Is the President Allowed to Have Conflicts of Interest?
The United States has never seen a president like Donald Trump. As a wealthy businessman, Trump took office with dozens of business dealings all over the world, including real estate investments, commodities, and financial holdings. We’ve heard a great deal about the president and his potential conflicts of interest. Find out what the U.S. Constitution has to say on the matter.
What Is a Conflict of Interest?
A conflict of interest is defined as a situation in which either an individual or an organization is tasked with focusing on a primary interest while being influenced by a secondary interest, usually involving a third party. This second interest may be a financial incentive, usually in the form of a business dealing or a financial transaction of some kind. When applied to the federal government, it means that the official is tasked with working on behalf of the American people, while being influenced by a secondary interest. This official could have ties to another country, a business that might seek to sway the decisions of the government, or a personal relationship with a third party or another individual outside the government.
For example, an elected official is tasked with deciding whether to approve environmental regulations for how a business should dispose of its toxic waste. But that official previously worked for an oil and gas company and still keeps close ties to the business. The official’s final decision would be subject to investigation from the Department of Justice.
The Ethics of Government Act
In an effort to improve the integrity of the federal government, the Ethics of Government Act was signed into law in 1978. The act required all members of government, including both elected and non-elected officials, to list all of their financial holdings and their entire employment history. This helped to create more transparency in the federal government and to reduce the chances of conflicts of interest. These reports are handed into the Office of Government Ethics, which investigates and monitors any conflicts of interest in the government. The act also put a cap on how much money elected officials could make from financial dealings outside the government. It also states that officials are not allowed to lend their name to or work on the board of an outside entity.
Why the President Is Exempt
While the president is strongly encouraged to divest himself of any financial holdings and business interests that might lead to a conflict of interest, it is not legally required. President Trump has stated over and over again that the law is on his side when it comes to conflicts of interest, and that’s true. It may seem odd that the Commander in Chief is exempt from the laws that are meant to keep our government transparent and free of corruption, but things were different back in 1787.
When the founding fathers wrote the U.S. Constitution, any clause having to do with business conflicts of interest were not designed to include the president. That’s because so many of the founding fathers were wealthy businessmen, with massive estates, slaves, and business holdings all over the country. Forcing the presidents to divest themselves of these assets was seen as an undue burden. The founding fathers did not see a problem with this arrangement, assuming that the nation’s future leaders were bound to be involved in various businesses. Instead, they focused their efforts on leading the country as best they could.
Understanding the Emoluments Clause
One thing that the founding fathers were concerned with was outside influence from another country. So they added the emoluments clause to prevent elected officials from receiving gifts from leaders of other nations. Any gift that the president receives is subject to review and must be approved by Congress. Several presidents in the past have come under fire for receiving lavish gifts from foreign leaders, but international gift giving is often an integral part of effective diplomacy.
This puts President Donald Trump in tricky territory. With business assets all over the world, Trump could find himself being investigated for having conflicts of interest in dozens of ways. Deciding what is considered a gift isn’t always straightforward. For instance, when a foreign leader rents a lavish suite at the Trump Hotel in Washington D.C., is that considered a favor or a gift to the president? If China approves a massive business transaction with the Trump Organization, what should be made of President Trump’s dealings with China? Drawing the line will largely be up to the Office of Government