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Branding the presidency

With his trademark swagger, the president-elect is venturing into a minefield of conflicts where no U.S. president has dared go before

From left: Donald Trump Jr, Eric Trump, Republican presidential nominee Donald Trump, Melania Trump, Tiffany Trump, and Ivanka Trump take part in a ribbon cutting ceremony during the grand opening of the Trump International Hotel in Washington, DC on October 26, 2016

Donald Trump has flip-flopped on a lot of things since the election.

The climate-change denier now has an “open mind” on the subject. The “big, beautiful wall” with Mexico might be more chain-link fence. And never mind about locking up Hillary Clinton.

But the U.S. president-elect is steadfast about one thing: his determination to keep the global business empire that bears his name intact and firmly in family hands when he moves to the White House.

Breaking with decades of presidential precedent, Mr. Trump is brazenly mixing affairs of state and his own business interests, even as he prepares for his January inauguration. And the billionaire real-estate mogul is bragging about how it will all make him even richer.

“The brand is certainly a hotter brand than it was before. I can’t help that, but I don’t care,” the relentless self-promoter told The New York Times this week.

These blurred lines could lead Mr. Trump into a minefield of conflicts where no president has dared go before. His business dealings with foreign governments may even be illegal under an obscure section of the U.S. Constitution. Allies and enemies alike will forever wonder who’s in the White House – the head of state, a profiteer-in-chief or some murky hybrid, exposing the country to unprecedented financial and national security risks. The only way out, ethics experts say, is to sell everything or put his empire beyond family control in a truly blind trust.

“It’s a crazy maelstrom,” says Stuart Gilman, a former United Nations diplomat whose company, Global Integrity Group, of Manassas, Va., advises governments and organizations on ethics and governance. “I see unbelievable problems. The first year will look like an ethics nightmare, and the president could care less.”

Mr. Trump is unbowed. He insists Americans knew full well what they were getting when they elected him – as he rationalized in a recent tweet: “Prior to the election it was well known that I have interests in properties all over the world. Only the crooked media makes this a big deal!”

His position is clear. He’s telling Americans that he has many obvious conflicts of interest, but they don’t matter because he’s too wealthy to let them cloud his judgment and because he’ll step back from actively running the Trump Organization, his international conglomerate.

The early signs aren’t encouraging that Mr. Trump is willing or able to compartmentalize his many and multilayered conflicts of interest. And they suggest that, far from not caring – as he insists – his branded business empire remains as important to him as ever.

The Trump Hotel with the golden facade from above. Rio All Suite Hotel and Casino and The Orleans in the back.

Trump-owned condos, resorts and golf courses have become convenient backdrops for the cameras as he forges the team and policies of his new administration. And behind closed doors it’s business as usual. His daughter Ivanka, an executive in his organization, sits in on meetings and phone calls with foreign leaders, while his son-in-law Jared Kushner, a real estate developer, advises him on policy. And the president-elect met with British politician Nigel Farage in recent days, urging him to oppose a windmill farm that would mar the view from two Trump golf courses in Scotland.

The world has taken note: Philippine President Rodrigo Duterte has just appointed a real-estate developer who pays millions of dollars to put the Trump name on a tower in Manila as his special envoy in Washington.

Meanwhile, foreign diplomats say they are booking rooms at one of Mr. Trump’s newest ventures – a hotel located five blocks from the White House on land leased from the U.S. government – to ingratiate themselves with the incoming administration.

Mr. Trump acknowledges many of these conflicts will inevitably follow him into the White House. “The president of the United States is allowed to have whatever conflicts he wants,” he insisted.

Technically, he’s right. No U.S. law bars Mr. Trump from continuing to be involved in his diverse business interests, which include hotels, condos, golf courses and various brand licensing deals. Presidents are specifically exempted from provisions of the 1978 Ethics in Government Act, which requires members of Congress, cabinet secretaries and other top officials to recuse themselves from any government business that affects their personal financial dealings.

A visitor carries a ‘Trump Store’ bag at Trump Tower, November 22, 2016 in New York City.

But Mr. Trump is heading into uncharted waters. There have been wealthy men in the White House before (most usually are), but none who ran a global business empire built on the value of their own name. And for decades, every U.S. president has placed his assets in a blind trust, run by independent trustees – something Mr. Trump is saying he won’t do.

The closest comparison internationally is Silvio Berlusconi, the former Italian prime minister, who openly exploited his ownership of a media empire to further his political aims.

Since Richard Nixon, U.S. presidents have gone to extraordinary lengths specifically to avoid potential conflicts. Barack Obama sold all his assets and converted them into treasury bonds and index funds.

Mr. Trump, on the other hand, seems proud of his conflicts – and his wealth.

“In theory, I could run my business perfectly and then run the country perfectly,” he said. “And there’s never been a case like this where somebody’s had … this kind of asset and this kind of wealth, frankly.”

Integrity experts strongly disagree. They insist that not putting everything he owns in a blind trust isn’t just unethical, it could pose a threat to national security.

A prominent group of governance organizations and experts, including White House ethics advisers to Mr. Obama and George W. Bush, sent a letter this week to Mr. Trump, urging him to sell all his assets and put the fortune into a “genuine” blind trust, not one run by his three eldest children, Ivanka, Donald Jr. and Eric. Without that separation, they argue, the future president would have a clear window into his business empire – and his children into the affairs of state.

“There is no acceptable alternative – and your duties to the American people now must prevail over your personal ties to the Trump Organization businesses,” they told Mr. Trump. “Failure to follow this course of action will create conflicts of interest of unprecedented magnitude.”

So far, there has been no direct response to the letter from Mr. Trump or his transition team, according to Jordan Libowitz of Citizens for Responsibility and Ethics in Washington, one of the signatories.

“When they exempted the president from conflict-of-interest laws, they figured the president does so many things, so everything could be considered a conflict,” Mr. Libowitz explained. “But they were never considering someone with business interests like this. Everything Trump does is put up in giant gold letters.”

The problem isn’t just the opportunity to line his pockets by enhancing the Trump brand. As president, he’ll be confronted with multiple scenarios, where people won’t know if he’s acting as president or business mogul. There’s the continuing audit of his tax returns, which could put his pick to run the U.S. Internal Revenue Service finding problems with his boss’s tax filings. And there are the continuing multibillion-dollar settlement talks between Deutsche Bank, a German financial giant with $120-million (U.S.) in loans to Trump properties, and the Department of Justice over allegations that the bank sold toxic mortgages before the housing crash. The interests of Trump the borrower might clash with those of Trump the president, who will make as many as 300 political appointments at the Department of Justice in the coming months.

Similarly, imagine a dispute involving the new Trump hotel in Washington, where Mr. Trump would be both landlord and tenant because the property is owned by the federal government.

“There is a lot here that makes people very uncomfortable,” Mr. Libowitz said.

A view of the re-designed 509 yard 17th hole of the Ailsa Course at the Trump Turnberry Resort in Scotland in July.

Mr. Trump’s ties to foreign properties, developers and lenders may prove to be the trickiest ethical challenge of all.

“The fear is that he will endanger American national and financial security to benefit the Trump organization’s bottom line,” Mr. Libowitz argued. “I’m not saying he’s going to do that, but there is the spectre of that, especially in dealing with foreign countries.”

Among Mr. Trump’s global assets are roughly 10 deals in which developers pay him millions of dollars to use the Trump name on their buildings, including planned projects in countries where the lines between business and government are often murky – in the Middle East, China and former Soviet bloc countries. Over all, Mr. Trump has done business in 18 foreign countries, including hotel and condo towers in Toronto and Vancouver.

He has ties in countries where the United States has sensitive national security interests, including Turkey, Saudi Arabia, the United Arab Emirates and China. His properties in many of these countries would become obvious security risks, merely because they bear his name. Imagine if the U.S. was embroiled in a political showdown or a conflict with a country where the Trump Organization has assets. Would Mr. Trump put U.S. lives at risk to protect a Trump property?

None of this is strictly illegal – just fraught with ethical red flags. And unlike ordinary citizens, presidents can’t be prosecuted criminally for breaking laws; the only recourse is impeachment by Congress or civil suits.

But Mr. Trump’s foreign dealings could land him in hot water with the U.S. Constitution – a document his presidential oath of office demands he “preserve, protect and defend.”

An obscure section of the Constitution known as the Emoluments Clause prohibits all elected officials, including the president, from accepting payments of any kind from foreign governments or officials.

Any number of payments to the Trump Organization could, arguably, be deemed unconstitutional, including foreign diplomats staying at his hotels, payments for use of his brand by foreign government-owned companies or even the now-enhanced value of some of his foreign properties.

That raises the ultimate question: Would a Republican-led Congress dare to impeach one of its own and say, “You’re fired”?

Might the Trump International in Washington be the go-to hotel for visiting dignitaries seeking to ingratiate themselves?


Just what is the Emoluments Clause of the U.S. Constitution?

“No Title of Nobility shall be granted by the United States: And no Person holding any Office of Profit or Trust under them, shall, without the Consent of the Congress, accept of any present, Emolument, Office, or Title, of any kind whatever, from any King, Prince, or foreign State.”

How rich is Donald Trump?

Personal net wealth: $3.7-billion (U.S.), No. 156 on Forbes magazine’s 2016 list.

The Trump Organization has assets of: $4-billion

It has a debt of at least $650-million; annual revenues of $490-million; holdings include interests in 50 U.S. properties, 18 golf courses,15 hotels and roughly 500 limited liability companies, plus name-licensing deals on condos, apartments and hotels in a dozen other countries. Roughly 65 per cent of Trump assets are in New York City real estate, including its flagship Trump Tower, where the presidential transition team is preparing the incoming administration.

Sources: The New York Times, The Economist, Forbes, Trump Organization

Meet the First Family-elect

Donald Trump Jr., 38

The eldest child of Donald Trump and former wife Ivana Trump is executive vice-president of development and acquisitions for the Trump Organization and will help run the company while his father is in the White House. He is married to Vanessa Trump, and they have five children. Donald Jr. has an economics degree from the University of Pennsylvania’s Wharton School. He was an adviser and constant presence during the election campaign. He has come under fire for a Paris meeting during the campaign with a group of Syrians aligned with Russia in the civil war – apparently acting as an envoy for his father.

Ivanka Trump, 35

The daughter of Donald and Ivana Trump, she too is executive vice-president of development and acquisitions for the Trump Organization. The former fashion model also has her own line of jewellery, clothing, shoes and accessories. She is married to Jared Kushner, and they have three children. Like her brothers Donald and Eric, Ivanka was a close campaign adviser. She introduced her father at the Republican convention and helped craft his family policies. In recent days, she attended a meeting between her father and Japanese Prime Minister Shinzo Abe as well as joining a phone conversation with Argentine President Mauricio Macri. (Media reports in Argentina said a stalled Trump project in Buenos Aires came up during the conversation, but the accounts were denied by both men.) Her fashion company used a Trump family postelection appearance on the CBS program 60 Minutes to promote a $10,800 gold-and-diamond bracelet from her line that she wore on the show.

Eric Trump, 32

He is the youngest child of Donald and Ivana Trump. He is married to Lara Yunaska. Like his older siblings, he is executive vice-president of development and acquisitions for the Trump Organization. Eric has a finance and management degree from Georgetown University, oversees the Trump Organization’s 18 golf clubs and separately owns the Trump Winery in Charlottesville, Va. During the campaign, he was a regular surrogate for his father at rallies and interviews.

Jared Kushner, 35

Ivanka Trump’s husband emerged as a powerful adviser to Mr. Trump on the campaign trail, on the transition team and perhaps even in the White House. Mr. Kushner is a real-estate developer and owner of the New York Observer newspaper group. The president-elect says he wants to make Mr. Kushner a special envoy to the Middle East, charged with helping forge peace between the Israelis and the Palestinians. Mr. Trump has called him “a very smart guy … a quality person,” adding, “I think he can be very helpful.” That would make a Trump son-in-law an administration insider, although that Trump team insists it should not trigger federal anti-nepotism laws because Mr. Kushner would be hired but would work without pay as an adviser. It could still put Mr. Kushner in an awkward ethical spot – married to a Trump Organization executive and working for the White House.

Tiffany Trump, 23

She is the president-elect’s fourth child, a daughter from his second marriage, to actress Marla Maples. Tiffany grew up in Los Angeles and graduated from the University of Pennsylvania this year with a double major in sociology and urban studies. She also spoke at July’s Republican convention, praising her father’s support throughout her life.

Barron Trump, 10

Barron is the only child of Donald and Melania Trump. He attends the $45,000-a-year Columbia Grammar and Preparatory School in Manhattan, where he will stay until the end of the 2016-17 school year. That means he and his mother may not move into the White House immediately after the Jan. 20 inauguration. He has been part of the family entourage at a range of Trump events and videos. If he follows in the path of his older siblings, he has a good shot at becoming executive vice-president of development and acquisitions for the Trump Organization.

Editor's Note: Corrects spelling of Jordan Libowitz, spokesman for for Citizens for Responsibility and Ethics in Washington.



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