“Lyndon Johnson was always to maintain that his wife’s radio interests were totally divorced from politics,” biographer Robert Caro wrote, “and that he, the politician in the family, had absolutely nothing to do either with acquiring KTBC’s license or, once it was licensed, with its operations.”
Lady Bird, not Lyndon, owned it. Lady Bird, not Lyndon, managed the parent company, LBJ Holdings, which grew from a five-figure operation to a $150 million success story thanks to a federally protected monopoly and immense advertising demand from politically exposed companies.
Lady Bird’s radio station made Lyndon a millionaire. Everyone agrees today that it was a case of rank political corruption.
In some ways, it was cleaner than the mixture of politics and business that, absent changes, President-elect Trump would bring with him to the White House. Unlike Johnson, Trump is the principle owner of his companies. And Lady Bird’s business entanglements were mostly domestic, while Trump’s are global.
Trump pledged Wednesday to roll out a new business plan that will clear away some of the ethical problems caused by his business holdings. This is good to hear, but we hope he plans more than superficial tweaks.
He can’t eliminate all conflicts, and the country elected him knowing that they were there, but he can minimize them if he’s willing to make serious sacrifices. The signs to date, however, suggest Trump is eyeing fixes that do not go far enough.
His plan would involve his three adult children “increas[ing] their responsibilities” in the Trump companies, news reports indicate. But shifting control from Trump to his children does not clear away the conflicts of interest, as the Lady Bird example shows.
Trump’s son-in-law Jared Kushner will be “chief of staff in all but name,” according to well-sourced media reports. If Ivanka is running Trump’s sprawling global company while her husband is running the White House, there is no separation.
It’s not only impossible to separate Trump’s children from his White House, it’s also undesirable. Ivanka, Donald Jr., Eric and Jared Kushner are among the handful whom Trump seems to trust implicitly.
Those of us who want Trump to succeed as president should want him to have the constant counsel of his children. Handing the business to them either deprives him of their counsel, or further tangles his business with government, probably a combination of both.
And there’s a deeper problem in his announcement Wednesday about how he’d hand off the “business operations.” That notably omits the question of ownership.
If Trump still owns his company, he will continue to be enriched by its success. If a foreign leader subsidizes a Trump business, the money ultimately sluices into President Trump’s pocket.
Trump has spoken of putting his company into a “blind trust.” That is a good idea, but it has to be a blind trust in more than name.
Unlike stocks and bonds, real estate assets cannot be really obscured from the president’s view. Foreign leaders and domestic businesses who support Trump businesses may expect the Trump administration owes them something. Making arrangements that would foster this expectation is a problem even if Trump doesn’t reciprocate.
Trump appointees and underlings could feel uneasy about taxing, regulating or overseeing their boss’ businesses, even if Trump never explicitly sends them that message. And Trump has not shown himself indifferent to flattery. What if businessmen, diplomats and potentates make it plain they’re subsidizing or patronizing businesses he still owns?
Thus, Trump needs to push the management and ownership of his companies as far away from him as possible.
Here’s one way he could do it: He could put his hard assets such as hotels, golf courses and buildings under management by an independent trustee charged with selling them at a reasonably expeditious but not a fire-sale pace. Such an arrangement might be called an occluded trust, since it cannot be fully blind. Then the cash proceeds would go into a truly blind trust.
As for Trump’s less “hard” interests, such as the licensing of the Trump name to residences, it is not too much to ask that the new president suspend that line of business. The public should be able to assume that the president would abstain for four or eight years from selling his name while he does the people’s business.
This asks Trump to make a substantial sacrifice for his country. But it is not an unreasonable request. His country has just handed him the most important and prestigious job in the world. He needs to reciprocate.
He ran on the promise of draining the Washington swamp, and it is vital to the success of his presidency that he arranges his personal fortune so as to make that campaign promise plausible. He ran against a crooked, self-serving politician; he must show that he is not another such.
When he’s done in the White House, Trump could return to that business of licensing his name. Once he has been president, his brand is likely to be more valuable than ever before. This doesn’t pose a conflict of interest, because the best way to increase the value of that asset over the next few years would be to Make America Great Again.
