It is now widely understood that Donald J. Trump's presidency poses unprecedented conflicts of interest. This is not an abstract worry: his administration has unleashed kleptocracy and self-dealing on an unprecedented scale, in ways that imperil the integrity of our politics and the sanity of our policies. But one ethics concern towers above all others: Trump’s continued acceptance of foreign and domestic emoluments. This conflict is not merely disturbing; it is also flagrantly unconstitutional.
Too often, however, journalists and the public treat constitutional questions as significant only in the context of potential litigation. Who has standing to sue? What will a judge do? What about the mysteries of political question doctrine? Soon enough, a fixation on these procedural matters can supplant discussion of the actual constitutional violation—and can encourage the false impression that lawsuits filed in federal court are the only way of holding power to account. That is an unfortunate pattern.
In the emoluments context, there are now three major lawsuits pending against the President: one filed by private parties (in New York); one filed by Maryland and DC (in Maryland); and one filed by nearly 200 Members of Congress (in DC). These cases are important. And as many contributors to this blog have explained, each case should be decided on the merits, rather than dismissed on technicalities. (NB: Trump definitely loses on the merits.)
But these lawsuits aren’t the end of the story. Far from it.
Consider, for example, the Domestic Emoluments Clause. That provision forbids the States, or any part of the federal government, from conferring “emoluments” on the President (other than his fixed salary). This clause serves the vital purpose of keeping peace between state and federal factions that might seek to obtain influence by feathering the President's nest. Wholly apart from the pending lawsuits, and apart from Trump’s willingness to receive emoluments, the Constitution places state and federal actors under a distinct legal duty not to confer any such emoluments in the first place. This part of the story deserves more attention than it has thus far received.
Fortunately, recent developments shine a light on that issue.
Yesterday, as reported by Julia Harte of Reuters, “[a]dvocacy groups launched petitions and sent letters . . . urging two of the biggest U.S. public pension funds to divest from an investment fund unless it stops paying one of President Donald Trump's companies to run a New York hotel.” This organized anti-emolument campaign followed an earlier in-depth Reuters report that pension funds in at least seven states “periodically send millions of dollars to an investment fund that owns the upscale Trump SoHo Hotel and Condominium in New York City and pays a Trump company to run it.”
The campaign's targets are state officials who oversee the California Public Employees' Retirement System (CalPERS) and the New York State Common Retirement Fund. The campaign's stated goal is to persuade these officials to reconsider their portfolio unless the investment fund ends its relationship with the Trump Organization—on the intriguing theory that payments to the investment fund might well qualify as illegal emoluments: “The money used for this investment comes from mandatory deductions from the paychecks of public employees. These employees are thus forced to indirectly subsidize President Trump beyond the Constitution's mandate of a fixed salary.” (Check this letter to CalPERS for an analysis of relevant constitutional questions.)
In short, as Free Speech for the People has explained in a written statement, “CalPERS and the New York State Retirement Fund are now paying millions to the fund manager in quarterly performance and management fees that risk being funneled directly to Trump International Hotels Management, LLC for managing and marketing the Trump SoHo.”
This campaign raises a host of exceptionally interesting questions. But perhaps the most important takeaway is that the story of emoluments isn’t just the story of a few landmark lawsuits litigated in federal court. The Trump Organization spreads its tentacles throughout the United States and already interacts with state and federal entities in a host of potentially unethical respects. What’s more, the Trump Organization has announced its intention to expand domestic operations. That expansion will unquestionably be accompanied by endless requests for licenses, subsidies, tax breaks, permits, and a host of other discretionary governmental benefits that redound to President Trump’s personal financial benefit as owner of the Trump Organization.
Citizens, legislators, and state and federal officials must be alert to the many (and diverse) ways in which President Trump receives unlawful domestic emoluments. Popular activism to thwart such illegal transactions can and should be the next major front in the war against kleptocracy under Trump. After all, it is now crystal clear that Trump—aided and abetted by sophistry from lawyers at Morgan Lewis and the Department of Justice—won’t do anything to stop the flow of money into his own coffers. That’s not surprising: this is a guy who avowedly thinks he’s above the law.
If the people of this nation want a president who acts unclouded by private financial benefits, they must step up and insist that their officials not pay illegal emoluments to Trump in the first place. Hopefully the letters sent this week to CalPERS and the New York State Retirement Fund are merely the opening salvo in that new struggle.