Feedback needed!
Your feedback will help guide and shape our coverage and our grassroots membership program. It’ll only take 5 minutes.
Former financial regulator Bill Black says not only is handing off his business to his children a conflict of interest, but it’s a violation of the U.S. Constitution
Story Transcript
SHARMINI PERIES: It’s The Real News Network. I’m Sharmini Peries coming to you from Baltimore. On Wednesday, Donald Trump held a press conference. He dealt with many issues, but one very important among them, is what he plans to do with his business empire. Let’s take a brief look at what he and his lawyer, Sheri Dillon, had to say. (video clip) DONALD TRUMP: But I have no conflict of interest provision as president. It was many, many years old –- this is for presidents. Because they don’t want presidents getting… I… I understand. They don’t want Presidents getting tangled up in minutiae. They want a president to run the company. So, I could actually run my business. I could actually run my business and run government at the same time. I don’t like the way that looks, but I would be able to do that, if I wanted to. I’d be the only one that would be able to do that. You can’t do that in any other capacity. But as a president, I could run the Trump organization — great, great company. And I could run the company… the country. I’d do a very good job. But I don’t want to do that. What I’m going to be doing is — my two sons who are right here, Don and Eric — are going to be running the company. They are going to be running it in a very professional manner. They’re not going to discuss it with me. Again, I don’t have to do this. They’re not going to discuss it with me. And with that, I’m going to bring up Sheri Dillon, and she’s going to go… these papers are just some of the many documents that I’ve signed turning over complete and total control… REPORTER: Sir… is there…? SHERI DILLON: … he said he’s voluntarily taking this on. 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. Even so, President-elect Trump wants there to be no doubt in the minds of the American public that he is completely isolating himself from his business interests. 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—- (audio gap) …first, President-elect Trump investments and business assets, commonly known as the form… as the Trump Organization, comprising hundreds of entities which, again, if you all go and take a look at his financial disclosure statement, the pages and pages and pages of entities, have all been, or will be conveyed to a trust prior to January 20th. (end video clip) SHARMINI PERIES: The President-elect is separating himself from his business empire by apparently transferring assets into a trust, and putting his two sons, Eric and Don, in charge of it all. So, then the question remains, will the trust deal with his conflict of interest that he is all tangled up in? Joining us today to examine this, is Bill Black. Bill is a white-collar criminologist, and former financial regulator. He’s the author of “The Best Way to Rob a Bank is to Own One”. He is also a regular contributor here at The Real News Network. Bill, welcome back. BILL BLACK: Thank you. SHARMINI PERIES: So, Bill, let’s start with what Trump plans to do with his business empire, and whether it actually deals with the problem. BILL BLACK: (laughs) He has three obvious problems, in terms of the business. One is, continuing this kind of business ownership violates the Constitution. The second is, it creates immense conflicts of interest. And the third is, that running the presidency of the United States is supposed to be more than a full-time business. And it’s clear that Trump is really far more interested in doing business deals than the business of the nation. And, no, this doesn’t solve any of these three problems. Doesn’t solve the constitutional problem, because he is going to be taking money, perhaps vast amounts of money, from foreign governments in his business entities. It doesn’t solve the conflict of interest, because it’s not a true blind trust at all. And even in a supposed blind trust, he would obviously know what his assets were, unless he divested, which is what he is refusing to do. So, there’s nothing blind about the trust. SHARMINI PERIES: Bill, let’s unpack that for a moment. Now, yesterday in the press conference, he said that one way he plans to deal with this issue is to… Any funds that his hotels receive from the foreign governments by way of, say, holding events — for example, one of the things that have been cited is if, let’s say, the government of Saudi Arabia wants to hold an event in Washington and they use the Trump Hotel in Washington to hold that event — he would then take that income and give it to the public treasury. Now, how feasible is all that? And how do we track any of that, and what do you think of his measure of allowing this to go to the public treasury? BILL BLACK: Well, first, again, we don’t know how any of this would be done. And he is someone who is the opposite of transparent, the only person in modern times who has refused to release his tax returns. (video clip) DONALD TRUMP: Well, I’m not releasing the tax returns, because as you know, they’re under audit. REPORTER: But every President since the ’70s has been required an audit from the IRS… DONALD TRUMP: Oh gee, never heard that… Oh gee, I’ve never heard that… REPORTER: …the last six have released them. But as President, sir… DONALD TRUMP: …I’ve never heard that… You know the only one that cares about my tax returns is you reporters… REPORTER: You don’t think the American public is concerned about that? DONALD TRUMP: No, I don’t think so. I won. (end video clip) BILL BLACK: Under this completely bogus explanation that he’s under audit, as if that meant he couldn’t release his tax returns. With my law hat on, there’s absolutely no such clause. In terms of the government, they have every incentive to curry interest with Trump. It’s abundantly apparent that Trump cares enormous amounts of money… amounts about having money, and of course, they wouldn’t have to do it in the name of the Saudi government. They could do it in the name of… any of… literally over a thousand Saudi princes, and such. Or their supposed charitable funds, or their lobbyists could do it. So, no, none of this does anything other than cause you to use a cutout, and the Saudis are expert at using cutouts — nothing unique about the Saudis. Everybody understands how to do this to curry favor, and to appear to comply with some laws. So, again, that’s why the head of the Office of Government Ethics –- now, people may recall that there’s a Congressional Ethics, and that their very first act, literally, of the Republicans upon constituting the new Congress, was to try to take a whack at those folks. And that that lasted one day before public opinion caused them to back off. But there’s an Office of Government Ethics, more generally, and this is not a particularly stringent-type entity. But back in the past, for example, they made criminal referrals when Charles Keating was trying to put a mole –- Charles Keating was the most infamous fraud of the Savings and Loan debacle –- and through the Reagan administration he got a presidential appointee who was, you know, literally as intelligence agents used the term, a mole for this leading fraud running the agency. The Office of Government Ethics, once I blew the whistle to them, was instrumental in getting Lee Henkel, that mole, to resign in disgrace. So, you know, they have their moments. Well, the head of the Office of Government Ethics just came out, flat out, and said, this is outrageous, you should not do this, divestment is the only effort that can work. And the claim that it’s a sacrifice, everybody else to serve in the federal government, including, of course, all the people in the armed services, make vastly greater sacrifices than this. So, he just took a hammer and hit it right in Donald Trump’s forehead, figuratively, on this issue. And then the former head of ethics for the Bush administration, Richard Painter, who, in disclosures — a colleague of mine, wife on the faculty of the U Minnesota Law School — has been increasingly, clear. This flatly violates the Constitution, and of course, is a terrible act in terms of conflicts of interest that you’re supposed to avoid. Let’s be clear: the framers of the Constitution, the U.S. Constitution, is blessedly short, so there aren’t that many specific, “You can’t do this,” is in it. One of the things they explicitly put in, because of real world experience, was in… “No, we’re going to make sure the President of the United States cannot be influenced by foreign governments through these means. We have this prohibition,” and in its day, just a flat prohibition. So, Trump’s lawyers are absolutely wrong in saying, “Well, you know, if you just do business in the normal course, as the Saudis or the Russians, with the Trump Empire, that can’t be problem.” No, that’s forbidden. SHARMINI PERIES: Wow. So, what do you make of the type of trust that’s been established? Now, there’s been a lot of talk about whether it’s a blind trust, or just a trust. I think he was… in just, established a trust that he would just hand over to Don and Eric to run. Does it matter what kind of trust? BILL BLACK: Yes. If you did real divestment, you wouldn’t then know what you owned, in a blind trust. And there would be less concern that you were doing things as a president that might make you rich. If it’s not a blind trust, you’d know what your assets are intimately. You know exactly what will help those assets in terms of policies, and in lobbyists and friends and foreign parties, like we’ve been talking about, and it brings government into disrepute. So, he could have created a blind trust. It would’ve required divestment. He’s absolutely refused to do what all Presidents have done in the modern era. He’s flatly refused to follow the advice of the Office of Government Ethics. He’s flatly refused to follow the advice of people where this is their specialty area, the ethics in finances of the government. He has created blatant conflicts of interest, and he has made it farcical by putting his two sons — so, this isn’t the Ford Foundation running something — this is his kids. And, you know, he even said at the end of the conference, “Well, what would you do if these kids did a bad job of running it?” He said, “I’d fire them.” So, he’s retaining control. So, it’s a farce, and it’s an outrage, and it’s unconstitutional. It needs to be stopped. And as I said, on top of that, he has a more than full-time job trying to learn to be President of the United States. The last thing in the world someone as lazy as Donald Trump is, who can’t be bothered to read a memo, because it interferes with his ability to be touting his towers. Someone who constantly takes the press to do photo opportunities, as his own businesses, to make himself richer, he is the last person in the world that needs these conflicts of interest, and these distractions. So, on all three grounds, it simply should be completely unacceptable. SHARMINI PERIES: Bill, you travel these circles. Some of your colleagues you’ve mentioned, others… many people are talking about this big, huge elephant in the room that he keeps trying to deflect as a non-issue. In fact, at the beginning of the conference he says, “I’m not required by law to do any of this.” But you’re a lawyer. What are people saying about it? When you say this is constitutional conflict here why isn’t that registering with Donald Trump? BILL BLACK: (laughs) Because he could care less about these kinds of things, he’s a rich guy, born not with a silver spoon, but with a platinum spoon, and then when he screwed that up, he got another serving from dad. All his life he’s been able to skate. All his life he’s been made rich by the government. David Cay Johnston’s book can explain this to you in great detail, how he was bailed out twice, by the federal, and then the state government combination, through his taxes. He has contempt for all normal rules. He… It’s of a piece with his refusal to disclose his tax returns, and he’s flat out wrong on the constitutional part. That is a law, and he’s going to take an oath to defend and protect the very Constitution that he’s going to start out massively violating. Now, he is correct that in addition to the Constitution, there is something that isn’t a legal mandate. It is simply what all modern Presidents have done, in the view that it is essential to the dignity of the office, to respect for the office, that Americans should know that there aren’t conflicts of interest, and Donald Trump is saying, “Screw you,” on that. Now, that isn’t a law, that second part, nor is it a law that says, “Hey, you’ve got more than a full-time job being president.” But anyone responsible would not do what he’s doing. Now, of course, no surprise to us that he’s going to act irresponsibly, but he needs to be hammered when he does these kinds of things, we cannot simply accept this progressive destruction of ethics as being inevitable. SHARMINI PERIES: Bill, there’s some rumors on the Hill that some congress people are possibly calling for, enquiring, into the direct conflicts that are going on. Are there any legal courses that Congress, or anyone else, could take in terms of these obvious cases of conflict of interest you’re talking about? BILL BLACK: Oh, certainly. Congress can hold hearings. Congress can have the GAO investigate. But, only the majority party can call hearings, subpoena witnesses, subpoena documents, and it would be extraordinary –- I mean, it would be a good thing — but no one expects that’s going to be done by any Republican Chair, any time remotely soon. Individual members of Congress can ask the GAO to investigate. But when the GAO, for example, sought to investigate –- remember when Dick Cheney was vice-president and he had his secret Energy Commission that was overwhelmingly top executives, like of Exxon, secretly making our policy? And the GAO sought to investigate? Well, there was even a court case, and then the GAO gave up that court case. And the reason is, it was threatened with massive reduction in its budget. Should it take on the President in those kinds of actions, and the Vice President, Dick Cheney? Of course, the absolute most influential group of that secret group of energy companies with Dick Cheney? …That was Enron. SHARMINI PERIES: Right. And obviously there’s a similar conflict going on as the hearings unfold. We’re coming to know that Tillerson, and a number of other appointees that are getting confirmed as we speak, have similar conflicts of interest. And then there’s not possibility of Congress or Senate putting any of these concerns into any sort of inquiry going on. It’s a done deal, it seems. BILL BLACK: And there’s simply no candor. So, he testified in his confirmation hearing that Exxon, to his knowledge, had not directly lobbied to try to get out of the Russian sanctions. In fact, it lobbied extensively, and then he said, when he was confronted with the evidence that they’d lobbied, “Well, how do you know we lobbied against the sanctions, that cost us tens of billions of dollars?” You know, it’s just… they’re not even trying to create a good cover-up. It’s just, “We can get away with anything.” SHARMINI PERIES: Right. And why do you think the Democrats are going along with it? I mean, they’re asking the most, lame questions in this hearings one could imagine. The odd congressman, or senator, is asking some tough questions, but it’s rare. BILL BLACK: Yes! So, Marco Rubio was by far the toughest questioner… (laughs) …in any of the hearings. Will Rogers, I think, said it best, now, maybe 80 years ago, “I’m not a member of any organized party. I’m a Democrat.” SHARMINI PERIES: (laughs) All right, Bill. I thank you so much for joining us today. BILL BLACK: Thank you. SHARMINI PERIES: And thank you for joining us on The Real News Network. ————————- END