President Trump’s Post-Mueller Corruption Problem

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Mr.

Trump put himself in a very bad position when he didn't divest himself of conflicts when he took over as President of the United States.

But he has decided to reject the advice of the Office of Government Ethics to divest from all of his businesses.

President Trump's businesses violate the Constitution's anti-corruption provisions.

I could actually run my business and run government at the same time.

These papers are just some of the many documents that I've signed turning over complete and total control to my son.

I have been no conflict of interest provision as president.

When elected, most presidents either sell their assets or put them in a blind trust.

Isolating a president's financial interests from his time in office has been a norm for the past four decades, from Jimmy Carter handing his peanut farm to a trustee to Barack Obama liquidating his assets.

We already know that Donald Trump is not like most presidents, but on this count in particular, he stands alone.

Trump has said he won't divest from his businesses, even though his real estate deals around the world open him up to countless opportunities for conflicts of interest.

Trump is certainly shattering a presidential norm, but what he's doing may also be unconstitutional.

When businesses like the Trump International Hotel in D.C.

earn him money from foreign governments, it may violate what is called the the Emoluments Clause of the Constitution.

And while the clause has been in the Constitution for over two centuries, it has never been tested by the courts.

Until now, until this week.

What is the Emoluments Clause?

And could it actually threaten the Trump presidency?

This is Radio Atlantic.

Joining me to discuss all this is lawyer Joshua Matz, who is an adjunct professor at Georgetown Law.

He is the author of a book on impeachment with Harvard's Lawrence tribe.

He is the co-author of the wonderful and informative 2017 Atlantic piece, Why Trump Will Violate the Foreign Emoluments Clause.

A bit prescient, perhaps.

And he is a lawyer who has represented the plaintiffs in two major emoluments cases faced by President Trump.

Joshua Matz, great to have you on the podcast.

Thank you for having me.

So before we get to the matter at hand, the present-day struggles around the emoluments clause, I wanted to make time for a little bit of the fascinating history of emoluments and the U.S.

government.

If people don't know, I mean, we talk about the emoluments clause, and I think some people are ready to fall asleep the minute you finish saying the words emoluments clause, but the history of this thing is totally fascinating.

In 1785, Ambassador Ben Franklin leaves France with an extravagant parting gift from King Louis XVI, a tiny portrait of the king set in 408 diamonds.

I have one of those of myself, just full disclosure.

The Constitution had not been written at that point, but the Articles of Confederation had a strict rule against officials accepting gifts or second incomes from foreign governments.

Ben Franklin was a careful man, and he offered the portrait to Congress, which generously let him keep it.

And when when the Constitutional Convention occurred a few years later, the rule was debated, and Franklin's portrait gift was specifically discussed.

They decided, that Congress, to include the Emoluments Clause.

Joshua, it's a sort of like illustrious beginning to a clause we haven't talked about with any sort of frequency or regularity until now.

It really is.

I mean, the framers displayed extraordinary foresight and wisdom here.

Although I have to say, at least part of the credit belongs to the Dutch.

This rule actually originated in 1651, back in Europe, where the Dutch realized that the gift-giving customs at the heart of diplomacy created so many opportunities for foreign powers to try to corrupt their ministers that they prevented foreign ministers from accepting any presence directly or indirectly in any manner or way whatever.

And the Americans were inspired by that example.

They came to appreciate that if the young nation was to flourish, its officials could not be subject to corruption by foreign powers, many of whom would be all too happy to hobble the young nation by enticing its officials away from their loyalty to the new republic.

And it was in that context that they originally included a provision like this in the Articles of Confederation, and that ultimately they included it in the Constitution itself.

Now, originally, at the Constitutional Convention, the emoluments provision of the Articles of Confederation was removed, although we have no idea why that happened.

And then late in the Convention, Charles Pinckney got up.

And according to the notes that we have, he urged the necessity of preserving foreign ministers and other officers of the United States independent of external influence.

And that's where I really think we see the example of the Benjamin Franklin snuffbox, where he had those, as you say, 408 diamonds of a beautiful color, as they are often described.

That's where we see that Franklin experience come to life in the Constitution as it was ultimately ratified.

The diamonds are an ambassador's best friend.

Yes, I should have been clear.

That portrait was on a snuff box.

It sounds like the sort of emoluments clause slept, basically, until

lions

brought it to the foreground in 1840 in the presidency of Martin Van Buren, which is when two foreign gifts led to a crisis over the clause.

Van Buren's consul in Tangier received two lions as a gift from the Sultan of Tangier, and separately the Sultan of Oman sent a shipload of gifts into New York Harbor.

Congress was at odds about what to do.

Eventually they authorized Van Buren to accept and sell the gifts from both sultans.

I'm not sure what happened to the shipload of gifts, but the lions who had basically been cooped up in a room in the consulate were finally shipped from Morocco to Pennsylvania where they were auctioned off in Philadelphia's Navy Yard in August 1840 for $375, the low, low price for two lions, $375.

That seems like a deal, although I'm sure inflation factors into all of this.

Joshua,

you know, and it seems like ever since Van Buren and the Lions,

Presidents have just sort of fallen in line as far as the emoluments clause goes.

I mean, LBJ, every president basically in contemporary, modern American presidential history has sold his assets or put them into a blind trust.

Jimmy Carter sold his peanut farm in a warehouse.

Barack Obama wasn't sure whether he could accept the Nobel Prize because he thought that might be a violation of the Emoluments Clause.

They take this thing incredibly seriously.

They do.

I mean, the story, if you want to push it, even goes back a little bit further in time.

In 1830, President Andrew Jackson transmitted to Congress a commemorative gold medal that Columbia's President Simone Bolivar had presented to him.

And Congress there too directed that the medal must be deposited in the the Department of State.

And there's this kind of long line of authority in the 19th century.

It becomes a bit of a menagerie where President John Tyler was offered horses.

President Abraham Lincoln was offered decorative elephant tusks.

I mean, fortunately for everybody, nobody seems to be showing up at the Trump Hotel DC with lions or tigers or bears.

Yet.

At least not yet.

If someone thought that

doing so would persuade President Trump to grant them a favor, you can rest assured that there'd be lions for blocks.

But there really is this long history of presidents complying with the clause because they understand

that the clauses speak to a very important principle, which is that no official of the United States government who occupies an office of profit or trust, and that describes nobody better than the president, should be engaged in interactions with foreign powers rife with at least the appearance of corruption and rife with the kinds of interactions that the framers understood create the conditions for dual loyalty and blurred patriotism.

You know,

it's important to get a little bit of the historical perspective because

the concern was initially snuff boxes, then it's exotic pets.

Then it's, you know, we get into the realm of actual presidential business and how the sort of business entanglements could compromise sovereignty.

When you look at this president in particular and his vast, vast business empire, it really does highlight just how questionable the president's current position is.

And I want to kind of go through with you some of the specific foreign entanglements the president has that may perhaps put him in a difficult position as it concerns the emolument clause, which for the record forbids any person holding any office of profit or trust under the United States from accepting any present emolument, office, or title of any kind whatever from any king, prince, or foreign state.

So, So with that in mind, let's talk a little bit about President Trump and China.

The Chinese state bank is renting Trump Tower office space.

The Industrial and Commercial Bank of China, whose majority stakeholder is a Chinese government, rents office space in the Trump Tower.

Trump's real estate holdings, in many cases, are backed up by extraordinary Chinese loans.

Trump has a huge stake in a real estate holding that is underwritten with a loan from the Chinese government.

Those things alone, which are not even part of the current lawsuits that we'll be talking about in a second.

I mean, how do you see those foreign entanglements as it concerns something like emoluments?

Well, certainly as a matter of sound statecraft and of the kind of conduct we would expect from the President of the United States, it's deeply disturbing to think that they would be enmeshed in these kinds of extraordinarily lucrative entanglements with an occasionally hostile foreign power, especially under circumstances where they are indebted to them or where the president may rely

in some ways and for some of his investments on that foreign power.

It can reshape the relationship between them in ways that directs the president's attention away solely from the interests of the United States and instead at least partly toward his own very substantial entanglement with them in matters of private business.

There's also Saudi Arabia, and we've been talking about this White House in Saudi Arabia in the wake of the Jamal Khashoggi murder and exactly what the relationship is, and whether or not there's not some sort of deeper connection, potential quid pro quo, something going on between the Saudis and the Trump White House.

Because with all the strains, with all the pressures, the president has remained immovable in his support for the Saudi regime.

Trump has tens of millions of dollars riding on building projects in Saudi Arabia.

There is direct money from the Saudis in Trump properties.

Trump said at a rally in 2015 when he was then a candidate.

He talked about the Saudis spending $40 and $50 million

buying apartments from him.

And then in August of last year, it was revealed that the general manager of the Trump International Hotel announced that after two straight years of decline, revenue at the hotel grew 13% in the first quarter of 2018.

And according to information obtained by the Washington Post, that increase in revenue was due to a last-minute visit to New York by the Crown Prince of Saudi Arabia.

There is the Trump properties enjoy strong support from the Saudis.

When you look at those relationships, when you look at the Chinese relationships, why was this not dealt with at the outset of the Trump administration, Joshua?

That would have been the responsible thing to do.

I mean, the problem here, as your articulation of the facts so brilliantly captures, is that there is certainly an appearance that the president may be more favorably inclined toward certain foreign powers as a result of their decision to funnel large amounts of money to him through his private businesses.

You know, are there quid pro quos lurking underneath that?

We don't know.

We genuinely don't.

And the theory of the emoluments clauses is that we shouldn't have to guess about it, that the foreign emoluments clause prevents the president from putting himself in a position where people have to wonder whether because he's receiving things of value from foreign countries, he is conducting himself in the office at all differently.

And as a result of that, like we've already discussed, the vast majority of presidents, really an unbroken line going back to the framing period,

separated themselves from precisely these kinds of interests from the outset so that there wouldn't be questions later.

And when President Barack Obama, for example, was awarded the Nobel Prize during his time in office, the first thing he did was go to the Department of Justice Office of Legal Counsel and ask if he could keep it.

And that is exactly what President Trump hasn't done.

He hasn't taken the steps that every other president has and that any prudent president would take to ensure that he is complying with the clauses and preventing an impression, let alone perhaps the reality, that he can be influenced in any way by his private financial dealings with foreign powers.

I think that's a really important point that you're making, that this is about the impression of conflict, not necessarily evidence of corruption, right?

Just the you want to believe, America needs to believe that its president is free from the influence of foreign governments.

Therefore, presidents divest themselves of anything that could smack of foreign ties.

And yet this president took a decidedly different tack when he was sworn into office.

And his lawyers basically presented a plan whereby the president would not be as in control of his hotels and related properties, right?

They basically said he's going to tip his hat to the emoluments clause, but he is not going to go full monty.

He is not going to get out of the businesses or sell the businesses.

He allowed his sons to keep control of his business interests, his hotels.

And one of the things when the president was sworn into office is his lawyers tipped their hats effectively to the emoluments clause, but they did not go full monte.

They did not fully divest.

They didn't sell the businesses.

The Trump sons retained management responsibilities for a number of these businesses.

And they came up with a creative solution to dealing with the hotel properties and foreign guests.

What was that solution, Joshua, and how complicated is it?

Well, so you call that a creative solution.

I think of that as disingenuous lawyering of the first caliber.

What the president's lawyers basically came up with was a scheme in which, as to all of his properties and all of his holdings other than the hotels, those can remain emoluments, vortexes, to sort of their heart's content.

And money and favors and advantages and special treatment can flood in through them without limit.

And then with respect to the hotels, they said, we're still going to allow foreign government officials to stay here.

We're not even going to check especially hard to figure out who is a foreign government official conferring money on us through these properties.

But what we're going to do is take a stab at figuring out which of the guests at the hotels might be those people.

And we'll take the profits that we realize from them and deposit it with the U.S.

Treasury.

That, I have to say, like, at least it would be a stab in the vague direction of complying with the emoluments clause if it didn't turn out that when they were investigated and when more information about this came out, they're not even really trying to figure out who is a foreign government official.

They therefore don't really know with any degree of certainty which guests conferring profit on them are doing so at the behest of a foreign power.

And there are any number of reasons to be doubtful as an economic matter of the way in which they've said about this entire project.

And so the result is that Trump's lawyers allowed him to go on TV with a giant stack of Manila folders behind him, supposedly creating the illusion that there was a lot of paperwork and thought that went into this.

And he says, I'm going to, you know, I'm not actually going to be running it.

They're going to put some of this money aside to the U.S.

Treasury.

The problem is solved.

And, you know, that is just, you know, to put a fine turn on it, that is malarkey.

That is pure applesauce.

And it's the worst kind of bad faith compliance with the emoluments clause.

It was a step taken solely for the purpose of generating the illusion that some part of the problem had been solved while not doing anything of substance to address the underlying constitutional violation.

Well, yeah, we should note that the Trump businesses have said that they are respecting their guests' privacy and they're not trying to pry into who might be footing the bills for stays at the Trump Hotel.

So if you talk about like actually really trying to make sure that your hotel properties are free from sort of like

they're not becoming

pinatas, basically, for foreign money,

there doesn't seem to be a real drive to be in compliance with all of that.

The bottom line here is that if the president actually wanted to comply with the emoluments clause, it wouldn't be so terribly difficult to do so.

He could divest himself of his ownership interest in the company.

They could refuse or suspend to do business with foreign powers during the pendency of his time there.

Essentially, he could do the things that every other government official in the executive branch is required to do as a matter of both adherence to the Constitution and adherence to the regulations and ethics rules that govern them.

And he can do the things that every president throughout history has always done.

And the idea that he would retain an ownership stake in the company, temporarily allow his kids to manage it, and then come back and take ownership of it and claim that he doesn't feel any continuing financial connection to it really is just a jaw-dropping assertion.

And the bottom line is that, you know, if there's any doubt about whether President Trump cares about his private companies and cares enough about them that conferring favors on them could potentially influence him, it's the fact that he hasn't done those things.

You think by virtue of the fact that he hasn't divested, that's all the evidence that you need that he's truly invested.

That's exactly right.

right.

Somebody who was not going to be influenced by this, who didn't care, would happily, in exchange for the privilege of being, oh, you know, the president of the United States, be willing to give up their financial stake in a business for the sake of complying with the Constitution and avoiding the foreign affairs and national security complications that can arise from his personal entanglement with all of these diverse financial holdings around the world.

Yeah, well, we have, I mean, and we do, in fairness, have a lot of reporting that says, you know, Trump never expected to win the presidency and, in fact, looked at his bid, his candidacy, as a business maneuver.

Really, this whole thing has been to leverage his properties around the world and to gain a foothold in various foreign markets.

So is it surprising that he's not giving up his businesses for the presidency when really, potentially, the businesses were the whole point of the presidency to begin with?

We're going to take a quick break, but when we come back, we will have much more with Joshua Matts Matts and much more on the Emoluments Clause.

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And we are back with professor, lawyer, scholar, Joshua Matz talking about the emoluments clause and the question of corruption in the American presidency.

I'm focused on the Trump Hotel in Washington because that seems to be, it is the diamond-covered snuffbox of 2019, right?

This is the thing we are turning over and debating.

So much of the sort of ideas about Trump and foreign entanglements, the questions around the Emoluments Clause, they find their locus of action in the Trump Hotel, which has become

a place where Trump supporters, foreign governments come and meet in the lobby.

The Kuwaiti embassy held its National Day celebration there three years in a row.

Lobbyists representing the Saudi government reserve blocks of rooms throughout December of 2016.

This is the thing that we talk about most because it's come to be representative of the debate over President Trump and emoluments.

That's exactly right.

And, you know, to be honest, I may not sign on to some of the broader claims that we were just talking about, that, you know, he's only in the presidency

to boost his businesses.

I mean, it does seem clear he didn't know he was going to win the presidency and that his run for president was a business venture.

But I'm willing to give him the benefit of the doubt.

He's the president.

He wants to run the country.

He was elected.

He took the oath of office.

The fact is, having now taken the oath of office, he has an obligation to comply with the Constitution.

And that might mean giving up some of the things that were very dear to him before he came into that position.

The Trump Hotel is especially unnerving when you think about the role it's come to play.

I mean, there are times where if one were to go sit in the lobby there, it would feel a bit more like a kleptocracy or a banana republic than a first world liberal democracy, where you have the president's private property becoming the central focus of intense lobbying efforts on the part of foreign powers, state officials, and prominent administration officials.

The idea that all of that power and influence is swirling around a context that the president literally owns and profits from should be disturbing to anybody.

That would be true whether or not the emoluments clause was in the Constitution.

In a sense, it just makes it worse that not only is what he's doing sketchy, it's also illegal.

So that brings us to the emoluments lawsuit that was heard this week in the Fourth Circuit Court of Appeals.

You are representing the plaintiff, so I know you are limited in the sort of scope of what you can talk about.

But can you just tell me what the suit is for people who are unfamiliar?

Absolutely.

So right now, there are three emoluments clause lawsuits pending against the president.

One One of them was brought in the southern district of New York, which is the federal court in Manhattan.

That was brought originally by Crewe.

Let me just interrupt you.

Crew, for those who don't know, is Citizens for Responsibility and Ethics in Washington, which is a government watchdog group.

Go ahead.

Absolutely.

And so in the New York case, it was brought originally by Crewe, and then they were joined by restaurants and hotels, which argue that they serve the same clientele as the president's properties, and they can offer goods and services that are just as great.

But what they can't offer is the opportunity to privately enrich the president.

And therefore, they're competitively disadvantaged and are suffering injury as a result of the president's violations.

That's the case in New York.

There's then a separate case in Washington, D.C.

that was brought by originally 196 members of Congress.

I believe there may have since been a few more added to it.

They allege that the foreign emoluments clause allows them, in fact, requires them to consider and then give or deny consent to any emoluments that are conferred on the president.

And that President Trump, by refusing to even put his things up for a vote, by refusing to go to them and asking, as so many other presidents did, can I keep it, has offended their prerogatives as legislators and therefore injured them.

And then there's the third case, the one that was argued this week, that was brought by the state of Maryland and by the District of Columbia.

They allege, first, that like the plaintiffs in New York, they own businesses that are in direct competition with Trump's properties and that they're suffering injury as a result of Trump having skewed the competitive landscape.

They also allege that as sovereigns with quasi-sovereign interests and sovereign interests of their own, including an obligation to act for the good of their citizens who may themselves also be suffering injury, that they have the ability and, in fact, the obligation to go and to sue the president to ensure that he comes into compliance with the clause, thereby redressing the injuries that they're suffering.

So that is where you are engaged, the lawsuit that was heard at the Fourth Circuit Court of Appeals this week, there is a district court judge in Maryland who allowed initially the suit to proceed.

His name is Judge Peter Massidi.

He's limited the case to allegations that Trump is profiting from foreign and state government guests who patronize the Trump International Hotel, but he has allowed the case to proceed to the evidence-gathering stage.

The Justice Department, representing President Trump, effectively is not happy about that, in part because that's a lot of information.

Basically, after Judge Massetti allowed the discovery process to move forward, the attorneys general, the plaintiffs in the case, sent subpoenas to the Trump organization,

the president's privately owned real estate company, and other corporate entities of his.

Those subpoenas

could potentially reveal quite a bit of information.

Is that fair to say, Joshua?

Judge Massetti ordered very reasonable and very limited discovery here.

The discovery was not going to be served on Trump personally.

It wasn't going to be served on the office of the White House.

This was not discovery that was aimed at or that would interfere with the operation of the executive branch or the conduct of Trump in running the country or in the White House generally.

Right.

This is focused on his business interests.

That's exactly right.

The discovery here was directed principally to the Trump organization and to the president's business interests, as well as to a few other government agencies to understand sort of whether they were allowing government employees to go to and to spend money at Trump properties.

But the discovery was reasonable, it was limited, it was cautious, it was designed to respect the boundaries that the Supreme Court and other courts have identified.

And I think it's telling that notwithstanding the pains to which the plaintiffs went to construct careful discovery and notwithstanding the fact that Judge Massetti allowed some of that discovery to begin and took a careful look at it, the president is so convinced that no one can hold him accountable for violating the emoluments clause that he had to rush to the court of appeals in this truly extraordinary posture, seeking what's called a writ of mandate, in which he not only asked the court of appeals to stop discovery or to narrow discovery, but asked the court of appeals to dismiss the entire case outright.

This is not how federal court litigation works, and I think it's further evidence that the president believes that the rules simply don't apply to him.

From all accounts, the three-judge appeals panel that heard the case this week sounded fairly critical of the case against the president, or at least their line of questioning was fairly sharp.

I know that we have a road ahead of us, but do you think this thing is going to end up at the Supreme Court, Joshua?

Other legal eagles seem to think that it's inevitable.

You know, it's entirely possible.

You know, we appreciate the Court of Appeals panel giving our case full and fair consideration.

And of course, if we disagree with their ruling, we can ask the full Court of Appeals for the Fourth Circuit to hear the case sitting sort of together.

Or of course, there are other options that may potentially include Supreme Court review.

You know, the bottom line is, could this end up at the Supreme Court?

It could, but one would hope that the President might come to his senses.

Maybe this is hoping against all reason.

Hope that the President might come to his senses and realize that instead of fighting tooth and nail for a sort of singular exception to a requirement that every other President has seen fit to adhere to, that the president should instead comply with it and put all of this to rest.

And of course, I should just add one other point, which is separate and apart from the litigation, there is now a Democratic majority in the House of Representatives.

And I think we're likely to see in the near future more aggressive efforts on the part of the House, including the Oversight and Intelligence and Judiciary Committees, to explore the scoping contours of the President's violations of the clause and to start taking more meaningful steps toward accountability.

You know, I want to ask you one last question before we go, which is so much of our attention is focused on the Mueller Report.

But it seems like the legal work is really truly,

in some ways, just beginning.

As you said, there are multiple lawsuits, there are multiple investigations happening elsewhere in the country.

And this is a president who has a complicated,

which may be euphemistic, but a complicated, who has taken a complicated position on some very serious legal matters.

That's absolutely right.

The fact is, the Mueller report, I suspect, like so many things, will be a beginning rather than an end.

Or if it's the end to one story, it's the beginning to another.

In many ways, that's true of so many of these cases that are pending against the president, right?

There's a broader problem here with the rule of law.

And there's a broader problem in that this president and some of the key figures in his administration seem really unconcerned with complying with norms and rules and understandings and legal and constitutional requirements that have for a great, you know, for decades now, helped ensure that power is exercised prudently and responsibly and consistently with the idea that this is a democracy governed by the people and not subject to various kinds of pernicious influence.

That problem will remain regardless of the outcome of the lawsuit.

It's in some ways a problem that may ultimately be addressed in the 2020 presidential election.

And so these lawsuits are meant to address a number of the more extreme problems and a number of the problems that are amenable to resolution in a litigation posture.

And we should hope, and everyone should hope, that the outcome of these cases is that the president is brought into line.

But underneath this all is a deeper issue, and that's one that is not a problem for lawyers, but instead a problem for all of us.

I think a lot of the American public wishes it was just two lions in the Morocco consulate, huh?

Those were the good old days.

Lawyer, professor, author, most importantly, Radio Atlantic podcast guest, Joshua Batts.

Thanks for your time and thoughts.

Great to have you on the program.

Thank you for having me.

That'll do it for this week of Radio Atlantic.

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