The Trumps Expand Their Empire
Tags: Politics, Donald Trump, Defiant Politics

Federal regulations and Trump family interpretations

The Trumps and Kushners will behave in ways that will benefit their global businesses. There’s just one catch. They have to get away with it, legally speaking. So the first law of family business in the Oval Office turns out to be: get stellar legal counsel.

And they’ve done that. Their lawyers have by now successfully created trusts that theoretically — but only theoretically — separate Ivanka from her businesses and deflect any accusations over activities that may, now or in the future, violate federal rules. And there are two of those in particular to consider.

The Code of Federal Regulations is a set of rules published by the executive departments and agencies of the government. Title 18 section 208 of that code deals with “acts affecting a personal financial interest.” This criminal conflict of interest statute states “an officer or employee of the executive branch of the United States Government” can’t have a “financial interest” in the result of their duties.

What that should mean, legally speaking, for a family occupying the executive office is — Ivanka could not have dinner with the president of China while her business was applying for and receiving provisional approval of pending trademarks from his country, if one of those acts might impact the other. To an outsider, the connection between those acts seems obvious enough and it’s bound to be typical of what’s to come.

Meanwhile, there are real penalties for being convicted of violating this rule. These include fines or imprisonment or both as set forth in section 216 of Title 18.

Certain lawyers have argued that Ivanka’s and Jared’s appointments don’t violate Rule 208 or other nepotism statutes because they are not paid advisers to the president. In other words, because Ivanka doesn’t get a salary for her service to her … uh, country … conflicts automatically vanish. She’s already done her Trumptilian best to demonstrate her affinity for ethical behavior by cordoning herself off from her business responsibilities, sort of.

According to The New York Times, “Ivanka has transferred her brand’s assets into a trust overseen by her brother-in-law, Josh Kushner, and sister-in-law, Nicole Meyer.” Phew, no family connections there! Or maybe she just doesn’t care for her siblings-in-law.

But not all assets, it turns out, are created equal. So the daughter-in-chief will, it seems, keep her stake in the Trump International Hotel, a 15-minute stroll from the White House, which just happens to boast “the Ivanka Trump Suite” and “The Spa by Ivanka Trump.” (“The Spa by Ivanka Trump™ and Fitness Center transitions guests from the Technogym setting of the Fitness Center to the tranquil spa haven that is calming, balancing, purifying, revitalizing and healing … ”

There, many a foreign diplomat or special interest mogul can “calm, energize [and] restore” himself or herself, while angling for an “in” with the family. We don’t know precisely the nature of what the Trump family stands to gain from the hotel because its books aren’t made public, but it’s reasonable to assume that we’re not talking losses.

Besides this other D.C. domain, Ivanka and Jared will remain the beneficiaries of their mutual business empires now valued at about three quarters of a billion dollars, according to White House ethics filings.

But wait. There’s an even more explicit rule against using public office — like, say, the White House — for private gain. Title 5 section 2635.702. On that subject, the section states that “an employee shall not use his public office for his own private gain, for the endorsement of any product, service, or enterprise, or for the private gain of friends, relatives or persons with whom the employee is affiliated in a nongovernmental capacity.”

Okay, that’s wordy. And though the rule doesn’t apply to the president or vice president — we have Nelson Rockefeller to thank for that, but more on him later — for any other executive office position, the rule explains that “status as an employee is unaffected by pay or leave status.” That means that you can’t say someone is not an employee just because she isn’t drawing a paycheck, which means she isn’t, in fact, exempt just because she can’t show a W-2 form.

The second rule of family business is undoubtedly — control the means of enforcement. And Trump just got his man onto the Supreme Court, so even if ethical charges rose to the highest court in the land, the family has at least a little insurance.

666 Fifth Ave. Photo via Wikipedia

Bankers and presidents

The idea of powerful bloodlines collaborating is nothing new in either business or politics. At the turn of the 20th century, mogul families routinely intermarried to spawn yet more powerful and profitable business empires.

And when it comes to Oval Office politics, American history is littered with multi-generational public servants with blood ties to presidents. Abraham Lincoln’s oldest son, Robert, a Republican, served as secretary of war in the administrations of Presidents James Garfield and Chester Arthur, and finally as U.S. minister to Great Britain during Pres. Benjamin Harrison’s administration.

Dwight D. Eisenhower’s son John became a decorated brigadier-general, served as assistant staff secretary in the White House while his father was in office and was later appointed ambassador to Belgium under Pres. Richard Nixon, once his father’s vice-president. But neither of them inflated the coffers of the family business in the process.

Whether family business connections might influence prominent figures in the White House isn’t a subject new to the Trump era either. In 1974, when Gerald Ford, who took over the presidency after Richard Nixon’s impeachment, nominated Nelson Rockefeller to be his vice president, Nelson’s brother David ran the Chase Manhattan Bank, now JPMorgan Chase.

Questions naturally arose about the notorious wealth and political reach of the Rockefeller family. Nelson, the grandson of oil magnate John D. Rockefeller, had even worked at the bank and had been on the boards of multiple oil companies.

That same year, the Department of Justice conveniently concluded that conflict of interest laws did not apply to the office of the vice president — but not before Democratic senator Robert Byrd asked, “Can’t we at least agree … that the influence is there, that it is a tremendous influence, that it is more influence than any president or vice president ever had?”

And yet, as fabulously wealthy and linked in as Nelson Rockefeller was, his situation doesn’t even compare to the family business tangle in the Trump White House.

There have been other family members than the Trumps and Jared Kushner in positions of significance in the White House. When, for instance, Woodrow Wilson fell gravely ill in 1919, his second wife, Edith, stepped in to act on his behalf, essentially running the government in a blanket of secrecy from his bedside.

Her intention, however, was never to make hay with a family business, but to ensure that her husband’s policies prevailed. The two Bush presidents, with a business and banking legacy that snaked back a century, were elected, not handed power.

And though Bill Clinton’s reign in the Oval Office enabled wife Hillary to garner enough public recognition — and banking connections — to successfully run for senator in New York, become secretary of state under Pres. Barack Obama, and launch two ultimately unsuccessful presidential bids, the Clintons only became super-wealthy after Bill’s time in office. Though their charity foundation’s ties to foreign governments remain suspect, they never had a private business while Bill was in the White House.

What can’t be found in the historical record is someone’s child, wife, or relations holding court in the West Wing while expanding a family business, no less a network of them. The present situation, in other words, is unique in the annals of American history. Only 100 days into Trump’s presidency, he already has something of the look of the authoritarian kleptocrats elsewhere on the planet who siphon state wealth into their own bank accounts and businesses.

And remember, the Trump empire is also the Kushner empire. Jared’s family business depends on global investors hailing from countries that just happen to be in his White House portfolio. He, for example, led the efforts to prepare for the state visit to Mar-a-Lago of the Chinese president — all while the Kushner business was engaged in high-level talks with a major Chinese financial conglomerate.

A Russian state-owned bank under U.S. sanctions whose chairman met with Jared in December 2016 referred to him as the head of Kushner Companies, though he was already visibly if not yet officially a Trump adviser.

He is similarly the administration’s point man for Middle East “peace,” even though his family has financial relationships with Israel. Meanwhile, in his role as head of the newly formed White House Office of American Innovation, the potential opportunities to fuse government and private business opportunities are likely to prove endless.