In a series of Twitter posts, the Office of Government Ethics revealed legal advice that would normally be confidential: Donald Trump must divest his financial stake in his businesses.
WASHINGTON — The Office of Government Ethics has informed lawyers for President-elect Donald Trump that only a divestiture of his financial stake in his sprawling real-estate business will resolve ethical concerns about conflicts of interest as he assumes the office of the presidency.
The revelation from the normally secretive federal agency came Wednesday in a bizarre series of oddly informal postings on its Twitter account after officials apparently concluded, erroneously, that Trump had committed on his own Twitter account to divesting his assets.
“As we discussed with your counsel, divestiture is the way to resolve these conflicts,” the office wrote on Twitter, revealing legal advice that would normally be confidential and adding in a separate post: “Bravo! Only way to resolve these conflicts of interest is to divest. Good call!”
Some rules that may apply to Trump
The Congressional Research Service provided guidance on federal provisions that “might technically apply” to President-elect Donald Trump. Some highlights:
The Constitution’s “emoluments clause”: The country’s founders drew a bright line against a president or anyone else in government accepting a foreign gift or payments.
Ethics experts are zeroing in on this as the trickiest issue for Trump, whose international business means he is accepting payments for goods and services in other countries. Questions would remain even if he turns the business over to his adult children.
Employment of relatives or spouses: The federal anti-nepotism statue was passed soon after President Kennedy made his brother Robert Kennedy the U.S. attorney general. Now, public officials may not employ a spouse or family member in a paid position.
Business secrets: This law states that a government employee or official may not disclose or divulge trade secrets or other “proprietary” information he or she learns in the course of official duties. That has the potential to complicate Trump’s communications with his children and business-world peers.
The Associated Press
In fact, Trump had made no such commitment, at least publicly.
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In a series of early-morning posts on Twitter, Trump said he would separate himself from the operations of his global business empire.
Trump provided few details and did not say whether he would divest his assets. But he promised to hold a “major news conference” with his adult children in two weeks to reveal legal documents that would remove him from what he called the “business operations” of his company.
He vowed to leave the Trump Organization “in total” to focus on running the country.
But his vague promise to “in no way have a conflict of interest with my various businesses” drew an immediate rebuke from legal and ethics experts in Washington, who said a close reading of the words in the posts suggested Trump was not planning to take sufficient steps to eliminate conflicts.
The emphasis on “business operations,” not on ownership, hinted that Trump was not ruling out retaining a financial stake in the Trump Organization or putting his children in control of the company. Ethics experts said such moves would leave Trump vulnerable to accusations that his official actions were motivated by personal financial interests.
“Although it is of course important that he have no involvement in Trump business operations, in order to avoid conflicts he must also exit the ownership of his businesses through using a blind trust or equivalent,” Norman Eisen, who served as a White House ethics lawyer in the Obama administration, and Richard Painter, an ethics lawyer in the Bush administration, said in a joint statement.
Noah Bookbinder, executive director of Citizens for Responsibility and Ethics in Washington, a liberal nonprofit group that promotes ethics in government, said: “Unless his solution is to sell the business outside the family and put the proceeds in a blind trust, he’s not really doing anything to solve the problem. Just because you say something on Twitter doesn’t make it so.”
Every president in the past four decades, Eisen and Painter noted, has taken personal holdings he had before being elected and put them into a blind trust in which the assets were controlled by an independent party.
If Trump were willing to sell his assets, one option would be to seek a certificate of divestiture from the Office of Government Ethics, which would allow him to sell his real-estate holdings and other businesses with an enormous tax advantage.
This system was set up to allow wealthy Americans to take government jobs and avoid conflicts of interest without a large financial effect. It allows incoming government officials to defer paying capital-gains taxes on any earnings on the investment. This could generate an enormous windfall for Trump, given his real-estate holdings.
Money generated from the liquidation of Trump’s assets would have to be invested in “permitted property,” which is limited to Treasury bonds or diversified mutual funds, ending the real-estate ventures that are so tied to the family’s identity.
Still, that is what the Office of Government Ethics has said he should do.
The office is normally a low-profile agency that rarely talks to reporters on the record, but Wednesday’s Twitter posts were strangely enthusiastic. The series of nine posts suggested officials were celebrating what they thought was a decision by Trump to accept their legal advice.
In a statement, Seth Jaffe, an agency spokesman, said officials there were “excited” by Trump’s announcements on conflicts of interest and that the messages were not based on any information about the president-elect’s plans beyond what was shared on his Twitter feed.
Officials for Trump’s campaign and the Trump Organization did not respond to requests for comment about the disclosures from the agency.