[Original version May 2, 2017; updated April 11, 2019]
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 Organization 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 Organization from his son Eric, we will 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. We will organize the issues 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:
- U.S. Government Payments to the Trump Organization
- Use of the Power of the Presidency to Promote Trump Brands
- U.S. Government Regulatory and Policy Decisions that Benefit Business Interests of the Trump Family and Senior Advisors
- Private and Foreign Interests Seeking to Influence the Trump Administration Through Dealings with Trump Businesses
1. U.S. Government Payments to the Trump Organization
One of the most direct ways that President Trump can profit from the presidency is by making decisions that effectively require U.S. government agencies to purchase goods or services from the Trump Organization. Though unseemly and costly to taxpayers, this is one of the less destructive forms of potential profiteering by President Trump, since it does not significantly distort U.S. policy. Illustrative examples that have been reported in the media include the following:
- Secret Service at Trump Tower: Up until July 2017, the Secret Service, which is charged with protecting the President and his family, rented out two vacant floors of Trump Tower. This was not the first time the Secret Service had rented space from the government officials it is protecting. For example, when the Secret Service needed to protect former Vice President Joe Biden, the Service rented a nearby cottage that he owned. However, the payments were several orders of magnitude larger in the case of Trump Tower. In July 2017, the Secret Service vacated its rented space in Trump Tower because of disputes over terms of the lease, relocating to a trailer on the nearby sidewalk.
- Department of Defense at Trump Tower: The Department of Defense has followed its standard practice of setting up a separate headquarters near the President’s private residence—in this case also in Trump Tower. The Department rented space near President Barack Obama’s Chicago home and rented a secure trailer near President George Bush’s ranch, but the sums of money involved in the Trump Tower rental are substantially larger. The Department of Defense apparently had a $2.39 million lease to rent space in Trump Tower from April 2017 through September 2018. The status of the headquarters after September 2018 has not been publicly reported. (The Wall Street Journal obtained the redacted lease, which does not reveal the owner’s name, through a Freedom of Information Act request. In a letter to Representative Jackie Speier, a Defense Department official claimed that the unit is privately owned and that the rental transaction would not benefit President Trump. The $130,000 monthly rental price tag is well above the most expensive recent listings at Trump Tower.)
- Trips to Mar-a-Lago and other Trump Properties: As of March 31, 2019, President Trump had spent 235 days at properties owned by the Trump Organization, with the bulk of that time at the Trump National Golf Club in Bedminster (71 days) and Mar-a-Lago resort in Florida (94 days). (Visits also tracked here.) On these visits, the Secret Service must pay the Trump Organization directly for any costs related to protecting the president. In fact, a Government Accountability Office report concluded that the Secret Service paid about $60,000 to the Mar-a-Lago resort for four trips between February and March 2017 alone (out of a total cost to the government of $13.6 million). Based on this figure, the Washington Post estimates that the government had spent a total of nearly $370,000 at Mar-a-Lago itself as of February 2019. The Secret Service, however, appears primarily to spend money at third-party companies, such as tent and fencing suppliers, when supporting Mar-a-Lago visits.
- Trump Properties Abroad: If President Trump or his immediate family travel abroad and choose to stay at a Trump property, the U.S. government will pay the Trump Organization to rent space for the Secret Service and any additional necessary support. For example, the State Department paid at least $60,000 to the Trump Organization’s golf resort in Scotland when President Trump stayed there in July 2018. (An attorney for the Trump Organization said that the resort charged the rooms at cost, receiving no profits from the stay, and sources differ slightly on the exact amount paid—see here, here, and here.) Similarly, the State Department paid $15,000 for 19 rooms at the Trump hotel in Vancouver when Donald Jr., Eric, and Tiffany Trump attended an opening ceremony there in February 2017. (This amount does not include undisclosed Secret Service expenses for the trip.)
- Secret Service on Trump Jets: The President is required to travel on Air Force One or Marine One during his time in office, but the First Family can and does travel on private planes owned by the Trump Organization. When the Secret Service accompanies the Trump family on their private planes, they reimburse the Trump Organization directly. (In fact, during the presidential campaign the Service paid TAG Air, Inc.—a Trump company—$1.6 million. The Service may have over-reimbursed the campaign for these flights due to an internal error by the Service and one instance of double-billing by the campaign.)
2. Use of the Power of the Presidency To Promote Trump Brands
Donald Trump and his family can also enrich themselves by taking advantage of the unique status and exposure of the President of the United States to promote Trump family brands. Shortly after the inauguration Eric Trump noted that the Trump brand “is the hottest it has ever been,” while Ivanka Trump’s apparel line sales increased 346% during the first month of her father’s presidency. While some of this increase is “passive” and thus less problematic, there have been incidents that suggest efforts on the part of President Trump, his family, and members of his administration, to actively promote Trump brands. Indeed, the Trump Administration promoted the Trump brand by mentioning or referring to its private businesses on at least 54 different occasions during the president’s first year in office and 87 times during his second year. President Trump himself promoted his brands 68 times in 2018, up from 33 in 2017. (Interestingly, some recent reports (see here, here, and here) suggest that, despite these efforts, the value of the Trump Organization may in fact be decreasing, and the President’s personal wealth falling, perhaps due in part to the polarizing nature of his presidency.)
While distasteful, this brand-promotion activity is also one of the less harmful ways in which the Trump Administration may seek to profit from the Presidency, as it does not involve significant distortions of U.S. policy. Nonetheless, the overt attempts to use the presidency as a marketing opportunity indicate a troubling underlying attitude. Examples of specific instances in which the Trump family or members of the Trump Administration have taken active steps to use the prestige and influence of the presidency to promote the Trump brand include:
- Melania Trump Jewelry: Within minutes of President Trump’s inauguration, the White House website was updated to include details on Melania Trump’s jewelry line at QVC. After criticism of this endorsement of her products, the site was updated to drop any mention of specific brands.
- Nordstrom Tweet: After Nordstrom’s department stores dropped Ivanka Trump’s clothing line, President Trump attacked Nordstrom’s “unfair” treatment of his daughter. Shortly thereafter, White House senior advisor Kellyanne Conway explicitly endorsed the Ivanka Trump brand, saying from the White House briefing room, “I’m going to give a free commercial here: Go buy [Ivanka’s products] today, everybody.” This was a clear violation of a federal ethics regulation, codified at 5 C.F.R. § 2635.702(c), which states that a federal employee “shall not use or permit the use of his Government position or title or any authority associated with his public office to endorse any product, service, or enterprise[.]”
- Scotland Golf Course Tweet: On March 2, 2018, President Trump retweeted a post by the Trump Organization advertising the Trump Aberdeen golf course in Scotland, adding that it is “perhaps the greatest golf course anywhere in the world” and that it “furthers U.K. relationship!” While Trump posted the tweet using his personal Twitter account, not the official presidential Twitter account, he still received widespread criticism for promoting the golf course, with a former head of the Office of Government Ethics calling it “Trump’s most explicit commingling of public interests and public office to date.” Several commentators noted the tweet came just days after the Scottish government prevailed in a lawsuit that Trump had brought in an attempt to block a wind power development near this golf resort.
- Access and Influence at Trump Properties: President Trump has actively promoted the impression that staying at Trump properties—particularly at the Mar-a-Lago resort, where membership applications have soared, and Trump’s Bedminster Golf Club—comes with a front-row seat to the inner workings (and “excitement”) of the U.S. government. Indeed, President Trump himself has nominated at least eight members of his clubs to senior administration posts—including five ambassadorships—and has boasted that “[m]any of the world’s great leaders request to come to Mar-a-Lago.” President Trump’s frequent stays at the Mar-a-Lago and Bedminster resorts, noted in the previous section, have been criticized by ethics experts as providing free publicity for Trump Organization properties. Presumably to capitalize on the reputation of Trump properties as uniquely situated to provide access to the president, the Mar-a-Lago resort doubled its initiation fee to $200,000 following the election. Annual dues increased by $1,000, to $15,000, and tickets to the annual New Year’s Eve party in 2018 were considerably higher than in previous years—guests were charged $1,000 (up from $750 in 2017 and $575 in 2016) and members $650 (up from $525 in 2016). A since-discontinued brochure promoting Bedminster as a wedding venue promises that if President Trump “is on-site for your big day, he will likely stop in & congratulate the happy couple.” In February 2019, Trump recorded a welcome video for guests at a Mar-a-Lago party where tickets ranged from $550 to $1,650 per person; Commerce Secretary Wilbur Ross dropped by to take photos with the party’s guests. In August 2018, Trump spent 12 days at the Bedminster Club (which an administration official has referred to as “the Summer White House”), where he golfed with a U.S. Senator, signed an executive order reimposing sanctions on Iran, met with business executives, and hosted a fundraising dinner. During a similar two-week stay in August 2017, he signed bills, met with members of his administration, and hosted some of his most generous donors for dinner. There have also been instances of Mar-a-Lago associates involving themselves in government affairs. For example, a Mar-a-Lago member sent a policy proposal on behalf of the American Dental Association to President Trump (on Mar-a-Lago stationary, and addressed “Dear King”), which the President then forwarded on to the Secretary of Veterans Affairs. Even more troublingly, there are reports (currently under investigation by the House Veterans Committee) that three Mar-a-Lago members acted as a de facto shadow leadership for the Department of Veterans Affairs, reviewing a confidential draft of a $10 billion government contract and weighing in on policy and personnel decisions.
- Advertisement for Mar-a-Lago on State Department Website: In April 2017, a U.S. State Department website called Share America—which is supposed to be a “platform for sharing compelling stories and images that spark discussion and debate on important topics like democracy, freedom of expression, innovation, entrepreneurship, education, and the role of civil society”—posted a feature on Trump’s Mar-a-Lago resort. The post was then shared by the U.S. embassies in both Albania and the United Kingdom, though the posts have since been taken down. After widespread criticism from lawmakers and ethics experts—who pointed out that the post was also a clear violation of 5 C.F.R. § 2635.702(c)—the State Department removed the posting.
- Ivanka Trump’s Clothing Line: In 2017, the World Bank launched the Women Entrepreneurs Finance Initiative, which awards millions in financing to women entrepreneurs in emerging markets (including $50 million that President Trump recently committed to the project). Ivanka Trump’s clothing brand stood to gain from her involvement in the program, prompting Senator Ben Cardin to write a letter to Treasury Secretary Steven Mnuchin objecting that it is inappropriate for Ivanka Trump to “serve as a public advocate for the fund” as long as “Ms. Trump continues to benefit financially from a brand that bears her name.” Ivanka Trump continues to serve as a public advocate for the fund, but closed her clothing line in July 2018.
- Ivanka Trump’s Book: Both Voice of America (a government funded news agency) and the State Department promoted Ivanka Trump’s book, Women Who Work: Rewriting the Rules for Success. Voice of America published an Associated Press article review about the book and advertised the book on Twitter. The State Department’s Office of Global Women’s Issues retweeted Ivanka Trump’s tweet promoting the book, but later deleted the tweet after criticism. (Trump herself has pledged not to draw publicity through any promotional tour or media appearances, and she has also pledged to donate the advance and profits from the book to charity.)
- Golf Tee Markers: The Trump Organization ordered the production of tee markers for golf courses emblazoned with the Presidential seal. The seal’s use is typically reserved only for official government business and misuse of the seal is a criminal offense.
- Trump Merchandise with White House Images: In the spring of 2019, the Trump Organization released a “Cherry Blossom Collection” of merchandise “inspired by” the Trump International Hotel in Washington, DC, which included images of the White House on two t-shirts, a mug, and a soap set. The soap set included an illustration of the White House emblazoned with the Trump Hotels logo. The former director of the Office of Government Ethics decried the products as an attempt by Trump to “monetize the presidency.” Following the media attention, the Trump Organization removed the image of the White House from the marketing materials for the products, though it is unclear if the items are still for sale.
- White House Discount for Golf Merchandise: In the summer of 2018, the Trump National Golf Club in Bedminster, NJ was offering discounts to President Trump’s staff on branded merchandise equivalent to the 15–70% discounts members receive. Staff could receive the discount if they flashed their Secret Service pins identifying them as White House officials. One news source claimed that President Trump and Ivanka Trump personally pitched the discounts, though White House officials denied that Ivanka Trump was even aware of the discount. The discounts encourage White House staff to purchase and perhaps wear Trump-branded merchandise, helping promote the Trump brand. The discounts may violate ethics rules on gifts to government employees (see here and here).
- Trump 2020 Campaign: President Trump plans to headquarter his 2020 reelection campaign at Trump Tower in New York City. In February 2019, Trump’s campaign manager gathered Republican donors for a strategy presentation at the Trump Hotel in Washington, D.C., and the campaign held fundraisers at the hotel in June 2017 and September 2018. Sources differ on precisely how much the campaign has spent at Trump businesses in this election cycle, with the Washington Post reporting $743,781 (as of November 2018), the Citizens for Ethics and Responsibility in Washington reporting $1 million (as of January 2019), and Forbes reporting $1.3 million (as of March 2019). The Trump Victory and Trump Make America Great Again Committee have together spent more than $1 million at Trump properties during his term. Ethics experts criticize the president for improperly mixing his business interests with his political interests, since campaign events also serve as promotional events for his properties. For instance, the Trump campaign sent a tweet to supporters describing June 2017 event venue as a “beautiful hotel” and “BIG LEAGUE.”
- Republican Re-Election Events: The Republican National Committee (RNC), numerous congressional campaigns, the Republican Governors Association, and state Republican Party organizations have spent somewhere about $3.5 million at Trump-owned businesses in re-election efforts and fundraisers in the 2018 election cycle. In March 2018, the RNC spent $271,000 at two Trump properties, equivalent to 86% of its expenditures for its venue and catering. The RNC also spent over $122,000 at the Trump International Hotel for a fundraiser in June 2017 (at a rate of $35,000-a-person), and the Republican Governors Association spent over $400,000 on a “Corporate Policy Summit” at Trump National Doral in Miami. In all, 33 political events (including 5 RNC events) were held at a Trump property during the president’s second year in office. The RNC is also paying $37,541 per month in rent to Trump Tower, and Republican campaigns and committees have spent over $42,000 just at the steakhouse inside the Trump International Hotel in Washington. Additionally, at least 117 Republican candidates and committees sent money at Trump properties during the 2018 midterm election cycle. (See here for a complete breakdown.) While sitting Presidents often host fundraisers for re-election campaigns, it is troubling when they directly profit from these events.
- Elected Officials at Trump Properties: During 2017, 36 US Senators and Members of Congress visited Trump properties, for a total of 47 visits. In 2018, those figures increased to 53 and 90, respectively. Vice President Mike Pence also made at least nine appearances at the Trump Hotel in 2018, an increase from three visits in 2017. Most of these elected officials’ visits involved attending political fundraisers, such as the gala held by Turning Points USA and the America First Action Leadership Summit. At least 33 state-level officials also visited Trump properties, including nine governors, two lieutenant governors, and 15 members of state legislatures (see here and here). If these visits are taxpayer funded—and ongoing public records requests are seeking to find out—officials could be diverting public funds into the president’s private trust. This concern appears to have been borne out in a recent investigation by the Portland Press Herald, which found that former Maine Governor Paul LePage and his staff spent at least $22,000 in Maine taxpayer money staying at the Trump International Hotel over a two-year period—an amount far in excess of the state spending limit for this type of expense.
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 (see here, here, and here); multiple Trump properties until 2019 failed to use a government screening tool to ensure that employees were authorized to work in the United States; 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:
- HUD Subsidies: The Trump Organization owns properties that may be eligible for grants and subsidies from the Department of Housing and Urban Development (HUD). Although Trump’s proposed 2019 budget sought to cut HUD grants and subsidies overall, it notably left in place a federal housing subsidy paid directly to private landlords—a program from which Trump earned millions of dollars in profits. In fact, HUD paid the partnership that owned Starrett City (of which President Trump was part owner until May 2018) more than $490 million in rent subsidies between May 2013 and June 2017, with nearly $39 million of that figure coming in after the President took office. Furthermore, President Trump nominated Lynne Patton, an event planner and longtime Trump family loyalist with no experience in housing or housing policy, to head HUD’s Region II, which includes New York and New Jersey. In her new position, Patton has the authority to “disburse billions of dollars in federal housing funds to the states in which the President’s company owns the most property.” Following a congressional letter sent to HUD concerning this potential conflict of interest, Patton recused herself from all policy decisions involving Starrett City.
- 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, in one of its first actions in office, 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 2015 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 in December 2018 proposed a permanent repeal and replacement of the rule. 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 and real estate developers, meaning the Trump Organization stands to gain from the proposed repeal. (In August 2018, a federal district court blocked the administration’s efforts to delay the 2015 Obama-era rule’s implementation; the Supreme Court has agreed to hear the administration’s appeal.)
- General Services Administration Lease: The Trump Organization leases 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. The GSA’s Inspector General published a report in January 2019 finding the agency had failed to address possible constitutional violations in its decision and “instead certified compliance with a lease that is under a constitutional cloud.” While the report does not go so far as to find the lease should be canceled, it recommends that it be reviewed. The lease provoked further controversy during the partial federal government shutdown in January 2019. Although the National Park Service was closed and rangers were furloughed without pay, the GSA found money in its budget to pay the salary of the three rangers running the elevator and observation deck at the Old Post Office’s clock tower. A lawsuit filed in February 2019 under the Freedom of Information Act alleges that the GSA and National Park Service wrongfully withheld records relating to the operations of the Old Post Office tower during the shutdown. The records were eventually released and show that the GSA made a deal to spend nearly $600,000 to continue operating the Old Post Office’s clock tower for up to a year in the event of a continuing government shutdown.
- New FBI Headquarters: President Trump has become personally involved in plans to demolish the FBI headquarters in Washington, D.C., presenting a potential conflict of interest because the Trump International Hotel is located almost directly across the street from the current FBI headquarters. The hotel could suffer losses if the FBI relocates, both because the property could be developed by a potential hotel competitor, and because a lengthy construction process nearby could deter guests from staying at the Trump International Hotel. The FBI had planned for years to demolish its building and move to a new larger, more secure suburban facility nearby, but it abruptly changed course in early 2018, planning instead to rebuild a smaller headquarters on the current site, and move more than 2,000 employees out of the Washington area. Officials at the General Services Administration (GSA) have been evasive about their meetings with the President and senior White House staff regarding the plan, as documented in an August 2018 Inspector General report. (Also, after an ethics watchdog’s FOIA request to GSA for records related to the decision provided few results, a federal court in December 2018 ordered the GSA to conduct a new search.) After GSA officials invoked executive privilege regarding the meetings, the GSA’s Inspector General learned that the White House Counsel’s Office had authorized them to discuss “high-level agreements that resulted from the meetings,” but “not to disclose any statements made by the President.” Furthermore, during House testimony in April 2018, the GSA Administrator twice dodged questions about whether she had discussed the project with the President or other senior White House officials, possibly misleading her audience, according to the report. Congressional Democrats have since released emails that appear to indicate President Trump was directly involved in scuttling the relocation plan, with a January 28, 2018 email written by the GSA Administrator’s Chief of Staff stating that the project was now going to be “a demolition/new construction per the president’s instructions” and “what POTUS directed everyone to do.” However, in testimony to Congress on March 13, 2019, the GSA Administrator stated that the President had no role in deciding to keep the FBI headquarters in place, and claimed that the decision had already been made at the request of FBI Director Christopher Wray before she met with the President to discuss the project.
- Ivanka Trump and Jared Kushner’s Advisory Roles: Ivanka Trump serves as an advisor to her father, while her husband Jared Kushner also serves as senior advisor to the president. Since Ivanka 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 (approximately $1.5 million a year) from the Organization and the Trump International Hotel in Washington, D.C. (Ms. Trump’s fashion brand announced it was shutting down in July 2018, after she earned approximately $5 million from the brand in 2017.) Similarly, although 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. Like Ivanka Trump, Kushner does not receive a government salary. Neither Ivanka Trump nor Jared Kushner placed their assets in a blind trust, which means that their financial interests could influence their counsel to President Trump, and both of them have continued to earn substantial sums from real estate, other investments, and their stakes in their family companies.
- 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 through at least 2017 was invested in Mr. Roth’s real estate development company, Vornado Realty Trust, and received $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. The council’s activities are currently the subject of a discovery battle in district court.
- Deutsche Bank Investigation: The Department of Justice is investigating Deutsche Bank’s connection to a Russian money laundering scheme, and Justice Department officials appointed by President Trump are overseeing the DOJ’s investigation. Deutsche Bank has lent President Trump more than $2 billion dollars, and Trump 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. In addition to the concerns about how these financial interests might influence the Justice Department’s current investigation, critics also raised concerns about the Labor Department’s decision, in January 2018, to grant Deutsche Bank a waiver from the punishments it would have otherwise received after previous criminal convictions; the waiver allowed 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 concerns about whether the financial interests of President Trump and his son-in-law may have influenced this decision. The House Financial Services Committee is also investigating both Deutsche Bank and the president’s finances, and has stated that Deutsche Bank is cooperating with the committee.
- 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 then-Interior Secretary Ryan Zinke granted was for Florida. Secretary Zinke’s justification for the exemption, that “Florida is reliant on tourism as an economic driver,” also applies to other coastal states. Many skeptics have therefore suggested that political or personal financial considerations—in particular, the possible adverse impact that offshore drilling could have on Trump’s Mar-a-Lago resort in Palm Beach, Florida, influenced the administration’s decision. Secretary Zinke defended the decision in March 2018, citing an existing federal moratorium on offshore drilling in Florida until 2022 that he said distinguishes it from other states. In October 2018, New Jersey Attorney General Gurbir Grewal sued the U.S. Department of the Interior for failing to answer a FOIA request about why it exempted only Florida. However, there is some debate about whether the exemption was actually formalized by the Interior Department; Secretary Zinke left office in January 2019 without any written, formally-enacted confirmation of the offshore drilling exemption for Florida, and in March 2018 when asked by the House Committee on Natural Resources he stated that “Florida did not get an exemption.”
- 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. President Trump himself has invested $3-5 million in Mr. Paulson’s funds, and thus would stand to gain from a decision to end government control of the companies. Since President Trump’s election, shares of Fannie Mae and Freddie Mac have increased substantially, and Treasury Secretary Mnuchin—a former business partner of Mr. Paulson—also expressed interest in ending the conservatorship. 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 2017. Share prices spiked 170% in January 2019 amid increased talk by administration officials of unilateral action, fell days later when a spokesperson walked back the statement (indicating the White House planned to work with Congress), and then rose again in February when officials again suggested the White House might bypass Congress. Two watchdog groups wrote a letter to the Inspectors General of the Treasury Department and Federal Housing Finance Agency stating that “[t]his curious series of events” raises concerns about insider trading by senior administration officials. On March 27, 2019, President Trump officially called for an end to the Fannie Mae and Freddie Mac conservatorship, signing an order to “develop a reform plan for the housing finance system.”
- The Scope of the Travel Ban: In January 2017, President Trump signed a controversial executive order that barred entry into the U.S. for individuals from seven Muslim-majority countries in the Middle East. (A revised order replaced three of the countries originally included with Chad, North Korea, and Venezuela.) Experts, lower courts, 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 seven Muslim-majority countries originally 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 Visa Applications and Investigation: Despite President Trump’s campaign rhetoric about hiring American workers, his administration increased the permitted number of H-2B visas from 66,000 to 81,000 in both 2017 and 2018. In 2017, 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. In July 2018, the Trump Organization submitted a request for 61 H-2B visas for guest workers at Mar-a-Lago. (The administration has resisted pressure to increase quotas for other guest visa categories, including those for tech workers, for which Trump companies typically do not apply.) The Department of Labor recently announced an initiative focused on investigating hotel industry breaches of the H-2B visa program requirements, particularly the requirement that an employer attempt to recruit domestic workers. Trump properties in Florida and New York hired 143 foreign guest workers but only one domestic seasonal worker between 2016 and early 2018, heightening Trump companies’ exposure in this investigation and posing a potential conflict of interest.
- Benefits from the Tax Plan: The Republican tax-reform bill signed in late 2017 substantially benefits 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. In August 2018, the U.S. Attorney’s Office for the Southern District of New York secured a guilty plea from President Trump’s former attorney, Michael Cohen, and granted immunity to the Trump Organization’s former chief financial officer, Allen Weisselberg, for testimony in the Cohen case. That Office may also have to make other important decisions in investigating potential Russian interference 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 Wilbur Ross’s Financial Interests: Commerce Secretary Wilbur Ross pledged to divest millions of dollars in assets to avoid conflicts of interests, and in November 2017 he wrote to the Office of Government Ethics that he had divested of everything he promised. However, his claims to have divested himself of all assets that might create a conflict of interest were shown to be false. For most of 2017, Secretary Ross maintained financial stakes in Chinese, Russian, and Cypriot firms, all of which would potentially be affected by U.S. government policies that Secretary Ross is in a position to influence. (Secretary Ross’s family appears to continue to hold interests in these companies, even though Ross himself has apparently now divested.) For example, Secretary Ross maintained passive investments in Diamond S Shipping Group Inc., one of the world’s largest operators of shipping vessels, despite stepping down from positions within the company. Also, as the so-called “Paradise Papers” leaks revealed, 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 Vladimir Putin’s son-in-law. 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. 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. Moreover, five days before the media first reported Secretary Ross’s connections to Navigator (which caused the stock price to drop), he shorted stock in the company, leading several commentators to assert that Ross was likely taking advantage of his knowledge that the story was about to break in order to make more money off of the connection. In July 2018, the Acting Director and General Counsel of the Office of Government Ethics informed Ross that his “failure to divest” and related false statements—for instance, representing that he divested from stock in Invesco Ltd. (stock valued at $10–50 million) before he had done so—“created the potential for a serious criminal violation on your part [of 18 U.S.C. § 208 (conflict of interest)] and undermined public confidence.” Ross responded by “direct[ing] that all of [his] equity holdings be sold and the proceeds placed in U.S. Treasury securities.” The next month, two legal watchdog groups (see here and here) accused Ross and his wife of having held financial interests in several companies—including Boeing, Chevron Corporation, Greenbrier Companies, and the International Automotive Components Group—while meeting with those companies’ CEOs while they were lobbying the U.S. government on issues related to his position, despite his previous promise to divest. In October 2018, Secretary Ross filed yet another disclosure correction admitting that in violation of his federal ethics agreement, he retained $15,000 worth of stock in BankUnited, Inc. through October 2018, despite submitting two federal ethics reports swearing he had divested the stock. He claimed the errors were inadvertent. These acts and omissions potentially violate 18 U.S.C. §§ 1001 and 1621, and 5 U.S.C. app. § 104 (prohibitions on false statements and omissions), in addition to 18 U.S.C. § 208. In February 2019, the Office of Government Ethics took the rare step of refusing to certify Ross’s 2018 financial disclosure report, citing his false sworn statements about the BankUnited stock.
- Carl Icahn: 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 ultimately benefited—to the tune of $189 million—an oil refinery in which Mr. Icahn held an 82% stake. The Environmental Protection Agency Administrator, Agriculture Secretary, key Senators, and the President met in early 2018 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 (SEC), the Commodity Futures Trading Commission, and the EPA to look into whether Mr. Icahn’s conduct amounted to insider trading or other illegal conduct. In late 2017, Manhattan federal prosecutors were investigating Icahn’s actions as special advisor and served him with a subpoena. In a separate incident that prompted an nonpartisan watchdog group to request an SEC investigation, Icahn sold over $30 million of stock in Manitowoc Company—a crane manufacturer that uses imported steel—shortly before President Trump announced new tariffs on foreign steel and aluminum imports in March 2018. Icahn had not traded his stock in the company for more than three years; after Trump’s announcement, the trading price of the company fell by more than 6%, leading some to suspect Trump tipped off his former advisor prior to the formal announcement.
- Acting Interior Secretary David Bernhardt: In February 2019, a watchdog submitted an ethics complaint to the Inspector General of the U.S. Department of the Interior alleging that Acting Interior Secretary David Bernhardt may have violated his ethics pledge by making decisions about water diversion and endangered species protections that helped a water district for which he had provided significant lobbying work before entering office. Two U.S. senators have also asked the Inspector General to investigate the matter.
- Education Secretary Betsy DeVos and Neurocore: Education Secretary Betsy DeVos continues to hold between $5 million and $25 million in stock in Neurocore, a company that provides brain diagnostics and treatment for children and adults. In addition to the general possibility of a conflict of interest arising, DeVos’s stake in the company presents the appearance of her endorsing the company’s claims, particularly since the DeVos-owned investment company promotes Neurocore on its website.
- Rupert Murdoch’s 21st Century Fox: Media mogul Rupert Murdoch is a close confidant and advisor to President Trump. Mr. Murdoch has at least three important interests that President Trump could influence. First, President Trump could influence the 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 creates a powerful rival to Mr. Murdoch’s company, 21st Century Fox. A recent unconfirmed report by The New Yorker claims that in summer 2017, a few months before the Justice Department intervened against the merger, President Trump attempted to order economic advisor Gary Cohn to pressure the Justice Department to file suit. According to the report, Cohn ignored Trump’s order because he saw it as improper. The Justice Department lost its suit to stop the merger in federal district court in June 2018, and lost its appeal in February 2019. There have also been unconfirmed reports (see here and here) that in late 2017, 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. Second, also in June 2018, the Department of Justice approved the Walt Disney Company’s bid for the entertainment assets of 21st Century Fox with certain divestment conditions. The Department’s divergent positions in the two cases raised concerns of favoritism in light of President Trump’s frequent praise for Fox News and closeness to Murdoch. Third, the Justice Department opened an investigation in 2017 examining Fox News’ use of financial settlements related to sexual harassment lawsuits brought by female employees, although the investigation’s current status is unclear.
- 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. Allen was confirmed by the Senate in late December 2017. TVA had been Armstrong Energy’s second-largest customer, and at the time of his nomination, Allen was still receiving payments from Armstrong on the basis of the amount of coal mined and sold from various Armstrong-owned properties. Armstrong Energy declared bankruptcy in late 2017; earlier that year, one of Armstrong Energy’s TVA customers replaced two of its coal burners with a natural gas generator, contributing to Armstrong Energy’s financial problems.
- 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 (DHS). She was confirmed by the Senate on December 5, 2017. Thad Bingel of the 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 owns another company that does government contracting work, and Mr. Bingel’s clients have in total hundreds of millions of dollars of contracts with DHS. For instance, one client currently has a $145 million DHS deal to build a “virtual wall” along the U.S.- Mexico border. This connection sparks conflict of interest concerns that Mr. Bingel’s free help might influence Ms. Nielsen to send his company future DHS contracts. Secretary Nielsen resigned in April 2019.
- Barry Myers Nomination: In October 2017, President Trump nominated Barry Myers, then chief executive of weather forecaster AccuWeather, to head the National Oceanic and Atmospheric Administration (NOAA). Myers’s nomination initially raised concerns because AccuWeather relies on the data NOAA collects and Myers has long sought to prevent the government from competing with AccuWeather’s forecasts. But even more troubling is Myers’s decision to use AccuWeather’s D.C. lobbyist to manage his confirmation process. As with Secretary Nielsen’s use of a private lobbyist, Myers’s approach creates a concern that Myers will give special access to the lobbyist’s firm.
- 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 real estate crowdfunding 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. In May 2018, Cadre was in talks to receive an investment of at least $100 million from the SoftBank Vision Fund, a private fund that receives around half of its capital from the governments of Saudi Arabia and the United Arab Emirates. While the fund chose not to invest, the talks raised conflict-of-interest concerns because of SoftBank CEO’s investment in Sprint, which is seeking federal approval to merge with T-Mobile, and Kushner’s role in U.S. policy toward the Middle East (see here and here). This issue received renewed attention following the murder of journalist Jamal Khashoggi by Saudi intelligence agents, given Kushner’s close relationship with Saudi Arabia’s Crown Prince Mohammed bin Salman.
- Jared Kushner and Opportunity Zone Funds: A new real estate investment program that has been heavily promoted by Ivanka Trump (see here, here, and here) appears situated to benefit her husband Jared Kushner and his family. The “Opportunity Zones” program offers large tax breaks to developers who invest in economically disadvantaged low-income neighborhoods. As mentioned above, Jared Kushner owns a passive stake in Cadre, and the company has announced its intention to take advantage of the Opportunity Zone program to build projects across the country. Additionally, the Associated Press found that 13 properties held by the Kushner family could qualify for tax breaks due to their location in newly-designated Opportunity Zones in New Jersey, New York, and Maryland. (Many of these properties include units priced well into the millions in already affluent areas.) While the couple did not play a role in determining which neighborhoods would receive the “Opportunity Zone” designation, experts have called the situation an “ethical minefield,” and even if the couple does not file for the tax credits, the properties they own will likely benefit from an increase in overall neighborhood prices. In February 2019, President Trump further bolstered the program with an executive order engaging thirteen federal agencies to aid its implementation.
- Kushner Companies Seeking Federal Loan: The property company owned by Jared Kushner’s family, Kushner Companies, is seeking a $1.15 billion loan from Fannie Mae and Freddie Mac to facilitate a purchase of apartments in Maryland and Virginia. If Kushner Companies proceeded with the purchase, it would be the firm’s largest purchase in a decade and would add to the more than $500 million in loans Kushner Companies already have from Fannie Mae and Freddie Mac. The loan application puts Jared Kushner in a position to financially benefit from government decisions, particularly as the administration moves forward with ending the government conservatorship over Fannie Mae and Freddie Mac (see above).
- 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 at least 280 workers after being awarded the contract. Suspiciously, Whitefish Energy Holdings is located in then-Interior Secretary Ryan Zinke’s hometown in Montana, and the company had previously employed his son. While Secretary Zinke maintained 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. Since then, Whitefish has received new government contracts, including one worth $225,000 in June 2018 from the Interior Department and another worth more than $1 million in September from the Energy Department. The Interior Department denied that Zinke played any role in awarding the June contract.
- Ryan Zinke’s Property Deal: Acting on a referral from the Department of the Interior’s Acting Inspector General, the Department of Justice is currently investigating former Interior Secretary Ryan Zinke for possible criminal prosecution regarding a Montana land development deal (see here, here, and here). The development plan in Zinke’s hometown of Whitefish, Montana is backed by the David J. Lesar, the chair of Halliburton, the nation’s largest oil services firm. Halliburton is subject to regulation by the Interior Department. Lesar is funding the construction of a retail park adjacent to multiple land plots owned by Zinke and his wife that would stand to increase substantially in value if the deal goes through. A nonprofit foundation created by Zinke and currently run by his wife committed in writing to allow the new development to build a parking lot on land donated to the foundation to create a town park. Records show that even after assuming office, Zinke met with Lesar and the lead project developer, and has been involved in communications about the project’s design. Zinke has been the subject of seventeen known federal investigations into ethical violations during his tenure as Interior Secretary, of which the above appears to be among the most serious. While Secretary Zinke resigned from his position on January 2, 2019, the probe into the land deal will continue.
- Brenda Fitzgerald’s Financial Investments: Dr. Brenda Fitzgerald resigned from her post as Director of the Centers 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, and his wife Merlynn is the chief executive of Myriddian LLC. 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.” Of particular concern is that the administrator of the Center of Medicare and Medicaid Services (CMS) was one of the individuals invited to the tour (though she did not attend), and less than three months later, Myriddian LLC was awarded a $485,000 government contract without a competitive bidding process from CMS. Secretary Carson has asked HUD’s Inspector General to investigate the issue.
- NLRB’s Vacating Hy-Brand Decision: In February 2018, the National Labor Relations Board (NLRB) vacated its December 2017 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.”
- Ethics Waivers Issued to Former Industry Lobbyists: The White House Counsel’s office has issued at least 37 ethics waivers that allow key Trump administration officials to participate in matters involving former private clients, including at least three that were undated and potentially issued retroactively (see here and here). The EPA seems to have the most conflicts of interest, with nearly half of Trump appointees having strong industry ties. Of the 59 EPA hires from the last year, at least three have gotten waivers allowing them to participate in matters involving former clients, despite signing ethics agreements precluding them from doing so. Additionally, President Trump nominated Peter Wright, a senior attorney at Dow Chemical, to head the EPA’s Office of Land and Emergency Management. If confirmed, Mr. Wright would have been responsible for overseeing contaminated Superfund sites that Dow Chemical was responsible for cleaning up. Wright began working for the EPA in July 2018 as a “special counsel,” sparking concerns among Senate Democrats that he was circumventing the Senate confirmation process. He was ultimately not confirmed before the 115th Congress ended, meaning President Trump would need to resubmit his nomination for Mr. Wright to be considered.
- Denials of Tariff Exclusions to U.S. Manufacturers: U.S. companies may request “exclusions” from the Trump administration’s tariffs on steel imports for products that they cannot buy domestically, and domestic steel manufacturers have an opportunity to object to the exclusion requests with the Commerce Department. While more than 20,000 companies had requested exclusions as of August 2018, two major U.S. steel manufacturers with former business ties to administration trade officials have objected to 1,600 of the requests and have succeeded in blocking all of them. The current U.S. Trade Representative and his deputy both represented one of the companies that filed most of the objections, United States Steel, while in private practice as lawyers. The other company, Nucor, spent $1 million in 2011 to finance a documentary made by the President’s adviser on trade policy, Peter Navarro. While none of those officials serves in the Commerce Department office directly overseeing exclusions, all hold significant influence over U.S. trade policy. Prior to the press report, in April 2018, the Republican Chairman and ranking Democrat on the Senate Finance Committee sent a letter to Secretary Ross expressing concerns about a lack of “basic due process and procedural fairness” in the exclusions program and suggesting it was “being abused for anticompetitive purposes.”
- Trump Tower Moscow: On November 29, 2018, Michael Cohen, the Trump Organization’s former lawyer, pleaded guilty for the second time in three months. The new plea agreement and sentencing memos, part of the ongoing investigation into Russian interference in the 2016 election led by special counsel Robert Mueller, have provided more details about efforts during the 2016 campaign to build a Trump Tower in Moscow. The project began in 2015, and then-candidate Trump signed a preliminary agreement on October 28, 2015, the day of the third Republican primary debate. Cohen previously told Congress the Trump Tower Moscow project ended in January 2016 before the Republican primaries began. In the plea agreement, he admitted to lying, stating the discussions actually lasted until at least June 14, 2016. Cohen also said he lied to Congress about the dealings to minimize the president’s involvement. He admitted to having “more extensive communications” with President Trump about the project than the three instances he had previously disclosed and alleged that President Trump “knew of and directed” plans for the Moscow project. Cohen also said he had briefed Trump family members. (Ivanka Trump suggested an architect for the project.) The Trump Organization even reportedly planned to give President Vladimir Putin a $50 million penthouse at Trump Tower Moscow to incentivize oligarchs to live in the development and allow Trump Tower to charge higher prices for the units—$250 million more total. Cohen’s guilty plea also confirmed that negotiations over Trump Tower Moscow were ongoing while Russia pursued efforts to interfere in the U.S. presidential election against Hillary Clinton’s campaign. The new information raises concerns about then-candidate Trump’s opposition to Russian sanctions, and his lack of support for Ukraine. (Proposals to provide lethal aid or weapons to Ukraine were removed from the Republican Party platform before the Republican Convention, although Trump said he was not involved in the change.) These concerns have carried into his presidency. In May 2017, the FBI opened an investigation into whether President Trump was working on Russia’s behalf against American interests, but the current status of the investigation is unclear.
4. Private and Foreign Interests Seeking To Influence the Trump Administration Through Dealings with Trump Businesses
Another significant concern is that individuals, private firms, and foreign governments may believe—rightly or wrongly—that they can curry favor with the Administration and increase their odds of favorable policy decisions by engaging in private business transactions with companies owned by or connected to President Trump—or, in the case of foreign governments, granting favorable regulatory treatment to Trump business operations in their countries. This is one of the most serious concerns related to the Trump family’s interest in profiting from the presidency, as it gives rise both to the appearance of corruption and the risk of actual corruption. The range of possible problems is too broad to summarize, but here are some examples of the leading sources of concern:
- The Trump International Hotel in Washington, D.C.: A number of concerns center on the Trump International Hotel in Washington, D.C., and in particular on whether foreign governments, or agents of foreign governments, may seek to curry favor with the Trump Administration by booking rooms and events at the hotel. (The hotel, which substantially increased its room rates after the election, earned President Trump $40.4 million in 2017.) While the Trump Organization claims to have donated all profits from foreign government spending at Trump hotels to the United States Treasury—a total of $191,538 for 2018 and $151,470 for 2017—the Organization has not disclosed how these amounts were calculated, thus leaving us to take the President at his word. This is particularly troubling since the Organization itself previously noted that it would be “impractical” to “fully and completely” identify all foreign guests staying at the Trump hotels. And a leaked email from September 2017 indicated that, despite public assurances to the contrary, President Trump is “definitely still involved” in the D.C. hotel’s business. Moreover, shortly after the election, the hotel hosted a promotional event aimed specifically at foreign diplomats, which almost 100 diplomats attended. Since then, there have been numerous reports of private companies and foreign governments paying for rooms and events at the Trump International Hotel, including in 2018 an Amazon subsidiary with billions of dollars in government contracts. As of May 4, 2018, the patrons at the hotel included 59 political groups, eight foreign governments, and 25 business interest events (industry or lobbying). Some illustrative examples include:
- Bahrain: Shortly after President Trump’s election, the Embassy of Bahrain booked a reception at the Trump International Hotel in Washington, D.C., held on December 7, 2016.
- Azerbaijan: The embassy of Azerbaijan was a co-host of a Hanukkah party held at the Trump International Hotel in December 2016, with guests including the Russian Ambassador Sergey Kislyak.
- Saudi Arabia: On January 23–26, 2017, a lobbying firm working on behalf of Saudi Arabia booked rooms at the hotel, which were paid for by the Saudi government. The firm paid for an estimated 500 rooms over the course of six trips. The total hotel bill came out to nearly $270,000, including $190,272 on lodging, $78,204 on catering, and $1,568 on parking. According to those figures, the firm paid only $360 per night for lodging at a time when the average nightly rate was $768. The rooms were booked as part of a lobbying campaign in which military veterans were offered a free trip to Washington, D.C. in exchange for lobbying on Capitol Hill against a bill the Saudis opposed.
- Kuwait: The Embassy of Kuwait’s celebration of Kuwaiti independence on February 25, 2017 was originally scheduled to take place at the Four Seasons Hotel, as it had for the previous ten years, but was moved to the Trump hotel. According to anonymous sources, the location changed because members of the Trump Organization pressured the Kuwaiti ambassador to move the event, though the ambassador has denied these reports. If the allegation is true, it suggests direct efforts by the Trump Organization to leverage the president’s position to steer foreign government business to the Trump hotel. The Embassy returned to host its National Day celebration at the Trump Hotel in 2018 and again for a third year in a row in 2019, with top administration officials, including Secretary of Commerce Wilbur Ross, Secretary of Housing and Urban Development Ben Carson, EPA Administrator Andrew Wheeler, and Kellyanne Conway attending the event.
- Turkey: The American Turkish Council and the Turkey-U.S. Business Council (TAIK)—an arm of the Turkish government—held their annual conference in May 2017 at the Trump hotel. Previous conferences have cost around $400,000, with about one-third of that going to the venue. (Also of note: TAIK is headed by Ekim Alptekin, who founded Inovo BV, the consulting company that paid former national security advisor Michael Flynn $530,000 for lobbying work.) In October 2018, Turkey cancelled an event set to take place at the Trump hotel during a tense phase in diplomatic negotiations concerning a U.S. pastor being held in Turkish jail.
- Malaysia: On September 11, 2017, Najib Razak, then the Prime Minister of Malaysia, visited the Trump International Hotel prior to a meeting with the President at the White House the following day. While Hotel staffers and Malaysian officials declined to say whether the Prime Minister and other officials stayed at the hotel, the visit brought at least 24 hours of activity and sales to the hotel. For instance, a dozen members of the Prime Minister’s entourage could be seen relaxing in a lounge area reserved for hotel guests during lunchtime. Further, the Prime Minister was seen leaving the hotel for dinner and returning later that night. Based on confirmed spending totals of other groups that have made base at the hotel, events of this scale usually result in hundreds of thousands of dollars in revenue for the Trump Organization.
- Philippines: The Philippines held an Independence Day celebration at the Trump International Hotel in June 2018, attracting 300 attendees. According to a Filipino news network, the ambassador stated at the event, “Having it in a hotel that happens to have [Trump’s] name is not necessarily the end-all, be-all. It’s a statement that we have a good relationship with this President.” The Embassy of the Philippines also claimed that unidentified “friends” of the ambassador, rather than the Embassy itself, paid for the celebration.
- Afghanistan: In April 2018, the Afghan-American Chamber of Commerce held the welcome reception for its annual “Business Matchmaking Conference” at the Trump International Hotel. The conference continued the next day at the nearby Ronald Reagan Building and International Trade Center, with planned speakers including Afghanistan’s Minister of Economy and Ambassador to the United States.
- Romania: In March 2019, the prime minster of Romania stayed at the Trump International Hotel during her trip to Washington D.C. for the annual AIPAC conference. It’s unclear how many rooms were booked or the total price paid. Romania currently has several interests pending with the U.S. government—for example, the prime minister has stated she would like Romanian citizens to be able to travel to the U.S. without a visa.
- T-Mobile: On April 29, 2018, T-Mobile announced a merger with Sprint that would require approval by the Federal Communications Commission, the Committee on Foreign Investment in the United States, and the Justice Department. The next day, nine T-Mobile’s executives booked stays in the Trump International Hotel as “VIP arrivals.” Reports and records show T-Mobile executives returned to the Trump Hotel repeatedly, staying 52 nights, and one executive made ten visits to the hotel within seven weeks of the merger announcement. This was a sharp increase in T-Mobile’s patronage of the Trump Hotel, as prior to the merger announcement there were only two instances of top T-Mobile officials staying there. In total, T-Mobile executives have spent at least $195,000 at the Trump International Hotel since the proposed merger was announced.
- American Coalition for Clean Coal Electricity: On June 20, 2018, the American Coalition for Clean Coal Electricity (ACCCE), which lobbies the administration to support coal producers, held a reception at the Trump International Hotel. Bob Murray and Heath Lovell—executives at two ACCCE member companies—stayed at the hotel and were listed as “VIP Arrivals” paying a “High Rate.” ACCCE’s President invited Deputy EPA Administrator Andrew Wheeler, a former lobbyist for Murray’s company, to the reception. It is not known whether Wheeler attended.
- Ballard Partners: Lobbying firm Ballard Partners, a firm with close ties to the Trump administration, appears to be directing clients to host events and stay at Trump properties as a possible influence tactic. Ballard client Citizens for Responsible Energy Solutions recently hosted a reception at the Trump International Hotel, with EPA and Department of Energy staffers attending the event. Other international clients who have interests pending before the US government—including the head of the People’s Democratic Party of Nigeria, and top Turkish officials—have stayed at Trump’s DC hotel as well.
- Events at Other Trump Properties: Similar concerns have been raised with respect to other Trump properties, where domestic or foreign interests may seek to curry favor with the president by booking space for events. In 2017 alone, over 60 trade groups, companies, foreign governments, interest groups, and political candidates stayed or hosted events at Trump properties, and Trump properties made $1.2 million dollars from political groups in 2017. (Before Donald Trump got involved in politics, the annual spending by these groups at Trump properties did not exceed $100,000 in any year since at least 2002; approximately $1 million of the $1.4 million that politicos have spent at the Mar-a-Lago club since 2003 was spent after President Trump announced his presidential bid in 2015.) Some examples:
- The National Confectioners Association, which represents large candy companies, hosted several large meetings at the Trump National Doral Resort and other Trump properties. While these bookings were also made before President Trump was elected, it is nonetheless the case that a lobbying group is paying the Trump Organization while it is also advocating for changes in government policy.
- The GEO Group—the country’s biggest private prison company—held its annual leadership conference at Trump National Doral in Miami in 2017, after previously hosting the conference near its headquarters in Boca Raton. The company has had billions of dollars of contracts (including the Trump Administration’s first contract for an immigration detention center) with the government and donated hundreds of thousands of dollars to the Trump campaign. GEO Group is especially “susceptible to abrupt legislative or executive changes,” including contract awards and immigration enforcement.
- In Canada, shortly after Trump’s election, the American Chamber of Commerce in Canada moved a planned meeting from the home of a diplomatic official to the newly-opened Trump International Hotel & Tower in Vancouver. The Chamber only paid $1,900 to rent the space for the event and asserted that the decision to move the event was due to a water leak at the original site, rather than any desire to influence the Trump Administration. While the explanation is plausible, events like this nonetheless contribute at least to the perception of an attempt to curry favor.
- In March 2018, visitors accompanying Saudi Crown Prince Mohammed bin Salman to New York stayed in the Trump International Hotel in Manhattan. The five-day visit drove a 15% increase in the hotel’s revenue from room rentals in the first quarter of 2018, enough to push revenue for the first quarter of the year up 13% after two down years, according to a letter by the hotel manager. Saudi room bookings at President Trump’s Chicago hotel also increased 169% over the 2016-2018 period.
- President Trump has also tweeted support for eight candidates shortly after either their campaign or an associated PAC spent money at a Trump property. He has only sent 53 tweeted endorsements for state or federal political candidates as of October 2018, meaning that 15% of these endorsements have been awarded to candidates after they patronized Trump properties.
- The Romanian Consulate General in Chicago celebrated the country’s annual Great Union Day at the Trump International Hotel and Tower Chicago in November 2018. While it is not clear who paid for the event, the consulate was responsible for organizing it. The event had been held elsewhere the previous five years.
- The Debt Collection Forum, an annual trade show for the debt collection industry, will be held at the Trump International Hotel and Tower Chicago in April 2019. The event’s organizer has denied any intent to influence the Trump administration and said he chose the venue for its size, location, and “beautiful” appearance.
- Renting and Purchasing Trump Properties: Dozens of companies pay more than $175 million annually to the Trump Organization for rent in Trump buildings. These include companies that lobby the federal government such as JPMorgan Chase Bank, Duane Reade, and Nike; known foreign governments such as the Bank of India and Industrial & Commercial Bank of China; and organizations under federal investigation such as Verizon, Wells Fargo, and Morgan Stanley. Each of these companies or foreign governments pays money directly to the Trump Organization in the form of rent. For example, the Bank of China, which is owned largely by the Chinese government and remains the largest commercial tenant in Trump Tower, pays an estimated $2 million a year in rent and will likely be renegotiating its lease with the Trump Organization before it expires in October 2019. And in February 2017, Chen Xiaoyan (who also goes by Angela Chen), the founder and managing director of a consulting and lobbying firm that helps clients secure access to senior public and private decision-makers in order to establish a presence in the People’s Republic of China, purchased a penthouse apartment in Trump Tower in New York for $15.8 million. In January 2018, the government of Qatar bought an apartment in one of President Trump’s New York towers for $6.5 million. As of June 2018, Qatar owned four units in the building for which it has paid a total of $16.5 million.
- Trump’s Business Ties with Saudi Arabia: In addition to the hotel rentals by the Saudi government and affiliated individuals noted above, President Trump has a long history of lucrative financial dealings with Saudi Arabian partners, including those in or close to the Saudi government. For example, in 2015 Trump bragged on the campaign trail about the millions of dollars he had earned from Saudi clients, stating that “[t]hey buy apartments from me. They spend $40 million, $50 million…. I like them very much!” In the 1990s, when President Trump was in financial distress, a Saudi prince bought both a stake in Trump’s Plaza Hotel and purchased his superyacht. In June 2001, the Saudi government purchased the 45th floor of Trump World Tower for $4.5 million. Although President Trump has asserted (via Tweet) that he has no current financial interests in Saudi Arabia, many observers are skeptical of this claim, which cannot currently be verified. Concerns about President Trump’s possible business and financial ties to the Saudis have been amplified due to his tepid response to the murder of Washington Post columnist and U.S. resident Jamal Khashoggi in the Saudi Consulate in Turkey, apparently by Saudi intelligence officers, in October 2018.
- Trump Development Projects Abroad: The Trump Organization has numerous hotel, resort, and other projects in a wide range of countries, and the profitability of these projects are often affected by local government policy. (Some of these projects appear to be new or increased in scope, despite a public assertion by President Trump’s attorney that “[n]o new foreign deals will be made whatsoever during the duration of President Trump’s presidency.”) There is therefore a concern that these governments’ legal and regulatory treatment of Trump-affiliated projects may be influenced by a desire to curry favor with the Trump Organization, or that such favorable treatment (or the implicit threat of unfavorable treatment) might influence U.S. policy toward these countries. Some examples of this concern include:
- Indonesia: The Trump Organization is currently developing a luxury resort on the Indonesian island of Bali. The Bali local government provided public land for the project, granted numerous licenses and permits, and is planning to build (at government expense) a toll road extension that will substantially shorten the drive from the airport to the Trump resort—a decision that has raised concerns that the government may be deliberately undertaking an infrastructure project to curry favor with the U.S. president. The Trump Organization is also hoping to build a theme park next door to the planned resort. Its Indonesian partner, the MNC Group, said on May 15, 2018, that it had struck a deal with a Chinese state-owned construction company, Metallurgical Corporation of China, to build the park. The theme park will be funded in part by a $500 million Chinese government loan. That Chinese loan in particular attracted widespread concern, because shortly after the deal was announced, President Trump indicated his intention to reverse U.S. sanctions against Chinese technology company ZTE, which had systematically violated rules against re-exporting US-made high technology components to sanctioned regimes, such as Iran and North Korea. More than 60 House Democrats are calling for an ethics investigation over the “extremely short time frame” between the Chinese loan to build the theme park and the president’s decision to lift sanctions on ZTE, and some commentators have characterized the sequence of events as evidence of straightforward quid pro quo bribery. In early June 2018, the Trump administration reached an agreement with ZTE according to which the U.S. would lift sanctions, and in return ZTE would pay a $1 billion fine, replace its board and senior management, and allow a compliance team selected by the U.S. to be embedded within the firm. Many commentators, however, continued to object, arguing that this deal let the company off far too lightly, and that the likely explanation for the deal was that it would benefit the Trump family’s business interests by currying favor with China. In July 2018, the U.S. Congress backed away from a seven-year ban on ZTE buying inputs in the United States under heavy pressure from the administration, which continues to mull a range of policy options toward ZTE (see here and here).
- India: In February 2018, Donald Trump Jr. made a week-long visit to India to sell the Trump Organization’s luxury high-rise condos. India is the largest market for the Trump Organization, with five projects including residential towers in Pune, Mumbai, Gurgaon, and Kolkata. During this trip, promotions stated: “Book your Trump Towers’ residence before Feb. 22 and join Mr. Donald Trump Jr. for a ‘conversation and dinner’.” Fifteen million dollars worth of real estate in the towers in Gurgaon was sold on the day that this offer appeared in the newspapers. In addition, the Trump Organization has partnered with individuals with close ties to corrupt Indian politicians as well as with one politician personally. On February 23, Trump Jr. also spoke at a business-leaders’ summit in New Delhi. Although he asserted that he was speaking as a businessman, not a representative of his father’s administration, others who attended the summit did not understand his remarks that way. According to V. Sunil, a managing director of a company that builds malls and cinema complexes, “[t]hough he claims that it’s not an official speech, we take it as an official statement…. He speaks to his father more than anyone here.” (Secret Service protection for Trump Jr.’s February trip cost taxpayers $97,805.)
- Panama: The Trump Organization developed a luxury hotel in Panama City, and the Panamanian government has stepped in to aid the project in various ways, including government-funded repair of privately-owned sewage and drainage systems, use of the hotel for various government functions, and favorable permitting and tax decisions—decisions that, while not illegal or necessarily improper, raise significant concerns about conflicts of interest. The drama concerning this property continued in February 2018, as the building’s majority owner, Orestes Fintiklis, tried to fire the Trump Organization for mismanaging the hotel’s finances, but the Trump Organization refused to leave, instigating a standoff in which the police were called; the Panamanian government is currently investigating whether there was “punishable conduct” by the Trump Organization. In March 2018, lawyers representing the Trump Organization sent a letter directly to Panamanian President Juan Carlos Verela asking him to intercede, warning that the dispute could have “repercussions” for Panama. The hotel was formally rebranded as a JW Marriott in September 2018.
- Turkey: The Turkish conglomerate Dogan Holding developed and pays licensing fees to the Trump Organization for Trump Towers Istanbul—an estimated $5 million in the first half of 2015, which dropped to “between $100,000 and $1 million” in 2017. The Erdogan government previously imposed a $2.5 billion tax fine on Dogan Holding, and could put further pressure on the company in the future. (In 2018, an opposition party asked Erdogan to seize the buildings in retaliation for U.S. sanctions.) According to some reports, this is a deliberate strategy to pressure the Trump Administration. According to a Newsweek report, President Erdogan “told associates he believes he must keep pressure on Trump’s business partner [in Turkey] to essentially blackmail the president.”
- United Arab Emirates: DAMAC Properties, a partner of the Trump Organization at its Trump World Golf Club Dubai, awarded the Middle East Subsidiary of China State Construction Engineering Corporation a $32 million contract to build a six-lane road as part of the residential piece of the golf club project called Akoya Oxygen. The companies’ news releases do not detail the exact timing of the contract, except to note that it was sometime in the first two months of 2017, which is around the time President Trump was inaugurated. The Trump Organization has said that the residential project and golf course are “totally unrelated,” despite marketing materials showing them to be intertwined.
- Scotland: In July 2018, the Trump Organization submitted requests to local officials in Scotland for permits to build a luxury residential community, “The Trump Estate,” near the existing Trump International Golf Links in Scotland. The Trump Organization’s chief compliance counsel denied that the plans violate President Trump’s pledge not to pursue new deals abroad, saying it is merely “the next phase of development of a long-term” project. But the sheer size of the proposed community—costing nearly $200 million to build and including 500 luxury homes priced up to several million dollars each—makes it a large expansion to the current golf club, and the fact that it will require new approvals presents possible conflicts of interest. (Earlier, the Trump Organization had unsuccessfully sued to halt an offshore wind turbine development near the resort. In February 2019, a UK court ordered the Trump Organization to pay the Scottish government’s legal costs from the lawsuit.)
- Dominican Republic: President Trump signed a licensing deal in 2007 with a local developer in the Dominican Republican, the Cap Cana Group, to build a luxury resort on the island’s east coast. After the financial crisis and a bitter lawsuit between the parties, the deal stalled. But in February 2017, after President Trump’s inauguration, the Cap Cana Group announced the project’s revival. Despite President Trump’s pledge that the Trump Organization would not pursue any new foreign deals during his presidency, a December 2018 investigation by Global Witness found strong evidence that the Trump Organization and the Cap Cana Group are in fact developing a new project, rather than reviving the old one (an allegation the Trump Organization denied, but without directly refuting any of the specific evidence uncovered by Global Witness). Also of concern is the Dominican Tourism Ministry’s December 2017 decision to allow high-rises on the beaches in Cap Cana and Punta Cana, prompting Bernardo Vega, the country’s former Ambassador to the United States, to allege that Dominican President Danilo Medina “forced the Minister of Tourism to change the rules” in order to incentivize the Trumps to invest. Especially after being humiliated when Trump declined to meet with President Medina in October 2017, Vega said, “Here in the palace, the president’s thoughts are that this U.S. president is angry and we better not get in his way.”
- Taiwan: On December 2, 2016, then-President-elect Trump broke with nearly four decades of presidential precedent and communicated with the President of Taiwan, Tsai Ing-wen. (Since 1979, the United States has not officially recognized Taiwan.) In the days after the call, news broke that the Trump Organization was considering expanding to Taiwan. While the Trump Organization denied any such plans, the Mayor of Taoyuan—the city where the Organization supposedly wants to build—confirmed a September 8, 2016 visit from a representative of the Trump Organization to talk about expansion.
- Chinese Trademarks: Although President Trump’s phone call with the President of Taiwan caused tension in the U.S.-China relationship, in February 2017 President Trump reaffirmed the U.S. commitment to the so-called “One China Policy.” Within a week of this announcement, the Chinese government granted the Trump Organization long-coveted Chinese trademarks for the “Trump” brand. As of June 2017, the New York Times reported that President Trump had 123 trademarks registered and provisionally approved (meaning they would be approved within three months if there were no objections) in China. While there is no direct evidence of a quid pro quo, and some commentators have suggested alternative explanations for the Chinese government’s decision, a number of factors—the suspicious timing, the unusual speed with which the trademarks were granted, and the mere fact that a foreign government conferred on the President’s business a benefit worth millions of dollars—together raise serious concerns. Similarly, Ivanka Trump’s company had over 40 trademark applications pending in China in 2017 (she closed the company in 2018). On April 6, Ms. Trump—who remains an important adviser to her father on China-related issues—dined with Chinese President Xi Jinping at Mar-a-Lago. That same day China granted her company three provisional trademarks (which had been filed with the Chinese authorities before President Trump was elected president). On May 21, 2018, China approved seven more of Ivanka Trump’s trademarks; the close proximity of this announcement to President Trump’s surprise declaration that his administration would lift sanctions on Chinese telecommunications company ZTE (which, as noted above, has been sanctioned by the US for illegally transferring US high-technology components to sanctioned regimes) has raised concerns that China’s favorable decision on Ivanka Trump’s trademarks was used as a way to influence President Trump’s position on ZTE. China granted preliminary approval for 16 of Ivanka Trump’s trademarks in October 2018 (bringing the total to 34 for the year) and granted another five in January 2019 amid ongoing, high-stakes trade talks.
- Membership in Trump Golf Clubs: Among the members of Trump golf clubs (who pay initiation fees that can exceed $100,000), there are at least 50 executives whose companies hold federal contracts, and 21 lobbyists and trade group officials. While many of these memberships may pre-date Trump’s election, individuals with a vested influence in influencing U.S. government are nonetheless paying substantial sums to businesses controlled by the President’s family, and from which the President directly benefits. Indeed, according to media reports, club members use the access to the President that membership affords in order to “influence the President on policy[.]”
- Guo Wengui Deportation: The Chinese government has urged President Trump to return Guo Wengui, a Chinese billionaire who fled China and has an application for asylum pending in the United States. Chinese officials accuse Guo of crimes including bribery, kidnapping, and rape. In October 2017, after receiving a request from the Chinese government hand-delivered by casino tycoon Steve Wynn (who himself depends on Chinese government approvals to operate his lucrative casinos in Macau), President Trump initially agreed that “[w]e need to get this criminal out of the country.” However, the President changed his mind after his aides informed him that Guo was a member of Mar-a-Lago. Setting aside a discussion of whether the United States should comply with China’s request, it is troubling that the President seems to be making decisions that have significant implications for the diplomatic relationship between the United States and China based at least in part on a personal profit motive. Guo announced on November 20, 2018, that he would be partnering with former White House chief strategist Steve Bannon to set up a $100 million “Rule of Law Fund” to investigate what they consider abuses of power by the Chinese government.
- Real Estate Sales to Secretive Buyers: In the first major divestiture of a Trump property since the election, the Trump Organization is selling Le Chateau des Palmiers—a five acre beachfront estate on the Caribbean island of St. Martin. President Trump bought the property in 2013 for an undisclosed amount, although the asking price at the time was $19.7 million. The property was initially listed for $28 million, but as of March 2019 is listed at $16.9 million. Given that any transaction would be a private property transaction, the Trump Organization would not need to reveal the identity of the buyer. This raises concerns that a buyer could overpay to curry favor with the Trump Administration and the President. Trump Organization companies sold more than $35 million in real estate in 2017 and another $35 million in 2018. Many of the buyers made purchases through secretive shell companies that obscure their identities. President Trump’s real estate companies began adopting this trend of obscuring the identities of buyers around the time he won the Republican nomination. Two years before the nomination, only 4% of buyers of Trump real estate used this tactic; a year after the nomination, the percentage of Trump real estate purchasers who hid their identity through anonymous shell companies was up to about 70%, a number that held steady through President Trump’s first year in office.
- Jared Kushner’s Debts, Financial Dealings, and Foreign Contacts: As discussed above, Jared Kushner serves as a senior advisor to President Trump, and although Mr. Kushner has formally resigned his role as CEO of Kushner Companies, he has not completely divested. He sold most of his ownership stake in the company to his family members, a move which many ethics experts consider inadequate, and reportedly retains the “vast majority of his interest in Kushner Companies,” including real estate holdings and other investments worth about $761 million. In addition, although he agreed to recuse himself from government matters related to his financial interests, it appears as though this recusal was limited. Over President Trump’s first year in office, Mr. Kushner’s debts grew substantially, and these debts directly implicate Mr. Kushner’s role in government and create a potential national security risk. In fact, officials in the United Arab Emirates, China, Israel, and Mexico have already discussed how to manipulate Mr. Kushner because of “his complex business arrangements, financial difficulties and lack of foreign policy experience.” (Another story asserts that the Saudi crown prince, Mohammed bin Salman, referred to Kushner as being “in his pocket” after the two met during Kushner’s visit to Riyadh.) These concerns were sufficiently serious that then White House Chief of Staff John Kelly downgraded Kushner’s interim security clearance in February 2018. Subsequently, two career White House security experts rejected Mr. Kushner’s application for permanent top-secret clearance, but they were overruled by President Trump, and Mr. Kushner was given permanent top-secret clearance in May 2018. Mr. Kushner was actually seeking an even higher designation—the clearance to review “sensitive compartmented information,” or SCI. This determination is made by the CIA, and although the agency does not comment on clearances, sources report that the CIA has not approved Mr. Kushner for SCI access. These developments both reflect and contribute to concerns that Mr. Kushner’s debts and complex financial arrangement could compromise his official role in a plethora of ways. For example:
- Kushner’s Failed Transaction with the Chinese: In March 2017, news outlets reported that a Chinese company, Anbang Insurance Group, planned a $4 billion transaction involving a property at 666 Fifth Avenue in Manhattan owned by Kushner Companies and deeply in debt. (In August 2018, Kushner Companies resolved its debt on the property by signing a 99-year lease to another firm, Brookfield Properties.) If the Anbang deal had gone through, it would have netted the Kushner family firm approximately $400 million. However, within a few weeks of the initial reports, Anbang and the Kushner family ended talks about a possible deal. It is not clear how much public outcry over the potential conflict of interest issue may have played a role. (Since then, the Chinese Government has taken control of Anbang and sentenced the Group’s chairman to 18 years in prison for financial offenses.)
- Kushner’s Failed Loan from Qatar: In 2015 and 2016, Jared Kushner negotiated with Qatari billionaire and former prime minister Hamad bin Jassim al-Thani (HBJ for short) regarding a possible $500 million investment in Kushner’s troubled property at 666 Fifth Avenue in New York City. However, HBJ pulled out when Kushner was unable to secure additional funding from Anbang in March 2017 (discussed above). In June 2017, President Trump sided against Qatar in the country’s diplomatic standoff with Saudi Arabia, the UAE, Egypt, and Bahrain, citing concerns about Qatar’s funding of terrorism. Since June 2017, Qatar has been under blockade by its neighbors. President Trump’s statements about Qatar contradicted those of then-Secretary of State Rex Tillerson, who had called for an end to the embargo. The timing of the failed business deal between HBJ and Kushner led some to speculate that President Trump’s stance toward Qatar was revenge, or perhaps an attempt to send a message of intimidation to other prospective foreign business partners. This speculation was fueled by the fact that, according to anonymous sources, Secretary Tillerson believed that the U.S. position on Qatar was being driven primarily by Kushner. Although the deal with HBJ fell through, the Kushners reached a deal in August 2018 to lease the 666 Fifth Ave. to Brookfield Asset Management Inc. for 99 years. Brookfield has extensive ties to Qatar—the government is the second-biggest investor in its real estate arm through the Qatar Investment Authority. Both Brookfield and the Investment Authority have asserted that the Qatar Investment Authority had no knowledge of or involvement in the deal.
- Kushner’s Meeting with Russian Officials: In connection with the investigation into possible collusion between the Trump campaign and the Russian government during the 2016 election, the FBI and Special Counsel Robert Mueller reportedly scrutinized meetings in 2016 between Jared Kushner and two Russian officials, Ambassador Sergey Kislyak and Sergey Gorkov, the head of VEB (a Russian state-owned development bank) and a close associate of Vladimir Putin. The contents of those discussions are still unknown. Sources said Kushner and Kislyak met on December 1, 2016, to discuss setting up secret channels of communication between Trump’s transition team and the Kremlin. Former National Security Advisor Michael Flynn was also present. Flynn’s sentencing memo, released December 4, 2018, could shed light on the truth of these accounts. (Information related to “ongoing investigations,” including a section covering “interactions between the transition team and Russia,” was redacted.) Regarding the December 13 meeting with Gorkov, the parties have issued seemingly contradictory explanations. Kushner, for example, asserted that he was discussing policy issues, while Gorkov asserted that in their meeting Kushner was acting in his private capacity as a representative of his business. Some media reports have suggested they may have discussed the possibility that Gorkov’s bank might extend financing to the 666 Fifth Avenue property mentioned above, or other business ventures of the Kushner family, if the Trump Administration lifted the sanctions that the U.S. had imposed on Russia in response to Russia’s incursion into Ukraine. Others, however, have questioned the plausibility of this speculation, given that the size of the loan required for the 666 Fifth Avenue property would be quite large relative to VEB’s assets.
- Plans to Transfer Nuclear Technology to Saudi Arabia: In February 2019, the House Committee on Oversight and Reform issued a report detailing the Trump administration’s efforts to transfer sensitive nuclear technology to Saudi Arabia, potentially in violation of U.S. law. Jared Kushner participated in the discussions and allegedly served at one point as the White House advisor who would present the plan to President Trump. Kushner had meetings with Saudi Crown Prince Mohammad bin Salman where the nuclear issue may have been discussed, and remained directly involved in the Department of Energy’s transfer efforts as of February 2019. Kushner’s involvement raises serious concerns because Brookfield Asset Management, the company that agreed to rent 666 Fifth Avenue in August 2018 (see above), also recently purchased a nuclear services company that is a member of the consortium that would build Saudi Arabia’s nuclear reactors under the proposal.
- Kushner Family Business Dealings with Saudi Arabia: In October 2017, Josh Kushner, Jared Kushner’s brother, attended an investor conference in Saudi Arabia where he met privately with Saudi officials on several occasions. Just the day after Josh Kushner left the event, Jared Kushner flew to the kingdom to meet with Crown Prince Mohammed bin Salman. While Jared Kushner is no longer affiliated with his brother’s firm, Thrive Capital, it presents a potential conflict of interest to have his brother discussing business with the country’s top officials while Kushner is the lead representative for American policy with the kingdom. A spokesman for Josh Kushner’s company declined to disclose if any Saudis had invested in any of their funds.
- Kushner’s Loans from Apollo Global Management and Citigroup: In the spring of 2017, Kushner had multiple White House meetings with representatives of two financial institutions, Apollo Global Management and Citigroup. Shortly afterwards, both Apollo and Citigroup made substantial loans to Kushner Companies. Both lenders, as well as Kushner, dispute that the White House meetings had anything to do with the loans, but the Office of Government Ethics and White House Counsel’s Office are looking into the matter to determine if any laws or regulations were violated. Of particular concern is the fact that the Apollo Global Management loan was three times the size of their average property loan, and just a month later the Securities and Exchange Commission terminated an investigation into the company’s financial reporting practices.
- Kushner’s Financial Ties with Israel: Shortly before Kushner accompanied the President on his first diplomatic trip to Israel, the Kushner family real estate company received a $30 million investment from one of Israel’s largest financial institutions, Menora Mivtachim. This transaction helped increase new equity into ten Maryland apartment complexes controlled by Mr. Kushner’s family firm, in which he still has a stake. A disclosure report released in June 2018 further revealed that Kushner and his father raised their line of credit from Israel Discount Bank from $5 million to $25 million over the past year. While these business deals do not appear to violate federal ethics laws, they raise concerns about whether Kushner Companies’ financial ties with Israeli financial firms could influence his diplomatic role in the region, or further undermine the perception of the United States as an independent “honest broker” in the Middle East.
- Kushner’s Financial Ties With Japan: In 2017, Kushner Companies made a real estate deal for $103 million with a company whose controlling shareholder is the government of Japan. However, the company denies that it was seeking to gain political influence, and a senior strategist at Okasan Securities in Tokyo claimed it was doubtful that the Japanese government had a role in the company’s investment.
- Kushner Family Influence-Peddling in China: At a May 2017 investor event in Beijing, Nicole Kushner Meyer—Jared Kushner’s sister—made a pitch soliciting $150 million for a Jersey City housing development at One Journal Square to over 100 Chinese investors. The pitch attracted criticism for two reasons. First, Ms. Meyer promoted the EB-5 visa, a program that allows a path to permanent residence for foreign investors who invest more than $500,000 in projects that create jobs in the US. (The brochure for the event included slogans such as, “Invest $500,000 and immigrate to the United States.”) The EB-5 program long pre-dates President Trump’s election and has been supported by both Democrat and Republican officials in the past; while the program has been persuasively criticized, Ms. Meyer’s remarks do not necessarily raise specific concerns about leveraging the political influence into private gain. Second, however, Ms. Meyer’s remarks attracted additional criticism because she also stressed that the investment project “means a lot to me and my entire family,” and she made a point to highlight the important role of her brother in the White House. Indeed, Mr. Kushner previously oversaw the project until he left the company to be senior advisor to the President, and he remains the beneficiary of trusts that own his stakes in Kushner Companies. After the criticism, the Kushner Companies apologized “if that mention of [Jared Kushner] was in any way interpreted as an attempt to lure investors.” Apology notwithstanding, evidence of the use of Jared Kushner’s government connections to attract investment from China surfaced again in July 2017. Two companies, Qiaowai and the US Immigration Fund, which were working with Kushner Companies to find Chinese investors, used Mr. Kushner’s role as a selling point in promotions posted on social media service WeChat. The Qiaowai ad made a direct reference to the Kushner family’s promotion of the EB-5 visa program, explaining that the development was approved for EB-5 visas and that the tight relationship between Kushner Companies and Mr. Trump means that “in the Trump era, the EB-5 program is likely to receive support and be expanded.” The US Immigration Fund ad, aside from referring to Mr. Kushner as “the celebrity of the family” and “30-something Mr. Perfect” linked to a December 2016 Forbes cover emblazoned with a photo of him and the headline, “This guy got Trump elected.” After CNN reached out to Qiaowai and the US Immigration Fund, they took down their ads. Kushner Companies claimed that it was unaware of the promotions. Nonetheless, the Securities & Exchange Commission and the Brooklyn U.S. Attorney’s Office have opened an investigation into whether Kushner Companies had violated the law in its promotion of the visa program to Chinese investors.
- Michael Cohen “consulting” payments: In October 2016, shortly before the election, President Trump’s personal attorney Michael Cohen formed a new company, Essential Consultants LLC. After the election, he advertised his closeness with the President to attract clients for his “consulting” services. Mr. Cohen’s clients included a firm with close ties to Russian oligarch Viktor Vekselberg (who in turn has close ties to the Putin regime, and who met with Mr. Cohen shortly before the inauguration to discuss US-Russian relations), Korea Aerospace Industries, AT&T, and Novartis. The business purpose of these payments is unclear, given that Mr. Cohen lacks expertise in any of the relevant policy areas—leading some to suspect that Mr. Cohen’s alleged “consulting” company was in fact a slush fund to be used for the benefit of President Trump. (This interpretation is buttressed by the fact that Mr. Cohen used Essential Consultants to funnel hush money to Stormy Daniels, the adult film star who claimed to have had an affair with President Trump.) More crudely, some have suggested that Mr. Cohen’s company was intended—and understood by many of its clients—simply as a means of paying cash bribes to President Trump himself, with Cohen acting as the “bag man.” An alternative explanation is that Mr. Cohen misled these clients with respect to his own ability to offer access or insights into Trump Administration policymaking.
- Sanctions on Russian Oligarchs: Potential ties between the Trump administration and the Russian oligarchs it is sanctioning (or choosing not to) have raised conflict of interest concerns on several fronts. Sanctions were announced against seven Russian oligarchs in April 2018, but the Treasury Department repeatedly delayed imposing them against one individual—Oleg Deripaska, once a client of President Trump’s former campaign manager, Paul Manafort. Then, on January 29, 2019, the Treasury Department lifted the sanctions on Mr. Deripaska entirely. The day after the sanctions were lifted, a member of President Trump’s transition team was appointed to the board of EN+, one of Mr. Deripaska’s companies. Yet another potential conflict stems from the relationship between Treasury Secretary Steven Mnuchin and Leonard Blavatnik, a major investor in one of EN+’s subsidiaries. The Treasury Department has maintained that Mr. Mnuchin and Mr. Blavatnik had “no business relationship,” though there was a 2017 business deal involving one of Mr. Blavatnik’s companies, Access Industries, and Mr. Mnuchin’s company, RatPac-Dune Entertainment. (Mr. Mnuchin has since divested from the company.) Mr. Mnuchin also attended at least one party on Mr. Blavatnik’s yacht.
- Inaugural Committee Contributions: In December 2018, federal prosecutors in New York opened an investigation into possible financial crimes related to the record-setting $107 million raised for President Trump’s inauguration. (The D.C. and New Jersey Attorneys General are now investigating as well.) The investigations concern two separate but related issues.
- First, the authorities are investigation potential tax law violations in connection with inauguration committed spending on rooms, food, and event space in the Trump International Hotel. A tax law prohibits nonprofits, such as the Presidential Inaugural Committee, from paying above-market prices to entities whose owners have control over the nonprofit’s activities. Ivanka Trump was responsible for negotiating the price the hotel charged the Inaugural Committee, and during the negotiation process Stephanie Winston Wolkoff, the top planner for the inauguration, emailed Ms. Trump and other top officials to express her concern that the hotel was charging above-market rates in violation of tax laws, asking what would happen “when this is audited.” Another committee official, Heather Martin, emailed colleagues to express concern about excessive prices, including one contractor’s prices that she described as “wildly different” from its work on previous inaugural events. Records show the Trump International Hotel was paid $1.5 million for the use of the ballroom and other spaces. (Because the inaugural committee is a nonprofit organization, it was only required to disclose its top five vendors, meaning it has only accounted for $61 million of the $107 million spent.)
- Second, and perhaps even more troubling, investigators are looking to whether donors contributed in return for political favors. Previous reports have connected at least two Trump administration policy proposals to specific inaugural fundraisers: (1) Carl Icahn, whose wife was a finance vice chair of the inauguration committee, later was granted a financial hardship waiver by the EPA for his oil refinery exempting it from federal biofuels requirements (discussed above). (2) Coal magnates Robert Murray and Joseph Craft of Alliance Resource Partners donated $1 million to the inauguration committee, and the Trump administration was said to then be considering a controversial coal plant subsidization. (Kelly Craft, President Trump’s nominee to serve as U.S. Ambassador to the United Nations, is married to Joseph Craft.) There are also allegations that foreign governments illegally donated to the inauguration committee (which, as noted above, was apparently transferring wealth to the Trump family by significantly overpaying for services from Trump Organization businesses.) Federal prosecutors in D.C. have already secured a guilty plea from W. Samuel Patten, a political consultant who funneled $50,000 from a Ukrainian politician to the committee via an American “straw donor. And federal prosecutors in New York and Special Counsel Robert Mueller examined whether Qatar, Saudi Arabia, or the United Arab Emirates similarly used straw donors to covertly and illegally donate to the inaugural committee, as well as to a pro-Trump super-PAC, with the goal of influencing American policy. (Investigators are focusing in particular on a breakfast meeting that took place at the Trump Hotel just two days before the inauguration; that meeting involved President Trump’s advisors and dozens of foreign diplomats, including officials from Israel, Saudi Arabia, and the UAE.) Mr. Mueller is also investigating reports that billionaires with Russian ties attended exclusive, invitation-only inauguration receptions typically reserved for top donors. For example, Leonard Blavatnik, who has close ties to a number of Russian oligarchs, donated $1 million to President Trump’s inaugural committee and attended the inaugural events.
- Sheldon Adelson’s Japanese Casino Plan: Casino magnate Sheldon Adelson and his wife Miriam were among the biggest financial supporters of President Trump during his campaign, donating $20 million to the campaign itself as well as $5 million to the inauguration fund. Adelson was also likely the biggest GOP donor for the 2018 midterm election cycle, donating $90 million to GOP organizations by mid-October 2018. Adelson is currently lobbying Japan for one of three limited licenses to build in their newly legalized casino market, which would guarantee a local monopoly and an enormous financial windfall. In February 2017 Adelson flew to Washington and had dinner at the White House with the President. The next morning, Adelson attended a small breakfast with the Japanese Prime Minister Shinzo Abe and other U.S. CEOs where the casino issue was discussed. Shortly thereafter, President Trump personally raised the topic of Adelson’s casino bid during his own meeting with Prime Minister Abe, telling him he should strongly consider licensing Adelson’s casino. The Japanese officials in attendance were “incredulous that he would be so brazen.”
- State Public Pension Funds: Public pension funds in California, New York, Texas, Arizona, Montana, Michigan, and Missouri—with more than five million members—have millions of dollars invested in The CIM Group, a Los Angeles-based investment group that owns The Trump SoHo Hotel and Condominium. Through 2017, the CIM Group paid Trump International Hotels Management LLC 5.75% of Trump SoHo’s operating budget, resulting in millions of dollars in payments. Thus, these state pensions paid millions of dollars almost directly to the Trump Organization through the CIM Group. (CIM and the Trump Organization agreed to end the Trump Organization’s role in managing the Trump Soho by the end of 2017. The decision came on the heels of a ProPublica report that Manhattan D.A. Cyrus Vance dropped felony fraud charges against Jared Kushner and Ivanka Trump for misleading buyers about the percentage of condos that had already been sold at the Trump Soho after Trump attorney Marc Kasowitz hosted a fundraiser for Vance’s 2013 re-election campaign that raised $9,000, in addition to donating $32,000 of his own money.)
- Mississippi Hotel Tax Breaks: In 2017, the Trump Organization announced a new mid-priced hotel chain, Scion (soon followed by another chain, American Idea). The first Scion hotel was granted a tax break in 2018 worth over $6 million from the Mississippi Development Authority. The hotel, The Scion at West End, will be located in Cleveland, Mississippi and built by Chawla Pointe LLC. The tax rebate, provided through the Mississippi Development Authority’s Tourism Tax Rebate program, will subsidize an estimated third of the project, projected to cost $20 million. While Dinesh Chawla, the CEO of Chawla Pointe LLC, emphasized that the Trump Organization played no role in the rebate application, the break would have directly profited the Trump Organization at the expense of Mississippi taxpayers. However, the Trump Organization announced it was ending its involvement in both chains in February 2019 and withdrew from the Mississippi project.