ACCEPTING UNCONSTITUTIONAL FOREIGN AND DOMESTIC EMOLUMENTS

The first ground for impeachment hearings arose from the moment that Donald Trump swore the oath of office. Trump had been warned, before his inauguration, that he would need to separate himself from his businesses. But he chose to ignore that advice. And because he profits from business with foreign governments, the federal government, and even state and local governments, he has been violating two different prohibitions of the U.S. Constitution—the Foreign Emoluments Clause and the Domestic Emoluments Clause—since day one.

The framers of the Constitution “were obsessed with corruption,” and for good reason—they had seen it in recent British history, in their study of ancient Greece and Rome, and in their own nascent republic.1 To defend against this ever-present danger, they built bulwarks into the Constitution itself, including the emoluments clauses.

The Foreign Emoluments Clause prohibits emoluments from foreign governments: “[N]o Person holding any Office of Profit or Trust under [the United States], 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.”2 And the Domestic Emoluments Clause prohibits emoluments from the federal, state, and local governments: “The President shall, at stated Times, receive for his Services, a Compensation, which shall neither be encreased nor diminished during the Period for which he shall have been elected, and he shall not receive within that Period any other Emolument from the United States, or any of them.”3

The somewhat old-fashioned word “emoluments” may suggest that this is an arcane or technical topic. But it is not. The Constitution was designed to be understood by ordinary people, and at the time of the founding, the word “emolument” meant nearly any form of profit, income, or financial advantage.4 For practical purposes, when you read the word “emolument,” you can mentally substitute “financial benefit.”5

It is certainly true that most people had never heard of the emoluments prohibitions before the Trump presidency. But that does not mean that these constitutional requirements are obscure or unimportant. To the contrary, they are essential anticorruption provisions designed to safeguard the republic by preventing improper influence or corruption, and the conflicts of interest and improper dependence that arise when a president’s policy considerations and actions are intermingled with his interest in personal financial benefits. The only reason most people had never encountered this issue before is that no previous presidents—even those of great wealth—have trampled over the emoluments prohibitions like Trump does.

Shortly after the election, a Washington Post analysis of Trump’s financial filings found that at least 111 Trump companies do or have done business in eighteen countries and territories around the world.6 Many of the Trump Organization’s extensive business dealings include receipt of payments or other benefits from foreign governments, businesses owned by foreign governments, and other foreign leaders. That creates the appearance that foreign governments can gain favorable treatment from the United States by doing business with the Trump Organization. Similarly, many of Trump’s businesses benefit financially from the federal government that he now heads (as well as from state and local governments), and several result in his receiving income or other benefits from the federal government (beyond his salary), or from state and local governments.

The president’s refusal to disclose his tax returns means that we do not have a complete picture of the sources of his income, and it would be entirely appropriate for congressional impeachment hearings to conduct further fact-finding. But the central point is undisputed: the president’s businesses receive substantial profits and other financial benefits from foreign and domestic governments.

On January 11, 2017, the Trump Organization’s tax law firm announced a plan to transfer management control of the Trump Organization to Trump’s grown sons and a senior executive, without removing Trump’s ownership stake.7 Instead, Trump transferred his ownership stakes in various Trump business entities to “The Donald J. Trump Revocable Trust.” This trust, of which Trump’s son Don Jr. and the Trump Organization’s chief financial officer are trustees, has as its purpose “to hold assets for the ‘exclusive benefit’ of the president,” and uses Trump’s Social Security number as its taxpayer identification number.8 The trust is run not by an independent trustee, but by his own son and longtime chief financial officer. And he can revoke the trust at any time.9 Similarly, on February 3, 2017, the Trump Organization filed paperwork to transfer management of the LLCs and corporations that operate the Trump International Hotel in Washington, D.C., to Trump’s sons, without removing Trump’s ownership stake.10

These arrangements do not diminish Trump’s ability to enrich himself during his presidency with funds from constitutionally prohibited sources, and even to shape U.S. policy to preserve and promote his business assets—an outcome the framers expressly intended to prevent. Trump knows which businesses his trust owns (indeed, most of them say “TRUMP” above the front door) and how his actions as president may affect their income and value.

The list of prohibited emoluments continues to expand. Some of the most egregious examples include the following.11

EMOLUMENTS FROM FOREIGN GOVERNMENTS

Foreign payments at the Trump International Hotel in Washington, D.C.

In September 2016, Trump used the opportunity of a campaign press conference (at which he renounced his previous claim that President Obama was not a natural-born U.S. citizen) to announce the opening of his new hotel in Washington, D.C.12 The hotel is physically located in Washington, D.C.’s historic Old Post Office pavilion, which is owned by the federal government and administered by the General Services Administration; in 2013, Trump won the contract to redevelop the historic building into a hotel with a sixty-year lease.13

Because new hotels typically do not turn a profit at first, the Trump Organization had estimated that Trump’s D.C. hotel would lose $2.1 million in the first four months of 2017. The hotel instead netted $1.97 million in that period.14 What changed?

Shortly after the election, “[a]bout 100 foreign diplomats, from Brazil to Turkey, gathered at the Trump International Hotel [in Washington, D.C.] to sip Trump-branded champagne, dine on sliders and hear a sales pitch about the U.S. president-elect’s newest hotel.”15 The motivation was not hard to discern:

In interviews with a dozen diplomats, many of whom declined to be named because they were not authorized to speak about anything related to the next U.S. president, some said spending money at Trump’s hotel is an easy, friendly gesture to the new president.

“Why wouldn’t I stay at his hotel blocks from the White House, so I can tell the new president, ‘I love your new hotel!’ Isn’t it rude to come to his city and say, ‘I am staying at your competitor?’ ” said one Asian diplomat.16

Indeed, according to one report, at least one foreign embassy was actively pressured to change an existing reservation by the Trump Organization:

The Embassy of Kuwait allegedly cancelled a contract with a Washington, D.C. hotel days after the presidential election, citing political pressure to hold its National Day celebration at the Trump International Hotel instead…[The embassy] abruptly canceled its reservation after members of the Trump Organization pressured the ambassador to hold the event at the hotel owned by the president-elect.17

But Kuwait—whose emissaries would later return to the Trump International Hotel for its National Day celebration in 2018—was not alone.18 Nor is the Trump Organization alone in pumping the hotel for ambassadorial functions. In late October 2017, Mexico’s former ambassador to the United States reported that he had learned from a former U.S. diplomat that the U.S. State Department’s official protocol now emphasizes to world leaders that they should use Trump’s D.C. hotel for official visits.19

This use of both the Trump Organization and (apparently) the State Department to encourage foreign governments to use Trump’s hotel is working. Just a few days after the inauguration, on January 23–26, 2017, a lobbying firm working for, and reimbursed by, the government of Saudi Arabia spent about $270,000 at Trump’s D.C. hotel—including $190,273 on lodging and $78,204 on catering.20 These Saudi government payments came as the kingdom lobbied to modify U.S. law to limit the ability of American families to file lawsuits against Saudi Arabia related to the terrorist attacks of 9/11.21

Other examples include:

In May 2017, the Turkey-U.S. Business Council, reportedly an arm of the Turkish government’s Foreign Economic Relations Board, cosponsored a conference at the hotel that prominently advertised the attendance of Turkish government ministers and members of parliament. Similar events in the past had cost approximately $400,000.22

In September 2017, Malaysia’s prime minister and an entourage of dozens stayed at the hotel and were seen using meeting rooms (including “a white-tablecloth breakfast in the hotel’s Lincoln Library meeting room”) and a lounge area for hotel guests. According to The Washington Post, bookings of this nature “would probably mean hundreds of thousands of dollars in revenue for the Trump Organization.”23

Ambassadors from Russia, the United Arab Emirates, and Turkey have also been seen at Trump’s D.C. hotel, and the Romanian president dined at the hotel.24

In June 2018, the Philippine Embassy hosted its invitation-only Independence Day reception at the hotel.25

What about Trump’s supposed plan to donate the profits from foreign governments to the Treasury? A few days before the inauguration, Trump’s tax law firm announced a plan to “voluntarily donate all profits from foreign government payments made to his hotel to the United States Treasury.”26 But the Foreign Emoluments Clause does not provide an exception for receiving foreign government payments, calculating and deducting operating costs, and then donating the “profits” to the Treasury. That is not how anticorruption law works in any context, even in local laws against pay-to-play for municipal government contractors, and certainly not in the U.S. Constitution.

In any event, the Trump Organization soon watered down its pledge. When the House Committee on Oversight and Government Reform asked for details about this plan, the Trump Organization claimed that it would be “impractical” to “fully and completely identify” all foreign-government customers and that doing so would “impede upon personal privacy and diminish the guest experience of our brand.” 27 Furthermore, the Trump Organization decided that, even for self-identified foreign-government patrons, the company would not calculate actual profits. Apparently, complying with Trump’s pledge “is not practical” and would require “time, resources, and specialists.” Instead, the Trump Organization would just estimate costs.28 Ultimately, in February 2018, the Trump Organization sent the Treasury a check for $151,470, purportedly representing its estimate of profits from 2017 foreign government business at its hotels and similar businesses, but without any explanation or accounting.29

Foreign payments at other Trump properties in the United States

Foreign governments also spend money at Trump’s other U.S. properties. For example, at Trump Tower, Trump’s flagship skyscraper at 725 Fifth Avenue in Manhattan, one of the largest tenants is the Industrial and Commercial Bank of China. This bank—controlled by the Chinese government—leases the entire 20th floor, and its lease will not expire until October 2019, after which it could be renewed.30 (The Industrial and Commercial Bank of China should not be confused with the separate, but also state-controlled, Bank of China, discussed below, which is also a source of foreign emoluments through the Trump Organization.) Given the price of renting that space, “[t]he Trump Organization makes more money from the Chinese bank alone than it could ever expect from hotel visits by members of a foreign government. And the president has made no pledge to hand over that money.”31

Other examples include:

The Kingdom of Saudi Arabia owns the 45th floor of another Trump building in Manhattan: Trump World Tower at 845 United Nations Plaza. The Saudi mission to the United Nations is housed there. The kingdom pays annual building amenity charges that exceeded $85,000 per year in 2001 (the last publicly available figure), and may be considerably higher now.32

The Bank of India, an Indian state-owned entity, leases space in a partly Trump-owned property in San Francisco. This lease will expire in 2019.33

On September 18, 2017, the Trump National Golf Club in northern Virginia hosted the “Turkish Airlines World Golf Cup,” sponsored by the state-owned Turkish Airlines.34

The Trump Organization and the White House have both refused to disclose Trump’s tenants and their payments, so it is impossible to discern the extent of foreign government patronage of Trump’s properties.35 Walter Shaub, who served as the Director of the U.S. Office of Government Ethics until July 2017, has pointed out that “the public reading the [president’s financial disclosure] form doesn’t know who is paying the president.”36

Foreign credit

Other forms of foreign emoluments include extensions of credit from banks owned or controlled by foreign governments. For example, the state-owned Bank of China—not to be confused with the Industrial and Commercial Bank of China, the major tenant in Trump Tower—holds part of a $950 million loan on 1290 Sixth Avenue in Manhattan, in which the Trump Organization holds a 30 percent ownership stake.37 This ongoing foreign government loan benefiting the Trump Organization (i.e., benefiting Trump himself) is also a foreign emolument.

Foreign trademarks

Not all emoluments are cash. In February and March 2017, the Chinese and Mexican governments granted the Trump Organization several long-sought (and long-denied) trademarks.38 These trademarks have a substantial economic value, and count as foreign emoluments. Moreover, the publicly reported timeline of Trump’s statements and actions concerning U.S. foreign policy with respect to China, and the Chinese government’s granting of trademarks to the Trump Organization, raise serious questions about the possibility of bribery and extortion involving the president of the United States and the government of China.

Starting in 2006, the Trump Organization sought to persuade Chinese authorities to award the right to register dozens of trademarks, starting with a trademark for construction services.39 During the decade that followed, the Trump Organization made little headway. The Chinese trademark office rejected Trump’s application in 2009, and rejected an appeal in 2014.40 Later in 2014, a court in Beijing rejected an appeal, and then in May 2015, two months before Trump announced his candidacy, a higher Chinese court issued a final judgment rejecting Trump’s appeal, even as he continued to apply for additional trademarks.41

Then in September 2016, the Chinese trademark office reversed course after more than a decade and invalidated a rival claim for some of the trademarks that Trump wanted.42 Finally, on November 13, 2016, just five days after the election, the Chinese government granted preliminary approval to the Trump Organization to register a construction services trademark.43

On December 2, 2016, Trump accepted a call from the president of Taiwan, making him the first U.S. president or president-elect to do so since the United States broke off diplomatic relations with Taiwan in 1979.44 The call prompted a domestic and international outcry that he had broken with the United States’ long-standing “One China” policy.45 China lodged a formal complaint with the United States.46 Following his telephone call with the president of Taiwan, Trump publicly stated that he might change the One China policy if the United States did not receive trade concessions from China.47

In a sudden reversal, on February 9, 2017, Trump spoke with China’s president, after which Trump publicly announced that he would honor the One China policy.48 The BBC perplexedly noted that it was not clear “what, if anything, the Trump Administration…won in return.”49 But on February 15, after the expiration of a three-month objection period and just six days after Trump made his official One China declaration, the Chinese government granted the Trump Organization final approval for its construction services trademark.50

On February 27, Trump held his first face-to-face meeting with a member of the Chinese leadership as he met China’s top diplomat at the White House.51 That same day, and also on March 6, in an apparent break with usual protocol and ten years of prior rulings, the Chinese trademark office gave preliminary approval for the Trump Organization to register thirty-eight more trademarks.52 Just one week later, the Trump administration announced plans for Trump to host China’s president at a two-day summit in April.53

Besides the unconstitutional foreign emoluments, these events, as reported, may violate the federal law against extortion or bribery, and/or gratuities. 54

Foreign government permits and approvals

Trump’s properties abroad supply another source of foreign emoluments. Forbes estimates that the Trump Organization is paid more than $5 million annually by foreign magnates—including many who have ties to local and federal governments—for the right to use the Trump name for branding.55 And, perhaps more subtly, many Trump projects abroad require foreign government permits and approvals. These approvals are noncash (but substantial) financial benefits that also constitute foreign presents or emoluments.

Although the Trump Organization’s tax lawyer announced before the inauguration that “[n]o new foreign deals will be made whatsoever during the duration of President Trump’s presidency,”56 the Trump Organization later retracted the essence of that assurance. It asserted that “[i]mplementing future phasing of existing properties does not constitute a new transaction.”57 The Trump Organization has continued, is continuing, and by all accounts intends to continue to expand its existing foreign properties.58 Trump’s sons continue to forge ahead with Trump Organization business and benefit from official escorts of U.S. embassy and presidential protective staff as they do so.59

These projects and approvals give foreign governments points of leverage—whether explicitly or implicitly—over the president. Consider Turkey. The Trump Organization has licensing deals with two Trump Towers in Istanbul. In December 2015, in response to a question as to Turkey’s NATO membership and reliability as a partner, Trump admitted that “I have a little conflict of interest, because I have a major, major building in Istanbul.”60 After the U.S. election in 2016, shares in Trump’s Turkish partner on the project surged almost 11 percent.61

Trump’s “little conflict of interest” has turned out to be not so little.62 In May 2017, Washington, D.C.’s Sheridan Circle was the site of an unprecedented attack by agents of a foreign government. Turkish president Recep Erdoğan was in town, and about twenty peaceful protesters assembled in a grassy area on public property across the street from the Turkish ambassador’s residence. Some of them held the flag of a Kurdish political party. Without provocation (or, more precisely, without provocation other than the act of protesting the Turkish president’s visit), black-suited men from Erdoğan’s security detail assaulted the protesters.63 As videos from the scene show, the Turkish presidential bodyguards kicked and punched the demonstrators while Erdoğan watched.64 Eventually, the D.C. police intervened and (after some time) were able to stop the attack.

The point here is not what the Turkish bodyguards did, but what Trump did not do: neither he nor his White House said a word about this foreign government attack on U.S. soil. In fact, on the day of the assault, the only government agencies to report the event were the D.C. fire department and the Turkish-language edition of Voice of America. After some delay, a State Department spokesperson eventually issued a short statement, and the department summoned the Turkish ambassador to its offices.65 (Turkey’s Foreign Ministry, for its part, summoned the U.S. ambassador in Istanbul to complain that the D.C. police failed to stop a “provocative” demonstration.66)

As for Trump and his prolific Twitter feed—silence. Was this a considered diplomatic de-escalation strategy or “a little conflict of interest”? It’s hard to peer into a president’s soul, so the Foreign Emoluments Clause is designed to prevent the “little conflict of interest” in the first place.

And that is not the only Trump property abroad that creates “a little conflict of interest.” Since the election in 2016, more Trump properties have continued to open abroad, such as a new golf course in Dubai.67 And there are many more. Additional foreign government permits and approvals will inevitably be required for ongoing and planned Trump projects, including:

Dominican Republic: The Trump Organization appears to be finalizing a partnership agreement to build in the Dominican Republic. In January 2018, the Cap Cana Group, which partners with the Trump Organization, was granted permits to construct seventeen buildings, including condominiums with links to the Trump Organization. Cap Cana recently released a statement announcing, “We are enthusiastic to work with the Trump Organization in future phases of the project.” Meanwhile, lawyers from the Trump Organization have argued that the project is part of a preexisting licensing deal that was signed in 2007.68

India: The Trump Organization reportedly has five projects in India, including a Trump Tower, an apartment project in Mumbai, and an apartment block; Trump has leased his name to each of the projects.69

Indonesia: The Trump Organization plans to open two new luxury hotels in Indonesia. And he has reportedly “forged relationships with powerful political figures in Indonesia, where such connections are crucial to pushing through big projects.”70

Philippines: The Trump Organization has a business interest in a Trump Tower in the Philippines that is on the verge of completion.71 Right after the November 2016 election, the Philippine government announced that it had appointed Jose E. B. Antonio, a real estate developer who partnered with Trump on the $150 million tower, as the country’s special envoy to the United States.72

United Arab Emirates: There are two Trump-branded and -operated golf clubs in the Emirates. All services, including electricity, water, and roads, “come at the discretion of the government,” including “government approvals to serve alcohol, not to mention other regulatory issues.”73

United Kingdom: Trump appears to have tried to exploit his position and access to leaders of the United Kingdom in the service of his two golf resorts in Scotland: Trump Turnberry, and Trump International Golf Links Scotland in Aberdeenshire.74 The Trump Organization plans to extend the Aberdeenshire course by “extending its boutique hotel and building a second 18-hole golf course.”75 Trump told The New York Times that he “might have” mentioned an offshore wind farm near the Aberdeenshire course with Nigel Farage, the former leader of the U.K. Independence Party, whom Trump has recommended as an ambassador to the United States.76 For years, Trump had complained about the wind farm supposedly spoiling the view from the golf course, and he tried to prevent it from being developed.77

In addition to providing permits and approvals for Trump properties abroad, foreign governments have also aided in the development of these projects more directly.

For example, the Panamanian government supported a project that connected sewer and water pipes to the new Trump Ocean Club International Hotel and Tower Panama City, when the company that was originally contracted went out of business.78 And when that property—a hotbed of money-laundering, later dubbed “Narco-a-Lago”79—ran into problems with the owners of its condominium units, the Trump Organization appealed directly to the president of Panama for assistance.80

Trump’s two Indonesia projects highlight even further the danger of the president’s businesses abroad. For Trump’s Bali resort, the Indonesian government has prioritized shortening the driving time between Bali’s primary airport and the Trump International Hotel and Tower Bali.81 And the business plan for his Lido (West Java) resort is financially dependent on a flagship theme park that will be built by a Chinese state-owned construction firm and is backed by $500 million in loans from the Chinese government.82

Two days after that loan was announced, Trump surprised his own government by tweeting that he would direct the Department of Commerce to lift penalties on ZTE, a Chinese phone maker that has violated sanctions on North Korea and Iran, and repeatedly lied to the U.S. government. In fact, the Department of Defense had just two weeks earlier banned ZTE phones from being sold on U.S. bases because of their security risks.83 This unprecedented and unexplained presidential reversal of a Commerce Department enforcement action, and its curious timing, leaves little doubt that the president’s official actions are being influenced (if not dictated) by his personal financial interests. That is the precise danger the framers sought to avoid through the Foreign Emoluments Clause. It further suggests that the Chinese payments to support Trump’s Indonesia development may be more than just a foreign emolument—they may also be a bribe.84

The Foreign Emoluments Clause does contemplate that Congress can consent to a particular foreign emolument. But Trump has not asked for, and Congress certainly has not given, consent for any of the foreign emoluments that Trump has received or will receive during his time in office.