The annual New Year’s Eve party at Donald Trump’s Mar-a-Lago resort in Florida was a festival of ostentatious excess. Celebrities and the wealthy sipped on champagne with their caviar and foie gras. But the hundreds of people who bought a ticket to the sold-out event enjoyed something even more elite: access to Donald Trump, who profited personally from their $500 entry fee.
Trump showed up to the event and gave a brief speech to club members, according to the New York Times. While it’s common for presidents to attend glitzy events to raise money for their political campaigns, their party, or for charity, the Mar-a-Lago event is different. The proceeds from the event benefit Trump, who owns the club, directly.
The Mar-a-Lago incident illustrates a fundamental question about Trump’s presidency: Will his personal financial interests come first — shaping US policy at the expense of the country?
In the final weeks of 2016, the Trump family responded to criticisms with a string of proposals to distance themselves from perceived conflicts of interest. Trump said he wants to shut down his so-called charitable foundation. He backed away from individual real estate development projects, including some in Argentina, Azerbaijan, and Georgia. And his son Eric vowed to stop holding charitable fundraisers while his father is president of the United States.
Trump has gotten a few optimistic headlines out of this, like these from the New York Times: “Trump Organization Moves to Avoid Possible Conflicts of Interest” and “Denying Conflict, Trump Family Tries to Resolve Potential Problems.”
The reality, though, is that these are just token concessions. Trump has done nothing to tackle the underlying problem: He’s the founder, president, and major shareholder of a multibillion-dollar corporation, and he has no plans to separate himself from his businesses before he becomes president on January 20. As long as that’s the case, conflicts like the Mar-a-Lago New Year’s Eve bash will be constant. The president of the United States will be up for sale.
Trump’s wealth went from a strength to a weakness
During the campaign, Trump touted his wealth as evidence of his incorruptibility. Unlike other politicians, the candidate claimed, he didn’t need to curry favor with special interests in order to raise money for his campaign.
That argument turned out not to be true. Trump raised and spent nearly $1 billion. Even during the primaries, when he claimed to be entirely self-funded, he raised more than $260 million.
Now that Trump is in office, his web of businesses offers many direct opportunities for a unique style of corruption. If you want to curry favor with Donald Trump, you don’t need to hire a lobbyist or donate to a Super PAC, a favor that would benefit his political prospects. Instead, you can put money directly into the president-elect’s pocket by doing business at his hotels or other businesses.
- The Trump International Hotel in Washington, DC, held a reception to promote itself to diplomats as the best place to stay in the city.
- The kingdom of Bahrain is celebrating its 45th national day at the hotel, and the Kuwaiti Embassy moved an event there from the Four Seasons.
- Ivanka Trump advertised to journalists a $10,000 bracelet that she wore in a television appearance.
- A Dubai billionaire says he hopes to do more business with the Trump Organization during Trump’s presidency.
This kind of corruption is more familiar in developing countries, where wealthy power holders and their children keep a foot in both business and politics. And if the usual influence of money in politics is pernicious, this is much worse. Trump isn’t just comparing which policies might benefit his campaign’s purse. He’ll be making decisions that come with numbers attached: He’ll know whether they affect his personal wealth. And the public won’t. A contribution to a campaign is public. A private dealing with Trump is not.
Despite Trump’s applause line that he wants to be “greedy for the United States,” he’ll be able to be greedy for himself as well.
Trump’s huge conflict of interest is still in place
Over the past two weeks, Trump and his children have taken several steps that, at least superficially, look like efforts to reduce the potential for conflicts of interest.
Trump said he would shutter his eponymous charity, the Trump Foundation. Legally, he might not be able to do this: The foundation is under investigation in New York for, among other problems, reportedly spending about $250,000 to settle legal problems for the Trump Organization.
The Trump Foundation was very bad at being a charity. So Trump’s vow to shut it down kills two birds with one stone: It eliminates a possible conflict of interest that’s far from the most serious of the potential conflicts he faces, and it gets a positive message about the Trump Foundation, which is under investigation, into the headlines for once.
The Trump Organization stepped back from real estate development projects in Argentina, Georgia, and Azerbaijan, and dropped a plan to build a controversial sea wall in Ireland. But the company’s general counsel portrayed these as normal business decisions rather than as an attempt to alleviate conflicts of interest. Doing so would have meant acknowledging the possibility of conflicts, something Trump has steadfastly refused to do.
And after news emerged that Trump’s two adult sons, Donald Jr. and Eric Trump, had helped found a new nonprofit supporting hunting and were offering access to themselves and their father in exchange for donations, Eric Trump said he’d stop fundraising for charity during his father’s administration. Then he pledged to withdraw from political decision-making as well and focus on running the business.
And while Trump was getting credit for all of this, his private club in Florida was selling tickets to a New Year’s Eve party the president-elect would attend. It’s not unusual for presidents to attend political and nonprofit fundraisers. But it’s very unusual for a president-elect to headline an event whose proceeds benefit him personally.
This illustrates why none of Trump’s recent announcements alter the two fundamental concerns about the potential for corruption in the Trump administration: The president could be for sale to any wealthy individual, corporation, or government willing to spend money at his businesses. And there’s no guarantee that Trump won’t shape US policy to benefit himself and his businesses at the expense of competitors and the rest of the country.
As long as the Trump Organization is run by Trump children and consists of, in part, selling the name “Trump” to businesses around the world, there is essentially a giant, blinking neon sign directing anyone who wants to try to bribe the president to the most convenient outpost for doing so. Trump isn’t giving up his stake in the Trump Organization, and while his children will be managing it while he’s in office, his announcement implied that he would return to the business after his presidency.
The Trump Hotel has not suddenly become the hottest venue in DC for events such as the Bahraini national day because it’s a nice hotel. DC has other lots of nice hotels. But there’s only one hotel whose profits go to the president-elect of the United States.
The changes Trump has announced so far are a sideshow compared with those big issues. The only way to actually avoid conflicts of interest is for Trump to sell the company.
Trump’s corruption is a real problem for everyone
A small group of ethics experts, most notably two former White House ethics officials, and some Democratic members of Congress have emphasized the risk Trump’s corruption posed. But many of Trump’s supporters see his businesses as a positive, while his detractors seem less concerned about the issue than they are his ties to Russia, his racist remarks, or his choices for his Cabinet.
Many people in the US believe that politics is already corrupt — that politicians are bought and paid for by special interests and that the legislation they pursue reflects this. And aside from Trump’s competitors, who could lose out on business because they don’t offer the prime benefit of access to the president, the potential victims of his regime are fairly abstract.
But the opportunities for corruption in the Trump presidency are different than the usual concerns about big money in politics. Norm Eisen, a former ambassador and the chief White House ethics officer for part of the Obama administration, compares the second-generation Trumps’ role in their father’s businesses to the “princelings” of Central Asia, the offspring of oligarchs who parlay their political power into riches.
And even if Trump piously refuses every attempt to influence him through his businesses, the mere possibility is likely to lead to less public trust in government. The result is what political theorist Francis Fukuyama compared to a “regressive tax” — the elites who play the game get richer at the expense of the rest.
Most of the analysis of the worst effects of corruption was done on countries that don’t much resemble the United States. They’re poorer, less productive, and less democratic. It’s a worrying club for the United States to be in.
Trump hasn’t taken steps to deal with this problem because he hasn’t even admitted it is a problem. Until he does, he shouldn’t be graded on a curve.