U.S. ethics laws weren’t written to account for a commander in chief with such far-reaching interests.
No matter who wins in November, the next president will bring enormous potential conflicts of interest to the Oval Office — and watchdogs say Hillary Clinton and Donald Trump aren’t planning to do nearly enough to remove themselves from the entanglements that come with the two global brands stamped with their names.
Americans could see a leader regulating the same banks that lend the Trump Organization millions of dollars, or one negotiating with foreign governments contributing millions to the Clinton Foundation.
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Trump’s empire includes over 500 business entities, with hotels, real estate and branding deals scattered across five continents. Like most real estate developers, he relies heavily on credit — including from foreign banks.
The Clinton Foundation, a sprawling $2 billion enterprise that has given the Clinton family a public platform and burnished former President Bill Clinton’s legacy, has accepted money from corporations, business leaders and foreign governments, including Saudi Arabia.
U.S. ethics laws weren’t written to account for a commander in chief with such far-reaching interests. Unlike most other federal officials, presidents and vice presidents aren’t subject to conflict-of-interest prohibitions. Americans will have to trust Trump or Clinton to do the right thing, since neither would be bound by law.
Trump’s and Clinton’s plans to let their children run the family brands do little to allay ethicists’ concerns.
“We’re very pleased that both Hillary Clinton and Donald Trump have strong daughters that they trust, but we don’t think that this is the way [it] should be handled, because it isn’t really a separation of the leader from their personal, financial interests,” said Susan Lerner, executive director of Common Cause.
The situation is “unprecedented,” said Craig Holman, the government affairs lobbyist for Public Citizen, a nonpartisan watchdog group.
“We’ve had wealthy presidents before, John Kennedy and others, but their wealth was mostly domestic. When it comes to Donald Trump and Hillary Clinton, both have become tied to foreign governments and foreign companies,” Holman said.
Trump has said he would hand off the reins of his global empire to three of his children, Donald Jr., Ivanka and Eric, all currently vice presidents of acquisition and development at the Trump Organization. Hillary Clinton, meanwhile, has suggested that if she wins, the Bill, Hillary and Chelsea Clinton Foundation would continue to include her family. Daughter Chelsea is vice chairwoman of the foundation’s Board of Directors, on which Bill Clinton sits.
Asked during a January debate if he would follow presidential precedent and place his assets in a blind trust, Trump said, “I would put it in a blind trust. Well, I don’t know if it’s a blind trust if Ivanka, Don, and Eric run it.” They’d run his business, he added, “with my executives.”
The Trump campaign did not respond to questions about plans to hand the company to his children if he wins.
A Clinton campaign spokesman referred POLITICO to Clinton’s statement this month on CNN about her husband’s future role: “We’ll cross that bridge if and when we come to it,” she said.
Speaking at a Clinton Global Initiative event, Bill Clinton on Tuesday said, “You have to be careful to avoid actual or potential conflicts of interest.”
“There’ll clearly be some changes in what the Clinton Foundation does and how we do it,” Bill Clinton said.
There are many potential minefields for each candidate: Trump has made real estate deals in the Middle East, for instance, and his businesses have taken out hundreds of millions of dollars in loans from Deutsche Bank, a German institution linked to several investigations in the United States. The Clinton Foundation, meanwhile, has accepted money from a string of governments whose interests don’t always align with those of the United States, including Kuwait, the United Arab Emirates and Qatar.
Whoever becomes president would still be subject to criminal anti-bribery laws and the financial disclosure rules mandated by the 1978 Ethics in Government Act. It’s against the law to use public office for personal financial gain, but the president and vice president are exempt from the web of conflict-of-interest laws and regulations requiring executive-branch officials to recuse themselves on certain issues and divest from certain holdings.
The exemption is based on the idea that the president deals with so many policies that conflicts are bound to arise. So while the head of the Federal Aviation Administration can’t hold stock in airlines, applying the same rules to the president and vice president would effectively preclude them from holding any assets. And the other option, recusal, simply isn’t feasible for the person who signs bills into law.
For other executive-branch officials, the conflict-of-interest laws recognize a spouse as connected to the official’s financial interest. Regulations also include relatives with whom the official has a close relationship in the category of “covered relationships” that require recusal.
The assumption that the presidential campaign vetting process is so exhaustive that there’s no need for an explicit law to restrain the president, since candidates would be eager to void any potential conflicts, has so far held. Mitt Romney, for example, placed his assets in a blind trust long before running.
But “when it comes to both Trump and Clinton, that blind trust concept no longer applies,” Holman said. “… They’ve got their children running it, and when it comes to Donald Trump he can’t just step out of his obligations to foreign companies.”
Given the gray areas permitted by law, voters will have to give either Trump or Clinton the benefit of the doubt on ethical questions. And polls indicate significant numbers are not inclined to do so.
Nearly two-thirds of respondents to a mid-May New York Times/CBS poll answered “no” when asked if Trump and Clinton were “honest and trustworthy.” Over half had generally unfavorable views of Clinton (52 percent) and Trump (55 percent).
“There’s a lot of public distrust and cynicism today about the way Washington functions. So either Secretary Clinton or Donald Trump, whoever is elected, would have to be very serious about preventing suspicions,” said Fred Wertheimer, president of the watchdog group Democracy 21.
That means eliminating even the appearance of anything untoward — and both Trump and Clinton have been known to brush off questions about the apparent impropriety of their actions, ethicists say.
“[Trump] basically gives the middle finger to anyone criticizing him, and Clinton can do that sometimes too,” said Richard Painter, a University of Minnesota law professor who served as ethics counsel in the George W. Bush White House.
Norm Eisen, President Barack Obama’s former ethics czar, pointed out that “Trump himself says rules are meant to be broken.”
“I believe that Trump will willfully break the rules. I think Secretary Clinton made a mistake on the emails. There is a big difference,” Eisen said.
“It would be any ethicist’s nightmare to have him as a client, and I say this truly, not just as somebody who’s going to vote for Hillary Clinton,” Eisen added.
Even if the two candidates haven’t particularly cared about the appearance of impropriety in the past, “they are about to have to care,” Wertheimer said. “There’s no way out of this.”
The nature of the Trump and Clinton enterprises are, of course, different; no one is equating delivering AIDS medicine in Cameroon to building a hotel in Qatar. And the Clintons do not have a direct financial interest in the charity.
“You can’t compare the two at all,” Eisen said. “In the case of Trump, you have a massive, and by the way somewhat murky, global financial empire. And the Clinton Foundation is a nonprofit. The difference is he has an ongoing for-profit interest and she has a former nonprofit.”
But it’s the potential influence by the Foundation’s many donors that raises concerns among other ethicists.
“The problem the Foundation faces is [that] it solicits and accepts huge donations from people and corporations and in some cases foreign donors that are also likely to have business pending before the government,” Wertheimer said.
“Any time you have an entity soliciting money and it has the name of and the daughter of the president, it’s a problem,” said Meredith McGehee, policy director at the nonpartisan Campaign Legal Center. “… People overseas sort of laugh and say, ‘Of course people are going to be giving to that.’”
The Clintons have faced questions about conflicts of interest for decades.
There was the incident in the 1990s when the Clinton White House decided to invite donors to sleep in the Lincoln Bedroom. Or the episode where Buddhist monks (who’d taken a vow of poverty) showed up at a fundraiser with envelopes full of cash for the vice president. Those drew criticism from even fellow Democrats, and the DNC returned some donations.
The Clinton Foundation, which continued to accept foreign donations even while the former secretary of State prepared to run for office, has raised a new round of scrutiny. The campaign has been forced to address a slew of stories including a Wall Street Journal report that the Clintons used the Foundation to help their friends; an International Business Times report that the State Department under Clinton approved increased arms sales to governments that had donated to the Foundation; revelations about the millions of dollars Bill Clinton has collected from Foundation donors; and the release of emails detailing the two-day appointment to a sensitive State position of Rajiv Fernando, a Foundation donor who stepped down after ABC News started asking about his qualifications.
And The New York Times reported that then-Secretary of State Hillary Clinton played a role in approving the sale of a uranium company to Russia while the head of the company secretly donated more than $2 million to the Clinton Foundation. The State Department said she was not personally involved.
That donation wasn’t disclosed, a violation of the ethics agreement the foundation struck with the Obama administration. It wasn’t the only lapse. Donors who contributed through a Canadian affiliate weren’t disclosed — a situation the Foundation pinned on Canadian privacy laws, which prohibit disclosing donors for commercial purposes. The Foundation has also had to refile a handful of tax returns that misreported donations.
Such revelations make some watchdogs leery of Clinton’s statement in March that “complete transparency” is the way to resolve potential conflicts if she wins.
“They tried easing some of the conflict of interest by having financial disclosure of their organization but they only did some … so they didn’t even live by that rule very closely,” Holman said.
The Clinton camp has repeatedly pushed back on accusations of impropriety by pointing out there’s no evidence the former secretary of State changed a policy because of a donation. They have dismissed the charges as “innuendo” and “insinuations” drummed up by the right wing.
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