'Quite an entanglement': Donald Trump and his potential conflicts of interest - Action News
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'Quite an entanglement': Donald Trump and his potential conflicts of interest

From a lease arrangement in Washington to dealings with countries "unfriendly" to the U.S., business mogul Donald Trump brings a slew of potential conflict of interest concerns real or perceived to the Oval Office.

It's essential to put business holdings 'at arm's length,' experts say

Figuring out how to eliminate conflicts of interest for an incoming U.S. president is a normal part of the transfer of power. But president-elect Donald Trump presents some unusual challenges. (Manuel Balce Ceneta/Associated Press)

Figuring out how to eliminateconflicts of interest for an incoming U.S. president is a normal part of the transfer of power.

Butpresident-elect Donald Trump presents some unusual challenges.

"We've never had quite an entanglement at this level," says Kenneth Gross, a Washington-based political law expert who hascounselledmany high-profile politicians.

Trump arrives in the Oval Office with vast real estate holdings bearing his name all over the world, posing an unprecedented challenge of separating his personal interests from his political duties.

The Trump Organization's corporate website lists internationalreal estate holdings and propertiesin Canada, Panama, Uruguay, India, the Philippines, Turkey andBrazil, as well as golf resorts inScotland,Ireland and the United Arab Emirates.

Foreign dealings

His foreign business interestspose a significantconflictof interest concern, according to Gross, because international dealings come with agenuine legal risk.

"[Trump]has to be sure that he's not getting any benefit from those entities [as president] because that's actually a violation of the U.S. Constitution," Grosssaid.

Paul Rothstein, a law professor at Georgetown University in Washington, says that when a politician has global business enterprises that require governmental permissions, "it's very important to put those businesses at arm's length."

One of Trump's recent business projects is the visually daring Trump International Hotel in Baku, Azerbaijan. (Aida Sultanova/Associated Press)

One area of concern is the fact that Trump owes an estimated $364 million US to German financial giant Deutsche Bank, which is currently in settlement negotiations with the U.S. Department of Justice as a result of a mortgage securities investigation.

Gross points out that Trump also has business interests in countries considered to be "unfriendly" to the U.S.In August, aNew York Times investigation revealed that his real estate companies owe hundreds of millions of dollars in debt, including to the Bank of China.

Trump was also buildinga hotel inBaku, Azerbaijan, but references to that property no longer appear on hiscorporate website. According to The Associated Press, the localpartner in the project, AnarMammadov, is the son of an Azerbaijani minister suspected byU.S. diplomats ofcorruption and money laundering for Iran's military.

Trump's interests in Turkey,including TrumpTowers Istanbul, could also beproblematic. Tensions with the U.S. ally have risen since a failed coup attempt in July led to a crackdown on the country's military and mass arrests.

New Trump hotel in Washington

In October, the president-electofficially opened the Trump International Hotel in Washington, D.C. The hotel is a redevelopment of the city's historic Old Post Office. Trump's corporation leases the property from the U.S. federal government.

Gross and Rothstein acknowledge issues could arise in the ongoing administration of the lease arrangement.
One of several potential conflicts of interest for Trump is the building that currently houses the Trump International Hotel in Washington, D.C., which is a historic property leased from the U.S. government. (Beth J. Harpaz/Associated Press)

"When there's a landlord-tenant relationship, there are often disputes between them and then they have to reach some kind of mutual arrangement," says Rothstein.

Rightly or wrongly, the public could suspect Trump of using his presidential leverage to influence the negotiations involving this property. It's essential that the administration ensure there is no pressure to show favouritism to the hotel compared to other tenants leasing property from the government, Gross says.

Settingcorporatetax rates

Some believe there is an inherentconflict of interest when a business mogul becomes president, because of his or her influence over corporate tax rates.

Gross says that line of reasoning is "probably going too far."

He says that if the Trumpadministration makes a decisionthat affects businesses broadly, "it would beunfair to say, 'Well, the real motivation for reducing taxes was to benefit his corporate enterprise or him personally.'"

Especially, he says, if the policies are consistent with what Trump promised during the presidential campaign.

Being a successful businessperson should not preclude someone from seeking the presidency, says Rothstein. He notes that the people who voted Trump into office knew hisbackground.

The best way for Trump to guard against potential conflicts of interest is to put his financial holdings into a "blind trust," Rothstein says, in which a trustee takes over the management of Trump'sportfolio and does not consult him about business matters while he is president.

Trump's proposed plan to turnover his business operations to his children is not a blind trust and "certainly not a perfect solution," Rothsteinsays.

"But it's better than nothing."

Other conflicts

Pinpointing all of Trump'spotential conflicts of interest is a difficult task, says Gross, because "we don't know" the full extent of hispersonal and business dealings.

Georgetown University law professor Paul Rothstein says it's vital for a U.S. president to prevent perceptions of conflict of interest to ensure the public doesn't feel the government is 'being run for private advantage.' (Georgetown University Law Centre)

Trump has not made his tax returns public, something presidential candidates normally do.

That means the public may not know about all of Trump's financial assets andliabilities.

But the fact is, many of Trump's potential conflicts of interest are likely more of a public perception problem than actual legal violations, because U.S.presidents and vice-presidents are exempt from many of the conflict of interest regulations governing other members of the executive office and Congress.

"The president and vice-president are quite free of any specific laws that might prevent or regulate conflicts of interest," says Rothstein.

The thinking, he says, stems from the notion that if voters democratically elect someone to be president, they must believe he or she can be trusted to handle any potential conflicts of interest.

It also assumes that the U.S. electorate wants people "of accomplishment" to run for president, Rothstein said, and that those people shouldn't be discouraged because they're concerned about their financial interests.

"These laws go back literally to the beginning, where the president's duties were considered to be so broad that they couldn't be regulated," Gross says.

"I mean, we have presidents who were advising on slavery in the 1800s who owned slaves."

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With files from Jeff Horwitz, The Associated Press