January 9 at 8:33 PM
While promoting a Trump Tower condo development in South America last week, Eric Trump assured an Argentine newspaper that his family’s business was “in the first phase” of a building project in Buenos Aires.
Soon after, the Trump company’s top attorney said there were no plans for a project “in the immediate future” and that the president-elect’s son “was simply saying that he is fond of the city” and hopes to have a project there one day.
The contrasting statements offer a real-time indication of the struggle that has taken place, largely behind the scenes, as President-elect Donald Trump, his family and advisers figure out how to remake the business he built over decades to avoid potential conflicts with his responsibilities as president.
Despite expressing initial reluctance to separate from the company, Trump over the past two months has taken steps to unwind some of the most visible potential tension points.
He has dissolved some potential transactions in international hot spots such as Azerbaijan and Georgia, pledged “no new deals” for his business during his time in the White House, and settled lawsuits that threatened to consume his time and stain his image. Advisers, meanwhile, have been examining how to address touchy legal questions about his ownership of the Trump International Hotel blocks from the White House, which leases its property from the federal government.
Nevertheless, on the eve of the much-anticipated announcement Wednesday by Trump detailing how he intends to wall off his presidency from the company, it has become clear that Trump’s approach is unlikely to eliminate all of the potential pitfalls stemming from the complex web of real estate holdings, partnerships and merchandising agreements that make up the Trump Organization.
Trump has largely resisted calls by ethics experts for full divestiture, saying his sons Don Jr. and Eric and company executives will manage the business but not committing to giving up his financial stake. He and his children have continued to meet since the election with business partners.
Alan Garten, executive vice president and general counsel at the Trump Organization, has called some of the recent steps by the business simple “housecleaning” measures, detached from Trump’s impending presidency.
“This is about closing loose ends and resolving open issues,” Garten told The Washington Post last week. “Everything we’ve done we’ve had the rights to do under the contracts we’ve entered into.”
The changes, however, have come amid mounting pressure for Trump to curtail aspects of his business that could collide with foreign policy and other aspects of his job. The changes reflect a growing understanding in Trump’s inner circle of the seriousness of potential problems and the political risks of appearing to put his personal financial interests above the country’s needs, according to a person with knowledge of the deliberations who spoke on the condition of anonymity.
Garten and other Trump advisers declined to describe the internal discussions in detail.
“It’s evolving, every single day,” said Michael Cohen, an executive vice president at the Trump Organization, adding, “There are teams of people who are on it.”
Trump’s family and close confidants have also taken steps to shield themselves from potential conflicts. Trump’s son-in-law, Jared Kushner, who officials said Monday will work as a senior adviser to Trump, is prepared to resign from his lucrative real estate business and divest foreign investments and other assets before joining the White House, attorneys said. Trump’s daughter, Ivanka, will resign from her business and the Trump Organization, divest stock and assets, and receive fixed payments from the revenue of a “diversified pool of projects,” attorneys said.
As for the Trump Organization, in addition to pulling back from projects in Azerbaijan and Georgia, it has halted prospective deals in Brazil and India, blaming issues such as missed “development milestones” on the sudden changes of heart. The Trump Organization has also dissolved several companies it had incorporated that appeared to be linked to a possible hotel in an oil-rich city in Saudi Arabia.
Trump agreed to pay $25 million to settle fraud claims against the defunct Trump University real estate seminar, tweeting that “the ONLY bad thing about winning the Presidency” was that he didn’t have the time to complete a “long but winning trial.” The company also suddenly settled a bitter dispute with union workers at the Trump International Hotel in Las Vegas, and agreed to not block workers at the new Trump hotel in Washington from seeking to unionize.
Many possible conflicts remain across the more than 500 business interests tied to the president-elect, Trump financial filings show. The company still owes hundreds of millions of dollars to foreign lenders and remains a partner to major branding deals in India, the Philippines, Turkey and other countries where the United States has sensitive diplomatic or financial ties. A new Trump International Golf Club is also scheduled to open in Dubai next month.
Some on the outside have been left questioning Trump’s business steps.
The Office of Government Ethics, the federal agency that traditionally works closely to advise transition teams, has struggled at times to communicate with his lawyers on their strategy for avoiding conflicts, according to a Freedom of Information Act release of government emails Friday.
“We seem to have lost contact with the Trump-Pence transition since the election,” agency director Walter Shaub wrote in a Nov. 18 email to transition aide. Later emails show both sides arranging meetings and calls to discuss moves.
Federal rules prohibit executive branch officials and employees from flexing their public status in a way that could benefit their private finances. Those laws don’t apply to the president or the vice president, but most of the country’s past leaders have followed in that tradition by selling their assets or shifting them into blind trusts managed by independent overseers.
The Office of Government Ethics and former chief White House advisers have said that only full divestiture would ensure potential conflicts don’t undermine Trump’s policy decisions.
Democrats have signaled they will use confirmation hearings with key Trump appointees this week to question how agencies in the Trump administration will handle issues related to the Trump company. For instance, Democrats plan to ask attorney general nominee Jeff Sessions about his views on a constitutional clause that makes it illegal for presidents to accept gifts from foreign officials — a clause that some ethics experts say Trump risks violating when foreign governments do business at his hotels.
Discussions within Trump’s team have centered on how legally complicated it would be for the business executive to fully divest of all of his real estate, according to a person close to the transition. Buyers have to be located for properties worth millions of dollars, and it could result in a massive tax hit for Trump. However, as a sign they have been taking the issue of conflicts more seriously, advisers have been discussing other ways Trump could show a commitment to separating from the business.
One idea that has been discussed, a person close to the transition said, would be the appointment of an independent monitor, unrelated to the company or the family, who would be charged with representing Trump’s interests and sorting out possible conflicts. One possible name that has been under consideration for the post has been former attorney general Michael Mukasey, the person said. Mukasey did not respond to requests for comment. The consideration of Mukasey by Trump aides was first reported by the New York Times.
Stuart Eizenstat, a top aide to President Jimmy Carter during his transition, said establishing a monitor “could be a very important positive step” to ensuring the business follows the rules and acts transparently.
“If it’s set up right, the monitor would be independent [and have] access to top management and to corporate records,” Eizenstat said. “If set up that way, then the monitor can be a very important prophylactic to insure against conflicts of interest.”
Others were more skeptical, arguing the role would provide little promise of keeping Trump’s business in check.
John C. Coffee Jr., director of the Center on Corporate Governance at Columbia Law School, said the monitor would be shoehorned in trying to ensure that the business resists potential problem points outside the monitor’s view.
“What can the monitor do to prevent an outright, hundred-
million-dollar gift from a government to Donald Trump?” Coffee said. “The monitor is not in the position to block the most obvious ways in which a foreign government or entity could benefit the company, in order to give a de facto bribe.”
That confusion over Trump conflicts took center stage in Argentina, where Garten and Trump company spokespeople have said in recent weeks they had ended exploratory talks over a potential Buenos Aires deal.
Last week, Eric Trump seemed to contradict them when he told the newspaper Clarín during a visit to Uruguay that the company was “in the first phase of looking at a project in Buenos Aires” and seemed to be looking for deals elsewhere in the region.
“There are opportunities in Panama, Colombia. There is a lot to do. It’s a tremendous market,” the Trump son was quoted as saying. “If we bring together North America, Central America and South America, it is a bigger market than China.”
Eric Trump did not respond to an email seeking comment regarding his Argentina comments.
Garten told The Post on Monday that it would be “grossly overstating the meaning of his comments” to see Trump’s quotes as the suggestion of a potential upcoming deal.
“He could not have been more clear in stating that the company currently does not have a project in Buenos Aires and that there are no plans for a project anytime in the immediate future,” Garten added.