Lawsuit may force Donald Trump to choose between presidency and his business empire

Conflict of interest suit filed by attorneys general of Maryland and District of Columbia could present billionaire property tycoon with stark ultimatum

Jennifer Rubin
Wednesday 14 June 2017 13:38 BST
President Trump pictured with his bodyguard and Secret Service agents
President Trump pictured with his bodyguard and Secret Service agents (AP)

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Louise Thomas

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In a lawsuit filed against President Donald Trump, the attorneys general of the District of Columbia and Maryland seek to pierce the web of Trump-related proprieties and force him to make a choice: the presidency or his business empire? The suit adds four critical elements to the legal fight over Trump's refusal to liquidate domestic and foreign holdings that put him in violation of the Constitution.

First, the suit broadens the list of holdings claimed to run afoul of the foreign emoluments provision. That provision prohibits Trump from receiving “any present, emolument, office, or title, of any kind whatever, from any king, prince, or foreign state.” The listed sources of Trump's wealth that inevitably draw in monies or benefits “of any kind whatsoever” include Trump's International Hotel (which has “specifically marketed itself to the diplomatic community”); Trump Tower (which leases space to a foreign-government-controlled enterprise); Trump World Tower (residences in New York wherein purchasers of units including Afghanistan, Saudi Arabia, India and Qatar continue to pay for common fees and charges); Chinese trademarks; licensing of The Apprentice to a British TV network owned by the government; development projects in Saudi Arabia and Indonesia; and other US properties that receive monies from foreign governments.

Second, the lawsuit prominently features the domestic emoluments clause, which has not been emphasised much in public debate and/or other litigation. This clause prohibits the president from receiving anything other than his salary from the US government and the states. (“The President shall, at stated Times, receive for his Services, a Compensation, which shall neither be increased nor diminished during the Period for which he shall have been elected, and he shall not receive within that Period any other Emolument from the United States, or any of them.”) This brings in a slew of other sources of income from which Trump benefits - renting golf carts to the Secret Service, the lease on the Old Post Office Building (which explicitly prohibits a federal employee from benefiting), and promotion of Mar-a-Lago (via US government websites). Everything from renting space to a government agency to a hotel event, say, held by the governors' association could trigger a violation. When Trump decamps to one of his properties and the feds rent rooms for his entourage, that's a domestic emoluments clause violation - each weekend. In short, domestic governments - the feds or the states - are not permitted to enrich Trump any more than are foreign governments.

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Constitutional expert Laurence H Tribe explains, “The attorneys general of states and of the district are in a particularly good position to emphasise the domestic emoluments prohibition inasmuch as the Article II ban on extra compensation to the president from any state and from any part of the federal government is directly and dramatically concerned with sparing the states and federal agencies and departments from the distracting and resource-draining consequences of interstate and interagency competition for presidential attention and priority, so the kind of harm they can allege and prove directly illustrates the evils against which the Article II domestic emoluments clause was designed to shield them.” He adds, “I'd say their chances of success on that claim are strong, and it's about time that the domestic counterpart of the foreign emoluments prohibition come out from behind the more dazzling issues that have thus far claimed the lion's share of national attention.”

Third, the lawsuit makes a case that Trump gets a premium above fair market value because the presidency gives Trump “greater brand prominence and exposure.” That premium - e g. $500 per room at the Trump International Hotel and a doubled Mar-a-Lago membership fee - would not accrue to him except for the presidency, the very sort of enrichment the Constitution seeks to prevent. Trump's constant appearance at his properties, covered by news outlets around the world, no doubt also increases the value of rooms and membership fees. For those arguing that “fair market transactions don't count,” here is the rebuttal: Trump gets more than fair market value because he is president.

Fourth, with states as plaintiffs, a new constitutional element comes into play. As property holders, DC and Maryland, sovereign entities protected by the Constitution, potentially are harmed not only by unfair competition but also because Trump can now extract concessions, tax breaks, variances, regulatory waivers and the like, or they face losing business to other states willing to knuckle under to Trump's demands. President George W Bush's ethics counsel observes that there are “lots of opportunity for the president to pick favourites among states.” Critically, the suit thereby opens up the possibility that other states (California? Washington?) with active Democratic attorneys general could sue as well, claiming similar unfair competition and pleas for valuable concessions that adversely affect their own public venues.

The states are represented by outside counsel, Norman Eisen and the Committee for Responsibility and Ethics in Washington, who also have brought another lawsuit on behalf of CREW itself, which joined private hotel owners harmed by unfair competition by Trump. In the newest lawsuit, Eisen explains, “The outrage of the unconstitutional foreign cash and benefits flowing to Trump at his DC hotel - an emoluments vortex sucking in illegal global tribute - sometime obscures the equally disturbing domestic emoluments that Trump is hoovering up across the US” The domestic emoluments clause opens up even more intriguing avenues. “The Constitution guarantees Maryland and DC that they will neither be disadvantaged by, nor forced to pay, that tribute. The AGs have hit not only the foreign emoluments clause but also the domestic emoluments clause issue hard in their complaint, and rightly so.” He continues, “The framers were as concerned about a president collecting cash or benefits from states, and so having a motive to advantage or disadvantage any of these co-equal sovereigns, as they were about foreign government emoluments.”

In sum, Trump's foreign emoluments problem is well-known by now. However, the domestic emoluments clause prohibits broadens the properties (e.g. hotels and venues that generate money or benefit from federal and state government largess) and the array of litigants. This litigation may force Trump to give up financial records he has tenaciously fought to keep private and to present him with an ultimatum: Get rid of the businesses generating income that runs afoul of the Constitution, or give up the presidency. Given how poorly things are going for Trump, he might actually choose the latter.

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