The CREW “Emoluments” Suit and the Congress

January 24, 2017
posted by Bob Bauer

CREW and its distinguished legal team has produced a sharply turned-out complaint seeking a declaratory judgment and associated injunctive relief to redress their claim that President Trump is violating and will continue to violate the Emoluments Clause. It may face long odds: there is a challenging question of standing, and, spooked by the unprecedented nature of the intervention being requested, courts may be eager to seize on the standing issue as their way out. But if CREW is motivated to keep the pressure on the President, increasing the cost of his adoption of a controversial resolution of this issue, the complaint will have served at least that purpose.

There is some suggestion that CREW’s team may hope (and indeed have reason) to declare victory if awarded enough discovery to pry the President’s tax returns out of his hands. In announcing the suit, CREW’s Chair has stated that “President Trump is the first president in decades not to release his tax returns. Seventy five percent of Americans want to see the President’s tax returns and so do we. We will seek those in discovery in this case in order to establish the details of the emoluments clause violations here.” The open pursuit of that objective would not necessarily move a court in CREW’s direction. A court that is disinclined to jump into this battle may be similarly reluctant to be the chosen vehicle for setting the political conflict over the disclosure of the returns.

Then there is the other branch, Congress, which CREW repeatedly notes must consent under the Clause to the President’s acceptance of any “emolument.” This is an intriguing facet of the legal action. A court could give CREW what it is looking for: agreement that the President’s business interests constitute a channel for acceptance of emoluments, and forcing the Republican Congress to decide whether step in and, by consenting,” save Trump’s current plan for “separating” himself from those interests without surrendering them. Congress would then own that choice, and it would be a choice: sanction the business arrangements and the threat of conflicts, or sting the President by withholding its consent.

The majority in Congress would be unhappy with this possible outcome, but maybe less so with another. If a court dismisses the suit, and the dismissal is upheld on an appeal should one be filed, the Republicans can and surely will claim--as will the White House--that the President’s position has been vindicated. That would not necessarily be true, of course, if the court resolves the case against CREW on standing. Or even if the court, rejecting the CREW standing theory, hints in dicta at sympathy for the substantive constitutional claim. The Republican “message” would, predictably, be that the courts had settled the issue, and that Trump was in the clear. (And that would be still more the case if the court’s dicta express sympathy for defendant Trump’s position.)

The Trump Conflict-Of-Interest Plan, On its Own Terms

January 12, 2017
posted by Bob Bauer

Donald Trump’s plan for mitigating, not eliminating, the potential for conflicts between his business and his presidency has not satisfied the most senior executive branch ethics regulators or a number of the commentators well-versed in ethics standards. He will retain his interest in his businesses known as the Trump Organization, but not management control, which will pass to his sons. His counsel has detailed various steps to accomplish his “complete” severance or isolation from business operations. To the extent that the business surrenders any advantage from the presidency, it is a cost to the foreign operations: no new foreign deals, and all foreign government payments to his hotel will be donated to the Treasury. Mr. Trump maintains that he is not required to go farther and, in the words of his counsel, he “should not be expected to destroy the company be built.”

It is possible that under pressure, the Trump team will reverse course and yield to the demand for divestment and a blind trust, but after all the time the Trump team and counsel have devoted to considering his course of action, this seems unlikely. Then the question would be: if this is the plan, how exactly will it work, and with what degree of transparency allowing for an evaluation of the seriousness and effectiveness of the controls the Trump Organization plans to put in place?

For example, the Organization has not named but will establish the positions of ethics adviser and chief compliance counsel. The adviser will review all domestic deals and issue written approvals of any that “potentially raise ethics or conflict of interest concerns.” The chief compliance counsel will be charged with ensuring that the “Trump businesses… are operating at the highest levels of integrity and not taking any actions that could be perceived as exploiting the office of the presidency.”

The relationship between the two, adviser and counsel, is one question. Will the adviser be required to consult with the chief compliance counsel in the course of reviewing a deal? According to Trump counsel, the adviser is a member of the “management team.” Normally, management would turn to counsel for advice, especially where the issue is one of law as well as applicable ethical standards (the ethics adviser is responsible for ensuring that "the Trump Organization continues to operate in accordance with the highest… legal… standards.")(emphasis added). Does this plan anticipate that the adviser will issue an approval only with the concurrence of the compliance counsel?

Category: Donald Trump, Ethics

Press reports on Mr. Jared Kushner's pending appointment to his father-in-law’s senior White House staff noted the nepotism issue and cited differences of opinion about whether the anti-nepotism statute applies at all. Mr. Kushner's own lawyers have acknowledged that there are arguments going both ways, but they had, they thought, the stronger legal position. Kushner’s legal team now looks forward to an opinion from the Office of Legal Counsel, which can consider the issue and rule as soon as the Trump Administration takes office, and they seem confident that OLC will come out in their favor.

Non-lawyers are surely bracing themselves for this fight. One question is whether the anti-nepotism statute was effectively narrowed by one enacted years later, with the result that the law does not restrict an appointment such as this to the president's immediate personal staff within the White House Office. In other words, a president’s appointments are still subject to anti-nepotism restrictions, but not all appointments--and, specifically, not a senior White House staff appointment like this. Mr. Kushner's lawyers also argue that the White House is not an "executive agency" whose appointments are governed by this law.

For the non-lawyers, hearing that there are arguments of merit on both sides, the question will be what precisely is at stake. What will be consequence--the presumed harm--of the pending appointment? And the answer to this question bears on how the law is most reasonably understood.

Category: Donald Trump, Ethics

The Quandaries of Ethics Reform in the Trump Era

December 19, 2016
posted by Bob Bauer

There is now bipartisan interest in a change in the lobbying rules to reach the “back room” or “shadow” lobbyist. Most immediately, the proposal has been to have the new Administration expand the ban by Executive Order on federal government employment of lobbyists to include these individuals believed to be lobbyists in all but the name. This would close a much-derided “loophole,” one that has been especially infuriating to those who do register under the lobbying disclosure law while watching others, who seem to do pretty much what they do, escape on an apparent technicality. An amendment to the Executive Order to capture “shadow lobbying” could be followed by a corresponding change in the lobbying laws to greatly enlarge the numbers subject to mandatory disclosure requirements.

The appeal to close a loophole packs its usual punch. It answers the frustration over apparent inconsistency (the demand that those doing similar things be treated alike), and the extension of reporting requirements to “shadow lobbying” would help create a more complete picture of the total dollars spent on influencing public policy. But, as always, there are complications and competing considerations that should affect how a reform like this is designed--with what limiting principles--and how it is administered.

The White House Counsel and Donald Trump

December 12, 2016
posted by Bob Bauer

To put the point in mildest terms, Ellen Weintraub and Don McGahn do not get along. When they served together on the Federal Election Commission, their mutual hostility was well enough known, and their time apart since Mr. McGahn left the agency does not appear to have eased the tension – – certainly not on Commissioner Weintraub's side, and probably not on Mr. McGahn's. Now Ms. Weintraub has published an op-ed in The Washington Post, arguing on the basis of her experience with Don McGahn that he is not fit to be the next White House Counsel.

How McGahn will perform in his current job might be judged as Commissioner Weintraub suggests, by putting the weight she does on a particular reading of his record at the FEC. Or, on a different view, a distinction could be drawn between Mr. McGahn's past and future roles, and a different standard of evaluation could be adopted for the work now ahead of him. In choosing the first of these alternatives, the Commissioner may be incorrectly framing the question of McGahn's suitability as White House Counsel and directing attention away from what is more relevant in assessing the role and performance of that Counsel in the incoming Administration.