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"In comments published Friday in Forbes, Eric Trump dispensed with any pretense of separation, divulging that he will continue to inform his father on the Trump Organization’s financial progress on a 'probably quarterly' basis," writes Max Yoeli. (Photo: Disney/ABC/flickr/cc)

President Trump and His Businesses: Not So Separate After All

President Donald J. Trump plans to retain ownership of his business empire and deal with the resulting conflicts of interest by placing all of his assets in a revocable trust controlled by his sons and a business associate, with whom the president vowed to not discuss the business. For months, ethics experts have said this plan does little to alleviate those conflicts. So who is right? It turns out that may be the wrong question.

Wealthy presidents who own businesses or other substantial assets are nothing new. Because the president’s unique authority extends to virtually every aspect of the national — and indeed, the global — economy, every other President since Lyndon Johnson has either placed his assets in a blind trust whose contents are completely insulated from the president’s knowledge or control, or held only what National Public Radio calls “plain vanilla index funds and Treasury notes,” which don’t give rise to any conflicts.

President Trump and his supporters argued that his ownership of a broad swath of business holdings makes a blind trust unrealistic, and that ceding direct control of his empire would be sufficient. Critics — including former Obama and Bush administration officials and the current director of the Office of Government Ethics — countered that ceding control but not ownership of his assets was “meaningless” from a conflicts perspective.

It turns out, however, that the president ceded neither. Late last week, it emerged that, far from being walled off from his businesses as he promised, President Trump is actually getting regular financial updates on them.

In comments published Friday in Forbes, Eric Trump dispensed with any pretense of separation, divulging that he will continue to inform his father on the Trump Organization’s financial progress on a “probably quarterly” basis. That admission escalates concerns about conflicts between the elder Trump’s official actions and his personal financial interests.

The prospect of a president who governs with the interests of his business empire in mind poses two intertwined risks of corruption that could undermine the integrity of our system of government. Newly magnified, these concerns underscore the need for President Trump to release his tax returns and take more rigorous steps to mitigate conflicts of interest.

The first significant risk Trump’s continued business ties pose is of a direct conflict of interest. The Trump Organization is a multi-billion dollar enterprise that does business through over 400 entities in at least twenty countries, including vital partner nations and antagonistic dictatorships. Meanwhile, President Trump enjoys the tremendous powers of the executive branch — robust authority in matters of foreign affairs and domestic policy alike. So long as Trump continues to track the progress of his business empire, he can surely assess how his actions as president might benefit or harm his company’s fortunes. Even intentions to the contrary aside, research shows that, when faced with a financial conflict of interest, individuals demonstrate unconscious bias toward reaching conclusions that benefit them. As such, a cloud of suspicion will engulf some of President Trump’s most momentous decisions, leaving observers wondering whether his personal business interests influenced his policy choices.

The second concern with Trump keeping tabs on his business is that it creates opportunities for bribery. Far from the anachronisms of Tammany-era bribery — a stuffed envelope traded for a quick favor — bribery in this sophisticated context occurs on an industrial scale. Such “indirect lobbying,” as academics who studied media mogul Silvio Berlusconi’s government in Italy politely termed it, is the practice of providing business to a firm that a politician controls, with the expectation that the given politician will, in return, act favorably for the lobbyer’s interests. With Eric Trump keeping his father abreast of the family business’ progress, there exists a credible risk that President Trump may direct the power of the federal government to reward those who benefit his bottom line and punish those who threaten it.  

Some might argue it is premature to project these risks onto Trump’s presidency. But, even if one grants President Trump the fullest benefit of the doubt, his awareness of the Trump Organization’s vital financials is damaging to our democracy. When it comes to corruption, optics are critical. Evidence of an opportunity for President Trump to act in an underhanded manner, even absent bad motives, degrades faith in our democratic institutions.

To preserve the integrity of those institutions, and to protect his presidency from further blight, President Trump should truly segregate himself from his business. Embracing that basic principle is just the first step in a much-needed ethical accounting that too often been absent from the Trump Administration.


© 2021 Brennan Center for Justice

Max Yoeli

Max Yoeli is a New York University Law School student and clinic student with the Brennan Center for Justice's Democracy Program.

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