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CONFLICTS OF INTEREST

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Trump has not merely failed to divest himself from his domestic and foreign business interests, he has enmeshed himself even further in arguably unconstitutional conflicts of interest. In likely violation of the Constitution’s Foreign Emoluments Clause, in June 2017 Trump gained preliminary approval from China for nine potentially lucrative Trump trademarks that it had previously rejected. The Trump International Hotel in Washington, D.C., has become a magnet for foreign interests, who rent rooms and hold events on its grounds. Trump has claimed that he will hand over to the U.S. Treasury any hotel profits from these foreign governments, but he failed to indicate how he will calculate revenue above costs.23

In violation of Trump’s pledge to launch no new foreign ventures, his organization has partnered with billionaire Hussain Sajwani to develop the Trump Estates Park Residences in Dubai, United Arab Emirates. Ongoing projects also enmesh Trump in potentially serious conflicts of interest. In Azerbaijan, one of the world’s most corrupt countries, Trump has entered into a development deal with Anar Mammadov, the son of the nation’s transportation minister. A Trump residential building and an office tower, funded by unknown investors whose money came through banks in Cyprus and Mauritius, is scheduled for completion during the next five years in a suburb of New Delhi, India. In Indonesia, Trump has launched two projects: a resort near Jakarta, and Trump International Hotel and Tower Bali. Trump’s partner, the billionaire Hary Tanoesoedibjo, has founded a new political party in his country and expressed an interest in emulating Trump by running for president of his nation. In Scotland, meanwhile, Trump’s company is embroiled in a permit dispute with the environmental agency over the development of a second golf course near Aberdeen. These and other foreign ventures likely violate the constitution, whether through the direct or indirect involvement of foreign officials and their patronage of Trump properties, or through their granting of discretionary permits, tax breaks, complementary infrastructure development, regulatory easements, and other concessions.24

A lawsuit, filed by the attorneys general of the District of Columbia and Maryland in June 2017, has called attention to President Trump’s violations of the Constitution’s Domestic Emoluments Clause. Recall, though, that the courts have no power to order impeachment, that authority rests solely with the U.S. House. According to Article 2, Section 1, Clause 7 of the Constitution, known as the Domestic Emoluments Clause, “The President shall, at stated Times, receive for his Services, a Compensation, which shall neither be increased nor diminished during the Period for which he shall have been elected, and he shall not receive within that Period any other Emolument from the United States, or any of them (emphasis added).” This means that, beyond his salary, the president cannot receive anything of value from the federal government or any state or local government.

The framers advisedly applied this prohibition only to the president. As Alexander Hamilton explained, the Domestic Emoluments Clause ensures that the federal and other governments “can neither weaken his fortitude by operating on his necessities, nor corrupt his integrity by appealing to his avarice.” Like the Foreign Emoluments Clause, its prohibition is absolute, with no quid pro quo specified.25

As president, Donald Trump has received and continues to receive unconstitutional domestic emoluments. According to an investigation by Reuters, state and municipal pension funds in at least seven states have made substantial investments in the CIM Group, and pay the Group a few million dollars in quarterly fees to manage those investments, including the controversial Trump SoHo Hotel Condominium in Manhattan. In exchange for managing and marketing the property, says Reuters, “In 2015 and the first five months of 2016, Trump International Hotels Management LLC drew at least $3.1 million from the SoHo, and Trump received $3.3 million in income from the hotel management company, hotel records and campaign filings show.” Thus, “it’s a payment chain from state pension funds to President Trump,” said Jed Shugerman, Professor of Law at Fordham University. “This looks like an emolument to me.”26

Trump built his business empire on concessions from local governments, and at least one of these emoluments, a New York City tax abatement for his Grand Hyatt Hotel, has persisted through his presidency. An analysis by the New York City Finance Department conducted for the New York Times found that in 2016, the tax break, which continues for another four years, netted Trump $17.8 million. That’s just one example of the tax breaks and lease arrangements from government that pose a constitutional violation. Trump has an application pending for a $32 million historic preservation tax credit for his Trump International Hotel in D.C., which he built on the bones of the famous Old Post Office building. The National Park Service, a federal agency under Trump’s control, must give final approval for this application.27

Trump likely received another form of federal emolument when his appointed head of the General Services Administration (GSA) approved his continuing hold on a lease to the Old Post Office property, thereby maintaining his privilege to own, operate, and profit from the hotel. Yet the terms of the lease state, “No member or delegate to Congress, or elected official of the Government of the United States or the Government of the District of Columbia, shall be admitted to any share or part of this Lease, or to any benefit that may arise therefrom.” Designed to avoid conflicts of interest between the GSA, which administers the lease, and other government officials including the president, the provision is not gratuitous. In what could be viewed as a strategic maneuver, Trump appointed a former member of his transition team as the GSA’s Administrator. This Administrator then approved the lease arrangement, which effectively rendered the president the simultaneous tenant and landlord of the property.28

When it comes to Trump’s conflicts with the Domestic Emolument Clause, some violations—like the direct payments made by the federal government to Trump-branded businesses—are especially glaring. The federal government has likely spent substantial sums at the Trump-branded golf resorts, for instance, that Trump has visited many times since his inauguration. The exact amount spent is unknown, because the administration has not responded to a request by congressional Democrats for an itemized accounting. In another textbook case of the types of conflict that framers sought to avoid, the Secret Service rented out space in Trump Tower. They’ve since withdrawn in early July, but only because of a dispute with management over the terms of their lease.29

The Case for Impeachment

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