Tycoon as president: Donald Trump’s conflicts of interest
WASHINGTON: Head of a business empire and now US president: by combining these two roles, billionaire Donald Trump could face conflicts of interest of an scale unprecedented in American political history.
The Republican elected to the White House Tuesday made his fortune by building a network of hotels, office towers and luxury apartment buildings as the head of the Trump Organization.
His real estate empire is primarily located in the United States, but also extends to countries such as South Korea and Turkey. Managing political relations with such US allies while president risks creating a curious mix of competing goals.
The Trump Organization is not publicly traded, so many of its activities are closed to scrutiny. But US media have reported it has financial ties with people close to Russian President Vladimir Putin, who the real estate mogul praised leadership during his campaign.
“For the record, I have ZERO investments in Russia,” Trump tweeted in July.
The potential for conflicts of interest from Trump’s business activities are not limited to countries like Russia. According to the Wall Street Journal, Trump has received some $2.5 billion in loans from Deutsche Bank since 1998.
But US regulators are currently in negotiations with the German bank over imposing a possibly multi-billion dollar fine for its role in the 2008 financial crisis. This raises questions about how the Trump administration will react if it inherits the case, and whether the new president’s business interests will be considered.
Accusations of conflicts of interest are not new in US politics. They tainted the administration of president George W. Bush, whose vice president Dick Cheney, until his appointment in 2000, headed the Halliburton oil services and logistics company, which went on to win lucrative contracts in Iraq after the US invasion.
But the problem takes on another dimension with Trump, whose name is inextricably tied to his business empire.
“It’s unprecedented in the history of the US in part because we don’t know the scope or the nature of his many financial ties in particular,” said Kathleen Clark, a law professor at Washington University in St. Louis.
She said one ethical point of particular concern is that Trump financed his company’s expansion through debt.
“We don’t know to whom he owes money. In some ways owing money is a much more significant financial contact than an investment,” she said.
Trump so far has not spoken much about his potential conflicts of interest. Possibly because few imagined he would end up in the Oval Office, but also perhaps because US laws on the issue are flexible when it comes to the president.
Under current law, while non-elected members of the US administration face stringent constraints on their business activities, those rules do not apply to the president or vice president.
Although the US Constitution prohibits any politician from accepting any “fee” from a foreign power, there is no prohibition on doing business with private partners abroad.
Trump had pledged during the campaign to entrust his business to a blind trust which would wall him off from any say in the company’s activities.
But the tycoon added that this would put the company under the control of three of his children who already are executive vice presidents of the Trump Organization.
Is that really enough to separate a President Trump away from his business empire?
“We’re not going to discuss those things … Trust me. As you know, it’s a very full-time job. He doesn’t need to worry about the business,” son Donald Trump Jr said in September of his father’s becoming US president.
Another world leader used the same strategy. After his first election in 1994 as head of the Italian government, Silvio Berlusconi entrusted the management of his media empire to his family. But that did not prevent persistent criticisms over conflict of interest.