Donald Trump is under fire for saying this week that he is not legally bound to avoid conflicts of interest because such ethical standards do not apply to him. Various commentators objected but Trump insisted “The law’s totally on my side, the president can’t have a conflict of interest.” Trump is legally correct. There is a public disclosure rule that applies but not a binding conflict of interest law. The federal law exempts not just the President but also the Vice President.
The controversy erupted in an interview with the New York Times in which Trump stated “In theory I could run my business perfectly and then run the country perfectly.” Well, “perfectly” is a value-laden term rather than a legal term. Suffice it to say that he can decline a blind trust and run both “legally.”
Under Title 18 Section 208 federal executive branch employees are barred from participating in matters where they have financial interests. Thus, employees use blind trusts to avoid the conflicts since they do not have knowledge of their investments. However, Section 208 expressly exempts the president, vice president, members of Congress and federal judges. The section states:
“Except as otherwise provided in such sections, the terms ‘officer’ and ’employee’ in sections 203, 205, 207 through 209, and 218 of this title shall not include the President, the Vice President, a Member of Congress, or a Federal judge.”
On top of the language of Section 208, there has been a long debate over the application of ethics laws to a president. The position of the Justice Department in the 1970s was that such laws did not apply to the president — even before the insertion of the express exemption.
What does apply is the Constitution’s Emoluments Clause, banning U.S. government employees from accepting presents or compensation from foreign governments. That can be a problem with a businessman with properties and business dealings with foreign leaders. The provision states:
“No Title of Nobility shall be granted by the United States: And no Person holding any Office of Profit or Trust under them, shall, without the Consent of the Congress, accept of any present, Emolument, Office, or Title, of any kind whatever, from any King, Prince, or foreign State.”
The vast Trump holdings raise obvious concerns under this provision and would likely be a continual source of concern for the White House counsel and others in the Administration.
None of this means that the exception under the federal law bars the President-elect from voluntarily accepting a blind trust. However, given the type of investments and properties in the Trump family, it would be hard to use a blind trust for so many fixed assets like hotels etc. The resolution is likely to be found in a shift of control to the children in a family business.
In the end, conflicts of interest may not be legally barred for the president but they can cause significant damage to the Office of the President and the country. They can also create the environment that leads to more serious violations — an erosion of judgment and restraint that can create serious, including potentially criminal, offenses. Thus, it is clearly incumbent upon presidents to do all that they can to separate their high office from family or personal interests. It is the difference between what is required and what is right.