President-elect Donald J. Trump is considering formally turning over the operational responsibility for his real estate company to his two adult sons, but he intends to keep a stake in the business and resist calls to divest, according to several people briefed on the discussions. Under a plan now being considered by the Trump family and its lawyers, Ivanka Trump, Mr. Trump’s elder daughter, would also take a leave of absence from the Trump Organization, in the surest sign that she is exploring a potential move to Washington with her husband, Jared Kushner. Mr. Kushner is discussing an as-yet undetermined role advising his father-in-law, and Ms. Trump plans on being an advocate on issues in which she has a personal interest, like child care. Before deciding how to separate from her father’s business, Ms. Trump is also assessing how to disentangle from her apparel and licensing brands, which are named for her, two people briefed on her plans said. She plans on appointing a president of her company to run the day-to-day operations.
This latest report suggests Trump will likely not put his financial assets into a blind trust, which presidents have typically done to avoid conflicts of interest or the appearance of such during their White House tenures.
Last month, Tara Helfman and Terry L. Turnipseed outlined in THE WEEKLY STANDARD how Trump’s unique position in real estate could create legal and ethical problems for him—and how the incoming president could mitigate those problems through divestiture. Here’s an excerpt:
Neither the Constitution nor federal law explicitly require the president to divest his assets in order to avoid a conflict of interest, but that may be the only meaningful solution available if President Trump is to avoid falling afoul of legal, constitutional, and ethical strictures. For example, Article I of the Constitution prohibits the president from accepting any present or emolument of any kind from a foreign state without the consent of Congress. Depending on how one interprets the word emolument, it is not difficult to imagine how Trump’s ongoing joint golf course venture with a U.A.E. government-controlled enterprise might raise constitutional alarm bells. This is of course not his only foreign holding: SEC filings indicate that Donald Trump owns a direct stake in over 500 companies including many in strategic countries such as Dubai, Egypt, India, Israel, the Philippines, and more. Furthermore, the Foreign Corrupt Practices Act bars any domestic concern (including business trusts) from making payments, offers, or promises to pay money or anything of value with the knowledge that the payment or promise will be passed on to a foreign official for the purpose of securing a business advantage. No matter how fair the face value of the transaction, any foreign dealings by the Trump Organization’s business trust could be suspect under this provision. Foreign enterprises (and associated government officials) might be keen to do business with the Trump Organization for the sole reason that the leader of the free world is its chief beneficiary. Steering clear of even a perceptionof impropriety under the FCPA would thus be a herculean task for a business trust run by the president’s own children. It is as important for the president to govern fairly as it is for him to be seen to govern fairly, and divestiture would make both these things possible for Trump. Divestiture can be accomplished without tax pain. Under the IRS code, Trump would not be forced to recognize capital gain on the sale of inception assets in a blind trust. He should welcome this once-in-a-lifetime opportunity to diversify without the usual penalty.
A “win-win proposition”, the authors conclude, but the Times‘s reporting suggests Trump isn’t interested in divestiture whatsoever.
