Philip Nichols and Richard Painter discuss Trump’s conflicts of interest
It’s a series of events that would give pause to any sentient corporate board. You offer the job to a new CEO. He says yes, but tells you that acceptance doesn’t mean he will be giving up the old job — and, by the way, you are getting clear signals that he might still feel more loyalty to the old company. The board of directors hires him anyway.
The scenario is not hypothetical. The “firm” in question is the U.S., and the new CEO, President-elect Donald Trump. Unless something unexpected happens, the electoral process will soon confirm a new U.S. president who has done nothing to satisfy concerns over his many conflicts of interests. Both domestically and internationally, Trump’s looming interlocking business and presidential interests and obligations are much more substantial than any other U.S. president in history.
So much so, in fact, that experts say Trump stands to be in violation of the law the moment he takes office. The U.S. Constitution spells it out: There are two emoluments clauses in the Constitution, says Wharton professor of legal studies and business ethics Philip M. Nichols. The one that applies in the present case is the more obscure one.
“It is obscure because no president has violated it,” says Nichols. “An emolument is a gift or a payment for services, and presidents have been careful to not accept gifts from foreign governments and certainly have avoided payments for services. But presidents have also been careful to divest themselves of business interests. Thus the only gifts they could have received from foreign governments would have been outright gifts. If President Trump maintains his interests in businesses, then he will almost certainly violate the emoluments clause.”
To name just one example, officials of foreign governments have publicly stated that they are booking rooms in Trump hotels to ingratiate themselves with the president-elect. “At a hotel, people pay for services,” says Nichols. “As soon as he is sworn into office, President Trump is beholden to the emoluments cause, and it is hard to understand how he would not be in violation.”
Does it matter? If Trump ends up doing a great job as president, why worry about conflicts of interest? But Trump’s maze of business and governing dealings makes conflicts inescapable, and their scale and scope promises to color his judgment to a remarkable degree in much more serious matters, as extensively detailed in a December 13 Newsweek article.
Among the potential conflicts cited in the article: Trump has praised Philippines president Rodrigo Duterte — or so Duterte claims — whose death squads have slaughtered an estimated 4,500 Filipinos merely suspected of being drug users or dealers. Trump and his family stand to make millions upon completion of Trump Tower at Century City in Manila, whose chief, Jose E.B. Antonio, is Duterte’s special envoy to the U.S. “The Trump family’s dealings in the Philippines will set off a constitutional crisis on the first day of Trump’s presidency, if anyone in the federal government decides to abide by the law,” Newsweek’s Kurt Eichenwald writes in the article.
The reasons for being wary of conflict of interest are as varied as they are numerous. “The research on corruption suggests that ‘tone at the top’ is extremely important in creating a culture that either is or is not corrupt. There is great reason for concern,” says Nichols. “It is also interesting that the ‘drain the swamp’ movement has morphed into an open door appointments policy for Washington insiders and lobbyists. I am not sure that this will increase the culture of corruption in Washington, but it is very unlikely to decrease it.”
“None of this is meant to say that the Trump administration will be endemically corrupt, but it is not starting in a good place.” –Philip M. Nichols
Nichols and others have conducted research in other countries that suggests a strong relationship between a culture of corruption and the occurrence of corruption. “Moreover, governments that are trying to substantially change things, which the Trump administration seems to suggest is its goal, sometimes are willing to put up with a certain amount of corruption as they focus on other things, and their tolerance of corruption usually comes back to haunt them,” Nichols says. “Think of Yeltsin’s Russia. None of this is meant to say that the Trump administration will be endemically corrupt, but it is not starting in a good place, and [Trump and his team] should be diligent — a diligence that has not yet been demonstrated.”
The U.S. Office of Government Ethics says that Trump should divest of conflicting assets, establish a blind trust, or both. Trump appears willing to do neither. “Nothing short of a real blind trust is going to be adequate, and no one in their right mind thinks he’s going to do that,” says Andrew D. Herman, a lawyer from Miller & Chevalier who specializes in election laws and Congressional ethics and investigations.
Conflicts of interest are pernicious, and they operate even on an unconscious level, making it impossible to disentangle what we think is the right thing from the thing we want, says Wharton operations, information and decisions professor Maurice Schweitzer. “Even subtle conflicts of interest, when explicit, can do quite serious damage in harming our objectivity,” he says. “It’s important for us to be really scrupulous in avoiding conflict of interest, and Trump’s cavalier attitude in itself has caused great harm. I don’t think we can be cavalier about it at all.”
As a practical matter, Schweitzer notes, between Trump’s cabinet nominees, himself and his family, “it’s a tangled mess of conflicts of interest.” He adds that research shows that conflicts of interest will influence Trump’s judgment and his decisions.
“There is no way around it,” Schweitzer says. “We can tell people we are unbiased, but that doesn’t make us unbiased. We know from science that really moral people are biased by conflicts of interest. Disclosure isn’t enough. Being very conscious of our conflicts isn’t enough. There is no way to be truly impartial. At the national level, I feel like we are backsliding with respect to the progress we have made at taking conflicts of interest seriously. And it presents a serious problem. Consider the dire state of many African nations. They are desperate to climb out of the corruption spiral they are in. Corruption is what is holding those economies back.”
A Global Web of Conflicts
Exactly what Trump and his advisers intend to do about his conflicts of interest is impossible to know by their words. He and members of his administration have made any number of statements in recent months that are demonstratively false, and they have failed to make good on promises and vacillated on the question of whether, and to what degree, Trump may remove himself from his business ventures.
Most recently, Trump postponed — until after the electoral college votes — a December 15 announcement on plans for addressing concerns about conflict of interest, instead offering on Twitter that he would be “leaving my businesses before [inauguration day on] January 20,” and that