[Three prominent ethics lawyers said in interviews on Sunday that the interaction between Mr. Trump and his business partners from India does not appear to violate federal laws or ethics rules, nor would it even if he had already been sworn in. This is in part because the president, unlike members of Congress and most other federal employees, is exempt from such requirements.]
By
Ayesha Venkataraman, Ellen Barry and Eric Lipton
 |
|
Trump Towers Pune in
Pune, India.
Credit Ayesha
Venkataraman
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PUNE,
India — It is a daunting
proposition to put $2 million apartments on the market in Pune — a quiet
industrial city in the west of India, where even the fanciest neighborhoods are
lined with squat housing blocks.
But the developers of Trump Towers Pune, an
elegant pair of 23-story black-glass pillars, have an extraordinary new
marketing tool they are moving quickly to exploit: the president-elect of the
United States.
Since Donald J. Trump won the presidency,
they have celebrated the growth that Mr. Trump’s win could bring to their
brand, even flying to New York last week to meet with the president-elect and
his family as he was assembling his cabinet.
“We will see a tremendous jump in valuation
in terms of the second tower,” said Pranav R. Bhakta, a consultant who helped
Mr. Trump’s organization make inroads into the Indian market five years ago.
“To say, ‘I have a Trump flat or residence’ — it’s president-elect branded.
It’s that recall value. If they didn’t know Trump before, they definitely know
him now.”
In just under nine weeks, Mr. Trump will take
control of a portfolio of public business between the United States and India,
the world’s two largest democracies, supervising debates over issues including
climate change, maritime shadowboxing with China and the nuclear standoff with
Pakistan.
The meeting shows that Mr. Trump has not
fully disengaged from his business ventures even as he leads his presidential
transition, and it highlights the potential conflicts he will face going
forward if he does not separate himself from a brand that has been constructed
around his persona.
In a telephone interview, Atul Chordia, one
of the developers who met last week with Mr. Trump, played down the appointment
as a “two-minute” congratulatory conversation in which no business was
transacted and no new projects were discussed.
But newspapers in India reported it as a
business meeting, illustrated with a photograph of the beaming real estate
executives — Atul Chordia, Sagar Chordia and Kalpesh Mehta — flanking the
future president, and indicated that the builders and Mr. Trump’s organization
are planning further collaborative real estate projects.
Sagar Chordia confirmed to The New York Times
on Sunday that this account of the meeting in New York — which included
discussions with the Trump family about possible additional real estate deals —
was accurate. A spokeswoman for the Trump Organization did not dispute this
account — saying only that the encounter with Mr. Trump himself was brief.
“We have identified a piece of land and
spoken to them,” Sagar Chordia told The Business Standard, a daily newspaper in
India. Sagar Chordia, who posted photos of himself wearing a “Make America
Great Again” hat on social media during the presidential campaign, did not
respond to repeated requests for comment from The Times.
Three prominent ethics lawyers said in
interviews on Sunday that the interaction between Mr. Trump and his business
partners from India does not appear to violate federal laws or ethics rules,
nor would it even if he had already been sworn in. This is in part because the
president, unlike members of Congress and most other federal employees, is
exempt from such requirements.
But each lawyer agreed the activities created
the appearance that Mr. Trump and his business partners are using his status as
a way to profit.
“It is unprecedented in modern history,” said
Andrew D. Herman, a lawyer who has represented more than a dozen members of
Congress in ethics cases. “But this is the new normal.”
Robert S. Stern, a lawyer who helped write
California’s ethics law and the former president of the nonprofit Center for
Governmental Studies, said that anytime Mr. Trump has a meeting with a foreign
government leader where one of his projects is based — a list that includes
Turkey, the United Arab Emirates, Britain, Canada, Panama, Dubai, the
Philippines, South Korea and Uruguay — questions may arise as to whether he
took any action that might benefit his investments.
“It already looks like he is using his
position as president-elect to promote something in India that would benefit
him financially,” Mr. Stern said. “It is not presidential — or at least
presidential before him.”
Hope Hicks, a spokeswoman for Mr. Trump’s
transition team, declined on Sunday to comment.
A spokeswoman from the Trump Organization
declined to address questions about the appropriateness of Mr. Trump meeting
with his business partners, and instead pointed to a statement the organization
made last week about shifting control of Mr. Trump’s business operations to his
children.
“This is a top priority at the organization,
and the structure that is ultimately selected will comply with all applicable
rules and regulations,” said Amanda Miller, the vice president of marketing at
the Trump Organization.
The Pune towers are the first Trump-branded
project to be completed in India, to be followed in the next few years by a
75-story skyscraper in Mumbai.
Mr. Trump’s five current projects in India
are worth around $1.5 billion, making it Mr. Trump’s most active development
market outside North America, Mr. Mehta, the managing director at Tribeca
Developers and the Trump Organization’s representative in India, told The
Indian Express last week.
In most cases, Mr. Trump does not invest in
the projects, but instead allows the developers to use his name in return for
an undisclosed sum in royalties, according to industry analysts. Though each
agreement is structured differently, in many cases the brand receives a
percentage of sales, meaning Mr. Trump stands to benefit directly from
increased revenues.
Publicity materials focus heavily on Mr.
Trump and his family. One pitch promises that “the experience of owning a
Trump-branded property and living the Trump lifestyle is unparalleled.”
Customers requesting information about the units receive an email illustrated
with a large photograph of Ivanka Trump, Mr. Trump’s elder daughter, seated
thoughtfully before a window.
The Trump name, Sagar Chordia told The
Business Standard, is so valuable that apartments in the towers sell for 35
percent more than comparable apartments in other developments. Similar projects
have been undertaken by Armani, the Four Seasons and the Ritz Carlton, said
Ramesh Nair, chief operating officer and international director at Jones Lang
LaSalle Property Consultants, a global real estate company.
“It’s a branding project,” Mr. Nair said.
“There is no skin in the game. You are lending your name. You give some
specifications for the project. And you will generate some free publicity.”
But sharing your brand name with Indian
developers could backfire. Over the past decade, many unscrupulous developers
here allowed projects to stall midway for lack of ready capital and used home
buyers’ deposits to begin work on the next project, leaving families stripped
of their savings to protest helplessly.
Mr. Nair said Mr. Trump so far had partnered
with well-regarded firms, but warned that a poor choice could damage not only
Mr. Trump’s reputation, but that of the United States, given the corruption
typical of Indian land deals.
“If that small university can get him into
trouble, you can imagine what could happen with India’s ‘squeaky-clean’ real
estate sector,” Mr. Nair said, referring to the fraud lawsuit against Trump
University, which Mr. Trump settled last week for $25 million. “Tomorrow they
could have 100 buyers standing outside the U.S. Consulate, saying, ‘Give me
back my money.’”
Industry observers differed on whether Mr.
Trump’s brand image would help increase real estate sales. India’s luxury
housing market has been weak for years, and has been further damaged by a new government
drive to stamp out untaxed cash transactions.
So far, some boldface names have reportedly
purchased units at the Trump Towers Pune, including the Bollywood actors Rishi
Kapoor and Ranbir Kapoor.
The Chordia family, which has close ties to
Sharad Pawar, the chief of India’s Nationalist Congress Party, is particularly
enthusiastic in its embrace of Mr. Trump. Mr. Trump has made targeted appeals
to Indian-Americans for financial support, holding a major fund-raising event
in October in Edison, N.J., a city with a large number of Indian residents,
where Mr. Trump called himself “a big fan of Hindu.”
On the morning of the election, Sagar Chordia
described giving a party for 800 people in honor of Mr. Trump’s first visit
there, in 2014. Vijayta Lalwani, a local journalist who interviewed Sagar
Chordia as the final results came in, described him as “ecstatic.”
Mr. Bhakta, the former consultant to Trump’s
development group, said he was confident that more collaborations were
forthcoming. He said Mr. Trump’s son Donald Trump Jr. has typically taken the
lead on advancing deals in India, but that the president-elect also spends
ample time with Indian partners.
“Every time I have been there with clients
from India, we always have a heart-to-heart with Senior,” he said. “He is very
much passionate about the India story.”
Many in Pune said they believed demand for
the apartments would rise. Mohan Devasi, 21, a laborer, said he had been
impressed by Mr. Trump when he “caught a glimpse of him” in Pune in 2014. He
had heard Mr. Trump was “a close friend of Narendra Modi” and that he had
promised to take a hard line on Muslims.
“He is right now the American president,
which means he is the most powerful person in the world,” said Partha Sikder,
25. “He’ll have that liberty. People will obviously want the apartments more.”
Mr. Trump’s real estate partners are also
taking steps to keep the focus on the president-elect. Sagar Chordia told
reporters from The Indian Express that he is planning to attend Mr. Trump’s
inauguration in January.
Ayesha Venkataraman reported from Pune,
India; Ellen Barry from New Delhi; and Eric Lipton from Washington.