President-elect Donald Trump looks set to enter the White House with arguably the biggest array of conflicts of interest of any US president.
For just one example, take the case of Deutsche Bank. Trump’s lender of last resort has loaned him $364 million in mortgages in the past few years, according to The Intercept, plus $2.5 billion to his affiliated businesses and a further $1 billion in loan guarantees. And how are Deutsche’s current relations with Washington? Oh yeah, the government fined the bank $14 billion in September, according to the Wall Street Journal, to settle a series of investigations into the bank’s use of mortgage-backed securities during the financial crisis.
“There will be times when an action taken on behalf of the US can enrich Trump Enterprises, even as it hurts other American interests. What will he do?” It’s not just a matter of managing his old friends, but his assets themselves. Unlike most other senior officials, the president and vice president have no legal obligation to put their assets in a blind trust. Trump has promised to do so, but there’s a wee problem there: the blind trust, he says, will be run by his children. At the head is likely to be his daughter Ivanka, who, along with her husband Jared Kushner, was one of Trump’s lead advisers throughout the campaign. Can we really expect Trump and his favorite child to never discuss the business on which they have spent years working together? Is it really a “blind” trust if you can work out what’s going on just by hearing a loose word from your daughter? Norman Ornstein, a political scientist and senior fellow at the nonpartisan American Enterprise Institute think tank, isn’t convinced.
“The idea that Trump will place his business holdings in the hands of his children is to me just frightening,” Ornstein wrote in an email. “There will be times when an action taken on behalf of the US can enrich Trump Enterprises, even as it hurts other American interests. What will he do?”
We contacted the Trump campaign to ask, but they didn’t reply to an emailed request for comment as of publication.
For answers to how this might play out, there’s a recent global precedent in Ukraine. Oligarch Petro Poroshenko was elected president there in 2014 while similarly promising to hide his assets from his sight and sell his main business, Roshen Confectionary Corporation, as soon as he could. However, he is yet to sell off Roshen, and his blind trust is currently run by the corporation’s long-time CEO Vyacheslav Moskalevsky, says Anders Aslund, a leading Ukraine expert and senior fellow at the Atlantic Council think tank. “It’s a completely hopeless situation,” he says.
Russian president Vladimir Putin has been using the situation to manipulate the Ukrainian leader, Aslund claims. Aslund’s sources in Ukraine tell him the two have discussed Poroshenko’s businesses in private conversations: “Poroshenko is kept very much in line by the Kremlin,” he says. In October, Putin even tauntingly mentioned a factory Poroshenko owns in Russia, telling a conference that “there are some problems with the non-payment of VAT.”
“Poroshenko is kept very much in line by the Kremlin.” Poroshenko was elected on an anti-corruption platform that prided itself on hiring foreign experts to clean up the country, but this year his administration has seen embarrassing, high profile resignations by officials frustrated with corruption slowing down their attempts at reform. In February, Poroshenko’s Lithuanian-born technocratic economy minister resigned over the entrenched graft he was facing, health minister Alexander Kvitashvili stepped down in July, and the bombastic former president of Georgia Mikheil Saakashvili quit as governor of one of Ukraine’s most important regions in November. Announcing his resignation, Saakashvili pointedly asked his onetime friend Poroshenko, “How much can you lie and cheat?”
In the midst of all that, the Panama Papers made public on May 9 revealed that, while war raged in eastern Ukraine only three months after Poroshenko was elected in 2014, he was quietly setting up a secret offshore company in the British Virgin Islands.
So, what lessons can we take for Trump’s presidency? First, we need complete transparency, beginning with Trump releasing his tax returns and announcing any assets he may not have declared on his FEC and SEC filings. Second, his assets should be put in a blind trust run by a third party to block off exactly the distractions Poroshenko faced while his country was at war. That’s not an unprecedented demand: Ronald Reagan, Bill Clinton and both Bushes did so.
Trump is involved in over 500 companies, in countries like China, the UAE and Saudi Arabia—all of which have very complex relations with the US. There’s also strong evidence that he has at least received financing from Russian investors, according to the Washington Post, and he has tried a number of times to invest in property there. Putin is unlikely to be able to bully Trump the way he allegedly does Poroshenko, but Aslund says “there is a straightforward bribery risk” when the future president ends up in diplomatic negotiations with countries where he has assets, or where his children running his business are trying to invest. And Putin, a wily former KGB agent, is likely to pull every lever he has at his disposal to try to manipulate Trump.
In addition, there’s little to stop Trump’s children leveraging his name to do deals with reprehensible regimes, as former Federal Election commission chair Trevor Potter has pointed out. “We are faced with the possibility that a son or daughter of the president will turn up in Moscow or Uzbekistan or somewhere else negotiating a deal on a new property that will bear the name of the president, and the full knowledge that the president really is an owner of the company. That presents problems of a dimension we have never seen before,” Potter said in September, according to the Post.
“Trump is a liar, he thinks he’s unaccountable, he can do what he wants—these are Ukraine’s elites since 1991.” The final message to take from Ukraine is the value of civil society, says Taras Kuzio, a senior fellow at the Canadian Institute of Ukrainian Studies. Ukrainians have learned to hold their elites to account where the justice system has failed, and have overturned two corrupt governments in revolutions over the last 12 years. They keep themselves intensely well-informed on politics: “You ask any taxi driver in Kyiv, who stole what, where, and when and he’ll tell you,” Kuzio says. “American civil society could learn a lot from Ukraine because they’ve had to deal with Trump-like characters a lot longer than America has had to; people lie to them all the time. Trump is a liar, he thinks he’s unaccountable, he can do what he wants—these are Ukraine’s elites since 1991.”
If American citizens, NGOs, journalists and communities fail to step up, the outcome could get bleaker and bleaker, says Ornstein: “What now? The word kleptocracy comes to mind,” he wrote.