Donald Trump’s remarkable election victory gives him an immediate business headache: what to do about his sprawling financial empire.
During the campaign, he said that if he became president, he would hand control of his business empire to Ivanka and her brothers, Don and Eric.
But the plan came under fierce scrutiny from critics, who said it involved big conflicts of interest.
So what are the risks and why should he be allowed to carry out such arrangements?
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Contents
Blind trusts
Well, first of all, there is absolutely no law that prevents him.
Previous presidents, from Lyndon B Johnson on, have avoided any hint of impropriety by placing their business interests into what is known as a blind trust. This means that the president gives up the right to manage his (or her) money personally, handing the task over to independent trustees.
In LBJ’s case, he set one up in 1963, after assuming the presidency in the wake of John F Kennedy’s assassination. He and his wife, Lady Bird, owned a TV station, KTBC, in Austin, Texas, and wanted to avoid regulatory problems without having to sell it.
In 1978, the Ethics in Government Act formalised the rules on blind trusts, but left them entirely voluntary as far as presidents are concerned.
Mr Trump has spoken about putting his holdings into a blind trust, but then said that his three oldest children would be in charge of the company, which would not pass the independence test.
“I don’t know if it’s a blind trust if Ivanka, Don and Eric run it,” he said earlier this year. “If that’s a blind trust, I don’t know.
“But I would probably have my children run it with my executives and I wouldn’t ever be involved.”
In any case, even if Mr Trump no longer controls those assets directly, he could hardly be expected to forget what they were, so he would remain vulnerable to allegations that his political decisions were designed to favour his business interests.
Foreign income
And there is another big spanner in the works: the US constitution has a provision that could potentially make life difficult for Mr Trump.
The constitution’s Emoluments Clause states: “No title of nobility shall be granted by the United States: and no person holding any office of profit or trust under them, shall, without the consent of the Congress, accept of any present, emolument, office, or title, of any kind whatever, from any king, prince, or foreign state.”
It’s easy to see what the point of that was. Having created a republic and enshrined the ideal of equality, the Founding Fathers wanted to prevent the US acquiring an aristocracy or being beholden to foreign powers that might undermine those ideals.
But it also seems to say that no-one in senior public office should have any foreign income.
Does that apply to the Trump Organization, which has joint property ventures and licensing deals stretching from Panama City to Istanbul?
In theory, yes. In practice, it probably depends on that little phrase, “the consent of the Congress”.
Any foreign deal or donation involving either of those bodies could easily spawn a Congressional investigation into a possible breach of the constitution. And once the juggernaut started to roll, it could lead all the way to impeachment.
In practice, a Republican-controlled Congress is unlikely to make life difficult for a president from its own party.
But unless his business activities are genuinely outside his control, Mr Trump cannot be sure of escaping unscathed.
[Source:- BBC]