Donald Trump, Clinton Would Both Bring Ethics Baggage to White House

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Whether it’s Hillary Clinton or Donald Trump, the next president will bring to office unprecedented financial entanglements that could pose significant conflicts of interest, ethics experts say, and there is no law that would regulate them.

Since federal ethics rules don’t apply to the president, there would be no formal impediment to Bill Clinton doing business with interested parties while his wife is in the Oval Office, or to Donald Trump demanding a tax break for a new golf course from a country that wants U.S. aid. While the such acts might be politically damaging if discovered, neither candidate has addressed exactly how, if at all, they would wall themselves off from ethical conflicts when no one is watching.

“Trump and Clinton are different” from recent past presidents in this regard, said Stephen Gillers, a professor and legal ethics scholar at New York University. “The last time I think we asked these questions might have been Kennedy.”

John F. Kennedy was rich, but a better cautionary example might be Lyndon Johnson, who used his clout in the Senate and later the White House to boost his wife’s Texas television stations, greatly enriching himself, historians have found. None of that was well understood at the time.

Trump’s vast business empire, and Clinton’s global charitable foundation, would each pose ethical pitfalls. How could President Trump assure the public he wasn’t using the powers of the presidency to help his far flung commercial interests? And how could President Clinton guard against people trying to curry favor by making contributions to her family foundation?

The law won’t be much help. Federal conflict of interest rules make it illegal for executive branch officials to use their office to further their private interests – but those rules don’t apply to the president or vice president. So there would be no legal prohibition against Trump pushing tax exemptions for real estate developers or Clinton appointing a foundation contributor to a big job.

The public and the press—ultimately, the voters–will decide what is tolerable, experts say.

The Clintons would have an easier time insulating themselves from ethical danger than Trump, legal scholars say. And the Clintons have already previewed some steps they would take. Bill Clinton said this week the foundation would stop taking money from foreign and corporate sources – and that he would step off its board – if his wife was elected president. His office also said he will take a break from paid speeches if Hillary Clinton wins the White House.

Bill Clinton also said they would end the end the Clinton Global Initiative, an annual gathering of politicians, philanthropists, donors and celebrities.

But experts argue the Clintons should go further. Some believe they should transfer the assets and programs of the $2 billion Clinton Foundation to another charity—say, the Bill Gates Foundation.

That “would go a long way and probably help her image,” Gillers said.

Or, they could change the foundation’s name and elect independent trustees, said Richard Painter, professor at the University of Minnesota Law School and former White House lawyer in the George W. Bush administration.

“If they don’t, it’s just going to lead to more nasty articles,” he said.

Bill Clinton’s “ability to command high fees is an obvious target of opportunity for people who want to influence the executive branch,” Gillers added.

Speaking at a Clinton Global Initiative event in June, Bill Clinton said, “You have to be careful to avoid actual or potential conflicts of interest…There’ll clearly be some changes in what the Clinton Foundation does and how we do it.”

Having made tens of millions of dollars in recent years from paid speeches and other ventures, the Clintons don’t need money.

Self-proclaimed billionaire Trump presumably doesn’t need money either. But the nature of his business interests make his situation harder. He’s got more than 500 different entities in an unknown number of countries. Some experts think he needs to sell his holdings—or at least the ones overseas.

“Broadly speaking, a person being president should not have a financial interest in companies or countries with which the United States could have some significant stressful interaction,” said Geoffrey Hazard, a professor emeritus at the University of Pennsylvania Law School.

But Gillers and others say that would be unfair, because Trump would be forced to sell at distressed prices.

“Having to sell stock is not the same thing as selling Trump Tower,” Gillers said.

Painter suggested Trump, if elected, could solve that problem by putting all his assets in a holding company and taking it public.

“Dump it all,” he said. “Pocket the cash.”

But the new company should not bear Trump’s name, he said.

“There is something a little bit tacky about the name of the president being used to increase the value of a public company.”

Trump could announce that he will wall himself off from his decision making at his companies, the way billionaire Michael Bloomberg did when he became New York City mayor. Bloomberg also donated his companies information terminals to the city so there would be no financial relationship between the company and city government, said Ken Gross, a Washington lawyer who specializes in ethics law and who represented the mogul.

But it’s hard to imagine how Trump could sever all financial ties between his company and the federal government, especially given that one of his highest profile projects at the moment involves redeveloping a historic Washington, DC post office pavilion into a hotel. The Trump organization is pursuing the project under a lease with the General Services Administration, the federal government’s real estate arm.

“I think optically it’s going to be a constant difficulty for him,” Gross said. “Anybody who meets with him with is probably want to say I am staying at the Trump Hotel, not the Hay Adams.”

The other problem with Trump is that, in part because he has refused to release his tax returns, the public has little insight into the extent of his global business interests. What are his entanglements with Russian oligarchs? Where, exactly, does he own property, or license his brand?

That lack of knowledge would make it difficult for the public and the press to police potential conflicts and hunt for abuses of government power.

Experts say every president since Ronald Reagan has placed some assets in a form of a blind trust, an arrangement that walls off the owner from knowing how the money is being invested. Barack Obama is the sole exception, mainly because he didn’t have enough assets to merit the use of such an instrument.

Asked about setting up a blind trust earlier this year during a Fox Business debate, Trump seemed to opt for a different arrangement.

“If I become president, I couldn’t care less about my company,” he said. “I have Ivanka and Eric and Don sitting there. Run the company, kids. Have a good time. I’m going to do it for America. … I would put it in a blind trust. Well, I don’t know if it’s a blind trust if Ivanka, Don and Eric run it. But — is that a blind trust? I don’t know. But I would probably have my children run it with my executives. And I wouldn’t ever be involved, because I wouldn’t care about anything but our country. Anything.”

But experts say that if children are involved—whether it’s Trump offspring running his business or Chelsea Clinton running the Clinton Foundation, which has been floated—it’s not really arms-length. In fact, it’s still a conflict of interest if someone takes official action to help his close relatives.

“These things are really quite simple,” Hazard said, “if you understand the kind of concerns that ordinary people have.”

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