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Banking Vague Trump vow to exit company leaves questions unanswered

Vague Trump vow to exit company leaves questions unanswered

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Donald Trump’s announcement Wednesday that he will leave his global business empire to focus on the presidency arrived like many of his assertions — as a series of self-promoting tweets with exclamation marks and no details. His promise to discuss the plan at a news conference with his children on Dec. 15 did little to tamp down concern that it may not be enough.

“If he just turns the management of his business over to his children, the conflicts remain,” said Richard Painter, who was President George W. Bush’s chief ethics lawyer. “He has to make sure no one in government talks about Trump Organization business.”

The concern, expressed by both Democrats and Republicans, that by putting his children in charge Trump hardly gets past the conflict-of-interest issues has been repeatedly aired since he won the election. His businesses are spread across more than a dozen countries and are worth some $3 billion.

Trump has sent mixed signals on the issue. He repeats frequently, and did so again on Wednesday, that he has no legal obligation to exit from his enterprise to enter the White House, which is broadly true. He nonetheless is taking the step to avoid the appearance of conflict, he said. As he put it, “While I am not mandated to do this under the law, I feel it is visually important, as President, to in no way have a conflict of interest with my various businesses.”

He went on to say that “legal documents are being crafted which take me completely out of business operations.”

Experts say they don’t know precisely what the tweets mean.

“There’s nothing in them that suggests he’s going to remove any of his conflicts,” said Norman Ornstein, a political scientist at the American Enterprise Institute. “And now we have two more weeks where presumably everything is kind of stuck in place, and no sense of what it means to remove himself from his business.”

Ornstein also looked askance at Trump’s appointment of Don McGahn as White House counsel. McGahn was ethics counsel to Tom Delay. The former Republican House majority leader faced charges of conspiracy to violate election law for distributing money donated to his political action committee to the campaigns of Texas Republicans. He was convicted, then acquitted on appeal.

“With Tom Delay, every single set of actions he took was: how can I get as close to the line without crossing it, or cross the line without anyone noticing,” Ornstein said. “I have very little confidence that you have a lawyer here who will do anything except help him avoid any consequences.”

A telephone message left for McGahn wasn’t immediately answered.

Some Republican activists have expressed similar alarm. Peggy Noonan, who was a speechwriter for President Ronald Reagan and writes a column for the Wall Street Journal, wrote last week that Trump seemed not to understand the gravity of the conflict-of-interest issue.

“For half a century Donald Trump has devoted all his professional energies to money, profit, the deal,” she wrote. “That is how he thinks: It’s his deepest neural pathway.” She added, “And now, for the first time in his life, money, profit, the deal is not his job. He will be president of the United States. He can’t help the family business as president. He can’t help his children make a living as president. He has to be losing money as president and putting personal profit motives behind him. Which means putting the ways and habits of a lifetime behind him.”

Past presidents have routinely placed their liquid assets, including stocks and bonds, into blind trusts. Trump, who also owns stocks and bonds independent of his other businesses, hasn’t announced plans to do the same.

Noonan said Trump should liquidate his stake in his company and put the proceeds in a true blind trust, a sacrifice to be sure, but one he should make for the country.

Painter, the ethicist, made a similar point.

“You have to erect a pretty big firewall,” he said. “You could have a situation where people talk about Trump business and government business side by side, and that could be interpreted as a solicitation of a bribe on behalf of the president.”

Trump’s lieutenants say he envisions a complete separation between the presidency and his family business. Anthony Scaramucci, the SkyBridge Capital founder who is on the executive committee of the transition, told Bloomberg Television on Wednesday that the Trump team is “working super hard on this.”

“You’re going to see Mr. Trump completely removed from the Trump Organization,” he said. “He’s leaving that to his children. There will be a very thick wall between the two.”

The normally buttoned-down U.S. Office of Governmental Ethics, which is charged with preventing conflicts of interest in the executive branch, on Wednesday unleashed a torrent of tweets lauding Trump on the apparent assumption that he would sell his business.

“We told your counsel we’d sing your praises if you divested, we meant it,” read one of them.

A spokesman said the agency had been”excited” by Trump’s cryptic promises.

“Divestiture resolves conflicts of interest in a way that transferring control does not,” Seth Jaffe said in an e-mail. “We don’t know the details of their plan, but we are willing and eager to help them with it.”

If he did unload his assets, Trump could postpone tax bills. Federal law allows executive-branch officials who sell to avoid conflicts of interest to postpone capital gains taxes — but only if they reinvest proceeds in Treasury bonds or government-approved mutual funds within 60 days. The tax would be due when or if Trump sold any of the replacement assets.

There are other ways the president-elect could wall himself off, said Norm Eisen, a visiting fellow at the Brookings Institution who previously served as the Obama administration’s ethics czar. Trump could appoint an independent chief executive officer, institute a list of Trump Organization executives he won’t talk to, and remove his children from leadership roles there. “No matter how complicated it may be to unwind his involvement in these assets, it is going to be infinitely more complicated for him and the U.S. and the world if he doesn’t,” Eisen says.

Trump’s international conflicts largely stem from licensing deals with international developers. The structures of these arrangements, under which he lends his name to owner-developers on the premise that it will help them sell condos and hotel rooms at higher prices, aren’t public.

That’s why some say a total separation is going to be difficult. Many of his assets are in real estate, rather than in simple stocks or bonds, while others depend on his involvement for their value.

“Trump the brand is very closely intertwined with Trump the man,” said Harold Vogel of New York, author of “Entertainment Industry Economics: A Guide for Financial Analysis.”

— with assistance from Lynnley Browning


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