has “no deals, no loans, no nothing” to do with Russia. He was responding to an explosive — but unverified — report made public on Tuesday. CNN reported that the intelligence community presented both Trump and Obama with a classified report on “compromising personal and financial information” Russian intelligence claimed to have on the President-elect.
Russia has never tried to use leverage over me. I HAVE NOTHING TO DO WITH RUSSIA – NO DEALS, NO LOANS, NO NOTHING!
— Donald J. Trump (@realDonaldTrump) January 11, 2017
Without a clear picture of Trump’s finances, however, Trump’s claim is impossible to verify — particularly because there have been previous indications of business dealings with Russia. In 2008, Donald Trump Jr. said a real estate conference that “Russians make up a pretty disproportionate cross-section of a lot of our assets,” according to The Washington Post.
As a practical matter, it’s virtually impossible for the Trump Organization to stop making new deals. Debt matures, leases expire and new regulations are issued. Dealing with these issues involves making new deals with a variety of actors, including large financial institutions and foreign governments. Operating a day-to-day business constantly involves making new deal just to keep thing going.
So what’s the real story? Without Trump’s tax returns, we don’t really know.
Will you violate a government lease?
The problems are also acute closer to home.
Trump’s prized new downtown D.C. hotel, located mere blocks from the White House, was leased for development from the government. Now, Trump will effectively be both the tenant and the landlord of the property — and in explicit violation of the terms of the lease, according to former OGE lawyers.
Most government procurement contracts, including the one that Trump signed, contain a clause barring elected officials from participating. It’s meant to make sure that the process is fair for all, and that officials are not using — and don’t appear to be using — their official position for personal financial gain. When he takes office, Trump will be in violation of this term.
Trump has previously indicated that he intends to hand over control of the hotel to his children. According to a briefing given to Democratic lawmakers, though, that plan doesn’t cut it — particularly as Trump has made his children part of his official transition team, and thus the architects of both his business and his government.
Another provision of the hotel lease requires an annual disclosure of detailed financial information and rent negotiations. But now that Trump is the president, how will government civil servants feel pressing the Trump organization for such information? What happens when they negotiate with the Trump organization and the Trump children, all while serving under an administrator appointed by President Trump?
While divestment is the answer to most of Trump’s conflicts, lawyers and Democrats in Congress have proposed another solution to this one: Trump will, simply, be in breach of contract. Therefore, the General Services Administration (GSA), which administers the lease, could take steps to evict his organization from the property.
How much money do you owe?
In his financial disclosures, Trump revealed that he owes at least $315 million to ten entities, some of which are backed by his personal guarantee.
According to reporting, though, Trump’s debts are even more extensive than what he disclosed. Because the FEC only required Trump to report debt from entities that he fully controls, the $315 million figure left out “more than $1.5 billion lent to partnerships that are 30 percent-owned by him,” according to an investigation by the Wall Street Journal.
A large portion of this debt is held by Deutsche bank, which alone holds more than $300 million of Trump’s debt, according to reporting from multiple outlets. Much of that debt comprises the mortgages of three of Trump’s most prized properties: the Doral golf resort in Florida, Chicago’s Trump Tower and his brand new luxury hotel in downtown Washington, D.C. — for which he obtained a $170 million credit line in 2015, even as his presidential campaign took off.
Not only does this put Trump in debt to a foreign bank — Deutsche bank is Germany’s largest, and is based out of Frankfurt — but it also puts Trump’s wealth and credit line at the mercy of an entity currently in the cross-hairs of the U.S. government.
In September, the U.S. Justice Department announced it was seeking $14 billion from the bank for its contributions to the 2008 mortgage crisis, sending Deutsche bank stock tumbling. The bank was in such peril that rumors (later denied by chancellor Angela Merkel) swirled that the German government might step in to shore it up. Considering Trump’s personal stake, such an act could be considered yet another violation of the emoluments clause should it happen.
The bank is also currently under investigation over suspect stock trades for wealthy Russian clients — an investigation Trump’s attorney general is going to inherit. Trump has said he wants to improve relations with Russia.
As president, Trump will have considerable power over regulations and policies affecting Wall Street, and over investigations like the ones currently dogging Deutsche bank. Deutsche bank’s continued well-being is critical to Trump’s businesses— most of Wall Street’s other big banks shun the mogul after a series of bad deals.
That’s not even considering what happens should Deutsche bank fail — in which case, the debt of the U.S. president might be put up for sale. That’s also a possibility with another of the entities holding Trump’s debt, Ladder Capital. Reuters reported that the group was exploring the possibility of a sale in December.
All of these are critical questions facing Donald Trump’s presidency. Their answers determine whether Trump will cause a constitutional crisis, whether longstanding democratic safeguards will remain standing, and what sort of precedent the Presidency will have going forward in questions of conflicts and corruption.
According to the Office of Government Ethics and prominent constitutional scholars, ultimately the clear, and only answer is for Donald Trump to fully divest from his assets and place them in a blind trust run by an independent trustee (as in, not one run by his children).
Every other modern president has completely separated themselves from their personal financial interests before entering the White House. President Obama sold his stock and placed his assets in index funds and treasury bonds. George W. Bush put his assets in a blind trust. Nixon liquidated his assets and tied them up by purchasing two houses. Jimmy Carter gave up his peanut farm and placed it in a blind trust.
Some members of Trump’s cabinet — which is shaping up to be the wealthiest in modern history — have also indicated plans to separate themselves from conflicts that ethics lawyers have greeted with approval. Rex Tillerson, the former CEO of ExxonMobile, announced a plan to sell his Exxon stock and place his assets into a blind trust after Trump tapped him to be the next secretary of state.
Trump’s son-in-law and future senior adviser, Jared Kushner, plans to sell his assets and interest in about 35 investments, resign from his role as chief executive of the family business, and sell his newspaper, according to The New York Observer (though, considering that Kushner plans to sell to his brother or to a family trust under his mother’s control, ethics experts say this still may not be enough).
Trump’s daughter Ivanka also plans to resign from management and operational roles at the Trump organization and at her fashion business, and will receive a fixed salary, so that her compensation can’t shift as the result of the government’s action.
Will Trump take similar steps? Thus far, he hasn’t indicated that he will.
He’s said he won’t be involved in management of his companies, and that he’ll hand over day-to-day operations to his sons. He closed down his charitable foundation — which was plagued by scandal, potentially violated IRS rules, and has been barred from fundraising since September. He’s said that he sold off all his stock, though he has yet to provide documentation. But he has yet to indicate that he intends to actually give up ownership of the empire.
Trump also has yet to release his tax returns, which would allow reporters and government lawyers can get a better picture of Trump’s financial situation. Trump has insisted that he can’t release his tax returns because they’re under audit by the IRS. The IRS has said they have no problem with Trump releasing his returns while under audit. Incidentally, as President, now Trump gets to appoint the new director of the IRS.
As with divesting, Trump has given no indications that he plans to release his tax returns. In all, his presidency is shaping up to leave America facing a lot of questions.