Ivanka Trump: The conflicts of interest and legal minefield surrounding the President’s daughter

Businesswoman's latest trip to meet world leaders in Berlin underscores problematic nature of White House role

Lindsey Rupp,Caleb Melby
Wednesday 26 April 2017 13:08 BST
An advocate gender equality and climate change, Ms Trump has softened the public image of the President
An advocate gender equality and climate change, Ms Trump has softened the public image of the President

On 25 April, presidential daughter Ivanka Trump joined a panel on women entrepreneurs in Berlin, where the moderator asked: “What is your role, and who are you representing, your father as president of the United States, the American people, or your business?” Ivanka Trump said she wasn’t there for her firm, but the question crystallised her situation, which is rife with potential conflicts of interest and legal pitfalls, perhaps even more so than President Donald Trump’s.

1. Why does she have conflicts?

Ivanka Trump wears many hats and, as a federal government employee, is subject to conflict of interest laws from which her father is exempt. As an adviser to the president, she has an office in the West Wing of the White House. She owns and profits from a personal business, named simply “Ivanka Trump.” She has a stake in the Trump International Hotel in Washington, as does her father. She sometimes stands in for First Lady Melania Trump in helping her father host dignitaries. In Berlin, she played the role of American diplomat for her first international trip as an official representative of the White House, at the invitation of German Chancellor Angela Merkel.

2. What does the law say?

If she engages in business dealings with foreign countries while involved in government decisions affecting them, Trump is at risk of violating federal criminal and civil laws prohibiting government employees from benefiting personally from an official position. She is also subject to the Emoluments Clause of the US Constitution, which bars government employees from accepting anything of value from other governments. While federal law doesn’t directly address it, there is an appearance issue when she hobnobs with foreign officials who can help advance her business in their countries.

3. Has that happened?

Ivanka Trump sat next to Chinese President Xi Jinping at an 6 April dinner at her father’s Mar-a-Lago resort, and that day, China gave provisional approval for three new trademarks her intellectual-property company, Ivanka Trump Marks LLC, was seeking. That could turn into quite a commercial coup: Such trademarks give her the exclusive right to sell apparel, jewellery, handbags, shoes and activewear under the Ivanka Trump name to 1.4 billion people. Chinese officials say it was a coincidence that the approvals came the same day as the dinner. During the presidential transition, the New York Times reported that she also sat in on a meeting with Japanese Prime Minister Shinzo Abe while her company was working on a deal with a Japanese apparel retailer whose parent company’s largest shareholder is owned by the Japanese government. At the time, however, Ivanka Trump wasn’t a government employee and her father hadn’t been sworn in as president.

4. Has she accepted an emolument?

The emoluments clause has been rarely — if ever — litigated. Some ethics experts say it could be interpreted to encompass transactions between private businesses owned by US officials and foreign governments (or government-owned businesses). Others say that reading would be too broad. For that reason, it’s unclear if the award of trademarks by Chinese officials to Ivanka Trump’s businesses falls under the obscure clause.

5. How does her situation compare with the President’s?

Unlike her father, who is exempt from most laws barring the president from having conflicts between his business affairs and his presidential role, Ivanka Trump is not exempt. Even though she accepts no salary, federal law bars government employees from personally benefiting from decisions they make as government officials. This rule also applies to her husband, Jared Kushner, like her a White House adviser, and whose family owns a sprawling portfolio of US real estate and technology investments.

6. How has she sought to address these conflicts?

In January, she announced she was giving day-to-day management of her brand to Abigail Klem, her company’s president. She also transferred the brand’s assets to a trust overseen by her husband’s relatives. She doesn’t plan to divest, said Jamie Gorelick, Trump’s attorney and a former top Justice Department official under President Bill Clinton. Instead, she retains ownership, including the right to approve or veto deals, and receives payments. She formed the Ivanka M. Trump Charitable Fund to donate income from her newest book, Women Who Work, set to hit shelves 2 May. She said she won’t promote the book to avoid any appearance of conflict with her government role, a big part of which is to advocate for working women.

7. What does she sell?

Ivanka’s brand sells work-appropriate clothes, shoes and accessories for women, from $138 sheath dresses at Macy’s to $135 black pumps on Zappos and $177 satchel tote bags at Bloomingdale’s. She recently discontinued a high-end jewellery line in favour of a more affordable fashion-jewellery selection. Her goods are sold at department stores and off-price retailers like TJ Maxx and Stein Mart. She has taken great pains to protect her name and what it’s used for in the US and overseas. Her intellectual-property holding company has moved to register a trademark on just her first name in a variety of categories over the last five years. She has filed for 173 trademarks in 21 foreign countries over the past decade, according to the New York Times. She’s also the author of The Trump Card, in addition to Women Who Work.

8. How successful is her business?

It’s hard to say, since her company is private. Some department stores like Nordstrom have removed her clothing lines that haven’t sold well, but the global branding strategy appears to be working and could pay off long after her father leaves office. Sales are growing at her $100 million clothing line manufactured by G-III Apparel Group, but the pace of growth has slowed. She’s still licensing variations of her name to give her the option to sell other products under it — from home goods to outerwear. Even farther afield, her licensing company has trademarked two versions of her oldest son’s name, Joseph Frederick Kushner, to use on clothes and accessories.

Copyright Bloomberg

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