//  5/25/17  //  Commentary

Yesterday we learned that the Trump Organization has deemed it “impractical” to identify all payments that its hotels receive from foreign governments. Instead of asking guests a few simple questions, the Trump Organization will rely on estimates and assumptions about payments from foreign powers at its properties. It will use those figures—in unclear ways—to calculate total profits from foreign governments. And from time to time, it will write a check for this amount to the U.S. Treasury.  

If the Trump Organization thinks that will solve Trump’s breach of the Foreign Emoluments Clause, it is mistaken. This plan responds to only a fraction of Trump’s emoluments and presents (those given by foreign powers to Trump through hotel rentals). And it is inadequate as a safeguard against emolument violations even in that limited context. The Constitution requires that Trump actually stop receiving foreign presents and emoluments, not that he forge an appearance of avoiding some of them.  

The scope and danger of Trump’s constitutional violations are, by now, well known. Yet even with advance warning and the best lawyers his money can buy, Trump has never fielded a good defense to claims that he’s violating the Foreign Emoluments Clause. In fairness to his lawyers, that’s because there isn’t a good defense to be had: he’s violating the Clause in nearly every conceivable way (short of accepting an office in Vladimir Putin’s government).

Instead, Trump has relied on the worst kind of parlor tricks. He held a fancy press conference awash in manila folders; his lawyers quietly issued a “white paper” that was really just a white wash; and he promised that he’ll donate back to the U.S. Treasury all profits that his hotels earn from foreign governments.

This last promise received a lot of attention. But make no mistake: it has always been a mere fig leaf, offered by a master showman. Given that many of his hotels truly are emolument magnets, Trump decided to strategically embrace that reality. He then used a flashy promise to create the illusion that he was addressing all the worst violations by supposedly resolving just this one. Pretty clever.

But not clever enough.

Even focusing solely on hotels and similar properties, this plan has been problem-ridden since it was announced in January. For instance, from the start, it was unclear how the Trump Organization would define “profit”—which really does matter when your defense is that you’re receiving only “fair market value” from foreign powers. As Larry Tribe and I have noted, this is a treacherous issue: 

In general, fair market value is understood as the price at which an asset will trade between a willing buyer and a willing seller when all of its attributes are known equally to both . . . What about a scenario where rental prices remain the same for everyone but many rooms that would have gone unoccupied are booked by foreign powers seeking to influence Trump, thereby [increasing] the profitability of his hotels? And if Trump’s new job does allow the business to raise prices at all Trump hotels—partly because foreign leaders are willing to pay more money, or rent more rooms, to curry favor with the President—is Trump allowed to reap the benefits of that spike in the “fair market value” of his business?

These questions are just the start of any meaningful inquiry into whether Trump is turning over foreign profits from his hotels.  

In addition, Trump’s promise raised a different kind of uncertainty: how would the Trump Organization identify all entities that qualify as “foreign” for purposes of the Foreign Emoluments Clause? This includes not only foreign governments, but also their agents and corporations they own or control. Given that the President is legally required to comply with the Clause, the burden has always been on him (and his company) to do so effectively and comprehensively.

Well, now we have answers to questions about profit and identifying foreign visitors.  With respect to “profit,” the Trump Organization refuses to show its work, instead asserting that the accounting rules are totally clear—even as many experts have pointed out obvious room for manipulation, confusion, or evasion.  And when it comes to identifying foreign money, the Trump Organization has basically promised that it’ll take its best crack at a guesstimate of some kind, whose inputs and parameters remain underspecified.

At bottom, it would be nothing short of astonishing if this ad hoc scheme successfully cured Trump’s violation. Certainly, the plan is shoddy enough to raise a presumption of inadequacy.

This might seem pretty bad. But it gets a lot worse if you zoom out and survey the broader emolumental landscape.

Hotel payments, after all, are merely part of a large network of illegal emoluments and presents centered around the Trump Organization. And as a quick Google search confirms, the Constitution does not prohibit only “any present, Emolument, Office, or Title, of any kind whatever, through his hotels, from any King, Prince, or foreign State.”  Instead—true to its exceptionally broad anti-corruption purpose—the Foreign Emoluments Clause reaches a wide array of “commercial, regulatory, licensing and investigatory contexts in which foreign powers can (and will) give the Trump Organization special treatment in hopes of influencing the President.”

Thus, as co-authors and I warned several months ago, a fixation on Trump’s hotels is arbitrary: “Since the whole Trump Organization is permeated with foreign money—and subject to an endless variety of potential advantages in foreign lands—a serious plan would have accounted for the whole empire, not just its hotels.”

Trump, of course, has not offered a serious plan.  Instead, focusing on a single source of constitutional violations and ignoring most others, he grandly promised to pay back profits from his hotels.  The implicit suggestion was that this gesture solved the basic problem, and that his other reforms solved the rest (hint: they didn’t).

So what are we left with? Let’s review: Trump is violating the Foreign Emoluments Clause in many different ways. He proposed “fix” allows most of those violations to continue unabated, but includes a promise that he’ll do something about his hotels. Except we’ve learned that even this part of his plan relies on obfuscation and estimation to an unsettling degree, thanks to policies adopted by the Trump Organization (now managed by his two adult sons).

I’d imagine that this scheme is the brainchild of the Trump Organization, not lawyers at the White House Counsel or DOJ. As a result, I can’t help but wonder: at what point might one conclude that the Trump Organization is actively (and perhaps unlawfully) conspiring to facilitate and conceal unconstitutional conduct?

Ultimately, as Representative Elijah E. Cummings explained in a letter to the Trump Organization, “If President Trump believes that identifying all of the prohibited foreign emoluments he is currently receiving would be too challenging or would harm his business ventures, his options are to divest his ownership or submit a proposal to Congress to ask for our consent.”  It really is that simple: either the President must stop receiving illegal emoluments or he must ask Congress to authorize them

The Constitution allows nothing less.

Postscript: If you’re interested in catching up on the Emoluments Clause litigation pending before Judge Abrams in Manhattan, check out the Second Amended Complaint in CREW et al. v Trump.

 

Disclaimer: I am not neutral.  I've worked closely with many of the lawyers bringing the CREW case and I've co-authored articles about the case with several of them.


Versus Trump: 2017 Scorecard

1/4/18  //  Uncategorized

On the first episode of Versus Trump of 2018, Jason and Charlie look back at Versus Trump cases in 2017 and score them as Administration wins, losses, or not-yet-decided. They also look ahead at big issues to come in 2018. Listen now!

Charlie Gerstein

Civil Rights Corps

Jason Harrow

Equal Citizens

District Court Tries Too Hard To Duck Emoluments Clause Case

12/27/17  //  Commentary

I did not expect that a federal district judge would simply fail to apply the law that currently binds him. Yet that's more or less what Judge Daniels did in dismissing the CREW emoluments case.

Michael C. Dorf

Cornell Law School

Emoluments, Zone of Interests, and Political Questions: The 13th and 14th Strokes of the Clock

12/26/17  //  In-Depth Analysis

Judge Daniels's opinion dismissing CREW's emoluments case makes profound errors in assessing 'zone of interests' and the political question doctrine. These errors are so grave that they cast doubt on the whole opinion.

Jed Shugerman

Fordham Law School