Letter to the Honorable Bob Goodlatte, Chairman of House Judiciary Committee - Request for Hearing on Donald Trump Conflicts of Interest and Possible Federal Law Violations

Letter

Dear Chairman Goodlatte:

On November 30, 2016, every Democratic member of the House Judiciary Committee wrote to you, urging you to hold hearings on the conflict-of-interest and ethics laws that apply to the President of the United States.

We write again to ask that the Committee hold hearings on President Trump's conflicts of interest, at home and abroad, in possible violation of federal law.

We believe that the Committee has an obligation to examine the application of these conflict-of-interest laws to both the President and his cabinet. Because President Trump insists on maintaining an interest in his business holdings, we also request an investigation of the legal structure and practices of the so-called "trust" managed by his two oldest sons, Donald Trump, Jr. and Eric Trump. Similarly, the Committee should investigate newly-created White House positions for Jared Kushner, the President's son-in-law, and "unpaid advisors" like investor Carl Icahn. These decisions may violate federal nepotism rules and the Anti-Deficiency Act.

We are aware that President Trump has apparently resigned from the management of "more than 400" business entities.[1] This serial resignation does nothing to change his financial interest in these businesses, to limit his ability to advise them, or to prevent other interests from currying favor with the White House by doing business with companies that might benefit the President's bottom line.

We are also aware that the Office of Legal Counsel has issued an opinion arguing that the federal anti-nepotism statute does not apply to Executive Office of the President.[2] The memorandum notes that OLC has addressed this subject matter before, and that its conclusion "departs from some of that prior work."[3] In fact, this opinion is a stark departure from its prior findings. In similar memoranda from 1972, 1977, 1983, and 2009, OLC reviewed the same statute and concluded that the President is barred from appointing a relative "to permanent or temporary employment as a member of White house staff."[4] We fear that additional departures from settled ethics rules may also be in development.

It is not too late for the Administration to adhere to more the practical advice issued by the OLC in 1974. Then-Assistant Attorney General Antonin Scalia wrote that, although certain ethics rules may not technically bind the White House, "it would obviously be undesirable as a matter of policy for the President" to engage in unethical conduct.[5] He warned: "[f]ailure to observe these standards will furnish a simple basis for damaging criticism."[6]

The Administration's attempts to address its ongoing conflicts of interest are, so far, wholly inadequate--and we are not alone in reaching this conclusion. For example, President Trump's private lawyers argue that the President can sidestep the Foreign Emoluments Clause of the Constitution by donating the profits of any foreign governments' use of his hotels.[7] Former ethics counsels to Presidents George W. Bush and Barack Obama described this plan as "porous and insufficient," asking:

[W]hy only hotels? What about foreign sovereign payments to buy his condos or apartments, for use of his office buildings or his golf courses, not to mention his massive foreign government bank loans, and other benefits? And why only profits, when the Justice Department has long held that the emoluments clause covers any revenue from foreign governments--not simply profits?[8]

Director Walter M. Shaub, Jr., head of the U.S. Office of Government Ethics, has expressed similar concerns. Evaluating President Trump's proposal to distance himself from his business holdings, Director Shaub concluded that "the plan does not comport with the tradition of our Presidents over the past 40 years" and risks "creating the perception that government leaders would use their official positions for profit."[9]

Some in the Majority have reacted poorly to this criticism. Rep. Jason Chaffetz, Chairman of the House Committee on Government and Oversight Reform, accused Director Shaub of "blurring the line between public relations and official ethics guidance," hinting at a congressional investigation into his conduct and threatening to shut down the Office of Government Ethics.[10] White House chief of staff Reince Preibus later appeared on national television to warn Director Shaub to "be careful" with his comments.[11] Director Shaub has served presidents of both parties with distinction for nearly twenty years. We ought to listen to his advice, not threaten his office or disparage his reputation.

Our November 30 letter outlined just some of the federal ethics and conflict-of-interest laws that might apply to the President of the United States. As Director Shaub and others have cautioned, President Trump's continued insistence that these laws and norms do not apply to his office presents a liability to the entire Administration.

First among these laws is the Foreign Emoluments Clause of the U.S. Constitution, which prohibits the President from receiving anything of value from any foreign government without Congressional consent.[12] The Foreign Emoluments Clause is a strict and absolute rule--it "operates categorically, governing transactions even when they would not necessarily lead to corruption, and establishing a clear baseline of unacceptable conduct."[13]

Because he has failed to meaningfully step away from his business holdings, President Trump may have been in violation of the Foreign Emoluments Clause since the moment he took his oath of office. Consider just a sample of recent reporting:

President Trump has sought and received funding for his business from Russian financiers.[14]Donald Trump, Jr., who presumably manages day-to-day business for the Trump Organization, has confirmed that "Russians make up a pretty disproportionate cross-section of a lot of our assets."[15]These facts are cause for concern in any respect, given the conclusion of the Intelligence Community that Russia worked to sway the recent election in President Trump's favor.If still ongoing, these financial ties also represent foreign emoluments.

The Industrial and Commercial Bank of China--which is owned by the People's Republic of China--is the largest tenant in Trump Tower.It is also a major lender to the Trump Organization.Its lease is slated to end in October 2019.[16]The bank's rent payments, its ongoing extension of credit to the President's business, and any financial benefit that may accrue to President Trump during renegotiation of the lease also appear to constitute foreign emoluments.

Foreign diplomats and other representatives of foreign governments have moved their business to the President's Washington, D.C. hotel.[17]At least one report suggests that a foreign embassy was pressured to move their event to the Trump property.[18]Even without an element of coercion, payments by foreign diplomats for lodging, meeting space, and food at the hotel are likely emoluments in violation of the Constitution.

In the context of private business, these transactions may be entirely legitimate. For the President of the United States, they present an inescapable conflict of interest--shading his decisions with questions about personal enrichment and foreign entanglement. "This is exactly what the Emoluments Clause is meant to head off at the pass."[19]

The Framers of the Constitution created an explicit role for Congress in the enforcement of this rule. Because our Committee oversees matters of criminal and constitutional law in the House of Representatives, that responsibility falls to us.

Accordingly, we ask that you schedule hearings on these topics as soon as possible.

Thank you for your prompt attention to this matter.

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