So far, Trump has behaved as if he believes that millions of voters chose him because they wanted to enrich his family and not theirs.PHOTOGRAPH BY SUSAN WALSH / THE APKleptocracy (from Ancient Greek κλέπτης (kléptēs, “thief”), κλέπτω (kléptō, “steal”), from Proto-Indo-European *klep- (“to steal”); and from the Ancient Greek suffix -κρατία (-kratía), from κράτος (krátos, “power, rule”; klépto- thieves + -kratos rule, literally "rule by thieves") is a government with corrupt rulers (kleptocrats) that use their power to exploit the people and natural resources of their own territory in order to extend their personal wealth and political power. Typically this system involves the embezzlement of state funds at the expense of the wider population, sometimes without even the pretense of honest service.
If there had been any ambiguity about how far Donald Trump was prepared to press his role as President in service of the business interests of himself and his family, it was laid to rest on February 9th by his most visible surrogate, Kellyanne Conway. “Go buy Ivanka’s stuff is what I would say,” Conway now famously said on Fox News. “I’m going to give a free commercial here: Go buy it today, everybody. You can find it online.”
This stunning promotional message (for which Conway was reportedly “counselled”) came after Trump publicly scolded the retailer Nordstrom, which made what appears to be a routine business decision to drop Ivanka Trump’s fashion line due to underperforming sales. Other retailers had already taken steps to reduce the Ivanka brand’s prominence in their stores; the discount chains T.J. Maxx and Marshall’s sent notes to their employees last week, according to the Times, instructing them to stop promoting the merchandise separately and to mix it in with other labels. Neiman Marcus, a more upscale chain, said that is was phasing out Ivanka’s jewelry from its Web site. (The jewelry is still available at Lord & Taylor, along with the label’s clothing, shoes, and handbags, which are also sold at Macy’s.) According to Nordstrom, sales of the brand had been declining “steadily” during the last year—and especially since September, 2016—while other estimates showed sales plummeting at several retailers. That is hardly surprising given that its target customers are young professional women, many of whom have recoiled from Trump’s overt misogyny. Judging from his public messaging, Ivanka’s father, the President of the United States, feels that corporations should set aside their own economic interests if their business decisions might hurt his family. So far, Trump has behaved as if he believes he has a mandate to act this way, as if millions of voters chose him because they wanted to enrich his family and not theirs.
It’s difficult to keep track of the ways in which the norms and ethical standards that have long governed the personal financial interests of the President have been breached in only a short time. Trump amassed enough Electoral College votes to become President without releasing his tax returns, leaving Americans in the dark about the sources of his earnings and his debts, and the urgent question of to whom, exactly, he is beholden. Shortly after Election Day, he declared that he was exempt from ethics and conflict-of-interest rules (which in some areas is technically true). On January 11th, Trump’s attorney stood behind a podium at Trump International Hotel in Washington, D.C., and pointed to a table stacked with manila folders: Trump would be resolving his enormous, unprecedented business conflicts, she assured the American people, by placing his ownership of the Trump Organization into a trust and leaving the operational management in the hands of his two sons. Ethics experts said at the time that the measures fell laughably short, because Trump already knew what businesses the company was involved in and would still be collecting its profits. Since then, it has become clear that even those thin measures were largely cosmetic. The trust itself, theTimes reported, will be overseen by Trump’s oldest son, Donald, and his longtime company C.F.O. As its name—Donald J. Trump Revocable Trust—suggests, it can also be undone at any time.
The Trump Organization has not gone out of its way to assuage concerns about overt profiteering: Trump’s Palm Beach golf club is moving ahead with plans to double its membership prices; the President is using his Mar-a-Lago golf club as a venue for hosting foreign leaders; the head of Trump Hotels has discussed plans for a massive domestic expansion; and the company continues to own the Trump hotel in Washington, which is located in the Old Post Office, in violation of a lease prohibiting federally elected officials from benefitting from it financially. More recently, it emerged that the Defense Department and the Secret Service were considering leasing space inside Trump Tower in New York, in order to provide security services to Trump and his family, effectively paying the President rent.
Although the new President has taken some steps to distance himself from his finances, including selling his public stock holdings and resigning from several of the family enterprises he was involved with, he has largely shown himself to be indifferent to critics of his conflicts, including the legal scholars and former White House ethics lawyers who filed a lawsuit on January 22nd alleging that taking payments from foreign government entities at his hotels and other properties violates the Constitution. As part of his plan to address these ethics problems, which threaten to create endless distractions for his Administration, Trump volunteered (in his words) to hire an ethics monitor to insure that nothing inappropriate happens.
For companies, the hiring of an ethics or compliance monitor often happens under different circumstances. Typically, after a company has been charged with fraud, or money laundering, or, possibly, with having been infiltrated by organized crime, the government will impose such conditions as a prerequisite to settling the case. The arrangement allows the Department of Justice to make certain that a company continues to uphold its side of the deal.
It appears that Trump, by calling for an independent ethics monitor to watch over his company, was trying to evoke those sorts of agreements—but what he has done, voluntarily, is far less than what a compliance-monitor agreement with the government would require.
Normally, the selection of a monitor is a rigorous process, and includes rules to insure that the monitor has an arm’s-length relationship with the entity being monitored. In addition, the government usually has the right to approve the person who is hired for the job. “There’s a certain amount of transparency—you can’t just pick and choose whomever you want,” Stephen Fishbein, a partner with Shearman and Sterling, who has served as a corporate compliance monitor himself, said. “If Trump wanted to do something similar, it would be a fairly elaborate setup. He wouldn’t have complete discretion on who it was, and there would be a written public document that would explain what the rules of the road are.”
Because Trump is undertaking the measures at will, he can pick whomever he wants. And the people the Trump Organization has chosen reflect, to some extent, Trump’s apparent attitude toward conflicts of interest. Bobby Burchfield, a litigator with the law firm King & Spalding, in Washington, D.C., was named as an independent ethics adviser to the Trump Organization; part of his job will be to review the company’s business transactions and make sure they don’t pose any conflicts. Burchfield is an experienced lawyer, but hardly a neutral one: he’s a longtime ally of the Republican Party, having represented George W. Bush during the vote recount in Florida, in 2000, and serving as chairman of Crossroads G.P.S., the Karl Rove-backed dark-money fund-raising machine. In 2015, he was named the Republican Lawyer of the Year by the National Republican Lawyers Association.
Perhaps even more troubling, Trump’s company also appointed its own attorney, a longtime Trump Organization executive named George Sorial, as its chief compliance counsel. The job, according to Sorial’s public statements about his plans, will be to insure that the company does not take any actions that could be perceived as exploiting Trump’s position as President. Sorial is deeply enmeshed in the company: he has been employed by Trump since 2007, and worked on the Trump University fraud litigation, which the company settled for twenty-five million dollars. Unlike official Justice Department oversight, which would require the monitor to report on the company’s behavior to the government, there is no indication that the Trump Organization’s internal or external ethics officers will be sharing their activities with the government or the public. In other words, Americans will continue to be uninformed as to Trump’s business conflicts, except when he decides to broadcast them on Twitter.
This stunning promotional message (for which Conway was reportedly “counselled”) came after Trump publicly scolded the retailer Nordstrom, which made what appears to be a routine business decision to drop Ivanka Trump’s fashion line due to underperforming sales. Other retailers had already taken steps to reduce the Ivanka brand’s prominence in their stores; the discount chains T.J. Maxx and Marshall’s sent notes to their employees last week, according to the Times, instructing them to stop promoting the merchandise separately and to mix it in with other labels. Neiman Marcus, a more upscale chain, said that is was phasing out Ivanka’s jewelry from its Web site. (The jewelry is still available at Lord & Taylor, along with the label’s clothing, shoes, and handbags, which are also sold at Macy’s.) According to Nordstrom, sales of the brand had been declining “steadily” during the last year—and especially since September, 2016—while other estimates showed sales plummeting at several retailers. That is hardly surprising given that its target customers are young professional women, many of whom have recoiled from Trump’s overt misogyny. Judging from his public messaging, Ivanka’s father, the President of the United States, feels that corporations should set aside their own economic interests if their business decisions might hurt his family. So far, Trump has behaved as if he believes he has a mandate to act this way, as if millions of voters chose him because they wanted to enrich his family and not theirs.
It’s difficult to keep track of the ways in which the norms and ethical standards that have long governed the personal financial interests of the President have been breached in only a short time. Trump amassed enough Electoral College votes to become President without releasing his tax returns, leaving Americans in the dark about the sources of his earnings and his debts, and the urgent question of to whom, exactly, he is beholden. Shortly after Election Day, he declared that he was exempt from ethics and conflict-of-interest rules (which in some areas is technically true). On January 11th, Trump’s attorney stood behind a podium at Trump International Hotel in Washington, D.C., and pointed to a table stacked with manila folders: Trump would be resolving his enormous, unprecedented business conflicts, she assured the American people, by placing his ownership of the Trump Organization into a trust and leaving the operational management in the hands of his two sons. Ethics experts said at the time that the measures fell laughably short, because Trump already knew what businesses the company was involved in and would still be collecting its profits. Since then, it has become clear that even those thin measures were largely cosmetic. The trust itself, theTimes reported, will be overseen by Trump’s oldest son, Donald, and his longtime company C.F.O. As its name—Donald J. Trump Revocable Trust—suggests, it can also be undone at any time.
The Trump Organization has not gone out of its way to assuage concerns about overt profiteering: Trump’s Palm Beach golf club is moving ahead with plans to double its membership prices; the President is using his Mar-a-Lago golf club as a venue for hosting foreign leaders; the head of Trump Hotels has discussed plans for a massive domestic expansion; and the company continues to own the Trump hotel in Washington, which is located in the Old Post Office, in violation of a lease prohibiting federally elected officials from benefitting from it financially. More recently, it emerged that the Defense Department and the Secret Service were considering leasing space inside Trump Tower in New York, in order to provide security services to Trump and his family, effectively paying the President rent.
Although the new President has taken some steps to distance himself from his finances, including selling his public stock holdings and resigning from several of the family enterprises he was involved with, he has largely shown himself to be indifferent to critics of his conflicts, including the legal scholars and former White House ethics lawyers who filed a lawsuit on January 22nd alleging that taking payments from foreign government entities at his hotels and other properties violates the Constitution. As part of his plan to address these ethics problems, which threaten to create endless distractions for his Administration, Trump volunteered (in his words) to hire an ethics monitor to insure that nothing inappropriate happens.
For companies, the hiring of an ethics or compliance monitor often happens under different circumstances. Typically, after a company has been charged with fraud, or money laundering, or, possibly, with having been infiltrated by organized crime, the government will impose such conditions as a prerequisite to settling the case. The arrangement allows the Department of Justice to make certain that a company continues to uphold its side of the deal.
It appears that Trump, by calling for an independent ethics monitor to watch over his company, was trying to evoke those sorts of agreements—but what he has done, voluntarily, is far less than what a compliance-monitor agreement with the government would require.
Normally, the selection of a monitor is a rigorous process, and includes rules to insure that the monitor has an arm’s-length relationship with the entity being monitored. In addition, the government usually has the right to approve the person who is hired for the job. “There’s a certain amount of transparency—you can’t just pick and choose whomever you want,” Stephen Fishbein, a partner with Shearman and Sterling, who has served as a corporate compliance monitor himself, said. “If Trump wanted to do something similar, it would be a fairly elaborate setup. He wouldn’t have complete discretion on who it was, and there would be a written public document that would explain what the rules of the road are.”
Because Trump is undertaking the measures at will, he can pick whomever he wants. And the people the Trump Organization has chosen reflect, to some extent, Trump’s apparent attitude toward conflicts of interest. Bobby Burchfield, a litigator with the law firm King & Spalding, in Washington, D.C., was named as an independent ethics adviser to the Trump Organization; part of his job will be to review the company’s business transactions and make sure they don’t pose any conflicts. Burchfield is an experienced lawyer, but hardly a neutral one: he’s a longtime ally of the Republican Party, having represented George W. Bush during the vote recount in Florida, in 2000, and serving as chairman of Crossroads G.P.S., the Karl Rove-backed dark-money fund-raising machine. In 2015, he was named the Republican Lawyer of the Year by the National Republican Lawyers Association.
Perhaps even more troubling, Trump’s company also appointed its own attorney, a longtime Trump Organization executive named George Sorial, as its chief compliance counsel. The job, according to Sorial’s public statements about his plans, will be to insure that the company does not take any actions that could be perceived as exploiting Trump’s position as President. Sorial is deeply enmeshed in the company: he has been employed by Trump since 2007, and worked on the Trump University fraud litigation, which the company settled for twenty-five million dollars. Unlike official Justice Department oversight, which would require the monitor to report on the company’s behavior to the government, there is no indication that the Trump Organization’s internal or external ethics officers will be sharing their activities with the government or the public. In other words, Americans will continue to be uninformed as to Trump’s business conflicts, except when he decides to broadcast them on Twitter.
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