Is private profit trumping public service in the U.S?

Mar 15, 2018 | Politics & Society

The Trump Administration has been dogged by accusations that President Trump, as well as his family members and close associates, are seeking to use the presidency to advance their personal financial interests. While President Trump claims to have ceded control of the Trump Organisation to his sons Eric and Donald Jr., the trust set up is porous at best, and reports indicate that the president can withdraw money from his more than 400 businesses at any time without disclosure.

Just as President Trump will receive “quarterly” updates on the Trump Organisation from his son Eric, [The Global Corruption Blog] track and report on instances in which there are credible allegations of President Trump, his family, and his close associates exploiting their public power for private gain. [This is organised into the] following four categories, which capture four related but distinct ways that political leaders may seek to leverage the power of public office to enrich themselves, their families, and their cronies:

  1. U.S. Government Payments to the Trump Organisation
  2. Use of the Power of the Presidency to Promote Trump Brands
  3. U.S. Government Regulatory and Policy Decisions that Benefit Business Interests of the Trump Family and Senior Advisors
  4. Private and Foreign Interests Seeking to Influence the Trump Administration Through Dealings with Trump Businesses

 

2 . Use of the Power of the Presidency To Promote Trump Brands

Donald Trump and his family can also enrich themselves by taking advantage of the unique status and exposure of the President of the United States to promote Trump family brands. Shortly after the inauguration Eric Trump noted that the Trump brand “is the hottest it has ever been,” while Ivanka Trump’s apparel line sales increased 346% during the first month of her father’s presidency. While some of this increase is “passive” and thus less problematic, there have been incidents that suggest efforts on the part of President Trump, his family, and members of his administration, to actively promote Trump brands. Indeed, the Trump Administration promoted the Trump brand by mentioning or referring to its private business’s on at least 35 different occasions during the President’s first year in office. (Interestingly, some recent reports (see here, here, and here) suggest that, despite these efforts, the value of the Trump Organization may in fact be decreasing, and the President’s personal wealth falling, perhaps due in part to the polarizing nature of his presidency.)

While distasteful, this brand-promotion activity also one of the less harmful ways in which the Trump Administration may seek to profit from the Presidency, as it does not involve significant distortions of U.S. policy. Nonetheless, the overt attempts to use the presidency as a marketing opportunity indicate a troubling underlying attitude. Examples of specific instances in which the Trump family or members of the Trump Administration have taken active steps to use the prestige and influence of the presidency to promote the Trump brand include:

 

  • Nordstrom Tweet: After Nordstrom’s department stores dropped Ivanka Trump’s clothing line, President Trump attacked Nordstrom’s “unfair” treatment of his daughter. Shortly thereafter, White House senior advisor Kellyanne Conway explicitly endorsed the Ivanka Trump brand, saying from the White House briefing room, “I’m going to give a free commercial here: Go buy [Ivanka’s products] today, everybody.” This was a clear violation of a federal ethics regulation, codified at 5 C.F.R. § 2635.702(c), which states that a federal employee “shall not use or permit the use of his Government position or title or any authority associated with his public office to endorse any product, service, or enterprise[.]”

 

 

  • Advertisement for Mar-a-Lago on State Department Website: In April 2017, a U.S. State Department website called Share America – which is supposed to be a “platform for sharing compelling stories and images that spark discussion and debate on important topics like democracy, freedom of expression, innovation, entrepreneurship, education, and the role of civil society”– posted a feature on Trump’s Mar-a-Lago resort. After widespread criticism from lawmakers and ethics experts–who pointed out that the post was also a clear violation of 5 C.F.R. § 2635.702(c) – the State Department removed the posting.

 

  • Ivanka Trump’s Clothing Line: The World Bank recently launched The Women Entrepreneurs Finance Initiative, which awards millions in financing to women entrepreneurs in emerging markets (including $50 million that President Trump recently committed to the project). Ivanka Trump’s clothing brand stands to gain from her involvement in the program, prompting Senator Ben Cardin to write a letter to Treasury Secretary Steven Mnuchin objecting that it is inappropriate for Ivanka Trump to “serve as a public advocate for the fund” as long as “Ms. Trump continues to benefit financially from a brand that bears her name.”

 

  • Ivanka Trump’s Book: Both Voice of America(a government funded news agency) and the State Department promoted Ivanka Trump’s book, Women Who Work: Rewriting the Rules for Success. Voice of America published an Associate Press review article about the book and advertised the book on Twitter. The State Department’s Office of Global Women’s Issues retweeted Ms. Trump’s tweet promoting the book, but later deleted the tweet after criticism. (Ms. Trump herself has pledged not to draw publicity through any promotional tour or media appearances, and she has also pledged to donate the advance and profits from the book to charity.)

 

  • Trump 2020 Campaign: In June 2017, President Trump held his first re-election campaign fundraiser at the Trump Hotel in Washington, D.C. Ethics experts criticized the event as improperly mixing the president’s business interests with his political interests, since the campaign event also serves as a promotional event for the hotel. The Trump campaign sent a tweet to supporters describing the event venue as a “beautiful hotel” and “BIG LEAGUE.” This was not an isolated event: In his first year in office, the president’s 2020 campaign — headquartered in Trump Tower in Manhattan — spent more than $543,000 at Trump-owned properties.

 

  • Republican Re-Election Events: The Republican National Committee (RNC), numerous congressional campaigns, the Republican Governors Association, and state parties have spent millions at Trump owned businesses in re-election efforts and fundraisers. (See here for a breakdown of campaign money spent at Trump properties by GOP representative.) The RNC has spent over $652,000 at Trump properties, including over $122,000 at the Trump International Hotel for a fundraiser in June (at a rate of $35,000-a-person), and the Republican Governors Association spent over $400,000 on a “Corporate Policy Summit” at Trump National Doral in Miami. The RNC is also paying $37,541 per month in rent to Trump Tower, and Republican campaigns and committees have spent over $42,000 just at the steakhouse inside the Trump International Hotel in Washington. While sitting Presidents often host fundraisers for re-election campaigns, it is troubling when they directly profit from these events. Trump International Hotel in Washington D.C.

 

  • New Ivanka Trump Store. Ivanka Trump—who serves as an advisor to her father— opened a new retail store in New York’s Trump Tower in December 2017. Though she handed over operations, Ivanka Trump continues to own the company, which netted her over $5 million between January 2016 and March 2017.

This blog was originally published on GAB | The Global Anticorruption Blog Law, Social Science, and Policy and was republished with permission. 

Disclaimer: The ideas expressed in this article reflect the author’s views and not necessarily the views of The Big Q. 

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