Trump faces challenges in separating from
business: legal experts
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[December 01, 2016]
By Tom Hals
WILMINGTON, Del. (Reuters) - U.S.
President-elect Donald Trump has several options for disentangling
himself from his business empire when he takes office next year, but
legal experts say the only way fully to avoid conflicts of interest
would be to sell his global holdings.
Trump tweeted on Wednesday that he would unveil on Dec. 15 his plans for
taking himself "completely out of business operations" before taking
office on Jan. 20.
Trump did not spell out his plans, but several ideas have started to
gain prominence.
U.S. Senator Ben Cardin, a Maryland Democrat, is pushing for a
resolution requiring Trump to establish a blind trust under independent
control to manage his holdings.
However, a blind trust only works if the office holder does not know how
the trustee has invested the money, legal experts said. Much of Trump's
money is tied up in highly visible, illiquid investments such as luxury
hotels and properties branded with his name, so he will still be aware
of these holdings even if he puts someone else in charge of daily
operations.
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Richard Painter, the chief ethics counsel to President George W. Bush,
said a blind trust would not protect against some of the most dangerous
conflicts from the Trump Organization holdings. Painter has urged
Electoral College members to refuse to make Trump the next president
unless he sells his business interests.
He said the organization's overseas real estate raises questions about
the cost of security and whether that would be paid by U.S. taxpayers,
foreign governments or the Trump Organization. The properties could also
become a target for violence, potentially ensnaring the United States in
a foreign conflict.
“A blind trust is a fairy tale in this context,” said Stephen Gillers, a
professor who specializes in ethics at New York University School of
Law.
CORPORATE MONITOR
New York Times columnist Andrew Ross Sorkin has touted the idea of
appointing a corporate monitor, and suggested Kenneth Feinberg, who
oversaw compensation funds for victims of the Sept. 11, 2001 attacks.
Judges often appoint monitors to oversee court settlements. If a party
violates the deal, the monitor can bring them back to court where they
would face potential penalties imposed by the judge.
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![](../images/120116pics/news_u37.jpg)
President-elect Donald Trump gestures from the front door at the
main clubhouse at Trump National Golf Club in Bedminster, New
Jersey, U.S., November 20, 2016. REUTERS/Mike Segar
![](http://archives.lincolndailynews.com/2016/Dec/01/images/ads/current/castlemanor_lda_051916.png)
However, any corporate monitor overseeing Trump's business would not
have a judge's backing, only the threat of public embarrassment if
Trump refused to cooperate. “That’s bad for Trump, but it’s not the
same as having a judge instruct a party in court that unless you
buckle up and do what I say you’re back in court and I’ll impose
more dramatic sanctions,” said Gillers.
Painter and Gillers said the best way to reduce potential conflicts
would be a sale of the entire Trump Organization. Painter said
Trump's children should also end their association with the
business.
“What he needs to do is get to the place where Trump’s interest in
profit of any Trump entity is the same as my interest or your
interest or the interest of the person on the street,” said Gillers.
That presents a new set of complications.
A portfolio of real estate developments would usually consist of a
large number of separate legal entities. "So, each one has to be
sold individually. That's a pain," said Brian Quinn, a professor at
the Boston College Law School. He said the sale would likely take a
long time.
Making matters worse, real estate developments often involve a
building owner who contracts with someone like Trump to brand and
manage the property. Quinn said those contracts derive their value
from the Trump name.
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"It won't be easy to do. He'll probably take a bath on the
transactions," Quinn said. "But it's really the only way for him to
go forward. Simply handing over day-to-day management of the
businesses to his kids will not be enough."
(Editing by Noeleen Walder and Alistair Bell)
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