The Emoluments Clauses and the Presidency: Background and Recent Developments
Released: 2019-11-05T00:00:00

T he Constitution contains three provisions that mention the term "emolument":

1. The Foreign Emoluments Clause . Article I, Section 9, Clause 8 provides that "no Person holding any Office of Profit or Trust under [the United States], shall, without the Consent of Congress, accept of any present, Emolument, Office, or Title, of any kind whatever, from any King, Prince, or foreign State"; 2. The Domestic Emoluments Clause . Article II, Section 1, Clause 7 provides that "[t]he President shall, at stated Times, receive for his Services, a Compensation, which shall neither be encreased 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"; and 3. The Ineligibility Clause. Article I, Section 6, Clause 2 provides (among other things) that no Member of Congress shall "be appointed" during his or her term "to any civil Office under the Authority of the United States, which shall have been created, or the Emoluments whereof shall have been encreased during such time[.]"

The first two of these Clauses are the focus of this report. For most of their history, the Foreign and Domestic Emoluments Clauses (collectively, the Emoluments Clauses or the Clauses) were little discussed and largely unexamined by the courts. Recent litigation involving the President, however, has led to multiple federal court decisions more fully addressing the Clauses' scope and application.

This report accordingly provides an overview of the Emoluments Clauses as they relate to the President, focusing on the legal issues that have been central to the recent litigation. More specifically, this report discusses (1) the history and purpose of the Clauses; (2) whether the President is a person holding an "Office of Profit or Trust under [the United States]" for purposes of the Foreign Emoluments Clause; (3) the scope of the Emoluments Clauses, focusing specifically on disputes over the breadth of the term "emolument"; and (4) how the Clauses may be enforced.

History and Purpose of the Emoluments Clauses

Founding Era

Foreign Emoluments Clause

The Foreign Emoluments Clause's basic purpose is to prevent corruption and limit foreign influence on federal officers. At the Constitutional Convention, Charles Pinckney of South Carolina introduced the language that became the Foreign Emoluments Clause based on "the necessity of preserving foreign Ministers & other officers of the U.S. independent of external influence." The Convention approved the Clause unanimously without noted debate. During the ratification debates, Edmund Randolph of Virginiaâa key figure at the Conventionâexplained that the Foreign Emoluments Clause was intended to "prevent corruption" by "prohibit[ing] any one in office from receiving or holding any emoluments from foreign states."

The Clause reflected the Framers' experience with the then-customary European practice of giving gifts to foreign diplomats. Following the example of the Dutch Republic, which prohibited its ministers from receiving foreign gifts in 1651, the Articles of Confederation provided that "any person holding any office of profit or trust under the United States, or any of them" shall not "accept of any present, emolument, office, or title of any kind whatever, from any king, prince, or foreign state." The Foreign Emoluments Clause largely tracks this language from the Articles, although there are some differences.

During the Articles period, American diplomats struggled with how to balance their legal obligations and desire to avoid the appearance of corruption, against prevailing European norms and the diplomats' wish to not offend their host country. A well-known example from this period, which appears to have influenced the Framers of the Emoluments Clause, involved the King of France's gift of an opulent snuff box to Benjamin Franklin. Concerned that receipt of this gift would be perceived as corrupting and violate the Articles of Confederation, Franklin sought (and received) congressional approval to keep the gift . Following this precedent, the Foreign Emoluments Clause prohibits federal officers from accepting foreign presents, offices, titles, or emoluments, unless Congress consents.

Domestic Emoluments Clause

The Domestic Emoluments Clause's purpose is to preserve the President's independence from Congress and state governments. To accomplish this end, the Clause contains two key provisions. First, it provides that the President shall receive a compensation for his services, which cannot be increased or decreased during his term, thus preventing Congress from using its control over the President's salary to exert influence over him. To preserve presidential independence further, the Clause provides that, apart from this fixed salary, the President shall not receive "any other Emolument" from the United States or any state government. In light of its purpose, the Domestic Emoluments Clauseâunlike the Foreign Emoluments Clauseâdoes not permit Congress to assent to the receipt of otherwise prohibited emoluments from the state or federal governments.

The Domestic Emoluments Clause, which drew upon similar provisions in state constitutions, received little noted debate at the Constitutional Convention. Its meaning, however, was elucidated by Alexander Hamilton in The Federalist No. 73 . Hamilton wrote that the Domestic Emoluments Clause was designed to isolate the President from potentially corrupting congressional influence: because the President's salary is fixed "once for all" each term, the legislature "can neither weaken his fortitude by operating on his necessities, nor corrupt his integrity by appealing to his avarice." Similarly, Hamilton explained that because "[n]either the Union, nor any of its members, will be at liberty to give . . . any other emolument," the President will "have no pecuniary inducement to renounce or desert the independence intended for him by the Constitution." Other Framers echoed this sentiment during the ratification debates.

Nineteenth and Twentieth Century Practice

The Foreign Emoluments Clause provides a role for Congress in determining the propriety of foreign emoluments, in that receipt of an emolument otherwise prohibited by the Clause is permitted with the consent of Congress. Under this authority, Congress has in the past provided consent to the receipt of particular presents, emoluments, and decorations through public or private bills, or by enacting general rules governing the receipt of gifts by federal officers from foreign governments. For example, in 1966, Congress enacted the Foreign Gifts and Decorations Act, which provided general congressional consent for foreign gifts of minimal value, as well as conditional authorization for acceptance of gifts on behalf of the United States in some cases.

Several Presidents in the 19th centuryâsuch as Andrew Jackson, Martin Van Buren, John Tyler, and Benjamin Harrison ânotified Congress of foreign presents that they had received, and either placed the gifts at its disposal or obtained consent to their receipt. Other 19th century Presidents treated presents that they received as "gifts to the United States, rather than as personal gifts." Thus, in one instance, President Lincoln accepted a foreign gift on behalf of the United States and then deposited it with the Department of State.

In the 20th century, some Presidents have sought the advice of the Department of Justice's Office of Legal Counsel (OLC) on whether acceptance of particular honors or benefits would violate the Emoluments Clauses. Three such OLC opinions addressed whether (1) President Kennedy's acceptance of honorary Irish citizenship would violate the Foreign Emoluments Clause; (2)Â President Reagan's receipt of retirement benefits from the State of California would violate the Domestic Emoluments Clause; and (3)Â President Obama's acceptance of the Nobel Peace Prize would violate the Foreign Emoluments Clause.

Persons Subject to the Emoluments Clauses

An important threshold issue in examining the Emoluments Clauses is determining who is subject to their terms. The scope of the Domestic Emoluments Clause is clear: it applies to "[t]he President." The Clause prohibits the President from receiving emoluments from state or federal governments, aside from his fixed federal salary. The Foreign Emoluments Clause applies to any person holding an "Office of Profit or Trust under [the United States]." OLC, which has developed a body of opinions on the Emoluments Clauses, has opined that the President "surely" holds an "Office of Profit or Trust" under the Constitution. OLC opinions are generally considered binding within the executive branch.

There has been significant academic debate about whether OLC's conclusion comports with the original public meaning of the Foreign Emoluments Clause. Some legal scholars have argued that the Foreign Emoluments Clause does not apply to elected officials such as the President, but only to certain appointed federal officers. Other scholars support OLC's view that the President holds an office of profit and trust under the United States under the original meaning of the Foreign Emoluments Clause.

In addition to textual and structural arguments, these scholars debate the significance of Founding-era historical evidence. To support the view that the Foreign Emoluments Clause does not apply to the President, academics have observed that, among other things, (1) a 1792 list produced by Alexander Hamilton of "every person holding any civil office or employment under the United States" did not include elected officials such as the President and Vice President; (2)Â George Washington accepted gifts from the Marquis de Lafayette and the French Ambassador while President without seeking congressional approval; and (3)Â Thomas Jefferson similarly received and accepted diplomatic gifts from Indian tribes and foreign nations, such as a bust of Czar Alexander I from the Russian government, without seeking congressional approval. On the other side of the debate, scholars have observed that, among other things, (1) during Virginia's ratification debates, Edmund Randolph directly stated that the Foreign Emoluments Clause applies to the President; (2) George Mason, another Framer, articulated a similar view in those same debates; and (3) Alexander Hamilton, discussing the dangers of foreign influence on republics in The Federalist No. 22 , stated that this concern extends to a republic's elected officials.

Beyond examining contemporaneous historical evidence of the Foreign Emoluments Clause's original public meaning, other evidence (such as text, precedent, and settled practice) is often usedâat least by some juristsâto inform constitutional meaning and interpretation. As a textual matter, both the Constitution itself and contemporaneous sources refer to the Presidency as an "Office." The President receives compensation for his service in office (that is, "Profit") and is tasked with many important constitutional duties (that is, "Trust"). Furthermore, as discussed earlier, historical practice from the 19th and 20th centuries could support the view that the President is subject to the Foreign Emoluments Clause. Unlike Washington's and Jefferson's actions, several 19th century Presidents notified Congress or sought congressional approval upon receipt of gifts by foreign governments. Finally, the common practice among recent Presidents of placing their financial interests in a blind trust or its equivalent could reflect a concern that presidential financial holdings may implicate the Foreign Emoluments Clause.

The parties in recent litigation involving the Emoluments Clauses have not disputed that the Foreign Emoluments Clause applies to the President. A single district court decision has reached the merits of this issue. Weighing the evidence discussed above, that court held that "the text, history, and purpose of the Foreign Emoluments Clause, as well as executive branch precedent interpreting it, overwhelmingly support the conclusion" that the Foreign Emoluments Clause applies to the President. This case is currently on appeal before the full Fourth Circuit.

The Meaning of "Emolument"

A key disputed issue regarding the scope of the Emoluments Clauses is what constitutes an "emolument." This question has divided legal scholars and has only recently been addressed by any federal courts.

Scholars, courts, and executive branch agencies have offered several potential definitions of "emolument":

1. Office-related definitions . Black's Law Dictionary defines an "emolument" as an "advantage, profit, or gain received as a result of one's employment or one's holding of office." Some scholars argue that this employment- or office-centric definition of the term is the definition encompassed by the Emoluments Clauses, meaning that the Clauses prohibit covered officials from receiving compensation "for the personal performance of services" as an officer or employee but do not bar "ordinary business transactions" between a covered official and government. 2. Any "profit, gain, advantage, or benefit . " Others argue that the term "emolument" is broader in scope, applying to any profit, gain, advantage, or benefit. Under this broader conception, even "ordinary, fair market value transactions" between a covered official and foreign or domestic governments would be prohibited. Two recent district court decisions adopted this broader definition of "emolument." 3. Functional or purpose-based d ef initions. Both the Department of Justice's OLC and the Comptroller General of the United States, on behalf of the Government Accountability Office (GAO), have issued opinions on whether the acceptance of particular payments, benefits, or positions would implicate the Emoluments Clauses. These opinions have at times appeared to adopt a fact-specific, functional view of the Clauses, focusing on the purpose and potential effect of the specific payments or benefits at issue as they relate to the Clauses' goals of limiting influence on the President and federal officers. The relevant assessment in some of these opinions has appeared to be whether the payments or benefits are intended to or could "influence . . . the recipient as an officer of the United States" under the totality of the circumstances. At least one commentator has asserted that the OLC and GAO opinions support a middle view that Presidents or other federal officers may receive "certain fixed benefits" without those benefits being considered emoluments so long as they are not "subject to foreign or domestic government manipulation or adjustment in connection with" the office.

Debates over the scope of the Clauses have largely centered on their text, their history and purpose, and historical practice. With respect to text, for instance, proponents of a broad definition emphasize the use of the word "any" in both Clauses and the phrase "any kind whatever" in the Foreign Emoluments Clause. They also contrast those provisions with the limiting term "whereof" that links emoluments to "civil Office" in the Ineligibility Clause (the provision that limits the ability of Members of Congress to hold dual positions). But proponents of a narrower, office- or employment-limited definition note that the word "any" in the Clauses may simply be read as extending coverage to multiple forms of emoluments (beyond just monetary remuneration). They further assert that the use of "emolument" in the Ineligibility Clause is clearly tied to an office-based definition and supports applying the same definition to the other provisions. As for the Clauses' history and purpose, both sides point to dictionary definitions and other uses of the word (including by Framers) contemporaneous with the Constitution's drafting to support their preferred definition. Proponents of a broad definition also argue that statements about the general anti-corruptive purpose of the Clauses support reading it expansively, while proponents of an office- or employment-limited definition assert that the Clauses were the product of a "balancing of values" that included attracting candidates for federal service who may have had conflicting commercial interests. As for the corpus of OLC and GAO opinions interpreting the Clauses, proponents of the broader and narrower definitions both cite opinions that they argue support their favored definitions.

In 2018 and 2019, two federal district courts substantively addressed the Emoluments Clauses' scope for the first time. Both courts concluded that the term "emolument" as used in the Clauses "is broadly defined as any profit, gain, or advantage." As to the Clauses' text, the courts found significant the use of "expansive modifiers" like "any other" and "any kind whatever," and rejected the proposition that the term's office-related use in the Ineligibility Clause should control its use in the other Clauses. With respect to the Clauses' history and purpose, the courts, while acknowledging that broader and narrower definitions of "emolument" both existed at the time of ratification, found the weight of the historical evidence and the Clauses' "broad anti-corruption" purpose supported the more expansive definition. Finally, the courts viewed executive branch precedent and practice as "overwhelmingly consistent with .Â .Â . [an] expansive view of the meaning of the term 'emolument,'" observing that "OLC pronouncements repeatedly cite the broad purpose of the Clauses and the expansive reach of the term 'emolument.'"

The recent court decisions construing the Emoluments Clauses are not final, however. In fact, as discussed below, one of the decisions was reversed by a panel of the Fourth Circuit on a separate issue regarding the standing of the plaintiffs to sue, and the full Fourth Circuit has agreed to consider the district court's rulings. The other decision has been certified for an immediate appeal to the District of Columbia Circuit. Thus, the import of these decisions is uncertain.

Enforcement of the Clauses

Separate from issues regarding the scope of the Emoluments Clauses is how the provisions' mandates are enforced, including whether and to what extent the federal courts and Congress have a role in addressing violations of the Clauses. A principal hurdle in recent litigation involving the President has been the doctrine of standing. Standing is a threshold limitation concerning whether the person or entity suing in federal court has a "right to make a legal claim or seek judicial enforcement of a duty or right." The limitation includes a constitutional component stemming from Article III of the U.S. Constitution, which limits the exercise of federal judicial power to "Cases" or "Controversies." The Supreme Court has interpreted this "case-or-controversy limitation" to require, among other things, that a litigant have "a personal stake in the outcome of the controversy" before the court. At a minimum, a plaintiff must establish that he or she has suffered a personal injury (often called an "injury-in-fact") that is actual or imminent and concrete and particularized. In other words, the injury cannot be "abstract," must affect the plaintiff in a "personal and individual way," and must actually exist or at least be "certainly impending" rather than merely possible in the future. The plaintiff must also show "a sufficient causal connection between the injury and the conduct complained of" (causation) and "a likelihood that the injury will be redressed by a favorable decision" (redressability).

Recent lawsuits over the Emoluments Clauses have been filed in three federal courts by (1)Â private parties who argue they compete for business with properties related to the alleged violations of the Clauses, as well as a public interest organization (the "SDNY litigation"); (2)Â the State of Maryland and the District of Columbia (the "Maryland litigation"); and (3) over 200 Members of Congress (the "Congressional litigation"). Each set of plaintiffs implicate distinct legal issues and precedents related to standing. Private-party competitor plaintiffs rely on the notion of "competitor standing," which holds that an economic actor may have standing to challenge unlawful action that benefits a direct competitor in a way that increases competition in the relevant market. State plaintiffs also rely on a competitor standing theory and additionally assert harms to certain sovereign and "quasi-sovereign" interests of the state related to tax revenue, diminution of their sovereign authority, and the economic well-being of state residents in general. Finally, Members of Congress assert standing stemming from the alleged deprivation of their constitutionally prescribed opportunity to vote on the permissibility of particular emoluments under the Foreign Emoluments Clause, which implicates a unique set of standing principles that apply specifically to legislative plaintiffs. More broadly, regardless of the status or classification of the plaintiffs, the fact that a lawsuit involving the Emoluments Clauses seeks a court ruling on the constitutionality of the conduct of an official within another branch of the federal government means that courts must conduct an "especially rigorous" standing inquiry given underlying separation-of-powers concerns.

Attempts by these various plaintiffs to sue for alleged violations of the Emoluments Clauses have thus far met with mixed results. With respect to private-party competitor plaintiffs, the district court in the SDNY litigation concluded that several such plaintiffs lacked standing because it was "wholly speculative" that any loss of business or increase in competition could be traced to alleged violations of the Emoluments Clauses rather than "government officials' independent desire to patronize [the] businesses" allegedly involved in those violations based on factors such as service and location. But the Second Circuit recently reversed the district court's ruling regarding the competitor plaintiffs, concluding that "a plaintiff-competitor who alleges a competitive injury caused by a defendant's unlawful conduct that skewed the market in another competitor's favor [has standing] notwithstanding other possible, or even likely, causes for the benefit going to the plaintiff's competition."

As for state plaintiffs, a different district court concluded in the Maryland litigation that the State of Maryland and the District of Columbia (D.C.) had standing to sue as competitors based on their interests, along with the interests of their citizens, in hotels and event spaces that competed with a hotel in D.C. related to the alleged unconstitutional conduct. The court reasoned that, based on specific factual allegations regarding diversion of business to that hotel, the plaintiffs were "placed at a competitive disadvantage" because of violations of the Clauses that "unfairly skew[ed] the hospitality market" against them. Yet a panel of the Fourth Circuit reversed this decision, concluding that the theory of standing hinged on the proposition that government customers were patronizing the relevant hotel "because the [h]otel distributes profits or dividends" in violation of the Clauses "rather than due to any of the [h]otel's other characteristics." In the panel's view, such a proposition required "speculation into the subjective motives of independent actors . . . not before the court, undermining a finding of causation." The Fourth Circuit panel's decision has itself now been vacated, however, with the full Fourth Circuit agreeing to hear the case.

Finally, as to Members of Congress, the district court in the Congressional litigation determined in 2018 that over 200 Members had standing to sue under the Foreign Emoluments Clause based on the deprivation of their "opportunity to exercise their constitutional right to vote on whether to consent prior to . . . acceptance of prohibited emoluments." Faced with Supreme Court precedent indicating that individual legislators generally lack standing to sue for institutional injuries that amount to "abstract dilution of institutional legislative power," but may have standing when their votes on specific items "have been completely nullified," the district court concluded that the Members alleging violations of the Foreign Emoluments Clause fell into the latter category. Central to the district court's decision in the Congressional litigation was its view that the Member-plaintiffs lacked an adequate legislative remedy for the alleged violations without court intervention. According to the court, although Congress as a whole could pass "legislation on the emoluments issue" to consent to or reject perceived emoluments, the political process would do nothing to address the deprivation of the Members' opportunity to give advance approval or disapproval of particular emoluments in the first instance.

As with the court rulings on the definition of the term "emolument," the judicial decisions on standing to enforce the Emoluments Clauses are all subject to further review by the respective circuit courts. It is thus possible that the outcomes in some or all the opinions just described could change. If the effective split between the Second and Fourth Circuits on the viability of competitor standing theories as they relate to alleged violations of the Emoluments Clauses endures, Supreme Court review is also possible.

Beyond standing, other doctrines may present potential roadblocks to judicial enforcement of the Clauses. For instance, though its continued vitality is questionable, the Supreme Court has traditionally applied a "zone of interests" test as a prudential aspect of the standing inquiry, which "denies a right of review if the plaintiff's interests are marginally related to or inconsistent with the purposes implicit in the constitutional provision" at issue. Applying this test in the context of the Emoluments Clauses, the district court in the SDNY litigation involving private competitors concluded that such competitors fell outside the zone of interests of the Clauses, because the Emoluments Clauses stemmed from "concern with protecting the . . . government from corruption and undue influence" and were not "intended . . . to protect anyone from competition." Another potential barrier is the political question doctrine, a separation-of-powers-based limitation on the ability of courts to hear disputes where there is, among other things, a "textually demonstrable constitutional commitment of the issue to a coordinate political department; or a lack of judicially discoverable and manageable standards for resolving it." In the SDNY litigation, the district court concluded that Congress's authority to "consent to violations" of the Foreign Emoluments Clause meant that Congress, rather than the judiciary, would be "the appropriate body to determine whether" the alleged conduct "infringes on that power."

Reversing both these rulings, however, the Second Circuit recently concluded that (1) "a plaintiff who sues to enforce a law that limits the activity of a competitor satisfies the zone of interests test even though the limiting law was not motivated by an intention to protect entities such as plaintiffs from competition," and (2) the judiciary's responsibility to adjudicate alleged violations of the Constitution was not lessened by the "mere possibility that Congress might grant consent" to particular emoluments. The district courts in the Maryland litigation and the Congressional litigation likewise agreed that the zone of interests test and political question doctrine did not bar those suits. But like the other issues raised in recent litigation involving the Emoluments Clauses, further review of the application of these doctrines is possible. Ultimate resolution of the issues is thus uncertain and will likely depend on the nature of the plaintiff involved.

If the courts lack jurisdiction to enforce the Emoluments Clauses, the political process would be the remaining avenue for enforcement. In this vein, Congress could seek to enforce the Emoluments Clauses through legislation, political pressure, or potentially impeachment and removal. For instance, given that the Foreign Emoluments Clause explicitly provides a role for Congress in evaluating the propriety of the receipt of foreign emoluments by federal officers, Congress may be empowered to create civil or criminal remedies for violations or establish prophylactic reporting requirements through legislation. Indeed, one bill from the 115th Congress would have required certain reports and divestiture of personal financial interests of the President posing a potential conflict of interest, among other things. Resolutions have also been introduced in the 115th and 116th Congresses objecting to perceived violations of the Foreign Emoluments Clause, as well as calling on the President to take certain actions based on alleged potential violations. That said, it is unclear whether legislative actions would provide an effective means to enforce the Emoluments Clauses against the President, given the possibility of veto and potential separation-of-powers objections. As noted above, the adequacy of these legislative options has been a central issue in the Congressional litigation as it relates to Members' standing, and the issue is subject to further review at the appellate level.