Watchdog Groups Blast Trump Refusal to Divest

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By Kenneth P. Doyle

Ethics watchdog groups blasted what they say are inadequate steps announced by President-elect Donald Trump to separate himself from his business interests after he becomes president.

Trump said at a long-awaited Jan. 11 news conference that he would hand over management of his business operations to his two adult sons, Eric Trump and Donald Trump Jr., set up a new review process for business deals and take other steps to avoid potential conflicts of interest. The Trump Organization businesses include a wide range of real estate holdings, hotels, golf courses, licensing agreements and other assets and operations.

The president-elect said, however, that he wouldn’t relinquish his ownership interests in these businesses through divestment and placing the proceeds in a blind trust, as watchdog groups had sought.

Watchdogs said the decision would create at least an appearance that Trump’s decisions could be motivated by self-interest rather than the public interest and would provide an opportunity for those seeking government access and influence to try to enrich Trump’s family without the public’s knowledge.

Potter: Trump Thinks He’s Above Law

Trevor Potter, an attorney specializing in election and ethics law who heads the nonprofit Campaign Legal Center said in a statement that it was “not unique for a president-elect with private business interests to need to take steps to avoid conflicts of interest, such as selling those interests and creating blind trusts.”

Trump’s situation was only unique because “thinks he is above the laws and traditions his predecessors followed out of an abundance of caution—to avoid even the appearance of a potential conflict,” said Potter, who served as counsel to Sen. John McCain (R-Ariz.) during McCain’s 2008 presidential campaign.

Trump emphasized during the news conference that the office of president is specifically exempted from the main conflict-of-interest provision in the federal Ethics in Government Act, which applies to other government officials. Trump’s critics have acknowledged that statutory exemption but noted that all previous presidents since the law was passed have adhered to its restrictions as a matter of policy, according to the U.S. Office of Government Ethics (OGE).

An attorney for Trump, Sheri Dillon of the firm Morgan Lewis, said during the news conference that Trump’s business operations also weren’t covered by a provision in the Constitution known as the Emoluments Clause. She said, however, that the Trump organization’s hotels would take steps to forego foreign profits. The constitutional provision bars U.S. officials from taking an “emolument, office, or title, of any kind whatever” from a foreign government.

‘Massive Conflicts of Interest.’

Noah Bookbinder of the nonprofit watchdog group Citizens for Responsibility and Ethics in Washington (CREW) said in a statement that the only way for Trump to avoid “massive conflicts of interest” was to sell his businesses to someone outside the family and place the assets in a true blind trust, where he wouldn’t have any way of knowing or influencing how the assets are allocated.

“By refusing to divest, Trump is breaking decades of precedent, just as he did with his refusal to release his tax returns,” Bookbinder said, referring to Trump’s refusal to release his tax forms during or since the 2016 presidential campaign. Bookbinder added that Trump had “failed to live up to the ethical standard of past presidents including Ronald Reagan, George W. Bush, and all others of the past 40 years.”

CREW’s board of directors is co-chaired by two attorneys, Norman Eisen and Richard Painter, who served as ethics counsel respectively for President Barack Obama and former President George W. Bush. Eisen and Painter have made numerous public statements calling on Trump to follow previous precedents and advice of the OGE to divest his business interests to avoid potential conflicts of interest once he becomes president.

Leaders of other nonprofit groups, including Public Citizen, Democracy 21, Every Voice and others echoed similar criticism of Trump and called on him to take steps to separate himself from an ownership interest in the Trump businesses.

Choice Between Business, White House

Another nonprofit, Take Back Our Republic, which seeks to increase conservative support for stronger ethics and campaign finance laws, said Trump’s announced actions were less than ideal but indicated that the president-elect was at least taking seriously the question of possible conflicts of interest.

“I am disappointed a more aggressive plan for full divestiture into a blind trust was not pursued,” said a statement from the group’s executive director, John Pudner, a former Republican political consultant. But he noted that Trump’s plans indicated those family members involved in the family business wouldn’t have a role in providing White House advice.

Pudner’s statement applauded Trump’s promise “to aggressively monitor business deals to ensure that the plan to have the Trump children basically choose between the business (Don and Eric Trump) or the White House (Ivanka Trump and her husband Jared Kushner) is in fact creating the necessary wall between Mr. Trump’s decisions as President and the interests of the Trump Organization that will still benefit his family.”

Ivanka Trump and Kushner have announced plans to move to Washington during Trump’s presidency, with Kushner taking on a formal role as a White House adviser.

The conservative watchdog group Judicial Watch was more sympathetic to Trump’s plans, saying in a statement that there was “no off-the-shelf ethics plan for a matter as complex and unprecedented as this.” The statement said Trump “seems to be on the right track” and that it would be unfair to insist that Trump destroy his business to become president.

To contact the reporter on this story: Kenneth P. Doyle in Washington at kdoyle@bna.com

To contact the editor responsible for this story: Paul Hendrie at phendrie@bna.com

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