President Trump has come into office as the first president in modern era to own an active business empire. One in which his name is the probably the most valuable asset. Like him or not; voted for him or not; He is the President. As we have seen in the past, scandals limit the ability of the President and Congress to govern.
I’m looking at the issue as way to reflect on things that work and don’t work for a compliance program.
The first step would be to divest from the conflicts. President Trump has already stated that he is not willing to sell the company and liquidate the proceeds into a blind trust. That leaves him with a sprawling business organization that is mostly owned by him, run by his children, and has business relationships around the world.
To be clear, President Trump is not subject to the legislated conflicts of interest laws. He is not required to divest his interests.
I think a majority of the American Public would be concerned if the President’s business interests were realizing direct financial gain from government action.
The other concern is the Emoulments Clause in the Constitution that prevents the President from receiving any “present, Emoulment, Office or Title, of any kind whatever, from and King, Prince, or foreign state.”
Within that framework, how do you establish a compliance program?
The first is the tone at the top.
President Trump has agreed to establish a compliance program. But he seems to have dismissed the concerns about conflicts:
“I have a no-conflict situation because I’m president, which is — I didn’t know about that until about three months ago, but it’s a nice thing to have. But I don’t want to take advantage of something.”
His legal counsel:
“The conflicts of interest laws simply do not apply to the president or the vice president and they are not required to separate themselves from their financial assets.”
But that was saved with:
“He instructed us to take all steps realistically possible to make it clear that he is not exploiting the office of the presidency for his personal benefit.”
There is some tone at the top. I think most compliance officers would cringe at those statements if their CEOs discussed conflicts in that manner.
Next, we would have a clearly articulated compliance program.
The Trump Organization will have an ethics advisor and a compliance counsel. So there is the start of a program.
What we don’t know is how the program is structured, how it will be administered, how it will be tested, or how it will be administered.
As a result, we have the first lawsuit filed. The Citizens for Responsibility and Ethics in Washington (“CREW”) brought the lawsuit to enforce the Emoulments clause. I think its a political ploy that will fail. I think the failure be one of standing and we will never get to the substance. That is left to the impeachment process. We won’t see a Republican Congress do that.
Even if President Trump acts completely ethically with a blind eye to how government action affects his businesses, there is the other side of the transactions.
I’m hard-pressed to believe that foreign governments, business parties and other interests will not treat the relationship more favorably now than they did last year. We have seen the wrath of President Trump on twitter affect stock prices and send businesses scrambling. He is now one of the most powerful people in the world. He wins the business argument even before you get to an argument. He is voted into office with no expectation that he would divest and carrying that conflict baggage.
In my opinion, the Trump compliance program is the most important compliance program in the world. As a compliance professional, I look forward to hearing more about the Trump compliance program so that we can all learn how we can better implement our own program or learn from its mistakes.