By S.M., The Economist, August 7, 2017
DONALD TRUMP is finding that it pays to be president. Since last November, prices at his properties have surged: the cheapest cocktail at the Trump International Hotel in Washington is now $24, up from $16. The initiation fee at his Mar-a-Lago resort in Florida—where he hosts foreign dignitaries—quietly doubled to $200,000 in the weeks before his inauguration. Mr Trump visits his own hotels and golf courses about twice a week, augmenting their visibility. He is vacationing this month at Trump National Bedminster, a golf club in New Jersey where he interviewed potential cabinet members after the election. A new “director of diplomatic sales” has steered Kuwaiti and Saudi Arabian bookings away from rival DC hotels to the Trump International. In the words of Mr Trump’s son Eric, the family brand is now ”the hottest it has ever been”.
That may be great news for the Trump Organisation, but America’s constitution seems to frown on a president using his office for personal enrichment at the hands of foreign leaders. In recent months, three lawsuits have been filed accusing Mr Trump of violating conflicts-of-interest standards enshrined in the constitution’s two so-called “emoluments” clauses. According to one rule, presidents may not take any payment but their salary from the federal government or the states. And Article I, Section 9, Clause 8 bars all federal officials from receiving “any present, emolument, office, or title, of any kind whatever” from a foreign state, unless Congress gives its consent. Maryland and the District of Columbia sued Mr Trump in June, followed closely by nearly 200 members of Congress, who say the president needs their approval before he takes any foreign money.
But the first suit was filed in January by Citizens for Responsibility and Ethics in Washington (CREW), a bipartisan watchdog organisation. Two months ago the Trump administration asked the federal court in New York to dismiss CREW’s suit for three reasons: the group lacks standing to sue; the constitution bars a president from being compensated only for an “official” act; and requiring a president to sell off his assets is unconstitutional. On August 4th, CREW responded to these arguments with a brief of its own. It is a persuasive refutation of Mr Trump’s attempt to defend his presidential profiteering.
Perhaps the weakest link in CREW’s original complaint was its claim to standing—a plaintiff’s duty to show that it has suffered an injury worthy of a court’s attention. Pointing to several precedents, the organisation argued that its work policing Mr Trump’s emolumental indiscretions diverted its “time, resources and efforts” away from other items on its agenda, including public officials’ adherence to campaign-finance laws. That may be a bit of a stretch (Mr Trump’s lawyers called it “abstract”).
But since January several hotel owners and restaurateurs have signed on as plaintiffs, providing clearer evidence of how the Trumps’ for-profit enterprises may harm competitors. Among them is Eric Goode, owner of four hotels and many restaurants in New York City. He says his properties, including the Bowery Hotel on the Lower East Side, face a more competitive market now that the power and prestige of the White House lie behind Mr Trump’s businesses. The Bowery is only a 15-minute cab ride from the Trump International Hotel and charges similar room rates, CREW notes. The Department of Justice (DoJ) lawyers’ contention that the Bowery is a mere “Four Diamond” hotel while Mr Trump’s is a Five Diamond, CREW says, is irrelevant. The claim that nobody could ever hope to compete with the Trump businesses sounds like Trumpian bravado rather than sound legal reasoning.
Regarding the interpretation of the emoluments clause, the CREW response is even more convincing. No court has ever teased out exactly what the clauses entail, but Mr Trump’s reading is both ahistorical (ignoring founding-era dictionary definitions of “emolument” as “profit”) and implausibly self-serving. The rules, the DoJ insists, do “not prohibit any company in which the president has any financial interest from doing business with any foreign, federal, or state instrumentality” but merely bar the most obvious kind of corruption: a foreign government sending the president a cheque for doing them a favour. “The defendant’s novel reading” of the constitution, CREW writes, “would gut a rule aimed at ‘every kind of influence by foreign governments’, allowing those very governments to send massive payments to the president in his ‘private’ capacity, or launder them through his businesses”. That, CREW notes, “is untenable”. When a federal official “receives something of value from a foreign power”, he or she “can be imperceptibly induced to compromise what the constitution insists be his exclusive loyalty: the best interest of the United States of America”.
What can courts can do about Mr Trump’s apparent violations of the constitution? CREW wants a kind of cease-and-desist order: a note to the president telling him to sell his businesses so that when foreign delegations book a block of rooms at Trump hotels and imbibe pricey cocktails, the profit doesn’t boost his net worth or risk encouraging him to favour them on the international stage. The DoJ lawyers point to an 1867 precedent that courts may not “enjoin the president in the performance of his official duties”, but CREW cites several examples to the contrary in more recent decades. And the brief observes that asking Mr Trump to divest himself of business interests does not—or should not!—have anything to do with his duties as president. If Mr Trump’s lawyers mean that taking “foreign and domestic governmental benefits does affect his executive decisions”, the brief says, “that is all the more reason to put an end to it”.