President-elect Donald Trump either does not appreciate, or does not care, that his extensive business holdings pose serious legal problems. At his news conference on Wednesday morning, Trump and a lawyer said that he would donate hotel profits from foreign governments to the United States Treasury and let his children manage all operations. Although the plan is vague on crucial details, it clearly isn’t strong enough to keep him on the right side of the Constitution.
Article I, Section 9 states: “And no Person holding any Office of Profit or Trust under them, 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.”
The so-called emoluments clause was meant to restrict the ability of foreign governments to influence American officeholders, a matter of great concern to a fledgling nation. It was also designed to prevent conflicts of interests. As Edmunds Jennings Randolph said in 1787, “This restriction is provided to prevent corruption.” The clause is meant to be much broader than a prohibition of bribery; it forbids a federal officeholder from receiving anything of value from a foreign country.
The emoluments clause applies to all who hold “office” in the United States government. The Office of Legal Counsel of the Department of Justice explicitly has declared that this obviously includes the president.
Trump’s business holdings are incompatible with the emoluments clause. Just for example, the largest single tenant in Trump Tower is the Industrial and Commercial Bank of China. Guess who owns that bank? The People’s Republic of China. Rent payments therefore arguably constitute an emolument — a salary, fee or profit — from a foreign state.
As a recent report of the Brookings Institution concluded: “The bottom line is simple: Mr. Trump stands to benefit personally, in innumerable and largely hidden ways, from decisions made every day by foreign governments and their agents.”
In a word, Trump’s proposed solutions are laughable. So what if he donates “profits” from foreign governments to the United States Treasury? All he has to do is accept money from a foreign government and he’s already in violation of the emoluments clause — it doesn’t matter whether it constitutes a profit, or where the money ultimately ends up.
Focusing on profits, moreover, ignores the countless ways that his businesses can benefit from foreign governments that would never show up on a balance sheet. For example, it was widely reported that Trump lobbied a British political ally to oppose a wind farm project because it might ruin the view from his golf course in Aberdeen, Scotland.
Besides, Trump on Wednesday again refused to reveal his tax returns and declared that the American people do not care about them. A pledge to turn over profits is meaningless without detailed accounting.
Trump also said that he would engage in no new foreign business deals. Yet at the same news conference he said he had discussions in early January with a developer in Dubai for a $2-billion real estate investment, which he ultimately declined. And after the election, Trump and his children met with Indian business partners building a Trump-branded luxury apartment complex south of Mumbai. What constitutes a “new” deal?
Adding to the pile of woefully inadequate steps, Trump said that his two sons would run his businesses, and that they would not discuss details with him. But how will anyone know if he violates this promise? Will Eric or Donald Jr. spill the beans? Even if he keeps it, the conflict of interest problem remains because the Trump family, and ultimately Trump, stand to benefit in countless ways from decisions originating in the White House. Consider that Trump’s businesses owe millions to financial institutions around the world, and that Trump’s Treasury Department must regulate and supervise these banks.
At the news conference, Trump declared that he could continue to run his businesses and be president. That is consistent with his earlier statement: “I can be president of the United States and run my business 100%, sign checks on my business.” Trump also has said, “The law is totally on my side, meaning, the president can’t have a conflict of interest.” That is simply false, not to mention Nixonian.
The only solution is for Trump to divest himself of his businesses, and especially all foreign holdings, or at least to place them in a blind trust. Otherwise, Trump risks violating the Constitution from his first moments in office.
Erwin Chemerinsky is dean and Raymond Pryke Professor of First Amendment Law at the UC Irvine School of Law.