White House

The Art of the Trump Enrichment Program

The president's sons are doing the deals, but he still owns the family business.

Family business.

Photographer: Julia Schmalz/Bloomberg

"That's not a get-rich-quick scheme," Donald Trump Jr. insisted to the Washington Post in a story published over the weekend.

Of course it's not! Don Jr., Eric, and their father, President Donald Trump, have four years -- maybe, God forbid, even eight -- to financially exploit the American presidency. There's no big rush.

The Post story, and a similar one the New York Times last month, have explored where the Trump sons expect to take the Trump Organization now that its founder is no longer focused on it, being the president and all. (Their sister Ivanka Trump, who was also a top executive at the company, resigned after her father was elected.) In both stories, the Trump boys insisted that a Chinese wall existed between themselves and their father, at least when it comes to the family business.

"There are lines we would never cross," Eric Trump told the Post, "and that's mixing business with anything government." To the Times, Donald Trump Jr. said that using the presidency "as a way to enrich yourself is laughable."

But rather than dampen the fears that the president would line his pockets while in office, the two articles -- and several others -- essentially prove that the Trump Federal Enrichment Program is going full tilt.

The ur-fact about the president and his company, of course, is that he hasn't sold any of his holdings, and appears to have no intention of doing so. (The president "can't have a conflict of interest," Trump declared shortly after the election, accurately capturing the letter of the law if not its spirit.) So even if his sons are now running the show, any deals they do puts money directly into their father's pocket.

And boy do they plan to do deals. Although they have promised not to seek out any new projects abroad -- well, except for the hotel in Dubai that just opened, plus the one in Vancouver, plus the golf course expansion in Scotland, as well as the new trademark right granted by China, and maybe a branding deal in the Dominican Republic -- their U.S. ambitions are enormous.

The boys envision creating a hip new hotel chain under the "Scion" brand, located in cities like Seattle, Austin and St. Louis. And the day after Trump was inaugurated, Eric Danziger, the chief executive of Trump's hotel company, said that it was planning a major expansion, according to Bloomberg. The Post reported that the Trump sons have already signed 17 letters of intent with potential developers for their new chain.

And where did the Trump boys make the contacts that are allowing them to dive so quickly into this new opportunity? On the campaign trail! "I met people along the way who would make awesome partners," Donald Trump Jr. told the Post. Can you imagine?

Would all these potential partners be lining up if Trump had lost? Anything's possible, I suppose. But the market the Trumps are trying to enter is already crowded. And the revelations that emerged during the campaign about how poorly Trump treats those who do business with him wasn't likely to help.

Now that Trump is president, however, there is a whole different calculation. "The potential partners like the idea that by doing a deal with the sons they are enriching the father," said Norm Eisen, the former Obama ethics czar who is now the chairman of the Center for Responsibility and Ethics in Washington. "Because in the end, the sons are running his business."

There is a second calculation. What if you don't want to do business with the president's sons? Will he tweet nasty things about you? Will he try to get back at you? Will he try to hurt your business in some way? No one can discount the possibility.

In addition, every time Donald Jr. and Eric Trump apply to a city for permission to build -- and then for the endless rounds of permits and so on that are required to construct a new hotel -- the government entities will be in a difficult spot. If they say no, they too will face the possibility of presidential revenge. 

QuickTake Q&A: The Emoluments Clause

But if they say yes, they run the risk of helping the president break the law. That's because, since Trump still owns the company, he'd be a beneficiary of their approval and thus they could be complicit in violations of the emoluments clause 1  of the Constitution if foreign governments used the hotels.

Of course Trump is already doing violence to that clause with his new hotel in Washington, where ambassadors are holding expensive receptions and foreign dignitaries are booking expensive rooms. The Associated Press recently called it "the new political capital in the nation's capital." It has become "the place to see, be seen, drink, network -- even live -- for the still-emerging Trump set," the AP added. "It's a rich environment for lobbyists and anybody hoping to rub elbows with Trump-related politicos."

In other words, instead of handing bags of cash to the new president, lobbyists and other favor-seekers are handing credit cards to hotel clerks. But the profits wind up in the same place: Trump's bank account.

Then there's Mar-a-Lago, which is both Trump's Florida home and a golf resort, and where the Trump Organization doubled the initiation fee to $200,000 knowing that people will pay because the president is there most weekends and loves to rub elbows with guests.

In previous cases when people were selling access to the president, "it was associates of the president" who were profiting from it, wrote Timothy P. Carney in The Washington Examiner. (Yes, that Republican-friendly Washington Examiner!) "With Mar-a-Lago, it's the president himself profiting from access to him."

Other presidents have been able put their holdings in a blind trust to avoid conflicts. But that won't work for Trump, who owns public real estate holdings, not stocks. Even if he were capable of letting someone outside his family manage his holdings, he would still be in a position to profit -- and everyone would know it.

The only answer, said Eisen, is for Trump to sell his holdings. But we all know that will never happen. So get used to it. Trump may or may not be able to overhaul Obamacare or get a tax bill through Congress. But he sure knows how to run the Trump Federal Enrichment Program. He's proving it every day.

This column does not necessarily reflect the opinion of the editorial board or Bloomberg LP and its owners.

  1. "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."

To contact the author of this story:
Joe Nocera at jnocera3@bloomberg.net

To contact the editor responsible for this story:
Jonathan Landman at jlandman4@bloomberg.net

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