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Thursday, 15 June 2017 05:51

Trump Challenged in the Courts for Profiteering Off of the Presidency

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trumphoteldcThe Trump old post office hotel in DC used by foreign government officials, surrounded by protesters. (Mike Maguire)

Given Donald Trump's expansive business empire -- much of it hidden away in the details of his unreleased tax filings -- being president is enhancing his "brand" and the value of his name, which he often licenses to outside investors. Furthermore, he has said that he is not running his business while he is president, but he is reaping profits from the Trump Organization because he still owns the same share of the business as he always has. As a result, when foreign powers patronize his businesses or invest in Trump properties or naming rights, he is -- in legal theory -- violating the emoluments clause of the Constitution.

Paul Pillar clarifies the emoluments clause in a recent edition of the Lobe Log:

The emoluments clause is part of a broader prohibition in the Constitution (in Article I, Section 9) that bars the granting of any title of nobility and the acceptance “of any present, Office, Emolument, or Title, of any kind whatever, from any King, Prince, or foreign State.” Emolument may be an eighteenth-century word that is not in many active vocabularies in the twenty-first century, but the concern about the effects of flattery and favor are at least as relevant today as they were when the Constitution was written. In fact, with the current president, the concern is more relevant than ever.

According to an article in the Los Angeles Times on June 12, legal action by state officials challenging Trump's flouting of the emoluments clause is now being undertaken:

Attorneys general for Maryland and the District of Columbia filed an anti-corruption lawsuit against President Trump on Monday, arguing that he is violating the Constitution by using his office to unjustly enrich himself.

It is the latest effort by politicians in blue states to challenge Trump in the courts and put a spotlight on the unusual conflicts of interest that arise when a billionaire business owner occupies the White House.

Their suit recites a now-familiar complaint that Trump, by retaining ownership of his hotels and other properties, is violating the ban on a U.S. official accepting “any present [or] Emolument … of any kind whatsoever from ... any foreign state.” They cite reports that the embassies of Kuwait and Saudi Arabia are booking expensive rooms and holding events at the Trump International Hotel on Pennsylvania Avenue, possibly seeking to win favor with the president.

In addition, nearly 200 members of Congress filed a lawsuit on June 24, charging president Donald Trump with directly violating the emoluments clause by inextricably mixing official government duties with his business interests. In the introduction to the lawsuit, the plaintiffs contend:

Plaintiffs, 30 members of the United States Senate and 166 members of the United States House of Representatives, bring this action against President Donald J. Trump to obtain relief from the President’s continuing violation of the Foreign Emoluments Clause of the United States Constitution, which was designed to ensure that our nation’s leaders would not be corrupted by foreign influence or put their own financial interests over the national interest. To achieve those aims, the Clause provides that “no Person holding any Office of Profit or Trust under [the United States], shall, without the Consent of the Congress, accept of any present, Emolument, Office, or Title, of any kind whatever, from any King, Prince, or foreign State.” Through this measure, the nation’s Founders invested members of Congress with an important role in preventing the corruption and foreign influence that the Founders sought to avoid -- permitting federal officeholders to accept otherwise prohibited “Emolument[s]” only if they first received "the Consent of the Congress."

Both lawsuits have a decent chance of proceeding, because both of the attorneys general, as well as the members of Congress, have what is known as "standing." This means that they represent interests directly impacted by the alleged violation of the emoluments clause.

The attorneys general of Maryland and Washington, DC, have standing because of local businesses in their jurisdiction losing clients to the Trump Hotel located in DC's Old Post Office Pavilion, for example. As Paul Pillar points out, they represent "business interests that may lose customers to the Trump hotel because of its connection to the presidency. Earlier this year, for example, the Kuwaiti embassy, which for many years had held its national day celebration at the Four Seasons Hotel, held the event instead at Trump’s hotel [in DC]."

Congressional representatives and senators have standing because they are filing on behalf of their constituents and to uphold the Constitution.

Trump has said that he will turn over the profits from any foreign government spending relating to the Trump Organization, but that is almost impossible to ascertain given the vastness of Trump's holdings. Further complicating the matter, does one count the Chinese government, for instance, granting the Trump organization a slew of trademarks to be a violation of the emoluments clause -- and how would one figure out their potential value if it was?

In an article earlier this year, NBC News posted a report on how difficult enforcement of the emoluments clause can be in regards to the Trump Organization and Trump's personal financial gains:

Just before taking office, President Donald Trump promised to donate all profits earned from foreign governments back to the U.S. Treasury.

But MSNBC has learned the Trump Organization is not tracking all possible payments it receives from foreign governments, according to new admissions by Trump representatives. By failing to track foreign payments it receives, the company will be hard-pressed to meet Trump’s pledge to donate foreign profits and could even increase its legal exposure.

The Trump Organization does not "attempt to identify individual travelers who have not specifically identified themselves as being a representative of a foreign government entity," according to a new company pamphlet. The policy suggests that it is up to foreign governments, not Trump hotels, to determine whether they self-report their business.

That is a pretty porous accountability system for determining Trump Organization profits derived from foreign powers. At this point in time, there is really very little to prevent foreign governments from seeking favor from and providing profit to President Donald Trump through engaging in business and granting favorable financial decisions to the Trump Organization.