Waivers and Pardons? Mounting Ethics Concerns for Trump's Ultra-Wealthy Cabinet
President-elect could present a waiver, to the tune of $150 million, if Secretary of State nominee Rex Tillerson balks at selling stock
One hundred million dollar waivers? Presidential pardons? With yet another billionaire appointed to a key position within the Donald Trump administration this week, speculations abound about what the president-elect intends to do about his cabinet's unprecedented wealth—and their unprecedented conflicts.
Monday's appointment of former infantry officer and Wall Street executive Vincent Viola to secretary of the Army makes him the fourth billionaire nominated by Trump to join what is clearly now the wealthiest administration in modern history.
One of the more blatant conflicts to date is the nomination of ExxonMobil CEO Rex Tillerson to lead the State Department.
Ethics lawyers say the oil tycoon will likely have to sell his substantial Exxon holdings and put his assets into a blind trust. But, as it stands, an estimated $151 million in Exxon shares won't be vested for several years.
One possible solution would effectively present itself as a $150 million gift from the president-elect to his secretary of state.
"There is a statute that gives Trump an option of issuing a waiver and allowing Tillerson to keep his shares if the president determines that the interest is not so substantial that it would affect Tillerson's services," Washington University Law Professor Kathleen Clark told The Street's Ronald Orol.
"It would be hard, I think, to say with a straight face that $150 million in stock options is not substantial," Clark added, but nothing is outside the realm of possibility in this #NotNormal administration.
Tillerson is just one example in a cabinet chock full of similar entanglements. Fast-food CEO Andrew Pudzer, tapped to lead the Department of Labor, and international bankruptcy mogul Wilbur Ross, nominated to Secretary of Commerce, will also likely have their holdings scrutinized.
Unlike the president, cabinet members are subject to federal ethics laws that will force appointees to eliminate conflicts before taking office.
Even so, as NPR observed on Tuesday, "If a nominee does have to sell investments to comply with federal ethics rules, he or she may be allowed to put off any capital-gains tax," which the outlet noted is a tax break "designed to help new nominees avoid conflicts of interest without paying a personal price."
Former speaker of the House and Trump ally Newt Gingrich on Monday offered another possible avenue for the president-elect to take in addressing these conflicts: Presidential pardons.
"I think in the case of the president, he has a broad ability to organize the White House the way he wants to," Gingrich told NPR's Diane Rehm. "He also has, frankly, the power of the pardon. I mean, it is a totally open power, and he could simply say look, I want them to be my advisors, I pardon them if anybody finds them to have behaved against the rules, period. And technically under the Constitution he has that level of authority."
"[W]e have not really dealt with this relative scale of wealth in the White House in some ways since George Washington, who may have been the wealthiest man in the colonies. So historically this is an unusual amount of economic interest and virtually impossible to isolate," he said. Thus, he continued, "traditional rules don't work, and we're going to have to think up, you know, a whole new approach."