Presidential Conflicts of Interest: Trump Refused to Divest from Business Empire
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Prior presidents had either sold their business assets or placed them in blind trusts managed by independent trustees. Trump placed his holdings in a revocable trust managed by his sons Donald Jr. and Eric, with Trump retaining the ability to revoke the trust at any time and receiving financial reports about the businesses. The Office of Government Ethics stated the arrangement was insufficient to prevent conflicts. The Trump International Hotel in Washington, housed in a federally-owned building under a lease Trump's own government administered, became a center of lobbying activity, with foreign governments and domestic interest groups booking events and rooms to seek favorable treatment. Saudi Arabia spent more than $270,000 at the hotel in a single year.
Overview
Every modern president before Trump had either sold business assets or placed them in a properly structured blind trust — independently managed, with no information flowing back to the owner. Trump placed his businesses in a trust managed by his sons that he could revoke at any time and that provided him financial updates.
Ethics experts were unambiguous: this was not an adequate arrangement. It was a conflict of interest on a scale without precedent in modern American history.
The Hotel
The Trump International Hotel on Pennsylvania Avenue occupied a federally-owned building under a lease with the General Services Administration. GSA was a federal agency within Trump's executive branch. The president's employees were administering a lease with the president's business.
The hotel became, almost immediately, a venue of choice for foreign governments and domestic interest groups seeking favorable treatment. The connection was not subtle. Kuwait moved its national day party there. Saudi Arabia spent hundreds of thousands of dollars there while lobbying on legislation that affected Saudi Arabia. Lobbyists advised clients that hotel bookings signaled goodwill to the administration.
The Trust
The arrangement Trump announced in January 2017 was called a trust. It had most of the form of a trust without the substance that makes a trust meaningful for conflict-of-interest purposes. His sons ran the businesses. He retained the ability to revoke the arrangement whenever he wanted. He received financial information about how the businesses were performing.
The Office of Government Ethics said this was insufficient. Trump's legal team disagreed. The businesses continued generating revenue from entities with interests in federal government decisions.
The 285 Days
Trump spent 285 days of his presidency at his own properties. This is not a conflict in the abstract. It is a direct transfer of taxpayer funds to Trump's personal businesses: Secret Service agents rented golf carts, White House staff booked rooms, food and beverage charges accumulated. Mar-a-Lago charged Trump-administration-era members $200,000 to join — double the pre-election rate — and the members got access to the president.
Every dollar spent by the federal government at a Trump property was a dollar earned by Trump's businesses from his own government.
Timeline
Sequence of events
January 11, 2017
Trump announces business arrangement — OGE says insufficient
Trump holds a press conference announcing he will place businesses in a trust managed by his sons. The Office of Government Ethics states the arrangement is insufficient to prevent conflicts. Ethics experts describe it as inadequate because Trump retains beneficial interest and revocation rights.
March 1, 2017
Trump International Hotel documented as foreign government lobbying venue
Reports document that Kuwait moved its national day reception to the Trump International Hotel. Saudi Arabia begins spending at the property. Foreign embassies describe the hotel as a useful venue for Washington business under the new administration.
June 1, 2017
Mar-a-Lago membership fees doubled — pay-to-play concerns raised
Mar-a-Lago membership fees double from $100,000 to $200,000 after Trump's election. Members describe the club as a venue for direct access to the president and senior officials. Lobbyists and business executives document attending the club and interacting with Trump.
January 1, 2018
Saudi Arabia documents $270,000+ at Trump hotel
Congressional and journalistic investigation documents Saudi Arabia's spending at the Trump International Hotel, including more than $270,000 on rooms and events in a single year, correlating with lobbying against the Justice Against Sponsors of Terrorism Act.
January 20, 2021
Trump leaves office — 285 days at own properties documented
At the end of his presidency, Trump had visited his own properties for 285 days of his 1,461-day term. Secret Service, staff, and accompanying personnel had generated substantial revenue to Trump's businesses during these visits. The conflicts of interest operated throughout the full term.
Sources
- ↑ Trump to Keep a Stake in His Business, Violating Ethics Pledges — The New York Times
- ↑ Ethics experts: Trump's arrangement is insufficient to prevent conflicts — The Washington Post
- ↑ Trump's business empire creates unprecedented conflicts of interest — The Associated Press
- ↑ Trump's Business Conflicts: A Comprehensive Record — Citizens for Responsibility and Ethics in Washington
Verification