Take Care is privileged to cross-post this article by Harvard Law Professor Matthew Stephenson from the Global Anti-Corruption Blog:

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 entirely 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 business 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 leverage the power of public office to enrich themselves, their families, and their cronies:

1. U.S. Government Payments to the Trump Organization
2. Use of the Power of the Presidency to Promote Trump Brands
3. U.S. Government Regulatory and Policy Decisions that Benefit Business Interests of the Trump Family and Senior Advisors
4. 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 directly pay the Trump Organization. Though costly to taxpayers and unseemly, 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: The Secret Service, charged with protecting the President and his family, must rent out two vacant floors of Trump Tower, where President Trump spends time and First Lady Melania Trump and son Barron Trump continue to reside. This is not the first time the Secret Service has rented space from government officials they are protecting. For example, when the Secret Service needed to protect former Vice President Joe Biden, they rented a nearby cottage that he owned. However, the payments are several orders of magnitude larger in the case of Trump Tower: While the Secret Service rented Vice President Biden’s cottage for $2,200 per month, the Secret Service may have to pay as much as $3 million per year to rent out two floors of Trump Tower. To accommodate this cost, the Service has requested an additional $28.6 million for next year to protect President Trump’s family and private home in Trump Tower.
• Department of Defense at Trump Tower: The Department of Defense will follow its standard practice of setting up separate headquarters near the President’s private residence—in this case also in Trump Tower. While the Department rented space near President Barack Obama’s Chicago home and rented a secure trailer near President George Bush’s ranch, it is unusual for the Department to rent space directly from the president’s own business organization for a substantial amount of money (though the exact amount, or the information required to estimate it, is not public).
• Trips to Mar-a-Lago: In the first three months of his presidency, President Trump visited the Mar-a-Lago resort six times—including on a diplomatic visit by Japanese Prime Minister Shinzo Abe. The vacations pose the unique issue of the Secret Service paying the Trump Organization directly for any costs related to protecting the president. This includes the $16,685 the Service spent at Mar-a-Lago on golf cart rentals alone.
• Trump Properties Abroad: If President Trump or his immediately family travel abroad and choose to stay in 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, when Eric Trump visited Uruguay, he stayed at the Trump Tower Punta del Este. The Secret Service rooms cost $88,320 while the U.S. Embassy in Uruguay paid an additional $9,510 for its staff to stay in the hotel to support the visit.
• 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 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.

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. Indeed, Eric Trump noted that the Trump brand “is the hottest it has ever been,” and Melania Trump noted in her defamation lawsuit that she had lost a “once-in-a-lifetime opportunity [as First Lady] . . . to launch a broad-based commercial brand” worth millions of dollars. Moreover, in the first month of the Trump Administration, Ivanka Trump’s apparel line sales increased 346%. While some of the 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.

While certainly distasteful, this is probably also one of the less harmful ways in which the Trump Administration may seek to profit from the Presidency, as it also does not involve significantly distortions of U.S. policy. Nonetheless, the overt attempts to use the presidency as a marketing opportunity indicates a troubling underlying attitude, one revealed by a number of specific instances in which the Trump family has apparently taken more active steps to use the prestige and influence of the presidency to promote the Trump brand. Examples include:

• Melania Trump Jewelry: In response to criticism of the language used in the defamation suit mentioned above, Trump’s attorney clarified that the First Lady had no intention of profiting from her position. However, 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 made the business decision to drop Ivanka Trump’s clothing line, President Trump used twitter to attack 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[.]”
• Access and Influence at Trump Properties: President Trump has actively promoted that impression that staying at Trump properties—particularly the Mar-a-Lago “winter White House” where the membership applications have soared—comes with a front-row seat to the inner workings of the U.S. government. During the process of selecting Cabinet nominees, president-elect Trump invited members of his Bedminster Golf Club to join the excitement at the Mar-a-Lago resort. At this same resort, after news broke of a North Korean missile test, President Trump discussed intelligence and briefings with Prime Minister Shinzo Abe of Japan on an open patio in plain view of resort guests. In fact, briefly after giving a joint press conference with Prime Minister Abe, President Trump gave an impromptu speech at a wedding, claiming, “[t]hey’ve been members of this club for a long time. They’ve paid me a fortune.” Further promoting this idea of access, retired investor Richard DeAgazio posted a Facebook picture of the Presidential Emergency Satchel (commonly known as the “nuclear football”). Presumably to capitalize on the reputation of Trump properties as unique places of access to the president, the Mar-a-Lago resort has doubled its initiation fee to $200,000 following the election of President Trump.
• Advertisement for Mar-a-Lago on State Department Website: In April 2017, a U.S. State Department website called Share America–which, according to the site, 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. After widespread criticism from lawmakers and ethics experts–who pointed out that the post was also a fairly clear violation of 5 C.F.R. § 2635.702(c)–the State Department removed the posting.

3. U.S. Government Regulatory and Policy Decisions that Benefit the Business Interests of the Trump Family and Senior Advisors

Federal 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 business closely tied to President Trump, his family, or his senior advisors. This is a much more serious concern, as it involves not only enrichment of the Trump family and associates at the expense of U.S. taxpayers, but also the potential distortions of U.S. policy, with more far-reaching consequences.

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; Trump businesses are subject to countless federal safety and environmental regulations; the Trump Organization owns properties that may be eligible for grants and subsidies from the Department of Housing and Urban Development (HUD). 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:

• 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.
• General Services Administration Lease: The Trump Organization leased the building that is now the Trump International Hotel in Washington D.C. (which used to be the D.C. Post Office) from the Federal Government’s General Services Administration (GSA). In order to avoid the conflict of interest that would arise if an elected federal government official leased the building, the GSA Lease §37.19 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 GSA recently decided that President Trump—who has the authority to appoint and potentially remove the head of the GSA—was fully compliant with §37.19 as long as he does not receive profits while he serves as President. The GSA’s decision was roundly criticized by most experts as an implausible reading of the contract.
• Ivanka Trump and Jared Kushner’s Advisory Roles: Ivanka Trump recently accepted a position as assistant to the president, joining her husband Jared Kushner who serves as senior advisor to President Trump. Since Ms. Trump is not being paid a salary and was not sworn in, she is not an official government employee (although she will still receive a West Wing office, security clearance, and White House communications equipment). While Ms. Trump is stepping down from her management and operations role at the Trump Organization, she will continue to receive fixed payments from the Organization and profits from her fashion brand and the Trump International Hotel in DC. Similarly, although Mr. 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. Similar to the president himself, neither Ms. Trump nor Mr. Kushner divested from their assets or placed them in a blind trust—compromising their counsel to President Trump.
• Infrastructure Plan: To oversee a council at the helm of the proposed $1 trillion infrastructure plan, President Trump selected Steven Roth and Richard LeFrack, billionaire real-estate developers and former business partners of the President. The Trump Organization is currently invested in Mr. Roth’s real-estate development company, Vornado Realty Trust, and receives $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 directly benefit the Trump Organization.
• Deutsche Bank Investigation: The Department of Justice is investigating Deutsche Bank’s connection to a Russian money-laundering scheme. Justice Department officials appointed by President Trump, including Attorney General Jeff Sessions, are overseeing the investigation. Deutsche Bank has lent President Trump billions of dollars, and he currently still owes the Bank about $340 million. Senator Chris Van Hollen highlighted this potentially serious conflict of interest in a letter he sent to Deutsche Bank, asking for assurances that the president’s debt would not be used as leverage.
• 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 government in 2008. Since President Trump’s election, shares of Fannie Mae and Freddie Mac have soared, and Mr. Paulson has called for the government to relinquish control of the companies. President Trump himself has invested $3­­–5 million in Paulson’s funds, and thus would stand to gain immensely from a decision to end government control of the companies. Treasury Secretary Mnuchin—a former business partner of Mr. Paulson—has expressed interest in ending government control of the companies.
• Commerce Secretary Ross’s Shipping Interests: Commerce Secretary Wilbur Ross shed millions of dollars in assets to avoid conflicts of interest. However, he 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. Secretary Ross will be at the forefront of the U.S. trade negotiations and will help shape U.S. trade policy, which will directly impact the financial interests of the Diamond S Shipping Group.
• Carl Icahn’s Mining Interests in Indonesia: Billionaire investor Carl Icahn serves as a special advisor to President Trump. Mr. Icahn is simultaneously a top shareholder in a Freeport-McMoRan, a mining company that does so much business in Indonesia that it is the country’s largest taxpayer. Freeport has been trying to extend its mining contract with the Indonesian government, and Icahn has pushed Freeport to fight more aggressively against the government’s challenges to Freeport’s contracts. Mr. Icahn’s simultaneous business interest in Indonesia and the importance of U.S.-Indonesian relations create serious conflicts of interest.
• The Scope of the Proposed Travel Ban: In January 2017, President Trump signed a controversial executive order than constituted a travel ban on seven Muslim-majority countries in the Middle East. Although experts, S. 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 suggested 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 countries 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.

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. 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 concerns 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. In fact, shortly after the election, the Hotel hosted a promotional event aimed specifically at foreign diplomats and attended by almost 100 diplomats from Brazil to Turkey. Since then, there have been numerous reports of foreign governments paying for rooms and events there. 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.
  • 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.
  • Kuwait: The Embassy of Kuwait’s celebration of Kuwaiti independence on February 25 was originally to take place at the Four Seasons hotel 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, but the Ambassador has denied these reports. If true, this suggests direct efforts by the Trump Organization to leverage the president’s position to steer foreign government business to the Trump hotel.
  • Turkey: The American Turkish Council and the Turkey-U.S. Business Council (TAIK)—an arm of the Turkish government—will host their annual conference 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.)
• Events at Other Trump Properties: Similar concerns have been raised with respect to other Trump properties, where domestic of foreign interests may seek to curry favor with the president by hosting events at Trump resorts. For example, the American Red Cross held its annual ball on February 4 at President Trump’s Mar-a-Lago Club. The ball has been held at the Mar-a-Lago resort before and was planned before the election. However, the event still raised concerns because the President will likely have to decide whether to appoint a new chairman and whether to review the Red Cross federal charter. Another example: The National Confectioners Association, represents large candy companies, will be hosting 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. And 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 leak at the original site, rather than any desire to curry favor with the Trump Administration. While the explanation is plausible, events like this nonetheless contribute at least to the perception of an attempt to curry favor.
• Taiwan: On December 2, 2016, President Trump broke the nearly four decades of presidential precedent and communicated with the President of Taiwan. Since 1979, the United States has not officially recognized Taiwan, and the phone call between president-elect Trump and Taiwanese President Tsai Ing-wen could cause serious tension in U.S.-China relations. In the days after the call, news broke that the Trump Organization was considering expanding to Taiwan. While the Trump Organization has denied any such plans, the Mayor of Taoyuan—the city where the Organization supposedly wants to build—confirmed a September 8 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 a long-coveted Chinese trademark for the “Trump” brand. While there is no direct evidence of quid pro quo, and some commentators have suggested alternative explanations for the Chinese government’s decision, the suspicious timing, the unusual speed with which the marks were granted, and the mere fact that a foreign government has conferred on the President’s business a benefit worth millions of dollars, raises serious obvious and serious concerns.
• Other Chinese Real Estate Purchases:
  • On February 21, 2017, Xiao Yan Chen (who also goes by Angela Chen), purchased a penthouse apartment in Trump Tower in New York for $15.8 million. Ms. Chen is the founder and managing director of a consulting and lobbying firm that helps clients secure access to senior public and private decision-makers in the People’s Republic of China, and includes among its clients the U.S. Department of Commerce and U.S. Trade and Development Agency.
  • In March 2017, news outlets reported that a Chinese company, Anbang Insurance Group, planned a $4 billion transaction involving a property owned by the family of Jared Kushner, President Trump’s son-in-law and senior advisor, which will net the Kushner family firm approximately $400 million. (Although Jared Kushner sold his ownership stake in the company when he assumed his White House role, he sold the stake to his family members, a move which many ethics experts considered inadequate.) 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.
• Philippines: President Rodrigo Duterte of the Philippines named Jose E.B. Antonio, the chairman of the company that is building a Trump Tower in the Philippines, as an envoy to the United States for trade, investment, and economic affairs. Mr. Antonio, whose company paid the Trump Organization as much as $5 million to use the Trump name on the current Trump Tower project, has said he’s discussing additional projects in the Philippines with the Trump family. In other words, Mr. Antonio will be representing the Philippines in discussions with the U.S. government regarding policy issues, and will at the same time be discussing private business ventures with the Trump Organization.
• Turkey: The Turkish conglomerate Dogan Holding was instrumental in developing the Trump Towers Istanbul, and continues to pay millions to the Trump Organization. The Erdogan government, however, has previously imposed a $2.5 billion tax fine on Dogan Holding, and could put further pressure on the company in the future. 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.”

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