Is President Donald Trump violating the US Constitution by accepting payments from foreign governments through his businesses? It’s a question provoked by Trump’s controversial decision not to divest from the more than 500 businesses he owns, many organised under the umbrella of the Trump Organization, before becoming president.
Instead, he put them in a trust to be managed by his sons and a Trump Organization executive.
The same question was at the centre of a lawsuit filed in January 2017, by Citizens for Responsibility and Ethics in Washington (CREW), a DC-based government watchdog organisation.
CREW filed the complaint in a federal court in New York, alleging that Trump was violating the foreign emoluments clause of the Constitution, the document that lays out the fundamental laws by which the United States is governed.
In December 2017, a judge dismissed CREW’s case, finding that the plaintiffs lacked standing because they could not show they were hurt by Trump’s business practices. CREW has appealed the decision.
CREW also serves as co-counsel in a lawsuit brought by the District of Columbia and The State of Maryland against Donald J Trump, which is discussed in the Fault Lines episode, All the President’s Profits.
DC & Maryland v Trump alleges that Trump is violating both the foreign and domestic emoluments clauses of the Constitution, by accepting payments from foreign and state governments at the Trump International Hotel in DC
In March 2018, a federal judge in Maryland ruled that the plaintiffs in this case had legal standing and that it could proceed.
The Justice Department declined Fault Lines‘ interview request regarding DC & Maryland v. Trump, and in an email at the end of July, spokesperson Andy Reuss wrote: “We continue to maintain that this case should be dismissed, a position that was shared by a New York court in a related case. The Justice Department is … determining next steps to continue vigorously defending the president.”
Noah Bookbinder is the executive director of CREW, and a lawyer who has prosecuted federal public corruption cases for the Department of Justice. He has served as Chief Counsel for Criminal Justice for the US Senate Judiciary Committee.
He spoke to Fault Lines correspondent Sharif Abdel Kouddous in August 2018. This interview has been edited for clarity.
Al Jazeera: Donald Trump is a businessman with many properties. He’s now US president and he has not divested from those businesses. What kind of conflicts of interest does that create?
Noah Bookbinder: I think of his decision not to divest himself of his business as the original sin of the Trump presidency, in many ways, because it really creates conflict in almost every decision he makes as president.
He’s got businesses all over the world and it means that foreign policy decisions that he makes could well be influenced by his business interests – what country it’s important for him to have good relationships with because he’s got businesses that are dependent, in part, on what people think of him in those countries, or that are dependent on foreign governments granting tax breaks or easements or any of the many things that businesses depend on.
His businesses are impacted by the tax code, and so the major tax reform, so-called, that Congress passed and the president signed is going to impact him much more than it impacts regular people.
Regulatory issues like environmental issues and any kind of property-related issues; all of those are going to impact his businesses. And any time he makes almost any decision, the American people have to wonder if he is thinking about their interests or if he’s thinking about his financial interests and the performance of his businesses.
Al Jazeera: Who owns the Trump Organization?
Bookbinder: The vast majority of it is owned by Donald Trump. The one thing that he did before he took office was he created this trust that technically owns the large majority of the Trump Organization. But it is anything but a blind trust. It is run on a day-to-day basis by his sons, who are not at all independent of him, and who, according to press reports, are reporting to him fairly regularly.
And not only does he know that that interest is going to revert back to him after he’s done as president, but the trust actually enables him to get at that money while he’s president if he wants to. So, they created something that on paper looks like a little bit of distance between him and the Trump Organization, but in fact, creates no meaningful barrier.
So, Donald Trump remains, for all intents and purposes, the owner of the Trump Organization, and he knows what the business interests are of the Trump Organization. A lot of them have his name in big letters on them, and he knows what is going to help those interests.
Al Jazeera: You mentioned his brand. Do the potential conflicts of interest extend to, for example, the president wearing a Trump hat?
Bookbinder: Absolutely. Through his time as president, we’ve seen him consistently use the presidency to essentially advertise for his businesses and his brand. He talks about his resort at Mar-a-Lago, or his golf club at Bedminster and how great they are, and he does it in official events that he’s attending as president. He stays and has meetings as president in those places.
He does wear Trump-branded clothing and in fact, our researchers found that last fall when he was going to a number of hurricane-relief events, he was wearing a hat that he was also selling on his campaign website.
So, in many ways, there’s a very direct use of the presidency to market his businesses, which seems like an abuse of that office.
Al Jazeera: Donald Trump has always worn those kinds of things, why is that a problem now?
Bookbinder: It’s a common question: Donald Trump has always been a businessman. He’s always promoted his businesses. Isn’t that what people should’ve expected when they elected a businessman as president?
And I think the answer to that is that it is fine to elect someone as president because you are impressed by what they’ve done with their businesses, but when they become president their responsibilities change.
When someone becomes president, that person’s responsibility is to the country and doing what is in the best interest of the American people and, at that point, business interests need to be put aside because people need to have faith that their leaders are working for them, not that their leaders are working for their own financial benefit.
He might have taken something of a loss if he had moved his businesses to a trustee, and had the trustee sell the businesses. And that seems like an appropriate sacrifice for someone to make if they want the great privilege of being the President of the United States and leading such a powerful and important country.
When someone becomes president, that person's responsibility is to the country and doing what is in the best interest of the American people and, at that point, business interests need to be put aside because people need to have faith that their leaders are working for them, not that their leaders are working for their own financial benefit.
Al Jazeera: How does this differ from previous US presidents?
Bookbinder: Generally, presidents have either put all of their assets into a true blind trust where they have a trustee who is not someone that they have a relationship with, and who is in charge of businesses and stock holdings and anything else, and has the power to sell them as that trustee sees fit.
Or presidents have put all of their money into commonly-held mutual funds and investments where it’s clear they’re not going to exercise any more influence over those than anybody else would.
Certainly, in the modern era, we’ve not had a US president who has had major international business holdings that they’ve held onto as president.
Al Jazeera: If a foreign government or special interest group books a room at the Trump International Hotel, is that a conflict of interest?
Bookbinder: It’s a conflict of interest because those groups may well be doing it to try to impress the president, get close to the president and influence him. And he may, in turn, be influenced by that.
He has put the word out there that he is positively disposed towards people who do business with him and so, any time somebody who’s got interests before the president gives business to him, and especially if they make it known that they’re giving business to him, we have to assume that there is at least a possibility they’re doing it to try to influence him and that they might succeed.
And that’s really problematic. That is not the basis on which policy ought to be made in the US.
Al Jazeera: There have been a number of lawsuits filed against the president concerning these issues, one of them filed by the State of Maryland and District of Columbia, and your organisation is a party, too. What are you hoping to achieve with the lawsuit?
Bookbinder: The framers of the Constitution understood, even 200-plus years ago, the dangers of having a president be influenced by payments from foreign governments, or states, or even the federal government. That there is a real danger that the president is going to be influenced in his or her decision-making based on those kinds of payments.
The framers of the Constitution also understood that proving that a decision was made because of a payment from a foreign government or a domestic government is going to be very difficult, so they set up what is essentially a prophylactic ban. They just said: you can’t take benefits from governments.
And Trump, in running his businesses and continuing to run them the way he’s always run them, is violating that on a daily basis.
What we’re ultimately looking for with these lawsuits is a court to say: One, he is violating the Constitution. That in and of itself would be really significant. And two, he’s got to stop doing it.
Al Jazeera: What’s the significance of the federal judge in Maryland, Judge Messitte, allowing the case (DC & Maryland v. Trump) to proceed?
Bookbinder: First, it means that we can move into discovery. That means that Maryland and DC ask for documents and records of the president’s businesses and in order to figure out what payments is the president getting from foreign governments, from states, all of those things.
The other thing that is hugely important is that, for the first time in more than two centuries of American history, you’ve got a court saying what the emoluments clauses of the US Constitution mean. The court accepted the definition of emoluments that Maryland, the District of Columbia, and we were pushing for, which is a broad definition that says essentially that the president can’t take benefits and payments and gain from foreign governments, from the states, from the federal government.
The president wanted to look at it very narrowly and say that the only thing he’s barred from doing is actually taking a bribe or entering into an employment contract with a foreign government. He was sort of trying to say that he can’t be on the payroll of Russia or Saudi Arabia or whomever, but beyond that, he can take as many payments as he wants. The court said “no” to that.
For the first time in more than two centuries of American history, you've got a court saying what the emoluments clauses of the US Constitution mean ... He (Trump) was sort of trying to say that he can't be on the payroll of Russia or Saudi Arabia or whoever, but beyond that, he can take as many payments as he wants. The court said 'no' to that.
Al Jazeera: The judge constrained the suit to the Trump International Hotel; why do you think he did that?
Bookbinder: He did that largely because there are questions of standing – of who is the right kind of party to bring this type of case. In finding that the State of Maryland and the District of Columbia were appropriate parties to challenge the president on these violations, he looked at how Maryland and DC were affected by the president’s actions and found that they were affected by the kinds of unconstitutional payments and benefits that the president was getting here in the Washington, DC, area.
And most or all of that is based around the president’s hotel in Washington. That does not mean that someone else can’t bring a lawsuit, whether it’s in New York or somewhere else, and say we were affected by these unconstitutional payments that the president took here.
Al Jazeera: The Trump Organization pledged to donate any profits from foreign government patronage at its hotels while Trump is in office to the US government. Earlier this year, it wrote a cheque for more than $151,000 to the Treasury – the amount the organisation says it made from foreign governments in 2017. Shouldn’t that take care of the issue?
Bookbinder: It really doesn’t, and it was a policy and a pledge that was riddled with holes from the moment it was put into place. First of all, it’s not clear that, that giving away profits, even if he was giving away all the profits, really takes care of the constitutional issue. There is still money coming in to his businesses from foreign governments, from state governments; that’s still quite possibly a constitutional problem, even if there aren’t profits.
But beyond that, it is very difficult to know what constitutes a profit, particularly for a business like a hotel. Having additional people staying at a hotel, even at cost can be very helpful for a hotel that otherwise would have a vacant room, and we don’t know what method they used to calculate profit. We can’t really assume that they were being accurate and truly forthcoming in that.
We really have no way of verifying how they got to that number or whether it’s the right number.
Al Jazeera: What about the Trump family? His sons run the Trump Organization, his daughter is a senior White House adviser, and she’s also involved in the business. What kinds of conflict of interest do they bring up?
Bookbinder: This country has nepotism laws because you don’t want people being selected for senior positions based on their relationship to the president or their relationship to anybody else. They should be selected for senior positions because they’re the right people for those jobs.
There is a debate as to whether those laws specifically apply to White House staff, but regardless of that, the principles should and so that’s a problem, for one of the president’s daughters and his son-in-law to have senior positions.
Then, there’s the fact that Ivanka Trump owns a share of the Trump Organization and certainly, through marriage, her husband benefits from that as well, so all of the conflicts that Donald Trump himself has are now shared by two senior advisers and that magnifies the extent of those possible conflicts of interest.
Plus, Ivanka Trump had her own business, which had interests around the world. She has said that she is at least partially shutting that down. It’s unclear exactly the extent of that. That seems like a positive step, but in many ways, it’s too little, too late.
As to the president’s sons, they’re not government officials but they clearly are in regular contact with the president which undercuts, to some extent, his claims of separation from the businesses.
Al Jazeera: From a broader perspective, does this really represent something new in Washington? You have a system where lobbying is allowed and is the way things work. Donors pay for political influence; why is this any different?
Bookbinder: CREW has been concerned for years about the campaign finance system that gives excessive influence to industries and other moneyed interests. We’ve been concerned for years about the power of lobbyists. Those are real, continuing issues.
Ironically, concerns about some of those issues are part of what led to the rise of Trump.
That said, I think there is a real difference between a system which allows moneyed interests to throw around their influence in certain ways more than regular people, as problematic as that is, and a system where the people in charge are using the government for their own personal financial gain.
That starts to look more and more like an oligarchy or a kleptocracy. That is not the kind of country that we have ever thought of ourselves as having in the US and it’s a line that we cannot and should not cross.
We also need to fix the problem with money in politics and dealing with this current crisis of ethics does not absolve us of the responsibility to do that. But I think this is a further line that is being crossed.
Al Jazeera: What’s ultimately at stake here?
Bookbinder: I think what’s ultimately at stake is the integrity of our democracy. It’s a question of whether we have a government that is operating for the benefit of the American people, or one that is promoting the interests of the people in charge? And that is a really fundamental question.
I also think that when it comes to questions of ethics and corruption, the tone is set at the top and so when you have the president making this decision to keep his businesses, regardless of the really significant conflicts that that would cause, that was a message that went out loud and clear and that, I think, is part of why you’ve now seen ethics problems in Cabinet secretaries across the government, ethics problems for White House officials in large numbers, and now more and more current and former aides to the president in his campaign and his private businesses in his administration who are being convicted of crimes.
The tone is set at the top. That was a really bad tone to set and we’re now seeing the results of that.