Kathleen Clark is a law professor at Washington University and practices government ethics law.
In the weeks since the election, the news about the presidential transition has been dominated by stories about Donald Trump’s financial entanglements at home and abroad. He has exploited transition-related activities, such as his meetings with foreign government leaders, to advance his own financial interests. When he met with British politician Nigel Farage, Trump sought Farage’s help opposing offshore wind farms because Trump believes they spoil the view from his golf courses. When he becomes president, Trump will have extraordinary opportunities to use government power to increase his personal wealth and that of his business partners.
A federal conflict-of-interest statute prohibits executive branch employees from using government power to further their personal financial interests. But as Trump has pointed out, that statute has an exemption for the president. Trump’s actions during the transition and his refusal to separate the government’s and his personal financial interests make clear that Congress needs to remove the conflict statute’s exemption for the president. The president should be bound by financial conflict standards, just as other executive branch employees are.
An earlier Congress imposed this financial conflict standard on the president. When Congress enacted the conflict statute in 1962, it did not exempt the president. But in 1989, President George H.W. Bush proposed a comprehensive ethics-reform package that exempted the president from three key statutes: the financial-conflict law, the prohibition on salary supplementation and the post-employment restriction. Bush’s reform proposal did not explain why the president needed these exemptions, and Congress focused its attention on other aspects of the proposal, such as its extensive post-employment restrictions for members of Congress and certain high-level executive branch personnel. Nonetheless, Congress enacted the proposed exemption.
The financial-conflict exemption may stem from a 1974 letter written by Acting Attorney General (now federal Circuit Judge) Laurence Silberman, asserting that the conflict statute did not apply to the president. Silberman, who has a reputation for opposing restrictions on presidential power, argued that “weighty constitutional problems” would arise if the conflict statute were applied to the president. He expressed concern that the statute would “disable [the president] from performing some of the functions prescribed by the Constitution or . . . establish a qualification for his serving as president (to wit, elimination of financial conflicts) beyond those contained in the Constitution.”
But Silberman’s argument is unpersuasive. The conflict statute did not disable a president (or anyone else) from performing a governmental function or establish a qualification for office. It simply prohibited a president (and every other executive branch employee) from participating in a matter if he or she had a financial interest in that matter. Moreover, the Constitution gives Congress a role in regulating government ethics. The emoluments clause specifically authorizes Congress to set standards for the receipt of gifts and payments from foreign governments. Congress has a long history of imposing ethics standards on the president, including the prohibition on bribes and illegal gratuities.
The significance of the 1989 law change was not immediately apparent because presidents since then continued to act as though they were bound by the conflict statute. Presidents George H.W. Bush, Bill Clinton, George W. Bush and Barack Obama avoided conflicts by placing their assets in blind trusts or in diversified mutual funds and Treasury bonds. This practice has given the public confidence in presidential decisions. Even when members of the public disagree with a president’s decision on policy grounds, they are assured that the president was acting out of his conception of the public interest rather than the prospect of private financial gain.
But President-elect Trump’s refusal to follow the example of his predecessors has brought this presidential exemption to a head. Congress needs to correct the mistake it made in 1989 and re-impose the conflict statute on the president going forward.
Rep. Katherine M. Clark (D-Mass.) has introduced a bill that would impose a financial-conflict standard on the president, and Sen. Benjamin L. Cardin (D-Md.) is expected to introduce a similar resolution. Congress may want to specify that any statutory change should go into effect six or more months after enactment in order to give Trump time to divest from his conflicting interests.
The Trump presidency may give us many opportunities to see how robust our system of checks and balances is. One of the first tests for Congress is whether it will re-impose the financial-conflict standard on the president and prevent President Trump from using the nation’s highest office to maximize his personal wealth.