The Trump Administration has been dogged by accusations that President Trump, as well as his family members and close associates, are seeking to use the presidency to advance their personal financial interests. While President Trump claims to have ceded control of the Trump Organisation to his sons Eric and Donald Jr., the trust set up is porous at best, and reports indicate that the president can withdraw money from his more than 400 businesses at any time without disclosure.

Just as President Trump will receive “quarterly” updates on the Trump Organisation from his son Eric, [The Global Corruption Blog] track and report on instances in which there are credible allegations of President Trump, his family, and his close associates exploiting their public power for private gain. [This is organised into the] following four categories, which capture four related but distinct ways that political leaders may seek to leverage the power of public office to enrich themselves, their families, and their cronies:

  1. U.S. Government Payments to the Trump Organisation
  2. Use of the Power of the Presidency to Promote Trump Brands
  3. U.S. Government Regulatory and Policy Decisions that Benefit Business Interests of the Trump Family and Senior Advisors
  4. Private and Foreign Interests Seeking to Influence the Trump Administration Through Dealings with Trump Businesses


3. U.S. Government Regulatory and Policy Decisions that Benefit the Business Interests of the Trump Family and Senior Advisors

Federal government decisions—on regulation, law, enforcement, and discretionary spending—may be influenced or manipulated in ways that benefit the private commercial interests of the Trump Organization or other businesses closely tied to President Trump, his family, or his senior advisors. This is a much more serious problem, as it involves not only enrichment of the Trump family and associates at taxpayer expense, but also potential distortions of U.S. policy.

The extent of the Trump Organization’s business interests makes it impossible to summarize all of the potential conflicts of interest that might arise. For example, the Trump Organization has been involved in labor disputes; Trump businesses regularly apply for visas for foreign workers; and Trump businesses are subject to countless federal safety and environmental regulations. (See here for an in-depth analysis of many of these potential conflicts.) As head of the executive branch, President Trump might have influence over numerous decisions that affect the Trump Organization’s business interests. While the potential conflicts of interest are too extensive—and in most cases likely too indirect—to enumerate, here are a few examples of more specific reports that raise concerns about how the financial interests of the President and his advisors may distort regulatory or policy decisions:


  • Dakota Access Pipeline (DAPL): In his first week in office, President Trump reversed a decision from the U.S. Army Corps of Engineers—which had announced it would not issue permits for building the controversial Dakota Access Pipeline—and directed the Corps to “review and approve [the construction] in an expedited manner.” President Trump’s filings with the Federal Election Commission in June 2015 and May 2016 indicate that he owned stock in Energy Transfer Partners, the company building the $3.7 billion pipeline. While the President has asserted that he sold his stock in the company in June 2016, resolving the possible conflict of interest, he has not provided any concrete, independently verifiable evidence for that claim.


  • Clean Water Act Rollback: In February 2017, the Trump administration issued Executive Order 13778, which directed the EPA to review and either rescind or revise the regulations pertaining to the scope and coverage of the Clean Water Act. In January 2018, the EPA formally suspended implementation of the Obama-era rule (which extended Clean Water Act protections from pollution to bodies of water including wetlands and half of the streams in America) for two years, and the EPA and US Army Corp of Engineers plans to release its own proposed regulation later this year. Though the proposed repeal would affect many constituencies (the waters that stand to lose protection contribute to the drinking water supply for one in three Americans), it is strongly supported by golf-course owners (among others); the Trump Organization owns numerous golf courses, and therefore stands to gain from the proposed repeal.


  • General Services Administration Lease: The Trump Organization leased the building that is now the Trump International Hotel in Washington D.C. from the Federal Government’s General Services Administration (GSA). The building is also known as the Old Post Office. The lease agreement explicitly states that “no . . . elected official of the Government of the United States . . . shall be admitted to any share or part of this Lease, or to any benefit that may arise therefrom.” The purpose of this clause seems to be avoiding the conflict of interest that would arise if an elected federal official were, in effect, on both sides of the transaction (as both landlord and tenant). In March 2017, the GSA decided that President Trump—who has the authority to appoint and potentially remove the head of the GSA—is in full compliance with the lease agreement as long as he does not receive profits from the hotel while he serves as President. The GSA’s decision was roundly criticized by most experts as an implausible reading of the contract. In July 2017, Democratic members of the House Transportation and Infrastructure Subcommittee grilled acting GSA administrator Tim Horne about the legality of the lease and sought to bring attention to a report prepared for Representative Peter A. DeFazio, which asserts, among other things, that President Trump claimed in a financial disclosure to have earned $20 million in profits from Trump Old Post Office LLC after his inauguration.


  • Ivanka Trump and Jared Kushner’s Advisory Roles: Ivanka Trump serves as an assistant to her father, while Ms. Trump’s husband Jared Kushner serves as senior advisor to the president. Since Ms. Trump is not being paid a salary and was not sworn in, she is not an official government employee (although she maintains a West Wing office, security clearance, and White House communications equipment). Although Ms. Trump stepped down from her management and operations role at the Trump Organization, she continues to receive fixed payments from the Organization and profits from her fashion brand and the Trump International Hotel in Washington, D.C. Similarly, although Mr. Kushner turned over his family’s real estate empire to family members, he still remains a beneficiary of his businesses through a series of trusts. Neither Ms. Trump nor Mr. Kushner placed their assets in a blind trust, which means that their financial interests could influence their counsel to President Trump.


  • Infrastructure Plan: To oversee a council at the helm of the $1 trillion infrastructure plan that President Trump proposed early in his presidency, he selected Steven Roth and Richard LeFrack, billionaire real-estate developers and former business partners of the President. The Trump Organization is currently invested in Mr. Roth’s real estate development company, Vornado Realty Trust, and receives $22.7 million annually from an ownership stake in two Vornado buildings. Not only has Roth entered bids to build new buildings for the Labor Department and the FBI, but, should the infrastructure plan be enacted, he will be in a position to influence billions of dollars in government spending in ways that benefit his company—and thus also directly benefit the Trump Organization. As of August 17, 2017, however, President Trump abandoned plans for the Council on Infrastructure.


  • Deutsche Bank Investigation: The Department of Justice and Special Counsel Robert Mueller are investigating Deutche Bank’s connection to a Russian money laundering scheme. Justice Department officials appointed by President Trump, including Attorney General Jeff Sessions, are overseeing the DOJ’s investigation. Deutsche Bank has lent President Trump billions of dollars, and he currently still owes the Bank about $340 million — a potentially serious conflict of interest. Furthermore, Jared Kushner reportedly accepted a $285 million loan from Deutsche Bank a month before the 2016 election as part of a refinancing package for a property in Manhattan. More recently, the Labor Department granted Deutsche Bank a waiver from the punishment it would have otherwise received after criminal convictions, thus allowing the bank to continue managing pension funds and individual retirement accounts for another three years. As defenders of the administration have pointed out, such waivers are not unprecedented, or even unusual. The Obama administration granted banks temporary waivers as well, and Deutsche Bank was not the only bank to receive a waiver in January 2018. Nonetheless, the apparent conflict of interest raises understandable concerns about whether the financial interests of President Trump and his son-in-law may have influenced this decision.


  • Florida Offshore Drilling Exemption: On January 4, 2018, the Trump Administration announced plans to lift the Obama Administration’s prohibitions on offshore drilling. Governors from many coastal states requested exemptions from the plan, but the only exemption that Interior Secretary Ryan Zinke granted was for Florida. Secretary Zinke’s justifications for the exemption, such as that “Florida is reliant on tourism as an economic driver,” also apply to other coastal states. Many skeptics have therefore suggested that political or personal financial consideration — in particular, the possible adverse impact that offshore drilling could have on Trump’s Mar-A-Lago resort in Palm Beach, Florida, influence the administration’s decision.


  • Fannie Mae and Freddie Mac: John Paulson is the billionaire founder and manager of the hedge fund Paulson & Co. Mr. Paulson’s funds have a stake in Fannie Mae and Freddie Mac—both of which were taken over by the federal government in 2008. Since President Trump’s election, shares of Fannie Mae and Freddie Mac have increased substantially, and Mr. Paulson has called for the government to relinquish control of the companies. President Trump himself has invested $3­­-5 million in Paulson’s funds, and thus would stand to gain from a decision to end government control of the companies. Treasury Secretary Mnuchin — a former business partner of Mr. Paulson — has expressed interest in ending government control of the companies. Paulson & Co. and Blackstone Group LP (whose CEO is Steven Schwarzman, the chair of Trump’s Strategic and Policy Forum) hired investment bank Moelis, Inc. to prepare a proposal for ending government control of Fannie Mae and Freddie Mac without legislation. The proposal was released in late May.


  • The Scope of the Proposed Travel Ban: In January 2017, President Trump signed a controversial executive order that barred entry into U.S. for individuals from seven Muslim-majority countries in the Middle East. Expertscourts, and the international community broadly denounced the effectiveness of a country-specific ban and the discriminatory purpose and intent of the executive order. Some critics went further, suggesting that the order itself may have been influenced by President Trump’s foreign business interests: The Trump Organization has no financial interests in any of the countries affected by the travel ban, but does have business interests in other predominantly Muslim countries that could have been included in the ban, such as Saudi Arabia, the United Arab Emirates, Turkey, and Egypt. This is admittedly speculation, however, as there are alternative explanations for the selection of the targeted countries.


  • H-2B Visas: Despite President Trump’s campaign rhetoric about hiring American workers, his administration recently increased the permitted number of H-2B visas from 66,000 to 81,000 for this year. Days after the Department of Homeland Security announcement about the increase, Trump companies submitted requests to the Department of Labor for a total of 76 H-2B visas for guest workers. The administration has resisted pressure to increase quotas for other guest visa categories, including those for tech workers, for which Trump companies typically does not apply.


  • Benefits from the Tax Plan: The recently passed Republican tax-reform bill will substantially benefit President Trump, his family, and the Trump Organization. Perhaps most notably, the reduction of the “pass-through” tax has been referred to by some as the “Trump Loophole” since the President stands to benefit immensely from its reduction. (The exact benefit is difficult to calculate since the President has not released his tax returns.) The extent to which these tax proposals were influenced by the President’s personal interests—as opposed to a generic Republican policy objective of reducing taxes on very wealthy individuals, a class that happens to include President Trump—is not clear. But the fact that the President and his family stand to gain so much financially from the tax changes is cause for concern.


  • Interviewing U.S. Attorney Candidates: While the President has the authority and responsibility to nominate U.S. Attorneys, President Trump has taken a special interest in candidates for the positions in New York and Washington, D.C., and has taken the unprecedented step of personally interviewing candidates for U.S. Attorney in the Eastern and Southern Districts of New York and the District of Columbia. These districts cover much of the Trump Organization’s business dealings, including those involving the Trump International Hotel in Washington, which is currently at the center of a federal emoluments clause lawsuit. Moreover, these U.S. Attorneys may have to make important decisions in investigating any potential interference of Russia in the 2016 Election. As Preet Bharara, former U.S. Attorney for the Southern District of New York, noted, “It is neither normal nor advisable for Trump to personally interview candidates for US Attorney positions.”


  • Commerce Secretary Ross’s Shipping Interests: Commerce Secretary Wilbur Ross shed millions of dollars in assets to avoid conflicts of interest. However, he maintained passive investment in Diamond S Shipping Group Inc., one of the world’s largest operators of shipping vessels, despite stepping down from positions within the company. Secretary Ross will be at the forefront of the U.S. trade negotiations and will help shape U.S. trade policy, which will directly impact the financial interests of the Diamond S Shipping Group. In addition, the so-called “Paradise Papers” leaks disclosed by the International Consortium of Investigative Journalists in early November 2017 revealed that Secretary Ross also has a stake in another shipping company, Navigator Holdings, that, since 2014, has received more than $68 million in revenue from a Russian energy company co-owned by Vladamir Putin’s son-in-law. Additionally, questions have been raised about whether Ross’s role in negotiating a trade deal with China to export more American liquefied natural gas will increase profits for Navigator. (Navigator ships liquefied petroleum gas, but production of the two products is significantly linked.) It remains unclear whether the trade deal would create direct, predictable benefits for Navigator, but there is nonetheless an unseemly appearance of a conflict of interest.


  • Carl Icahn’s Oil Refinery Bet: Until mid-August 2017, Billionaire investor Carl Icahn served as an unpaid special advisor to President Trump on regulatory issues. In that capacity, multiple reports indicate that Mr. Icahn sought to alter certain biofuels regulations in ways that would benefit an oil refinery in which Mr. Icahn held an 82% stake. The EPA Administrator, Agriculture Secretary, key Senators, and the President recently met to discuss these and other proposed changes to the Renewable Fuel Standard. According to media reports, Mr. Icahn also made substantial amounts of money through trades in assets the value of which would be affected by the regulatory reforms he was pushing. Democratic lawmakers have asked the Securities and Exchange Commission, the Commodity Futures Trading Commission, and the Environmental Protection Agency to look into whether Mr. Icahn’s conduct amounted to insider trading or other illegal conduct. According to recent reports, Manhattan federal prosecutors are investigating Mr. Icahn’s actions as special advisor and have served him with a subpoena.


  • Rupert Murdoch’s 21st Century Fox: Media mogul Rupert Murdoch is a close confidant and advisor to President Trump. Mr. Murdoch has two important interests that President Trump could influence. First, President Trump could influence the proposed merger between AT&T and Time Warner, as he promised to on the campaign trail stressing that it was, “a deal we will not approve in my administration.” Mr. Murdoch has a vested interest in scuttling the deal, as the merger would create a powerful rival to Mr. Murdoch’s company, 21st Century Fox. On November 20, 2017, the Justice Department filed suit to stop the merger. There have also been unconfirmed reports (see here and here) that in negotiations earlier in the month the Justice Department asked AT&T to sell Turner Broadcasting, a group of channels including CNN, in order to avoid the antitrust suit and that Mr. Murdoch had offered to buy CNN. However, no clear picture has emerged to substantiate these claims. Aside from the merger, the Justice Department is currently investigating Fox News for financial settlements related to sexual harassment lawsuits brought by female employees. The investigation will be overseen by Attorney General Jeff Sessions, who in turn reports to President Trump.


  • Kenneth Allen nomination: In September 2017, President Trump nominated Kenneth E. Allen, a former executive at the coal company Armstrong Energy to serve on the nine-member board of the Tennessee Valley Authority (TVA), which provides power to nine million consumers across seven Southeastern states. TVA has been and continues to be a longtime customer of Armstrong Energy, and Allen is still receiving payments from Armstrong on the basis of the amount of coal mined and sold from various Armstrong-owned properties. Allen was confirmed by the Senate on December 21, 2017.


  • Kirstjen Nielsen nomination:In October 2017, President Trump nominated Kirstjen Nielsen, then White House Deputy Chief of Staff, as head of the Department of Homeland Security. She was confirmed by the Senate on December 5, 2017. Thad Bingel of Command Group, a security consulting and lobbying firm, helped advise Ms. Nielsen through the confirmation process for free. This is a departure from the norm of government staffers, rather than private lobbyists, guiding nominees on the route to confirmation. The Command Group, a lobbying and consulting agency, owns another company that does government contracting work. This connection sparks conflict of interest concerns that Mr. Bingel’s free help might influence Ms. Nielsen to send his company future DHS contracts.


  • Jared Kushner and the Cadre Company: In Jared Kushner’s March 2017 financial disclosure to the Office of Government Ethics, he failed to disclose his financial stake in Cadre, a tech company he co-founded. Kushner and his lawyer claim that oversight was an “administrative error.” This error meant that instead of having to divest immediately from Cadre, Kushner made millions in profits as the company’s value rose after Kushner joined the White House. During this time, Kushner leveraged his White House position to meet with the CEOs and business leaders in many major technology companies.


  • Whitefish Energy Holdings: As part of the Hurricane Maria recovery effort, the Puerto Rico Electric Power Authority (Prepa) awarded a $300 million, no-bid contract to Whitefish Energy Holdings to help restore Puerto Rico’s power grid. When Hurricane Maria hit, the company had two full-time employees, but it hired more than 300 workers after being awarded the contract. Suspiciously, Whitefish Energy Holdings is located in Interior Secretary Ryan Zinke’s hometown in Montana. While Secretary Zinke maintains that he “had absolutely nothing to do” with the contract, the Federal Emergency Management Agency (FEMA) has since expressed “significant concerns” with the deal. After a request from Puerto Rico Governor Ricardo Rosselló, Prepa cancelled Whitefish’s contract. However, under the terms of the cancellation, Whitefish continued working in Puerto Rico until November 30, 2017.


  • Brenda Fitzgerald’s Financial Investments: Dr. Brenda Fitzgerald resigned from her post as Director of the Center for Disease Control and Prevention after it was revealed that she purchased stock in tobacco and health care companies while serving as Director. (She made these purchases on August 8, 2017, and sold the shares on October 26, 2017.) Dr. Fitzgerald claims that the investments were made by her financial advisor without her knowledge, and that she asked to have the stock sold as soon as she learned of it.


  • Ben Carson’s Listening Tour: On June 28, 2017, Ben Carson, the Secretary of Housing and Urban Development (HUD), began a listening tour in Baltimore, Maryland. Dr. Carson’s son, Benjamin Carson Jr., played a significant role in organizing the tour, including using his personal business connections to invite local executives. Carson Jr. is the chairman of Agro Systems LLC and co-founder of Interprise Partners. His involvement occurred despite the fact that, according to HUD’s deputy general counsel for operations, two days before the tour she had “expressed [her] concern that this gave the appearance that the Secretary may be using his position for his son’s private gain.” This concern was shared by the regional HUD administrator, who noted that Carson Jr. “may be doing business with these entities or may be interested in doing business with these entities.” Secretary Carson has asked HUD’s Inspector General to investigate the issue.


  • NLRB’s Vacating Hy-Brand Decision: The National Labor Relations Board (NLRB) vacated its December decision to overrule an Obama-era decision (Browing-Ferris) that had made it easier for workers at staffing firms and business franchises to unionize. The Board vacated the decision because of the conflicts of interest of member William Emanuel. Mr. Emanuel, a Republican nominated to the NLRB by President Trump, is a former management-side attorney who represented Leadpoint, a party to the original Browing-Ferris decision that was overturned. Given that Mr. Emanuel was a deciding vote in a 3-2 decision that benefited a past client and interests of his former firm, the NLRB inspector general investigated and issued a memorandum finding “a serious and flagrant problem” with the Board’s decision, noting that Mr. Emanuel “should have been recused from participation.”

This blog was originally published on GAB | The Global Anticorruption Blog Law, Social Science, and Policy and was republished with permission. 

Disclaimer: The ideas expressed in this article reflect the author’s views and not necessarily the views of The Big Q. 

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