We now have information on the assets and income of two of President Trump’s closest relatives and most intimate advisers, thanks to Friday night’s White House dump of financial disclosure forms. But Jared Kushner and Ivanka Trump have so many potential conflicts of interest that if they abide by ethics laws and past White House practices, they won’t be able to advise the president on three of his top priorities: Trade, tax reform and Wall Street deregulation.
Kushner’s financial report discloses assets worth between $240 million and $700 million for himself, his wife Ivanka (the president’s daughter and newly named assistant to the president) and their minor children.
Jared, the president’s son-in-law and senior adviser, has resigned from more than 260 outside positions, including as CEO of the Kushner Companies and publisher of the New York Observer. He has divested or committed to divest approximately 80 holdings owned by himself, his spouse or their minor children. (Although Jared indicated he would sell the Observer, we do not see evidence of the sale in the report.)
Ivanka has resigned from all her officer positions with her outside companies including those with the Trump Organization. She has appointed a company president to manage her day-to-day business operations and turned over the businesses themselves to a trust managed by her brother-in-law and sister-in-law. By resigning from their outside positions and taking the oath of office, Jared and Ivanka are now legally committed to the service of our country and are fully accountable under the federal conflict of interest laws.
But there are still serious ethics concerns regarding the couple because (like the president) they have chosen not to divest all their assets or place them in a blind trust to be sold by the trustee. Jared has retained extensive real estate holdings primarily located in Chicago, Manhattan, Brooklyn, Philadelphia and throughout New Jersey. He has secured lines of credit (some of which are shared with his mother and father) through 10 banks, including Deutsche Bank, Bank of America and Citigroup.
While the report discloses his personal lines of credit, it does not disclose the lenders and investors for the family businesses in which he retains an interest, which create further conflicts. These lenders reportedly include Goldman Sachs, the Blackstone Group, Deutsche Bank, the French bank Natixis, and Israel’s largest bank, Bank Hapoalim. Based on these financial backers, Jared will need to recuse from many matters involving the financial services industry, including any steps to repeal the 2010 Dodd-Frank Act. So will Ivanka, since one spouse's conflicts are by law attributed to the other.
They both will also have to recuse from any decisions about tax benefits for the real estate industry, and because the tax code is chock full of them, this will probably mean recusal from the entirety of tax reform. There are also many investors in Jared's holdings whose identities are unknown who further create conflicts of interest. The mystery investors must be identified to gain a fuller understanding of these conflicts.
Ivanka retains her extensive international clothing, shoe, and accessories businesses. That means she and Jared will have to recuse themselves from trade issues and discussions involving these products specifically and textiles more generally, anywhere in the world that may touch on her businesses. The same is true regarding intellectual property protections in trade negotiations. For example, Ivanka is reported to have seven trademark applications pending in China. So she and Jared should recuse themselves from trade issues with China involving intellectual property.
Because issues in trade negotiations are so intertwined, Ivanka's tangle of international conflicts may in practice require the couple to recuse from any trade discussions with China and other countries with which she does business. And she and Jared will also have to recuse more broadly from any disagreements with those countries the moment trade issues are injected into those disputes.
We have serious questions about how all of these recusals can be fully implemented and monitored -- and whether they will be. Assistants to the president need to be prepared to advise him on any matter at any time. They should expect to be drawn into more issues rather than fewer. Jared’s expanding portfolio attests to this fluidity. Yet he and Ivanka are legally required to recuse within the broad areas of financial services deregulation, taxes and trade, all of them extremely important to the president.
Any undetected lapses will impair the public interest. Detected violations may expose the couple to criminal prosecution, and the White House and all of us to more Trump scandal.
The situation is particularly worrying because ethics compliance in the Trump administration has been weak, as evidenced by the White House Counsel's inadequate response to apparent or actual lapses by several White House staffers including Kellyanne Conway, Christopher Liddell, Steve Bannon, Reince Priebus and Dan Scavino Jr. We are also concerned that the White House Counsel's office initially took the evasive and incorrect position that Ivanka could have a West Wing office, a security clearance and White House communications equipment without being considered a government employee for conflict of interest purposes. That office has also claimed many ethics laws may not apply at all to the White House, drawing a rebuke from the Office of Government Ethics. In light of this troubled start, we question whether and how enforcement will work for Jared and Ivanka, powerful relatives of the president.
And there are other serious legal issues as well. Ivanka has reported rental income of $1 million to $5 million from the Trump Old Post Office LLC investment. This raises the same constitutional conflict of interest issue as for her father. The Foreign Emoluments Clause of the Constitution bars any federal official from receiving any payment of “any kind whatever” from a foreign government. Several diplomats representing foreign governments have participated in events at the Trump International Hotel, including Kuwait which recently held its National Day event there. Unless she divests her interest, Ivanka runs a similar risk of running afoul of the Constitution. The hotel is also a problem for Ivanka under the federal conflict of interest statute, which bars her from taking any official action relating to her investment-- even going to the hotel on official business.
The president is counting heavily on Jared and Ivanka, as are the overwhelming majority of less prosperous voters who sent him, and now them, to 1600 Pennsylvania Avenue. But given their enormous wealth and far-reaching conflicts of interest, it remains to be seen whether they can perform their duties effectively — and legally.