[Mr. Trump will have no immunity from lawsuits
involving his corporate ventures, thanks to a Supreme Court ruling involving
Paula Jones, one of President Bill Clinton’s accusers. And nothing will stop
Mr. Trump’s family from continuing to run its vast international web of
businesses. Federal ethics laws and conflict-of-interest statutes that apply to
other federal employees and cabinet members do not apply to the president.]
By
Steve Eder
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Donald J. Trump with his
family at his campaign’s election night event
at the New York Hilton
Midtown. Credit Stephen
Crowley/The New York
Times
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Over the next few weeks, Donald J. Trump will
be deep in the throes of selecting cabinet members, reviewing potential Supreme
Court justices and deciding on the top priorities for his new administration.
In the middle of all that, he or his
companies will be running golf courses in several states, managing apartment
buildings in New York City and tending to properties all over the world. They
will also be fighting a fraud lawsuit in San Diego, going to court against two
chefs in Washington and continuing a long legal fight in Florida over airliners
flying above his Palm Beach resort.
A theme of Mr. Trump’s presidency is likely
to be the clash of his duties running the country with the remnants of his
decades as a hard-charging businessman. But federal rules and precedent make a
couple of things clear.
Mr. Trump will have no immunity from lawsuits
involving his corporate ventures, thanks to a Supreme Court ruling involving
Paula Jones, one of President Bill Clinton’s accusers. And nothing will stop
Mr. Trump’s family from continuing to run its vast international web of
businesses. Federal ethics laws and conflict-of-interest statutes that apply to
other federal employees and cabinet members do not apply to the president.
“It is unprecedented in modern history to
have the level of complexity of global substantial business relationships that
the president-elect has, and the litigation that inevitably follows any complex
global business venture,” said Norman L. Eisen, a former special counsel for
ethics and government reform under President Obama, who supported Mr. Trump’s
opponent, Hillary Clinton. “It will be complicated, but not insurmountable.”
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Trump
Tower in Manhattan. Credit Hiroko Masuike/The New York Times
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Mr. Trump faces potential conflicts on
multiple fronts. He has income streams that could be affected by taxation
policies he may try to get through Congress. His companies have hundreds of
millions of dollars of debt from banks regulated by the federal government. In
one case, Mr. Trump is a part owner of an office building in Manhattan that
carries a $950 million loan from lenders that include the Bank of China.
A key source of his revenue is the licensing
of the Trump name, both domestically and abroad, and the value of that brand
could be helped, or harmed, by actions he takes or does not take.
The Trump Organization said it had begun the
process of “vetting various structures,” with a goal of quickly transferring
the businesses to three of Mr. Trump’s children — Donald Jr., Ivanka and Eric —
along with executives. “This is a top priority at the Organization and the
structure that is ultimately selected will comply with all applicable rules and
regulations,” Amanda Miller, a marketing executive for the company, wrote in an
email.
During a debate in January, Mr. Trump said he
would put his holdings in a blind trust, an arrangement in which a public
official lets a financial manager control his wealth and does not know exactly
how the money is invested. But in the next breath, he acknowledged the problem
with that strategy: “Well, I don’t know if it’s a blind trust if Ivanka, Don
and Eric run it.”
In an interview, Alan Garten, a lawyer for
the Trump Organization, spoke of the difficulty of the task. “There has been a
huge event — a historic event — that has occurred,” he said. “There is no
question that makes my job more complicated.”
Under federal laws, executive branch
employees must comply with conflict-of-interest rules that guard against being
influenced by personal investments, and they must curb payments from sources
outside the government. As a result, employees may have to recuse themselves
from working on matters where they may have conflicts, holding certain
properties or accepting money. For example, when Henry Paulson, the former
Goldman Sachs executive, became Treasury secretary in 2006, he pledged to sell
about $470 million in company stock to comply with conflict-of-interest rules.
But the president and vice president were
exempted from such laws, on the theory that they needed to be able to carry out
their constitutional duties without restraint. So President Trump will be able
to take actions pertaining to another country even if he has business interests
there.
Federal laws like those against bribery and
receiving benefits from foreign countries still apply to the president.
Enforcement would fall to the Justice Department or to Congress, which could
pursue criminal or impeachment proceedings if evidence suggests laws were
broken.
Mr. Trump will be required next year to file
an updated personal financial disclosure listing his holdings, similar to the
forms he has filed the past couple of years as a candidate. But Mr. Trump will
not be required to make public his income tax returns, which he declined to do
during the campaign, citing a continuing audit by the Internal Revenue Service,
an agency he will now control. If he did release them, the tax returns could
provide transparency into his international business dealings and other
potential conflicts that may arise.
As president, Mr. Trump will have no
protection from lawsuits related to his life outside the White House, a result
of the 1997 Supreme Court ruling that President Clinton could be sued by Ms.
Jones in a sexual harassment case that dated to his time as Arkansas’s governor.
That litigation, which ended in an $850,000 settlement but no admission of
wrongdoing, preoccupied Mr. Clinton in his second term and indirectly led to
his impeachment.
That ruling could set a trap for Mr. Trump —
who has been accused by several women of unwanted advances, though none are
currently suing him — and present a strategy for his political opponents to
hamper his administration with litigation, legal experts said.
“I anticipate that is going to be one of the
first line of attacks against President Trump,” said Richard W. Painter, the
chief White House ethics lawyer under President George W. Bush from 2005 to
2007, who endorsed Mrs. Clinton. “It is potentially very destructive for the
country as it was with Clinton.”
On Thursday, as Mr. Trump was in Washington
meeting with President Obama and congressional leaders, his lawyers were in
court in San Diego for a lengthy hearing related to the Trump University
lawsuit, in which former students allege they were cheated out of thousands of
dollars in tuition through deceptive promises and high-pressure sales tactics.
Mr. Trump has rejected the allegations. But
on Thursday, one of his lawyers, Daniel Petrocelli, told the judge, Gonzalo P.
Curiel — whom Mr. Trump accused of bias because of his Mexican heritage — that
he was open to discussing a settlement in the case.
Mr. Petrocelli also said he might request to
delay the trial to next year, saying more time was necessary because “we’re in
uncharted territories” in light of Mr. Trump’s election, The Associated Press
reported. Trump University is also the subject of a lawsuit by the New York
attorney general. That case will also continue.
Mr. Trump and his businesses are enmeshed in
myriad other litigation. Mr. Trump has been engaged in a lengthy dispute with
Palm Beach County over jetliners flying over his Mar-a-Lago resort on the way
to and from the nearby airport. In a lawsuit, he claimed that the noise,
vibrations and emissions from the aircraft are disruptive to guests and
damaging the property, including the Dorian stone and antique Cuban roof tiles.
And in Washington, Mr. Trump has sued two
celebrity chefs, Geoffrey Zakarian and José Andrés, after they backed out of
restaurant deals at his new hotel development at the Old Post Office Pavilion
after he made incendiary comments last year about Mexican immigrants.
The Old Post Office project itself is a
potential conflict. The Trump Organization signed a 60-year deal with the
federal government to redevelop and manage the building as a hotel — meaning
that he will be, in a sense, his own landlord.
Kitty Bennett contributed research.
