Divest Shmivest. Trump to Reportedly Keep Stake in Business Run by Sons
More troubling, business assets managed by 'web' of LLCs, making it impossible to gauge the full extent of potential conflicts
Despite calls to divest, it appears that President-elect Donald Trump will maintain a stake in his business, according to reporting by the New York Times on Wednesday, as he makes plans to hand the sprawling empire over to sons Donald Jr. and Eric.
The proposed arrangement, the Times notes, would "complicate matters"—to say the least—as the acting president would be financially benefiting from business deals made both domestically and abroad while simultaneously enacting legislation that could impact those very same dealings.
Times reporters Maggie Haberman and Jo Becker reportedly "spoke to two people involved in the transition process who were granted anonymity to speak candidly about continuing negotiations."
According to those sources, the incoming first family "are exploring...a 'legal structure' that would give Mr. Trump and his daughter [Ivanka Trump] separation from the company" as they consider "formally turning over the operational responsibility for his real estate company to his two adult sons."
But even those within the transition team "have privately expressed concern over how foreign and domestic interests could seek to curry influence with the president by doing business with...Donald Jr. and Eric, that ultimately accrues to Mr. Trump's financial benefit," echoing the concerns of legal ethics experts, pro-democracy groups, and some Democratic lawmakers.
Last week on Twitter, the unofficial mouthpiece for the future commander-in-chief, Trump claimed that he is leaving his "great business in total in order to fully focus on running the country." The plan, he said, will be announced during a "major news conference" on December 15. "While I am not mandated to do this under the law, I feel it is visually important, as President, to in no way have a conflict of interest with my various businesses," he wrote.
In response, the Office of Government Ethics informed the incoming president that complete "divestiture is the way to resolve" his numerous conflicts of interest.
However, the Times notes that Trump is not interested in divestiture, namely because of "tax liability concerns." Haberman and Becker report:
At least part of Mr. Trump's reluctance to sell off his holdings stems from tax liability concerns, according to a person briefed on the plan. Government officials can defer capital gains taxes on assets they sell to avoid conflicts, providing they reinvest the money in government securities or certain approved mutual funds. But the bill comes due if those assets are sold after a person leaves office.
Even more troubling is the fact that "it impossible to gauge the full extent of potential conflicts between his business interests and presidential role," the Wall Street Journal reports Thursday, because Trump oversees a "web" of nearly 100 LLCs to obscure his financial holdings.
Roughly half—at least $304 million—of the revenue Mr. Trump reported in a federal financial disclosure form earlier this year came from assets held in 96 different LLCs, according to the Journal’s analysis. Those assets include a skyscraper at 40 Wall Street in Manhattan and the Mar-a-Lago Club in Palm Beach, Fla.[...]
None of the 96 LLCs examined by the Journal appear to regularly release audited financial statements. That opacity—compounded by Mr. Trump's decision to break with decades of precedent by declining to release his tax returns—makes it impossible to gauge the full extent of potential conflicts between his business interests and presidential role.
"We've never seen anything like this," Norman Eisen, President Barack Obama’s former White House ethics lawyer, told WSJ.
The Times report also focuses on the actions being taken by Ivanka Trump, the president-elect's trusted advisor and eldest daughter, and her husband Jared Kushner, who are reportedly planning to move to Washington, D.C. to assume roles within the Trump presidency. "Mr. Kushner is discussing an as-yet undetermined role advising his father-in-law," the Times reports, "and Ms. Trump plans on being an advocate on issues in which she has a personal interest, like child care."
Asked about the veracity of the Times' reporting by CNN in the lobby of Trump Tower in Manhattan on Thursday morning, Michael Cohen, an attorney for the Trump Organization, refused to comment.