Why ‘Emoluments’ Might Mean Headaches for Trump: QuickTake Q&A

From

Will the Trumps Cash In at the White House?

America’s founding fathers probably didn’t envision Donald Trump. They did, however, think to include a sentence in the U.S. Constitution that today strikes some critics as an appropriate check on the businessman-president. Chatter about the provision, known as the "emoluments clause," has intensified following Trump’s inauguration, his decision to keep his stakes in the Trump Organization, and a lawsuit by a government watchdog group. The first challenge may be determining what, exactly, the clause really means.

1. What does the Constitution say?

The foreign emoluments clause -- in Article I, Section 9 of the U.S. Constitution -- reads, "No Title of Nobility shall be granted by the United States: And no Person holding any Office of Profit or Trust under them, shall, without the Consent of the Congress, accept of any present, Emolument, Office, or Title, of any kind whatever, from any King, Prince, or foreign State."

2. What’s an emolument?

Webster’s New World College Dictionary defines it as "gain from employment or position; payment received for work; salary, wages, fees, etc." There’s general agreement that, say, unsolicited cash payments from foreign governments to U.S. officials would qualify as an emolument, and therefore be prohibited. Payments for official action -- bribes -- are covered by criminal law. Scholars agree less on whether business transactions would violate the clause.

3. Why is this an issue for Trump?

Though he stepped away from day-to-day operations of his businesses, Trump declined calls to divest or place his holdings in a blind trust. So he retains ownership in companies that do business with foreign diplomats (particularly at his hotel in Washington D.C.), the state-owned Industrial and Commercial Bank of China and state-owned foreign television channels. Critics say these dealings, among others, run afoul of the emoluments prohibition.

4. Has Trump accepted an emolument?

That’s hard to say. There’s no firm consensus on the meaning of the clause, and no major court cases applying it to the actions of presidents. Trump’s lawyers say fair-market transactions -- like a foreign delegation paying the market rate to stay at a Trump hotel -- are above-board and permitted. Others say Trump, by the nature of his business, violated the emoluments clause the moment he took office.

5. Who might be called upon to make a judgment?

Given the wording of the emoluments clause ("...without the Consent of Congress..."), it seems that enforcement begins on Capitol Hill.

6. What could Congress do?

Trump’s fellow Republicans, who hold majorities in both chambers, might be able to declare that Congress gives consent to Trump’s ongoing business with foreign countries. At the other extreme, impeachment is the one specific punitive power over the president that the Constitution gives to Congress. Whether a Trump hotel getting extra business from foreign dignitaries, say, would meet the constitutional standard for impeachment -- "treason, bribery, or other high crimes and misdemeanors" -- is in the eye of the beholder. Congress has tried or considered censuring presidents through U.S. history, but its authority to do so is far from clear. It could try to pass laws forbidding certain conduct, or put Trump’s business dealings under the scrutiny of one of its investigative committees.

7. What’s Congress likely to do?

At the moment, nothing. Republicans who control Congress are pursuing shared goals with Trump and are unlikely to take even initial steps to look into the emoluments issue.

8. So if not Congress, then who?

Some individuals and groups are testing whether they can challenge Trump via civil litigation. Citizens for Responsibility and Ethics in Washington, or CREW, sued in Manhattan, seeking an order preventing the president from violating the emoluments clause. A revised complaint, filed April 18, added more plaintiffs -- a restaurant association and a luxury hotel event booker, which say Trump’s businesses pose unfair competition. A lawyer in White Plains, New York, is trying to get a judge to put Trump’s profit from foreign governments into a trust that would be turned over to the U.S. Treasury. A wine bar in Washington claims the Trump International Hotel on Pennsylvania Avenue, just blocks from the White House, has an unfair advantage because it draws business from foreign dignitaries and organizations. No judge has had a chance to consider the suits yet.

9. Why might lawsuits be thrown out?

The issue is legal standing. To be allowed to move ahead with a lawsuit, a prospective litigant has to be more than unhappy. As Adler writes, a prospective plaintiff like CREW must show "that it has suffered a cognizable injury from Trump’s alleged violation of the emoluments clause — an injury that is both actual or imminent as well as concrete and particularized." CREW’s case for legal standing, based on a 1982 federal court ruling, is that Trump’s alleged emoluments make its watchdog job harder -- causing, as the group puts it in the complaint, "a significant diversion and depletion of its time, resources, and efforts." By adding co-plaintiffs representing restaurants and hotels claiming real damage from Trump’s business ties, CREW gives itself a second argument for legal standing.

10. Why is CREW taking on this fight?

There’s always the chance it could prevail. Beyond that, Norman Eisen, the former ethics czar to President Barack Obama and now a CREW board member, has said the group is also interested in getting Trump’s still-unreleased tax returns in the course of this litigation, which may well qualify as a victory even if CREW gets tossed from court eventually.

11. Will anybody else sue Trump?

Look to state capitals. A 2007 Supreme Court ruling made it easier for states to demonstrate standing. That helped Republican-led states take the lead in challenges to Democratic President Barack Obama, and it’s possible Democratic-led states may now do the same try with President Trump. In addition to its own suit, CREW sent a letter encouraging federal prosecutors in Manhattan to take on the issue. And a liberal advocacy group, Free Speech for People, asked New York’s attorney general to investigate the Trump Organization with the goal of revoking its charter to do business, based on emoluments and claims the company has violated state law.

12. How common are disputes over emoluments?

It’s rare for them to go to court, but the issue comes up occasionally. There was political dueling in 2009 about whether Obama could legally keep the Nobel Peace Prize he’d been awarded. In that case, Obama relied on a Justice Department memorandum that said there was no emoluments violation because the committee that awards the prize isn’t a “King, Prince, or foreign State."

The Reference Shelf

    Before it's here, it's on the Bloomberg Terminal.
    LEARN MORE