Give a gift
A foreign official travels to Washington, books the Ivanka Suite at the Trump International Hotel for $1,595 per night, and later makes glowing comments about the hotel during a meeting at the White House with President Trump.
To some, the scenario is no big deal – a bit of diplomatic flattery linked to a routine transaction for high-end business accommodations in the heart of the nation’s capital.
But to others, the hypothetical encounter sets off alarm bells. Trump critics see the renting of the suite as an effort by a foreign government to curry favor with the president of the United States by delivering a financial benefit to a hotel that bears his name, is run by his sons, and in which he maintains a personal and financial interest.
“I am confident that that is no mere hypothetical,” says Norman Eisen, an ethics lawyer in the Obama White House and chairman of the watchdog group Citizens for Responsibility and Ethics in Washington (CREW). “Trump is very focused on this kind of thing and quite likely to be influenced by this kind of blandishment.”
It is more than an ethical nuance. Mr. Eisen and other critics view the scenario as potential grounds for impeachment. Their case depends on convincing a federal judge to embrace an expansive interpretation of a once-obscure constitutional provision called the foreign emoluments clause.
The clause prohibits federal officials from accepting any present or “emolument” from a foreign government.
There is an exception. The official can keep the present or emolument if he obtains the consent of Congress.
Mr. Trump has not done so.
Lawsuits have been filed in federal court in New York, Maryland, and the District of Columbia seeking a declaration that Trump is violating the Constitution because his hotels and other companies continue to do business with foreign governments and foreign officials.
“President Trump’s myriad international and domestic business entanglements make him vulnerable to corrupt influence and deprive the American people of trust in their chief executive’s undivided loyalty,” reads the complaint filed in federal court in Maryland.
Ethics questions have dogged Trump and members of his administration since his election. They are driven in part by Trump’s refusal to release his tax returns and his decision not to divest his 77.5 percent ownership in the Trump Organization.
It has become common practice since the Watergate scandal in the 1970s for presidential candidates to release their tax returns and for presidents to divest their financial and business interests by placing those interests in a blind trust prior to taking office.
Not Trump.
Instead of divestment and full disclosure, the Trump administration and the privately held Trump Organization have offered the American people vague assurances that fall somewhere between “trust us” and “none of your business.”
These waters have been further muddied by the ongoing Russia meddling investigation. Special Counsel Robert Mueller is reportedly expanding his probe to examine at least some Trump-connected business deals, including issuing subpoenas for documents from the Trump Organization.
Questions have also arisen about the president’s son-in-law, Jared Kushner. Mr. Kushner has divested his ownership stake in his family’s real estate company. But the company is seeking to shore up financing for a debt-laden property on New York’s Fifth Avenue, with a $1.2 billion debt coming due in January 2019. Investors from China and Qatar had earlier been approached.
Kushner recently had his interim White House security clearance reduced from top secret to secret, reportedly amid concern that his family’s business dealings might make him vulnerable to foreign influence.
Administration lawyers maintain there is no conflict of interest between Trump’s work as president and the Trump hotel business. Trump’s sons have pledged not to pursue new business deals during their father’s presidency. And prior to becoming president, Trump pledged to donate to the US Treasury all proceeds from foreign officials staying at his hotels.
Trump Organization officials announced last month that they turned over $151,000 to the Treasury for business with foreign officials conducted between Jan. 20 and Dec. 31, 2017. Trump executives did not identify the officials or the foreign sources of the funds, making it impossible to assess any potential ethics issues.
Critics say such donations do nothing to reduce the threat of foreign influence.
The concern is that Trump will use his presidential stature and clout to bolster his international business empire at the expense of US national interests. One way to police that would be through enforcement of a beefed-up emoluments clause.
Debate hinges on definition
Legal scholars agree that the founding fathers wrote the emoluments clause into the Constitution to help insulate government officials from foreign influence and corruption.
But there is sharp disagreement over the prophylactic scope of the measure. One prominent scholar argues that the clause doesn’t apply to the president at all. But the bulk of the debate focuses primarily on the definition of “emolument.”
Lawyers for CREW argue in lawsuits filed in New York and Maryland that the term “emolument” must be interpreted broadly to bar the acceptance of “anything of value” from a foreign state – including the act of renting a room at market rates at a Trump hotel anywhere in the world.
A third lawsuit, filed in Washington, D.C., by the Constitutional Accountability Center on behalf of 200 Democratic members of Congress, seeks to advance the same “anything of value” position.
In contrast, lawyers for the Trump administration argue for a more targeted definition. They say the foreign emoluments clause only prohibits payments or gifts to the president if they are made in connection with services provided in his official capacity as head of state, or provided in a context that would effectively make him an employee of a foreign government.
That view would protect against foreign attempts to corruptly influence presidential actions, including classic quid pro quo bribery. But it would not prohibit commercial transactions that are not directly related to an official’s government authority.
“If I went to the Trump Hotel right now, and I reserved that [Ivanka] suite and I paid $1,600, stayed there for a night, had dinner, and left, nobody would say I had made a gift to the Trump Organization. I just paid what it cost,” says Andy Grewal, a professor at the University of Iowa College of Law.
“If, the very next day, a foreign ambassador stayed there and paid the exact same amount that I did, it seems strange to me to all of a sudden call it a gift or an emolument,” Professor Grewal says.
“You could reasonably say that maybe if the president knows about it, he may favor a particular country in negotiations if they are always holding receptions and functions at the hotel. But that doesn’t make it a gift,” Grewal says.
Eisen disagrees. The president’s hotel business presents an opportunity for foreign-influence operations, and Trump’s personality makes him particularly vulnerable, he says.
“We know that President Trump cares about even small advantages to himself,” Eisen says. “We know he is susceptible to flattery. And we know that he is checking on the performance of his hotel.”
“It is an enormous channel through which foreign governments are seeking, we believe, to influence the president,” he says.
Bribery vs. 'anything of value'
Lawyers challenging Trump in the court cases argue that the emoluments clause was meant to cover more than just bribery. It was designed to protect against a public official receiving anything of value that might compromise the Constitution’s demand of exclusive loyalty to the American people.
Such compromising opportunities would include:
- A foreign diplomat booking a room at a Trump hotel or hosting a diplomatic reception there.
- A foreign-owned bank providing a loan to a Trump business.
- A foreign-owned business paying rent for office space to a Trump business.
- A foreign government approving a license for a Trump company project.
- Any Trump Organization profit on a business transaction with a foreign government or foreign-owned entity.
Rather than trying to avoid contact with foreign officials, the Trump International Hotel in Washington has been reaching out to the diplomatic corps, encouraging them to conduct business at the hotel and conference center. The hotel even hired a director of diplomatic sales.
The effort is showing results. In February 2017, the Kuwaiti Embassy held its national day celebration at the hotel. It did so again this year. The Embassy of Bahrain also held a national day celebration there. Azerbaijan co-hosted a Hanukkah party at the hotel in December 2016. The ambassador and permanent representative of Georgia to the United Nations stayed at the hotel during a visit to Washington in April 2017.
Potential conflicts extend beyond Trump’s hotel business.
Last year Trump-owned companies had 157 trademark applications pending in 36 foreign countries, according to a New York Times report. The granting of any of those applications would amount to a benefit received from a foreign country.
For more than a decade, Trump had been trying, unsuccessfully, to win trademark protection in China for Trump-branded building construction services. His most recent rejection came in May 2015, according to the lawsuits.
Then, three weeks after winning election, the president-elect made a surprise phone call to the president of Taiwan. The call sent shockwaves across Asia, suggesting to some that the new president might jettison the US government’s longstanding one-China policy of not formally recognizing Taiwan.
A few weeks after taking office, in February of 2017, Trump affirmed in a meeting with the Chinese president that he would uphold the one-China policy. Less than a week later, the Trump Organization received trademark protection. In the weeks since, nearly 50 Trump trademark applications in China have been approved or received preliminary approval, according to press reports and documents filed in federal court.
Among other examples of potential conflicts cited by the plaintiffs in their lawsuits:
- Trump receives regular payments from the Chinese government via rent paid by the government-owned Industrial and Commercial Bank of China, a key tenant in Trump Tower in New York.
- Trump receives royalties from foreign governments for the television distribution of his show “The Apprentice,” and spinoffs from that program. International licensing fees are received for broadcasts on government-owned stations in the United Kingdom, Brazil, Bulgaria, Indonesia, and Vietnam.
- The Trump Organization runs the newly opened Trump International Golf Club in Dubai. In completing the project, the company required an array of permits and approvals from the Dubai government.
- Trump receives regular payments from Saudi Arabia, India, Afghanistan, and Qatar. All four countries have purchased space for their United Nations missions at Trump World Tower near the UN building in New York City. Saudi Arabia pays more than $88,000 a year for common amenities in the building. The three other countries pay pro-rated amounts for amenities.
The basic question in each of these examples is whether they constitute the receipt by the Trump Organization – and the president – of foreign “emoluments” prohibited by the Constitution.
According to the plaintiffs, the answer is yes.
How clause has played out in past
If embraced by the courts, such a broad definition of emolument would require US officials – including the president – to completely divest from any private business or investment that might engage in transactions with foreign officials or foreign governments.
The Trump administration’s narrower definition of emolument would allow US officials – including the president – to continue owning private businesses while in office and would allow those businesses to conduct transactions with foreign officials and governments, but only when the transactions were unrelated to the officeholder’s government responsibilities and were not being used as a conduit for corruption.
They say the plaintiffs’ broad interpretation of the foreign emoluments clause as covering “anything of value” runs counter to history. “For over two centuries, the foreign emoluments clause has been interpreted and applied in an office- and employment-specific manner, without infringing on the ability of presidents or other officeholders to have private business interests,” state legal briefs filed by administration lawyers.
One recent example is the appointment and confirmation of Hyatt Hotels heiress Penny Pritzker as President Obama’s Secretary of Commerce in 2013.
In preparation for taking office, the Chicago billionaire resigned from the board of directors of Hyatt Hotels Corp., but she declined to divest her substantial Hyatt stock holdings. At the time, no one raised concern that her continued ownership might violate the emoluments clause if foreign officials and foreign governments rented rooms and held conferences at Hyatt properties worldwide while she was Commerce secretary.
Ms. Pritzker pledged to recuse herself from any potential conflicts during her government service. She was confirmed by the Senate 97 to 1.
Twenty-two of the 30 Democratic senators currently suing Trump over the emoluments issue voted to approve Pritzker’s nomination.
Those arguing for a more targeted definition of emolument also point to the experience of the nation’s founding fathers – and its first presidents. Many of them were in the room when the emoluments clause was put to paper.
George Washington, Thomas Jefferson, James Madison, and James Monroe all owned plantations that continued to operate and sell tobacco and other agricultural products in foreign commerce while they were serving as president, according to briefs filed by administration lawyers.
“At the time of the nation’s founding, government officials were not given generous compensations, and many federal officials were employed with the understanding that they would continue to have income from private pursuits,” the government’s brief says.
Charles Pinckney, who proposed adding the emoluments clause to the Constitution, operated several plantations in South Carolina while serving in various public offices, the brief notes.
Eisen disputes the suggestion that the early presidents conducted private business with foreign governments while serving as president.
“Those people have not shown a single example of Washington selling his flour to a foreign government,” he says. “The reason they can’t find a single example is because Washington was careful about it.”
A friend of the court brief filed in the CREW litigation by five legal historians says the word “emolument” was not a carefully calibrated term of art in the 18th century. They say the Trump administration’s definition is “unduly narrow and artificial.”
What the framers meant
Robert Natelson is a constitutional scholar and author of the book “The Original Constitution: What It Actually Said and Meant.”
As the dispute over the definition of emoluments intensified last year, Mr. Natelson launched his own investigation unrelated to the pending litigation.
He consulted a dozen 18th century dictionaries, examined every use of the word “emolument” in the Continental Congress, the Confederation Congress, as well as the convention that framed the Constitution and those that ratified it. He also studied the use of the word in newspaper articles and pamphlets published during the ratification debates.
He ultimately concluded that the definition of emoluments most faithful to the framers is “pay and fringe benefits of financial value given to a public employee by reason of service.”
He says the definition proposed in the pending lawsuits prohibiting receipt of “anything of value” is not consistent with the original meaning, adding that if the framers of the Constitution had required complete divestment of any private businesses that might interact with foreign officials and governments, they would have had difficulty recruiting qualified candidates for public office.
“The mere existence of a separate enterprise outside your government salary is not something that they would have found inappropriate,” Natelson says. “They wanted to attract good people with good private sector experience to government and therefore they did not want to create a system that penalized those people or deterred them expressly from government service.”
“If you look through the leading list of founders you will find that while most of them had public sector experience, the majority had private sector experience as well,” he says. “And they were quite successful.”
Professor Grewal agrees with Natelson’s assessment.
“If you went back in time and told George Washington to put his assets in a blind trust, he’d ask you what the heck you were talking about,” he says, noting that Washington spent 400 days of his 8 years as president working at Mount Vernon.
Grewal does not believe the courts will ultimately embrace the plaintiffs’ expansive view of emoluments.
“If they are right that it means ‘anything of value,’ then that means every president has violated the Constitution, thousands of federal officials will be penalized, and a lot of our veterans will be in deep trouble,” Grewal says.
Administration lawyers agree that if the courts embrace the plaintiffs’ view, it will result in absurd consequences. “Under plaintiffs’ theory, no president, member of Congress, or military officer could hold stock in any chain of hotels that is patronized by any representative of a foreign government who is traveling on official business,” the government’s brief says.
“Indeed, covered officials would be barred from holding stock in any company that does business with any foreign government or government-owned corporation.”
In December, a federal judge dismissed the suit filed in New York. The judge ruled that CREW and its fellow plaintiffs did not have legal standing to file the litigation. That decision has been appealed to the Second US Circuit Court of Appeals.
In January, a federal judge in Maryland heard arguments about whether to dismiss that emoluments lawsuit. That case was filed by the attorneys general of Maryland and the District of Columbia. CREW is also a party to that suit. A decision is pending.
Lawyers have submitted briefs in the third emoluments suit that was filed in Washington by 200 members of Congress against Trump. A hearing has been set for June 7.
