White House

Scandal Fatigue and the Trump Ethical Swamp

The president and his family repeatedly conflate policy and profit. Please don't just ask, "What else is new?"

Big deal.

Photographer: Daniel Acker/Bloomberg

Thanks to some fine work by two Bloomberg news reporters, David Kocieniewski and Caleb Melby, we now know that a major Chinese financial services firm may invest $4 billion in a Manhattan skyscraper owned by the family of President Donald Trump’s son-in-law, Jared Kushner. And that Kushner's family stands to take home about $500 million for itself from the transaction.

All sorts of goodies are sprinkled around this potential deal, which is being circulated to attract additional investment. It would be the biggest investment -- ever -- in a single Manhattan building. Some of the Kushner family's debt on the property would get erased for about a fifth of its value. The Kushners would become equity partners with the Chinese firm, Anbang Insurance Group.

Best of all for the Kushners, the deal would rescue the family company from the consequences of overpaying for the building, 666 Fifth Avenue, which it purchased in 2007 for $1.8 billion. It would also buy out another prominent Trump political backer who invested in the building, Steve Roth of Vornado Realty, for 10 times his original investment.

“It would make business partners of Kushner Cos. and Anbang, whose murky links to the Chinese power structure have raised national security concerns over its U.S. investments,” Kocieniewski and Melby wrote.

Kushner Family to Get $400 Million From Tower Sale

That observation is made all the more pungent by the fact that Trump and China’s president, Xi Jinping, have been discussing the terms of a possible diplomatic summit meeting that may take place as early as next month.

Jared Kushner, whom the Kushner family claims had already sold his stake in 666 Fifth Avenue to them (though it’s not clear when), is a senior White House adviser whose purview has included foreign policy. The New York Times reported in January that Kushner spearheaded the talks with Anbang about an investment in his family’s business, that he met over dinner with Anbang’s chairman, Wu Xiaohui, to discuss the transaction about a week after his father-in-law was elected president, and that the talks had begun last July or so when Trump had already locked up the Republican nomination.

"A classic way you influence people is by financially helping their family," one public interest advocate told the Bloomberg reporters about the Anbang deal.

Well, doh! Of course that’s how it works.

And therein lies a problem: If we’ve learned anything about Trump in the chaotic seven weeks since he assumed the presidency, it’s that his entire clan will test our 1  capacity for surprise, distaste and even outrage when it comes to financial conflicts of interest.

After all, the Trump presidency is still in its infancy and the sheer volume of flagrant conflicts that have already emerged may induce "scandal fatigue" in anyone who values – in the most nonpartisan and most non-ideological of ways -- ethics and good government. That’s even truer when good-government advocates are confronted with a Republican-controlled Congress that is largely content to sit on its hands when the Trump family’s financial conflicts come spilling into view.

The Trumps have responded to these moments by reminding everyone that we should just trust them, even when they thumb their noses at White House traditions meant to ensure that the Oval Office doesn’t become a place where public policy and private deal-making mingle.

Kushner’s Anbang deal comes on the heels of news that Trump’s company recently received dozens of trademark approvals from the Chinese government after unsuccessfully lobbying for the same trademarks for about a decade.

As I noted last month, it’s unclear whether the trademarks were granted in exchange for Trump's public recognition of China’s sovereignty over Taiwan. But given that Trump hasn’t truly parted ways with the Trump Organization, still hasn’t released his tax returns and still hasn’t fully disclosed his assets, there will always be a presumption that he’s getting preferential treatment from foreign governments courting his favor.

My Bloomberg View colleague Adam Minter thinks the Chinese government didn’t grant the trademarks to try to bribe Trump but rather to protect him and itself from fallout associated with brand-poaching of the Trump name in China -- something Chinese officials probably weren’t concerned about until he became president. 

But regardless of what the Chinese government’s perspective is, the granting of the trademarks amounted to a plus for Trump's business. In the eyes of some legal experts, the simple fact that Trump accepted the trademarks is a violation of the Constitution’s mandate against presidents accepting payments of any kind from foreign governments. 2

“If the trademark has value in contributing to Trump’s wealth, the amount of the forbidden emolument might not be ascertainable before the transaction closes, but the constitutional prohibition doesn’t turn on how large the emolument turns out to be,” Laurence Tribe, a constitutional law professor at Harvard Law School, wrote in an email. “It’s the principle of the thing, not the size of the principal, that counts.”

Meanwhile, Xi is expected to be feted at Mar-a-Lago, Trump's Florida golf club, if he travels to the U.S. for a summit meeting, a treat Japan’s prime minister, Shinzo Abe, also got to enjoy (even when Trump seemed to be using Abe as a marketing tool for resort memberships).

Amid all of this, the Trumps hardly bother to conceal their conflation of policymaking and profit-seeking -- thus far without suffering any political or legal consequences.

Maybe they're relying on public scandal fatigue. This is the Trump White House, Trump and his children seem to be saying. There’s nothing to see here. Just move along.

So let’s not, shall we?

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

  1. I realize that “our” may just mean “me” or “anybody who is older than seven” or “half the country’s voters” or “Western civilization,“ depending on your point of view. So I’m using “our” as inexact shorthand.

  2. "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." Article I, Section 9, Clause 8

To contact the author of this story:
Timothy L. O'Brien at tobrien46@bloomberg.net

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

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