President-elect Donald Trump will leave his positions at the various companies of the Trump Organization, but he will not divest his ownership, said an attorney familiar with efforts to address his potential conflicts of interest.
Trump’s businesses, which include more than 500 companies with $3.6 billion in assets and ties to more than 20 countries, will be placed into a trust. The trust will be overseen by an independent ethics officer and managed by Trump’s sons Eric and Don Jr., and chief financial officer Allen Weisselberg, who will make decisions without consulting the president, the attorney said. The Trump Organization will terminate all pending partnerships, and won’t enter into new international business arrangements, such as licensing deals for new hotels, while Trump remains in the White House.
“That doesn’t solve any of the problems,” said Richard Painter, who served as a top White House ethics lawyer to President George W. Bush and is now a professor at the University of Minnesota Law School. “If he owns it, he has conflicts of interest.”
Existing Trump businesses, which include hotels and golf courses, will continue to operate and enter into new agreements, such as hosting weddings, parties and other events. Those will be reviewed by the ethics officer to ensure they are conducted at arms’ length. Trump’s debts will be paid down, according to their schedules. The company will voluntarily donate hotel profits received from foreign governments to the U.S. Treasury, the attorney said.
Trump’s legal team believes he isn’t in violation of his contract at the federal General Services Administration-owned building where he operates his Trump International Hotel in Washington. Although a provision in the lease appears to prohibit elected officials from benefiting from the arrangement, it is designed to prevent sitting officials from crafting sweetheart deals, the attorney said. Trump minted the deal as a private citizen.
His lawyers similarly believe that the emoluments clause of the Constitution, which prohibits gifts from foreign governments and heads of state, doesn’t apply to fair value exchanges between businesses.
Several legal experts have disagreed, arguing that the clause applies to the president and to Trump’s foreign holdings, which include a partnership with the U.S. envoy in the Philippines, tenancy in Trump Tower of the state-owned Industrial & Commercial Bank of China, and overseas development projects requiring government approvals. Former top ethics officials to Presidents George W. Bush and Barack Obama have said Trump will be in violation of the clause as soon as he takes the oath of office.
Prior to the Wednesday announcement, the Trump Organization canceled deals for developments in Brazil, Argentina, Azerbaijan and Georgia, though the projects were troubled and brought in little revenue. Ties with other countries, including China, the Philippines and Indonesia, remain.
Trump’s conflicts are unprecedented for a U.S. president. Ethics officials, including those at the Office of Government Ethics, have publicly urged him to divest from his assets and limit the involvement of his adult children in any ongoing business. The president-elect has been consulting Fred F. Fielding, an attorney with Morgan Lewis who served as White House counsel to Presidents George W. Bush and Ronald Reagan, on how to address them.
For four decades, incoming presidents and vice-presidents have gone to great lengths to establish clear lines between their governments and their personal fortunes. Vice President Nelson Rockefeller turned over 10 years of tax returns to the Federal Bureau of Investigation, and Congress held hearings on the finances, which derived from his famously wealthy family. President Jimmy Carter placed an independent trustee in charge of his family’s peanut farm in Georgia, and Vice President Dick Cheney sold his shares in Halliburton Co., where he had served as CEO, and earmarked proceeds from unvested stock options for charity. Presidents Bill Clinton and George Bush sold their assets and placed the proceeds into true blind trusts.