Donald Trump opened a new hotel in Washington Tuesday, the latest addition to a vast business empire that the real estate mogul rode to the Republican nomination.
The property’s debut highlights the unprecedented prospect of a presidency riddled with conflicts of interest for a world-famous businessman, one whose financial stakes range from the corridors of American power to spots around the globe stretching from Panama to Dubai to South Korea.
One of Trump’s central attack lines against Democratic opponent Hillary Clinton is that her family’s foundation benefited from donations by foreign governments seeking to influence the then-secretary of state. The Republican nominee has slammed Clinton as possibly “the most corrupt person ever to seek the presidency” based in part on those donations.
But former presidential financial advisers and global business analysts say that Trump’s massive, international financial holdings combined with his stated plan to entrust them to his children while in office pose a much thornier set of ethical questions. As president, he would be in a position to make decisions pertaining to the federal government, economy and foreign policy that could affect his family’s bottom line.
A Newsweek magazine cover story published Wednesday details a web of Trump’s business ties that could pose conflicts of interest.
Senior writer Kurt Eichenwald points, in one case, to Trump’s suggestions that Korea take on its own nuclear defense — a radical departure from the post-World War II security structure that could also enrich Trump’s Korean business partner, Daewoo Engineering and Construction, a major nuclear energy company.
And in India, Trump’s contracts with businesses linked to state governments and politicians — and his plans to expand the family business there — could raise questions about whether Trump’s foreign policy decisions would be driven by US strategic interests or company priorities.
The story also outlines how the Republican candidate’s comments about Muslims have deeply alienated Turkish President Recep Tayyip Erdogan, a crucial, if sometimes problematic, US ally in the fight against ISIS and other Sunni terror groups.
“The interests of these businesses, the interests of these politicians, often go directly against the interests of American national security. So right now you have Donald Trump in a situation where he makes money by aiding the people whose interests don’t coincide with America’s,” Eichenwald told CNN’s Chris Cuomo and Alisyn Camerota on “New Day” on Wednesday.
Some of the potential conflicts were on display when Trump arrived in Scotland in June to preside over the opening of a remodeled golf course.
Weighing in on UK voters’ recent choice to leave the European Union, which sent the British pound plunging, Trump said at his Turnberrry golf resort: “If the pound goes down, they’ll do more business.”
“What it will be, for sure, is a constant drama as to whether his business ventures are benefiting or being harmed by his public policy decisions,” said Gary Hufbauer, a senior fellow at the Peterson Institute for International Economics, who said that having his children manage his properties wouldn’t provide a strong firewall.
The Trump campaign declined requests for comment this story.
But asked by CNN’s Sara Murray about his business holdings, he said he would cut ties with his businesses if he becomes president and their operations would be run by his children and top executives.
“I would most likely just put it in a blind trust and they would run it, or something,” he said.
Financial experts, though, have noted that one’s children and executives don’t run “blind” trusts.
There is also the issue that his money is in specific properties, noted Kenneth Gross, who has advised previous presidential candidates on how to handle their finances.
“Putting it into a blind trust doesn’t wipe out your knowledge of it. You know it’s there,” he said.
Democrats attack Trump
Trump’s corporate practices are providing fodder for Clinton and other Democrats seeking to tarnish his business credentials in the minds of voters.
Soon after Trump’s comments in Scotland, @HillaryClinton tweeted that “hours after the #BrexitVote, Donald Trump was in the U.K. talking about how he, personally, would benefit.”
An attached video opens with breaking news alerts from news anchors warning about the shockwaves of an uncertain era that will impact financial markets before switching to a lounge music soundtrack and Donald Trump in the Scottish sunshine.
“Are you traveling with any of your foreign policy advisers?,” a reporter calls out to him.
“Well, I’ve been in touch with them, but there’s nothing to talk about,” Trump says, before cutting to his comment that his businesses could benefit from a dropping pound.
On the eve of his visit to Scotland, the Democratic National Committee released a statement that the trip was “not the first time that Trump has promoted his products or properties, including steaks, water, wine and hotels, during his run for the White House.” It continued, “But like the many other businesses Trump has hyped, his developments in Scotland and Ireland have been business failures.”
A CNN/ORC poll released in June found voters think Trump should start distancing himself from his private ventures. The survey reported 69% of voters — including 56% of Republicans and 77% of Democrats — say they think Trump ought to step down as chairman and president of the Trump Organization while he’s involved in politics. Only 28% think he should continue to run his eponymous company.
Whatever voters prefer, the law as it currently stands doesn’t prevent a president from continuing to act as CEO of for-profit enterprises — despite rules governing conflicts of interest for everyone from Cabinet secretaries to federal office clerks.
That raises concerns that decisions a President Trump might make in office on issues such as immigration, banking, land use or foreign ties could be colored by their impact on the personal fortunes of CEO Trump.
“We’ve never had a situation like this where the holdings of the president could create an acute conflict in carrying out his duties,” said Gross, now a lawyer with Skadden, Arps, Slate, Meager and Flom. “I’m really not sure how it would all play out.”
Trump, who has refused to release his tax returns, filed a personal financial disclosure form with the Federal Election Commission in May that shows income in excess of half a billion dollars, according to his campaign. In earlier filings, Trump has listed at least $1.4 billion in real estate and other assets.
An examination of that Financial Disclosure Report reveals he has interests in at least 22 countries, including Saudi Arabia, China, Turkey and the United Arab Emirates. These include hotels, golf courses and at least one aviation company.
While the bulk of Trump’s business interests are anchored in the US, his far-flung holdings — which also include assets as far afield as India, Qatar, Egypt and Panama — present significant potential conflict of interests, according to analysts.
“Most foreign policy decisions you would make would have real implications for your holdings and your net worth, which means the conflicts of interests would be piling up beginning with every morning’s security briefing,” said Norm Ornstein, a political scientist at the American Enterprise Institute.
Hufbauer said there’s also a concern that foreign governments might try to use their leverage over Trump’s personal businesses. Trump’s property development work relies intensely on getting permissions from local regulators for everything from land use to building heights, Hufbauer said.
“There would always be the question, whether they’re putting the screws on him in his private life to have him change his policies in his public life,” Hufbauer said.
Since Trump uses his name conspicuously in his businesses and licensing agreements in the US and abroad, “it seems harder to completely separate what’s going on in the business from his presence in a potential presidency,” said Hufbauer.
A President Trump would appoint Federal Reserve Board members who set interest rates that affect his properties. He would choose commissioners to the Federal Trade Commission, which oversees consumer regulation and antitrust complaints such as the one against Trump University.
He would tap leaders for the agencies that determine how easy it is for workers at his businesses to unionize or how easy it is for foreign laborers to enter the US to work in his hotels. Or he might be in a position to approve the creation of a national forest next to one of his golf courses, Gross said, that would improve the views and allow him to raise the green fees.
The Berlusconi model?
The closest parallel to a President Trump in modern times, Hufbauer said, is Italy’s former Prime Minister Silvio Berlusconi.
“There were all these issues of whether there was some indirect influence” on government policy because of Berlusconi’s sprawling business interests, Hufbauer said.
Trump himself has tried to raise the specter of foreign influence against Clinton, calling on her in a June 13 tweet to return “the $25 million plus” that Saudi Arabia had given to the Clinton Foundation — run by former President Bill Clinton — which matches donors to development projects aimed at solving the world’s most pressing problems.
The foundation has rejected the suggestion of foreign influence, saying the money was earmarked for specific projects, including AIDS relief.
In response to conflict of interest concerns when Clinton became secretary of state, she made an agreement with the Obama administration to limit foreign donations to the foundation to those countries that had already been giving, as long as their contributions stayed at the same levels.
Clinton, who has spent her presidential campaign so far in the United States, primarily visiting key battlegrounds such as Ohio and Virginia, has said that if she’s elected, she and her husband will “cross that bridge” on making a decision about the foundation. Bill Clinton has said things will change.
Hufbauer said one difference between Clinton’s situation and Trump’s is scale.
“We now see the Clintons are having some trouble in wondering what Bill will do with the foundation if Hillary is elected,” he said. “The problems of a Trump would be substantially greater because of the conspicuous use of his name.”
Few regulations for presidents
No law would require Trump to shed his holdings, though he would have to disclose them. And there’s no regulation that would prevent him from promoting his overseas resorts or other properties if he sits in the White House.
There isn’t even a legal requirement for presidents to place their holdings in a blind trust, which has become an accepted practice as candidates in previous years took steps to avoid a conflict of interest or the appearance of one.
And while executive branch employees are legally forbidden from taking part in a government matter that might affect their financial interests or those of their spouse or children, that rule doesn’t apply to the president or the vice president.
Beyond creating a blind trust, candidates often sell their businesses, convert their holdings into cash or general financial instruments such as index funds. Bush sold his stake in the Texas Ranger’s baseball team and put his securities in a trust, as did Republican candidate Mitt Romney.
Gross, who advised Romney, and others noted that Trump still faces the possibility of conflicts of interest even if he hands management of his assets over to his family.
“You’re supposed to have no clue what the people in charge of the trust are doing with your money,” Ornstein said.
Richard Painter, a corporate law professor at the University of Minnesota who served as the chief ethics lawyer for President George W. Bush, said another problem would be the way banks, regulatory agencies or other entities would relate to the family members managing Trump’s properties.
“You think the banks are going to turn down the president’s son on a leveraged loan?” he asked.
The Constitution’s failure to address these kinds of potential presidential conflicts of interest is a “fatal flaw,” said Painter, who pointed to history for an example of the impact personal financial interests can have on national fortunes.
Presidents including George Washington and Thomas Jefferson, along with many senators, owned plantations that relied on slave labor, a factor that Painter said affected their judgment.
“The first few presidents had conflicts of interests that made it impossible for them to intelligently and ethically deal with the country’s first moral dilemma,” Painter said. “The fact that we failed to deal with that in 1789 created the greatest political crisis and war in our country’s history.”
Some of Trump’s businesses around the world
Editor’s note: This story has been updated from the original version published on June 24.