Trump's Business Is Not Too Big to Sell
Donald Trump took to Twitter on Wednesday to hint at how he will avoid conflicts of interest after he trades in his hat as the Trump Organization’s chief deal-maker for that of the U.S. commander in chief.
Trump said he recognizes that it’s “visually important, as president, to in no way have a conflict of interest.” To that end, he said, “legal documents are being crafted which take me completely out of business operations.” He plans to unveil how he'll go about this at a press conference on December 15.
This shouldn’t be too difficult. Trump can either appoint an independent third party to oversee the Trump Organization’s business portfolio, or simply sell all the company’s holdings.
Trump’s supporters have argued that his business is too complex and sprawling to be sold or managed by others. Journalists have helped this argument along by routinely referring to Trump’s “vast real-estate empire.” In reality, though, the Trump Organization is neither vast nor an empire. It is lucrative, certainly, and Trump has longstanding personal attachments to the properties he’s bought and built. But his business is hardly a global conglomerate on the order of Apple, General Electric or Berkshire Hathaway, or a real estate giant akin to Brookfield Asset Management, the Blackstone Group or Cushman & Wakefield.
(I wrote about Trump’s personal, political and business histories for the biography “TrumpNation.” He sued me for libel, claiming the book had damaged his reputation and business prospects. He lost the case in 2011.)
Since Trump’s brush with personal bankruptcy decades ago, and in the wake of a series of corporate bankruptcies, he has favored licensing deals over outright ownership in a significant number of his ventures. The Trump Organization today has three main components: a licensing operation that attaches Trump’s name to other people’s buildings, as well as products like clothing and mattresses; a handful of golf courses and resorts; and certain domestic real estate and retail holdings.
Apart from the three golf courses he owns in Scotland and Ireland, Trump’s overseas operations consist of licensing deals that pay him a fee for the use of his name.
The domestic real estate business that Trump controls independently consists of one office building at 40 Wall Street in New York, two hotels in Chicago and Washington, several golf courses, and his Mar-a-Lago resort in Palm Beach. He has minority stakes in two buildings in California and New York that are owned by Vornado Realty Trust, and he has three hotel partnerships in Las Vegas and New York.
As for his signature property, Trump Tower, the president-elect doesn’t own the land it stands on. (The same is true of 40 Wall Street.) And most of Trump Tower’s residential space is controlled by the individual condominium owners. (Trump still owns some valuable commercial and retail space in and around the tower, as well as the triplex in which he lives.) The other residential buildings in New York that bear Trump’s name have also been largely sold to individual condominium owners, though the Trumps have stayed on as building managers.
The Trump Organization, in other words, is basically a family-owned, boutique business.
Conflicts surrounding the Trump Organization could be addressed by 1) turning over the company’s licensing deals to a third party (or selling them) and 2) selling 12 golf courses, two hotels, one commercial building, one resort, some retail and commercial space, and liquidating a handful of hotel and real estate partnerships.
As I’ve noted on multiple occasions since June, Trump’s children are likely to remain in regular contact with him while he’s president, and that stands to perpetuate his conflicts problem. The three eldest children are also involved in policy discussions as part of Trump's White House transition team, and Trump is considering awarding his daughter Ivanka’s husband, Jared Kushner, a senior policy or advisory role in the White House.
Examples have already surfaced of Trump appearing to trade the celebrity of the presidency for financial advantages -- at his Washington hotel, in his dealings with overseas business partners, and in showcasing various Trump properties during recent media events, for example. Selling the Trump Organization’s holdings or turning them over to an independent operator would effectively isolate Trump, his children and his son-in-law from the inevitable and more consequential financial conflicts awaiting the family.
Trump repeatedly insists that he did not seek the presidency to enrich himself; making America great again is more important to him than making money. He can demonstrate that he’s serious about those pledges by severing his own and his children’s ties with the Trump Organization.
This column does not necessarily reflect the opinion of the editorial board or Bloomberg LP and its owners.
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