Bobby R. Burchfield, 2017 Texas Review of Law & Politics article re: TRUMP ORG. "ETHCIS"

ETHICS IN THE EXECUTIVE BRANCH:
THE CONSTITUTIONAL, STATUTORY, AND
ETHICAL ISSUES FACED BY THE ETHICS
ADVISOR TO A PRESIDENT HOLDING IMMENSE
WEALTH

BOBBY R. BURCHFIELD*

INTRODUCTION ............................................................................ 265
I. CONFLICT OF INTEREST STATUTES AND THE CONSTITUTIONAL
EMOLUMENTS CLAUSES ............................................................ 267
II. WHY NOT LIQUIDATE THE ASSETS OR PLACE THEM IN A BLIND
TRUST?..................................................................................... 274
III. WHAT IS THE CURRENT STRUCTURE AND HOW DOES
IT WORK? ............................................................................... 279
CONCLUSION ................................................................................ 281

INTRODUCTION

Thank you again to the Texas Chapters of the Federalist
Society for inviting me to participate in your conference here
in Houston.
In this presentation, I will attempt to answer three questions.
First, what statutory and constitutional provisions govern the
private business holdings of the President of the United States?
Second, why did President Trump not simply liquidate or divest
his holdings, or place them into a blind trust? And finally, what
structure and process did President Trump put in place, and
how does it work?
In November 2016, the voting public elected the wealthiest
person to hold the Office of President since, perhaps, George
Washington.1

Donald J. Trump’s holdings are extensive, with a

* Bobby R. Burchfield is a Partner at King & Spalding in Washington, doing trials and
appeals. He currently serves as the Ethics Advisor to the Donald J. Trump Revocable
Trust. By appointment of President George W. Bush, he served on the Antitrust
Modernization Commission and was the General Counsel of President George H. W.
Bush’s reelection campaign. He clerked for Judge Ruggero J. Aldisert of the Third
Circuit, received a J.D. with Honors from the George Washington Law School where he



266 Texas Review of Law & Politics Vol. 22

total value into the billions of dollars.2

His holdings are also diverse, ranging from commercial and luxury residential real
estate, to luxury resort properties and golf courses, to vineyards.
His companies also have management and branding
arrangements. These interests are also geographically diverse,
located both throughout the United States and abroad.

Immediately upon his election, calls came for then President-
elect Trump to liquidate his holdings or to place them in a

“blind trust,” as other Presidents had purportedly done.3

At a press conference at Trump Tower on January 11, 2017,
President-elect Trump explained how he would address his
business holdings during his tenure as President.4

In short, he
resigned his positions in all the businesses; transferred the
businesses into the Donald J. Trump Revocable Trust, with his
son, Donald J. Trump, Jr., and long-time Trump Organization
executive Alan Weisselberg as co-trustees; and appointed son
Eric Trump as manager of most of the businesses.5
He
committed that the businesses would engage in no new foreign
transactions, and through his lawyer, Sherri Dillon of Morgan,
Lewis & Bockius LLP, committed to turn over profits earned
from foreign government officials staying at Trump hotels to the

was Editor-in-Chief of the Law Review, and received a B.A. from Wake Forest with
distinction in Economics and Politics. He currently serves as the Vice Chair of the Wake
Forest Board of Trustees and on the Dean’s Advisory Board at George Washington Law
School. He acknowledges with great appreciation the assistance of Chandra Kurien, an
associate at King & Spalding, with research and editorial suggestions for this article. The
views expressed in this article are those of the author.
1. See Emmie Martin, Donald Trump is Officially the Richest U.S. President in History, BUS.

INSIDER (Jan. 23, 2017), http://www.businessinsider.com/donald-trump-richest-us-
president-in-history-2017-1 [https://perma.cc/J6BQ-8Y5U] (“Trump officially became

the richest president in US history, dethroning Washington, the country’s first
president.”).
2. Because the President privately holds his assets, estimates vary about their total
value. See, e.g., The Definitive Net Worth of Donald Trump, FORBES,
https://www.forbes.com/donald-trump/#c9afc1a28992 [https://perma.cc/TQ8R-XFAT]
(estimating Donald Trump’s net worth as $3.1 billion as of September 2017).
3. See, e.g., Scott Bixby, Government Watchdogs Demand Trump Put Business Holdings in

‘Blind Trust’, GUARDIAN (Nov. 17, 2016), https://www.theguardian.com/us-
news/2016/nov/17/trump-organization-blind-trust-business-holdings

[https://perma.cc/D87C-54HE] (reporting on numerous agencies that called for
President Trump to place his holdings in a blind trust); see also Matt Ford, Nationalize the
Trump Organization, NEW REPUBLIC (Feb. 21, 2018), https://newrepublic.com

/article/147127/nationalize-trump-organization [https://perma.cc/L7HN-
6SE6?type=image] (calling for Congress to nationalize the Trump Organization).

4. Donald Trump’s News Conference: Full Transcript and Video, N.Y. TIMES (Jan. 11,

2017), https://www.nytimes.com/2017/01/11/us/politics/trump-press-conference-
transcript.html [https://perma.cc/U9HW-93K8].

5. Id.


No. 2 Issues Faced by the Ethics Advisor 267
United States Treasury.6

Certain transactions by the businesses
may be consummated only upon receipt of a favorable written
ethics opinion by an Ethics Advisor.7

Before the Inauguration,
President-elect Trump asked me to serve as Ethics Advisor.
CONFLICT OF INTEREST STATUTES AND THE CONSTITUTIONAL

EMOLUMENTS CLAUSES

Critics initially challenged President Trump’s continued
holdings by suggesting that the holdings might be inconsistent
with certain financial conflict of interest statutes and
regulations.8

Those conflict of interest statutes and regulations
are inapplicable, however. By their terms, the conflict of interest
statutes expressly exempt the President, members of Congress,
and the judiciary from the financial conflict of interest
provisions.9

Conflict of interest provisions in the Civil Service
Regulations also are inapplicable to the President.10 Recognizing
these points, critics have shifted their focus both in public
commentary and in litigation to the Emoluments Clauses.11
The issue of whether the President is in violation of the
Foreign Emoluments Clause and the Compensation Clause, also
6. See SHERI DILLON ET AL., MORGAN, LEWIS & BOCKIUS LLP, WHITE PAPER: CONFLICTS
OF INTEREST AND THE PRESIDENT (2017),
https://www.documentcloud.org/documents/3280261-MLB-White-Paper-1-10-Pm.html
[https://perma.cc/ETJ2-CWNR].
7. Id. at 2.
8. See, e.g., Tommy L. O’Brien, Conflicts of Interest? President Trump’s Would Be Amazing,
BLOOMBERG VIEW (June 2, 2016), https://www.bloomberg.com/view/articles/2016-06-

02/donald-trump-might-make-the-white-house-a-walmart [https://perma.cc/4ZMS-
GD8H] (acknowledging that the President is exempt from conflict of interest laws but

also stating, “[f]ederal conflict-of-interest laws would still prohibit Trump from using his
presidential powers to the advantage of his businesses or the financial interests of other
family members”).
9. 18 U.S.C. § 202(c) (2014) (noting that use of the terms “officer” and “employee”
in the relevant statutes “shall not include the President, the Vice President, a Member of
Congress, or a Federal judge”).
10. Memorandum from Antonin Scalia, Assistant Att’y Gen., Office of Legal Counsel,
to Kenneth A. Lazarus, Assoc. Counsel to the President, Re: Applicability of 3 C.F.R. Part
100 to the President and Vice President 1–2 (Dec. 19, 1974),
http://www.fas.org/irp/agency/doj/olc/121674.pdf. [https://perma.cc/47XK-36RK]
(“The Civil Service Regulations are clearly not applicable to the President and Vice
President; nor are the conflict of interest provisions of 18 U.S.C. §§ 202–209 . . .”).
11. See, e.g., Aaron C. Davis & Karen Tumulty, D.C. and Maryland AGs: Trump
‘Flagrantly Violating’ Emoluments Clause, WASH. POST (June 12, 2017),

https://www.washingtonpost.com/investigations/dc-and-marylands-lawsuit-trump-
flagrantly-violating-emoluments-clause/2017/06/12/8a9806a8-4f9b-11e7-be25-

3a519335381c_story.html?utm_term=.3cd5c0d830a6 [https://perma.cc/4EVQ-FAK8]
(providing an overview of the lawsuit by D.C. and Maryland claiming that the President’s
“Trump International Hotel may by drawing business away from the taxpayer-owned
Walter E. Washington Convention Center in the District and a facility in Maryland
subsidized by taxpayers” and thus violates the Emoluments Clause).


268 Texas Review of Law & Politics Vol. 22
called the Domestic Emoluments Clause, is currently being
litigated in three federal court actions. On January 23, 2017, a
group of plaintiffs led by the Committee for Responsibility and
Ethics in Washington (CREW) filed a lawsuit in the Southern
District of New York.12 The complaint alleges that the Trump
Hotel in New York is violating the Foreign Emoluments Clause
because foreign dignitaries pay to stay there.13 CREW claims
standing to bring the suit because it is having to spend money to
litigate the case.14 This theory has many flaws, but suffice to say
that, if it were successful, anyone could assert standing to
challenge any action based solely on his or her decision to spend
the resources to file a lawsuit. Other plaintiffs include restaurants
and bars alleging that the Trump Hotel is diverting business
from them and, as a result, they are being disadvantaged by the
alleged violation of the Emoluments Clause.15 Traceability and
redressability are serious issues for their standing. On December
21, 2017, Judge George B. Daniels of the Southern District of
New York dismissed the CREW lawsuit on the ground that none
of the parties have standing and that the emoluments
controversy is best left to Congress for resolution.16 On February
16, 2018, plaintiffs filed a Notice of Appeal to the United States
Court of Appeals for the Second Circuit.17
The Emoluments Clause issue is also being litigated in the
District Court in Washington, D.C., by Senator Blumenthal and
200 other Democratic Senators and Congressmen.18 These
plaintiffs allege that their legislative prerogatives are being
compromised because the President continues to hold interests
in his businesses while he is in office.19

12. Complaint, Citizens for Responsibility and Ethics in Wash. v. Trump, 2017 WL
6524851 (S.D.N.Y. Jan. 23, 2017) (No. 1:17-cv-00458).
13. Second Amended Complaint at 3, Citizens, 2017 WL 6524851 (No. 1:17-cv-00458).
14. Id. at 4 (“CREW has been significantly injured and will continue to be injured
unless this Court orders relief. CREW has been forced to divert essential and limited
resources—including time and money—from other important matters that it ordinarily
would have been addressing to the Emoluments issues involving Defendant.”).
15. Id. at 6 (“As competitors and employees of competitors of restaurants located in
Defendant’s hotels and other properties, including restaurants owned by Defendant,
ROC United’s members have been injured by these payments due to lost business, wages,
and tips.”).
16. Memorandum Decision & Order at 2, 28–29, Citizens, 2017 WL 6524851 (No.
1:17-cv-00458).
17. Plaintiffs’ Notice of Appeal, Citizens, 2017 WL 6524851 (No. 1:17-cv-00458)
(S.D.N.Y. Dec. 21, 2017).
18. First Amended Complaint at 20, Blumenthal v. Trump, No. 17-1154 (D.D.C. Aug.
15, 2017).
19. Id. (alleging that the President “denied Plaintiffs the opportunity to give or


No. 2 Issues Faced by the Ethics Advisor 269
The third lawsuit is a lawsuit by the State of Maryland and the
District of Columbia in the United States District Court for the
District of Maryland.20 Maryland and the District of Columbia
allege that businesses in their jurisdictions, as well as businesses
they run, and their sovereign prerogatives, are being prejudiced
because the Trump International Hotel in Washington, D.C., is
serving foreign dignitaries.21 Maryland even goes so far as to
suggest that it might never have ratified the Constitution if it had
thought the Emoluments Clauses would allow a President to
continue his private businesses in the manner President Trump
is doing.22 On March 28, 2018, District Judge Peter J. Messitte
denied the Government’s motion to dismiss in part, holding that
Maryland and the District of Columbia have standing to
challenge transactions at the Trump International Hotel in
Washington, but lack standing to challenge transactions at other
Trump properties.23 The court reserved for further argument
and later decision “the meaning of the Emoluments Clauses and
whether Plaintiffs have otherwise stated claims under
the Clauses.”24
In this context, an “emolument” is, I submit, a benefit “arising
from” or “derived from” the office. “Emolument” is used three

withhold their ‘Consent’ to his acceptance of individual emoluments and has injured
them in their roles as members of Congress”).
20. Complaint, District of Columbia et al. v. Trump, No. 8:17-cv-01596 (D. Md. June
12, 2017).
21. Id. at 36. The District of Columbia and the State of Maryland claim:
Residents of the District and Maryland are injured by the payment of presents
and emoluments to the defendant because it tilts the competitive playing field
toward his businesses; causes competing companies and their employees to
lose business, wages, and tips; and generates a range of market distortions that
restrict and curtail opportunity, diminish revenues and earnings, and hamper
competition.
Id.
22. Id. at 32 (“The prohibitions contained in the Domestic and Foreign Emoluments
Clauses were thus material inducements to the states entering the union. As a state
sovereign, Maryland retains its power to enforce those prohibitions today.”).
23. District of Columbia v. Trump, No. 8:17-cv-01596-PJM (D. Md. March 28, 2018).
The court held that plaintiffs had standing because “Maryland and the District of
Columbia may very well feel themselves obliged, i.e., coerced, to patronize the Hotel in
order to help them obtain federal favors,” because Maryland and the District of Columbia
hold certain business interests that compete with the Trump International Hotel, and the
plaintiffs have a parens patriae interest in protecting their citizens who compete with the
hotel. Id. at 19, 25, 29. It rejected Maryland’s claim to standing based on its alleged
reliance on the Emoluments Clauses when it ratified the Constitution as based on “the
highly doubtful historical proposition that a causal connection existed between the
Emoluments Clauses in the federal Constitution and Maryland’s decision to ratify it.” Id.
at 13.
24. Id. at 47.


270 Texas Review of Law & Politics Vol. 22
times in the U.S. Constitution.25 In two of those uses, it is
expressly tied to the performance of the duties of the office, and
in the third use it is also closely tied to the office. The
Compensation Clause, recently referred to as the Domestic
Emoluments Clause, is quite clear.26 It provides that “[t]he
President shall, at stated Times, receive for his Services, a
Compensation, which shall neither be encreased nor diminished
during the Period for which he shall have been elected, and he
shall not receive within that Period any other Emolument”—
”other” referring back to the term compensation for his
services—”from the United States, or any of them.”27
Likewise, the Incompatibility Clause, which is Article 1,
Section 6, Clause 2, says, “[n]o Senator or Representative shall,
during the Time for which he was elected, be appointed to any
civil Office under the Authority of the United States, which shall
have been created, or the Emoluments whereof shall have been
encreased during such time.”28 “Emoluments whereof” again
refers to the “civil Office” at issue.
The Foreign Emoluments Clause says, “No Person holding any
Office of Profit or Trust under them, shall, without the Consent
of Congress, accept any present, Emolument, Office, or Title of
any kind whatever, from any King, Prince, or foreign State.”29
“Emolument” seems at least implicitly tied to the service of the
Office of Trust or Profit. Moreover, when read consistently with
other uses of the term “emolument” in the Constitution, as the
Supreme Court has instructed in other contexts,30 the Clause
addresses only benefits bestowed as a result of the performance
of the duties of the office, not private business transactions
unrelated to the duties of the office. Thus, a focus on the
constitutional text strongly supports the view that an emolument
is a payment derived from the performance of the duties of
the office.
25. U.S. CONST. art. I, § 6, cl. 2; id. art. I, § 9, cl. 8; id. art. II, § 1, cl. 7.
26. See id. art. II, § 1, cl. 7.
27. Id.
28. Id. art. I, § 6, cl. 2.
29. Id. art. I, § 9, cl. 8.
30. See, e.g., McCulloch v. Maryland, 17 U.S. 316, 414–15 (1819) (looking to the use
and meaning of the word “necessary” in Article I, Section 10, to determine its meaning in
Article I, Section 8); Martin v. Hunter’s Lessee, 14 U.S. 304, 328–30 (1816) (looking to
the meaning of the phrase “shall be vested” in the Vesting Clauses of Articles I and II to
determine its meaning in the Vesting Clause of Article III).



No. 2 Issues Faced by the Ethics Advisor 271
Dictionary definitions support this textual reading. The
Oxford English Dictionary defines emolument as “[p]rofit or
gain arising from office or employment; reward;
remuneration.”31 Other dictionaries have similar definitions.32
Consistent with that well-settled definition, in 1850, the United
States Supreme Court in Hoyt v. United States33 said the term
emoluments, as used in a federal statute, “embrac[es] every
species of compensation or pecuniary profit derived from a
discharge of the duties of the office.”34 It is true that other
broader definitions of “emolument” existed at the time of the
Founding, as well as today, but a broader definition would not fit
the context of the word’s three uses in the Constitution, or the
Court’s ruling in Hoyt.
Thus, the renting of a hotel room from one of the Trump
businesses is not correlated to President Trump’s performance of
the duties of the Office of President. The Trump businesses
rented hotel rooms before the President took office, and
presumably they will do so after he leaves office, just as they are
doing while he is in office. Those transactions are not derived
from his performance of the Office of President.
Nor do the Emoluments Clause arguments fare well when
examined in the historical context. The motions to dismiss the
three suits filed by the United States show that George
Washington, while President, bought three parcels of land in the
31. Emolument, SHORTER OXFORD ENGLISH DICTIONARY ON HISTORICAL PRINCIPLES
(5th ed. 2002).
32. Emolument, BLACK’S LAW DICTIONARY (10th ed. 2014) (“Any advantage, profit, or
gain received as a result of one’s employment or one’s holding or office.”); Emolument,
WEBSTER’S NEW WORLD DICTIONARY OF THE AMERICAN LANGUAGE (2d ed. 1976) (“gain
from employment or position; payment received for work; salary, wages, fees, etc.”);
Emolument, THE AMERICAN HERITAGE DICTIONARY OF THE ENGLISH LANGUAGE (1976)
(“Profit derived from one’s office or employment.”). Academics disagree about which
definition of “emolument” was more commonly accepted when the Constitution was
ratified. Compare John Mikhail, The Definition of “Emolument” in English Language and
Legal Dictionaries, 1523–1806, (July 12, 2017) (unpublished manuscript), https://

papers.ssrn.com/sol3/papers.cfm?abstract_id=2995693 [https://perma.cc/Q6AX-
RHD9] (claiming that the definition of “emolument” used by the Department of Justice

is flawed), with James C. Phillips & Sara White, The Meaning of the Three Emoluments Clauses
in the U.S. Constitution: A Corpus Linguistic Analysis of American English, 1760–1799, 59 S.
TEX. L. REV. (forthcoming 2018), https://papers.ssrn.com/sol3/papers.cfm?abstract
_id=3036938 [https://perma.cc/4VA4-JSJD] (claiming that the Presidential Emoluments
Clause should be understood to contain a narrow, office or public-employment sense of
emolument). At the least, when coupled with the context of “emolument” in both the
Compensation and the Incompatibility Clauses, and the Supreme Court’s discussion of
“emolument” in Hoyt v. United States, 51 U.S. 109 (1850), the need for a connection
between the benefit and performance of the office seems compelling.
33. 51 U.S. 109.
34. Id. at 135.

272 Texas Review of Law & Politics Vol. 22
District of Columbia from the United States government.35 That
purchase was approved by three commissioners.36 One of those
commissioners participated in the Constitutional Convention.37
The other two commissioners served in the state conventions
that ratified the Constitution.38 If the plaintiffs’ definition of
“emolument” was consistent with the original use of that term in
the Constitution, the purchase of land by a President from the
United States, even at fair value, would implicate the
Compensation Clause. Even though President Washington as
well as each of the Commissioners had first-hand knowledge of
the original meaning and intent of the Compensation Clause, no
emoluments issue was raised during that purchase.
More recently, after President Nixon resigned and Vice
President Ford became President, President Ford nominated
Nelson Rockefeller to be Vice President. Under the Twenty-Fifth
Amendment, Mr. Rockefeller was subject to confirmation by a
majority vote of both the House of Representatives and the
Senate.39 Through his inheritance, Rockefeller continued to
hold stock in the Standard Oil company, which did business
worldwide, including with foreign governments.40 Even though
these holdings would, under the plaintiffs’ proposed definition
of “emolument,” implicate the Foreign Emoluments Clause, the
35. Memorandum in Support of Defendant’s Motion to Dismiss at 43, District of
Columbia et al. v. Trump, No. 8:17-cv-01596 (citing Certificate for Lots Purchased in the
District of Columbia, 18 September 1793, FOUNDERS ONLINE, http://

founders.archives.gov/documents/Washington/05-14-02-0074 [https://perma.cc/S9KL-
K42H]); Statement of Points and Authorities in Support of Defendant’s Motion to

Dismiss at 30, Blumenthal v. Trump, No. 17-1154 (same); Memorandum of Law in
Support of Defendant’s Motion to Dismiss at 38, Citizens for Responsibility and Ethics in
Wash. v. Trump, 2017 WL 6524851 (No. 1:17-cv-00458) (same).
36. See Letter from Thomas Johnson, David Stuart & Daniel Carroll as the Comm’rs
for D.C. to George Washington (Mar. 23, 1794), http://founders.archives.gov/
documents/Washington/05-15-02-0331 [https://perma.cc/X8ZK-TVMJ] (detailing the
purchase of real property by then President George Washington).
37. JAMES MADISON, THE DEBATES IN THE FEDERAL CONVENTION OF 1787 WHICH
FRAMED THE CONSTITUTION OF THE UNITED STATES OF AMERICA 1xxxiv (Hunt and Scott,
ed. 1920) (evidencing that Daniel Carroll attended the Federal Convention of 1787 on
behalf of Maryland).
38. See 1 JONATHAN ELLIOT, THE DEBATES IN THE SEVERAL STATE CONVENTIONS ON
THE ADOPTION OF THE FEDERAL CONSTITUTION 324 (2d ed. 1891) (evidencing that
Thomas Johnson voted in Maryland’s state convention); 3 id. at 654 (evidencing that
David Stuart voted in Virginia’s state convention).
39. See U.S. CONST. amend. XXV, § 2 (“Whenever there is a vacancy in the office of
the Vice President, the President shall nominate a Vice President who shall take office
upon confirmation by a majority vote of both Houses of Congress.”).
40. See NOMINATION OF NELSON A. ROCKEFELLER OF NEW YORK TO BE VICE PRESIDENT
OF THE UNITED STATES, S. Exec. Doc. No. 93-34, at 28 (1974); CONFIRMATION OF NELSON
A. ROCKEFELLER AS VICE PRESIDENT OF THE UNITED STATES, H.R. Rep. No. 93-1609, at 39–
40 (1974).

No. 2 Issues Faced by the Ethics Advisor 273
Foreign Emoluments Clause did not arise as a major issue during
months of hearings before the House and the Senate.41 Indeed, a
response by acting Attorney General Laurence Silberman to a
request from Chairman Howard Cannon of the House Rules and
Administration Committee for an analysis of the ethical issues
raised by Mr. Rockefeller’s holdings did not even address the
emoluments issue.42 Mr. Rockefeller was confirmed.43
Even more recently, the Senate confirmed Penny Pritzker,
President Barack Obama’s nominee as Secretary of Commerce,
even though she retained considerable holdings in her family’s
business, Hyatt Hotels.44 No emoluments controversy arose about
her continued holdings of those hotels,45 even though those
41. See NOMINATION OF NELSON A. ROCKEFELLER OF NEW YORK TO BE VICE PRESIDENT
OF THE UNITED STATES, S. Exec. Doc. No. 93-34, at 178–79 (1974) (“Neither the
Constitution nor Federal laws impose conflict-of-interest restrictions on the Offices of
President or Vice President.”); Nomination of Nelson A. Rockefeller of New York to be Vice
President of the United States: Hearings Before the Committee on Rules and Administration, United
States Senate, 93rd Cong. 19–20, 80–83, 236–37 (1974); Nomination of Nelson A. Rockefeller of
New York to be Vice President of the United States: Hearings Before the Committee on the Judiciary,
House of Representatives, 93rd Cong. 207–08, 714–15 (1974). In fact, during the hearings
on Vice President Rockefeller’s nomination, Senator Byrd stated, “[o]bviously if [Mr.
Rockefeller] were a candidate on the national ticket selected by the Republican Party
Convention, there is no present law that would require [him] to divest [himself] or make
[himself] independent of these vast holdings . . .”). Nomination of Nelson A. Rockefeller of
New York to be Vice President of the United States: Hearings Before the Committee on Rules and
Administration United States Senate, 93rd Cong. 80–83 (1974).
42. Letter from Acting Att’y Gen. Laurence H. Silberman to Hon. Howard W.
Cannon, Chairman, Committee on Rules and Administration, U.S. Senate (Sept. 20,

1974), https://fas.org/irp/agency/doj/olc/092074.pdf [https://perma.cc/VD3B-
H7PD].

43. See CONFIRMATION OF NELSON A. ROCKEFELLER AS VICE PRESIDENT OF THE UNITED
STATES, H.R. Rep. No. 93-1609, at 39–40 (1974).
44. Hyatt Hotels Corporation, Form 10-K, at F-41 (2016),

https://s2.q4cdn.com/278413729/files/doc_financials/q4_2016/Hyatt-Q4-2016-Form-
10-K.pdf [https://perma.cc/4WBY-CTNG] (listing the Pritzker family’s interests in and

ownership of Hyatt Hotels Corporation); Laura Litvan, Hotel Heiress Penny Pritzker
Confirmed as U.S. Commerce Secretary, BLOOMBERG (June 25, 2013),

https://skift.com/2013/06/25/hotel-heiress-penny-pritzker-confirmed-as-u-s-commerce-
secretary/ [https://perma.cc/EHJ2-4CHW] (“In a disclosure [from May 2013], Pritzker

reported assets of $400 million to $2.2 billion, excluding the value of more than $50
million in Hyatt stock.”).
45. See NOMINATION OF PENNY PRITZKER TO BE SECRETARY OF THE U.S. DEPARTMENT
OF COMMERCE: HEARING BEFORE THE S. COMM. ON COMMERCE, SCIENCE, AND
TRANSPORTATION, S. Hrg. 113-619, 113th Cong. (2013); 159 Cong. Rec. S5, 119–22 (daily
ed. June 25, 2013); Letter from Penny S. Pritzker to Barbara Fredericks, Assistant Gen.
Counsel for Admin., U.S. Dep’t of Commerce 2 (May 8, 2013),
https://extapps2.oge.gov/201/Presiden.nsf/PAS+Index/56D8501C3C6375D285257FC2
0010E4A7/$FILE/Penny-S-Pritzker-EA.pdf [https://perma.cc/LMH2-6XUT]. Pritzker
states:
I have been advised that the duties of the position of Secretary may involve
particular matters affecting the financial interests of Hyatt Hotels Corporation
and other hotel related entities in which I have a financial interest. The agency
has determined that it is not necessary at this time for me to divest my interests


274 Texas Review of Law & Politics Vol. 22
hotels, like the Trump properties, often host foreign
government officials.

WHY NOT LIQUIDATE THE ASSETS OR PLACE THEM IN A BLIND
TRUST?

Several ethics groups, led by CREW, argue that the President
should have simply divested or liquidated his holdings before he
became President, or alternatively, that he simply should not be
President.46 The President was not impressed by this argument.
His wealth and holdings were fully discussed during the election
campaign, and indeed he touted his wealth and business
experience as some of his primary qualifications for office.
In any event, liquidation or divestiture would not make sense
for several reasons. The first is that these holdings are extensive
and diversified throughout the world. The holdings are very
diversified—from hotels,47 to wineries,48 to licensing deals,49 to
clothing deals50—and many of them are branding deals that use
the Trump name. If the President were to try to divest or
liquidate all these assets, it would effectively be a fire sale with a
potentially draconian loss of value.
Second, liquidation or divestiture of all of these assets would
require scores of counterparties, and probably counterparties
from all over the world. Each prospective counterparty would
need to be evaluated under reasonable ethics standards to
determine whether the individual or entity was an appropriate
counterparty and whether the counterparty was seeking undue
influence with the President. Moreover, lenders to and investors
in the counterparties would need to be evaluated as well. The
vetting would need to look behind the corporate name or the
partnership to identify the true parties in interest and where the
in these entities because my recusal from particular matters in which these
interests pose a conflict of interest will not substantially limit my ability to
perform the essential duties of the position of Secretary.
Id.
46. Second Amended Complaint at 3–4, Citizens for Responsibility and Ethics in
Wash. v. Trump, 2017 WL 6524851 (No. 1:17-cv-00458).
47. Trump Hotels, THE TRUMP ORGANIZATION, https://www.trump.com/trump-hotels
[https://perma.cc/JR9H-4HHY].

48. TRUMP WINERY, https://www.trumpwinery.com [https://perma.cc/2BQG-
MTPL].

49. Ariel Stulberg, How Much Does the Trump Brand Pay?, REAL DEAL: N.Y. REAL EST.

NEWS (Apr. 1, 2017), https://therealdeal.com/issues_articles/how-much-does-the-trump-
brand-pay/ [https://perma.cc/M4B4-U9WF].

50. Merchandise: The Trump Collection, TRUMP ORG., https://www.trump.com
/merchandise/signature-collection/ [https://perma.cc/LY8X-3Z3Y].


No. 2 Issues Faced by the Ethics Advisor 275
money was coming from. This effort would be difficult, costly,
and time-consuming.
Third, the terms of each transaction would need to be
reviewed to determine if the transaction was at fair market value
or if it was a sweetheart deal intended to curry influence with the
President or the Administration.
Fourth, local, state, federal, and some foreign government
approvals would be required. For example, certain of the
transactions would likely require Hart-Scott-Rodino Antitrust
approvals.51 Some of the real estate sales or transfers of licenses
could be subject to local approvals. Transfers of intellectual
property rights might be reviewable in certain circumstances.
Government involvement in the process could be extensive.
Fifth, in the most optimistic circumstances, liquidation or
divestiture would take years. It would be a tremendous
distraction and disruption to the President, to the entire
Administration, and to the country for as long as the
process required.
And finally, an effort to dispose of assets this extensive and
diverse presents a very high prospect of disputes, some of which
could lead to litigation. Litigation would produce additional
distraction, and could require the President to appear in his
personal capacity before members of the federal judiciary, some
of whom he has appointed.
These concerns about divestiture are very real. Ranking
Member Elijah Cummings and Congressman Hakeem Jeffries of
the Committee on Oversight and Government Reform sent a
letter to The Trump Organization dated July 7, 2017.52 The letter
criticized the President on several grounds and asked some
questions about the proposed sale of the Starrett City Complex,53
a low-income apartment complex in New York City, in which the
President is a passive investor with less than a 5% interest.54 In
51. See 15 U.S.C. 18 (2012) (requiring approval by the Federal Trade Commission
and Department of Justice for certain mergers, acquisitions, or transfers of securities
or assets).
52. Letter from Elijah Cummings & Hakeem Jeffries, Congressmen, to Donald
Trump, Jr., Allen Weisselberg & Ben Carson (July 7, 2017), http://founder.archives.gov
/documents/Washington/05-15-02-03311 [https://perma.cc/3NZC-GAXE].
53. Id.
54. Oshrat Carmiel & Sarah Mulholland, Brooklyn’s Starrett City, With Trump as
Investor, Finds a Buyer, BLOOMBERG (Sept. 6, 2017), https://www.bloomberg.com/
news/articles/2017-09-06/brooklyn-s-starrett-city-with-trump-as-investor-finds-a-buyer
[https://perma.cc/S3KK-RH4C] (stating that Trump owns a 4% interest in the Starrett
City complex).


276 Texas Review of Law & Politics Vol. 22
the second paragraph, the letter asserted, “[t]he President has
rejected the advice of ethics experts from across the political
spectrum by refusing to divest his ownership in his personal
businesses.”55 In the very next paragraph, however, after noting
that the federal government would need to approve any sale, the
letter observed, “[t]he President is on both sides of the
negotiation—he oversees the government entity providing
taxpayer funds and he pockets some of that money himself.”56 So
the letter argues that the President should divest to cure
conflicts, but then observes that the act of divesting would create
a conflict. Liquidation or divestiture would not cure perceived
ethical issues; it would multiply and magnify them.
Another possibility proposed by certain critics is a blind trust.
To begin, a blind trust would not cure the supposed emoluments
clause problem claimed by CREW and others. The hotels would
continue, for example, to rent hotel rooms to foreign
dignitaries, and the President would continue to benefit from
those rentals, even if the blind trust shielded him from knowing
about those transactions.
Nor does precedent support use of a blind trust. The ethics
watchdogs often assert that earlier Presidents have used blind
trusts.57 That is not true. President Jimmy Carter placed his
peanut farm and related holdings into a trust, as President
Trump has done, and agreed to step away from the business, as

55. Cummings & Jeffries, supra note 52, at 1.
56. Id.
57. See, e.g., Drew Harwell, Trump’s Conflicts of Interest are Without Precedent in American
Presidential History, WASH. POST (Nov. 9, 2016), https://www.washingtonpost.com

/news/wonk/wp/2016/11/09/trumps-conflicts-of-interest-are-without-precedent-in-
american-presidential-history/?utm_term=.060334268dc1 [https://perma.cc/T7DN-
SDQV] (claiming “many modern presidents—including Ronald Reagan, Bill Clinton and

both Bushes—went beyond what was required and placed their assets in ‘blind trusts,’
run by third-party managers who keep complete control. But Trump has refused to make
such a pledge”); O’Brien, supra note 8, O’Brien says:
[g]overnment officials can retain their assets by placing them in a blind trust
controlled by a fully independent manager . . . a tradition recent presidents
have followed. Lyndon B. Johnson and his wife put their Texas radio holdings
in a blind trust. Jimmy Carter, Ronald Reagan, both of the Bushes and Bill
Clinton did the same with their assets.
Id. Yet Harwell and O’Brien are not alone in this claim. See, e.g., Jennifer Wang, Why
Trump Won’t Use A Blind Trust And What His Predecessors Did With Their Assets, FORBES (Nov. 15, 2016), https://www.forbes.com/sites/jenniferwang/2016/11/15/why-trump-wont-
use-a-blind-trust-and-what-his-predecessors-did-with-their-assets/#5db476fb29c0

[https://perma.cc/22E8-ETST] (claiming that in contrast to Trump, “presidents in
recent history have generally tried their best to adhere to the conflict of interest laws that
govern their fellow executive branch colleagues, keeping plain vanilla portfolios during
their time in office”).


No. 2 Issues Faced by the Ethics Advisor 277
President Trump has also done.58 President Carter chose his
lawyer, Charles Kirbo, as the trustee.59 A truly blind trust would
require appointment of a disinterested trustee, however.60
President Barack Obama did not use a blind trust. He held his
assets primarily in U.S. government bonds under his own
management.61 That is not a blind trust. Moreover, President
Obama received interest payments from the federal
government.62 Under the expansive definition of “emolument”
used by the President’s critics, any income from a federal entity
would violate the Compensation Clause. Moreover, President
Obama continued to receive book royalties while in office,63
some of which likely came from purchases by local, state, and
federal libraries, as well as by foreign governments. These
royalties would also qualify as emoluments under the expansive
definition advocated by CREW and others.
Even more important, President Trump’s assets do not lend
themselves to the treatment of a blind trust. They are highly
visible—Trump Tower in New York and Mar-a-Lago in Florida
are just two examples. Many of the assets are branded with the
“Trump” name. Further, the regulations governing blind trusts
allow holding of a limited range of assets.64 Blind trust treatment
would not work for President Trump’s assets.65
58. DILLON ET AL., supra note 6, at 1.
59. Carter Trustee Foresees the Sale of Peanut Warehouse in Georgia, N.Y. TIMES (Feb. 14,

1981), http://www.nytimes.com/1981/02/15/us/carter-trustee-foresees-the-sale-of-
peanut-warehouse-in-georgia.html [https://perma.cc/3B28-Q434].

60. Philip Taubman, Carter Drops ‘Blind Trust’ Secrecy and Divulges Finances for 1978-9,

N.Y. TIMES (May 31, 1979), http://www.nytimes.com/1979/05/31/archives/carter-drops-
blind-trust-secrecy-and-divulges-finances-for-19789.html [https://perma.cc/6PUU-
HQFK] (explaining that because “[t]he trustee of [a] blind trust must be completely

independent of the person whose business is managed,” Kirbo may have been “ruled an
invalid trustee”); Texts of Carter Statement on Conflict of Interest and Ethics; Appointees’
Guidelines, N.Y. TIMES (Jan. 5, 1977), http://www.nytimes.com/1977/01/05/archives/

texts-of-carter-statement-on-conflicts-of-interest-and-ethics.html [https://perma.cc/XR7P-
68HF] (“Blind trusts will be recognized as appropriate methods of divestiture where

divestiture is required provided: A. The trustee is truly independent . . .”).
61. The President and Vice President’s 2015 Financial Disclosure Forms, THE WHITE HOUSE:
PRESIDENT BARACK OBAMA (May 16, 2016), https://obamawhitehouse.archives.gov/
blog/2016/05/16/president-and-vice-presidents-2015-financial-disclosure-forms
[https://perma.cc/95VC-SBVC] (containing links to President Obama’s financial reports
throughout his tenure).
62. Id.
63. Id.
64. SELECT COMMITTEE ON ETHICS: UNITED STATES SENATE, 124th Cong., QUALIFIED BLIND TRUSTS 3 (2015) https://www.ethics.senate.gov/public/index.cfm/files/serve?
File_id=286A4CF9-5AAB-40EF-9A6C-BF2278E79E38 [https://perma.cc/8DLS-6649]
(listing which assets may and which may not be included in a qualified blind trust).
65. Peter Overby, 4 Questions About Donald Trump’s Potential Conflicts of Interest if He’s
Elected, NPR (June 9, 2016), https://www.npr.org/2016/06/09/481351291/if-elected-


278 Texas Review of Law & Politics Vol. 22
It is also worth noting that, although Donald Trump may be
the wealthiest person ever to be elected President,66 he is not the
first person of immense wealth to have held office in this
country. Mayor Bloomberg in New York City, also a billionaire,
had extensive holdings in a number of different businesses.67
Unlike President Trump, Mayor Bloomberg was subject to
certain ethics statutes, although not the Emoluments Clauses.
Chapter 68 of New York City Charter imposes ethics obligations
on New York City officials.68 Mayor Bloomberg addressed this
issue with a structure not so dissimilar to the structure President
Trump is using.69 He put his interests in a trust under separate
management, but unlike President Trump, Mayor Bloomberg
retained the authority to make major decisions on behalf of
those businesses during the time he was the Mayor.70 Unlike the
structure used by President Trump, the very similar structure
used by Mayor Bloomberg was at most modestly controversial.71

WHAT IS THE CURRENT STRUCTURE AND HOW DOES IT WORK?
So, if one accepts then Assistant Attorney General Scalia’s
position that the ethics laws do not apply to the President,72 and
if the Emoluments Clauses have the meaning I have suggested,
why did President Trump do anything at all? The answer is that
the President has set up this structure for prudential reasons, in
an effort to avoid or at least limit controversy. It is the only
practical way to deal with this issue and to try to minimize the
prospects of conflicts of interest. At his press conference on
January 11, 2017 at Trump Tower, the President and Morgan
Lewis Partner Sheri Dillon announced the structure and
--------------
president-would-trump-put-his-investments-in-a-blind-trust [https://perma.cc/6VMQ-
6PZK] (discussing how using a blind trust for President Trump’s largest assets, such as
the Trump Brand, would be difficult).
66. See Martin, supra note 1.
67. CITY OF NEW YORK CONFLICTS OF INTEREST BOARD, ADVISORY OP. NO. 2002-1 2–3
(Aug. 29, 2002), http://michalblaha.cz/wp-content/uploads/2015/06/AO2002_
1_Bloomberg_Financial_Interests-1.pdf [https://perma.cc/6KQF-TFGC] (listing
Bloomberg’s assets).
68. New York City Charter ch. 68 § 2404 (2017).
69. See generally NEW YORK CONFLICTS OF INTEREST BOARD, supra note 67 (detailing
how former Mayor Bloomberg managed his business interest while in office in light of
Chapter 68 of the New York City Charter).
70. Id.; see also Andrew Sorkin, Bloomberg Chooses a Friend to Manage His Fortune, N.Y.
TIMES (Jan. 16, 2008), http://www.nytimes.com/2008/01/16/nyregion/16conflict.html
[https://perma.cc/6QDH-G46X].
71. Sorkin, supra note 70 (discussing criticisms of Mayor Bloomberg’s involvement in
his business).
72. Memorandum from Antonin Scalia, supra note 10.
--------
generally described the process for preventing conflicts of
interest and ethical problems.73 Another Morgan Lewis Partner,
Fred Fielding, former White House Counsel, was involved in
setting up the structure.74 I became involved shortly thereafter,
and was closely involved in developing the ethical standards used
to evaluate transactions.
Before the Inauguration, the President transferred close to
500 of his businesses into the Donald J. Trump Revocable
Trust.75 The President resigned all of his positions with those
businesses. The trustees of the trust are his son, Donald Jr., and
Allen Weisselberg, who is the longtime Chief Financial Officer of
The Trump Organization.76
Eric Trump now holds executive positions with most of the
companies.77 Donald Trump, Jr. holds a few of those positions,
but the President has committed to give up management
responsibility for the businesses and avoid day-to-day contact
with them.
Ethics review is required for numerous categories of
transactions, including branding and management transactions.
The businesses can consummate those transactions only with the
written approval of an independent Ethics Advisor.78 That is the
job that I hold. A covered transaction cannot go forward without
my written confirmation that it complies with the ethics
standards. Although the statutory ethical standards do not apply,
I look to those standards and the law and lore of government
ethics, with which I am familiar from my years advising public
officials, for nonbinding guidance.
In reviewing the covered transactions, I apply four standards.
First, the transaction has to be in the regular course of business
and/or at fair value. My team and I consult with market
valuation experts and look at similar transactions in the business
sector and same geographic area for confirmation on these
issues. Second, the transaction has to be with an appropriate
---------
73. Donald Trump’s News Conference, supra note 4.
74. Id.
75. See Susanne Craig & Eric Lipton, Records Show Trump Is Still Closely Tied to His
Empire, N.Y. TIMES (Feb. 4, 2017), https://www.nytimes.com/2017/02/03
/us/politics/donald-trump-business.html [https://perma.cc/3DLM-5NXS] (discussing
President-elect Trump’s plan to place his vast business interests in a revocable trust).
76. DILLON ET AL., supra note 6, at 2.
77. Associated Press, Trump Sons Now Head Trump Organization, FORTUNE (Apr. 22,
2017) http://fortune.com/2017/04/22/eric-donald-jr-trump-organization/
[https://perma.cc/8L56-CF3X].
78. DILLON ET AL., supra note 6, at 2.

counterparty. In other words, the counterparty must be a person
or entity of repute, who is not, so far as we can tell after due
inquiry and often a professional background check, engaged in
inappropriate activities. We look beyond the corporate and
partnership forms to determine the real parties in interest as well
as the sources of funding. Third, there must be no indication
that either The Trump Organization or the counterparty is
trying to take advantage of the President’s position through the
transaction. The Trump parties are not allowed to pursue higher
sales values, rents, or management fees as a result of the
President’s position, nor are the counterparties allowed to make
sweetheart deals in an effort to gain influence with the Trump
Administration. This requires looking beyond just the value of
the deal for any other indication that the counterparty is trying
to influence the Administration. Finally, we determine whether
there is any prospect that the transaction would embarrass or
diminish the President or the Presidency. Only if I receive
sufficient information to show that the transaction meets the
criteria am I able to review it and confirm compliance.
I will not go into any particular transactions, which are subject
to attorney–client privilege, but the role I play as Ethics Advisor
is similar to the role that I have played with other public officials
and with corporate clients during the course of my career.79 It is
an iterative process; it is not a binary process in which The
Trump Organization presents a deal to me and I must either
approve it or reject it. To the contrary, if a rigorous review
confirms that the transaction fully complies with the standards, I
provide the required ethics opinion. If I see issues with the
transaction, I specify those issues, and the business has the
opportunity to go back and address those issues in a way that will
pass ethics review. I will not prepare and sign an ethics letter
until I am satisfied that the standards have been met. In a
number of instances, I have identified issues and then never
heard of the deal again, so I assume the business was unable or
unwilling to resolve the issues and the transaction did not go
forward. This is the way lawyers work with clients, through an
iterative process of helping them avoid ethical and legal issues
---------
79. Although my practice is primarily trials and appeals for corporations and
businesses, I have advised a President, numerous Members of the Senate and House,
Cabinet officials, and Governors, and many candidates about legal and ethical
compliance. Bobby R. Burchfield, KING & SPALDING,
https://www.kslaw.com/people/Bobby-Burchfield [https://perma.cc/2KJ9-9FNY].
but also helping them find a way to get to the right position in an
ethical and legal way. So far, I have received full cooperation
from The Trump Organization management, internal lawyers,
and compliance staff.

CONCLUSION

Many of the Founding Fathers who drafted the Constitution
were men of great wealth, with vast agricultural and business
holdings. Thereafter, many of them served in the highest
positions of the Federal Government in its early days. It is not
conceivable that they would have drafted a Constitution that
would prevent individuals with extensive private business
interests from serving in those positions, and then immediately
have violated their own proscriptions.
President Trump has gone beyond the legal requirements to
insulate himself and his businesses from ethical issues. Criticisms
of the structure in place misunderstand not only the definition
of “emolument” as used in the Constitution but also ignore the
serious ethical problems that would be created by divestiture or
liquidation. The ethical standards are rigorous and rigorously
applied. Fears of serious financial conflicts of interest have
not materialized.