Category: Pocket Padding

Trump Trust Revised So He Can Take Profits From His Businesses At Any Time

A newly surfaced detail in the trust agreement Donald Trump established to administer his business holdings shows the extent to which the President remains financially wedded to the Trump Organization months after moving into 1600 Pennsylvania Avenue.

As ProPublica reported Monday, Trump added a clause to his trust agreement on Feb. 10 that allows him to withdraw funds at any time from any of his businesses, which number more than 400, without disclosing it publicly.

“The Trustees shall distribute net income or principal to Donald J. Trump at his request, as the Trustees deem necessary for his maintenance, support of uninsured medical expenses, or as the Trustees otherwise deem appropriate,” the document reads.

Before Trump took office, he promised to cede control of the Trump Organization to his two adult sons, who also pledged to keep the President in the dark about the company’s day-to-day operations. As it turns out, Trump not only may continue to withdraw money from his businesses, but his son Eric Trump also has said he plans to give his father regular financial updates. As ProPublica noted, the revised trust agreement stipulates that trustees “shall not provide any report to Donald J. Trump on the holdings and sources of income of the Trust.”

If Trump’s refusal to release any of his tax returns is any indication, the public is unlikely to learn any details about what profits Trump is taking from his businesses while he is in office.

(h/t Talking Points Memo)

Ivanka Trump and Jared Kushner Still Benefiting From Business Empire

Ivanka Trump and Jared Kushner, President Trump’s daughter and son-in-law, will remain the beneficiaries of a sprawling real estate and investment business still worth as much as $740 million, despite their new government responsibilities, according to ethics filings released by the White House Friday night.

Ms. Trump will also maintain a stake in the Trump International Hotel in Washington, D.C. The hotel, just down the street from the White House, has drawn protests from ethics experts who worry that foreign governments or special interests could stay there in order to curry favor with the administration.

It is unclear how Ms. Trump would earn income from that stake. Mr. Kushner’s financial disclosures said that Ms. Trump earned between $1 million and $5 million from the hotel between January 2016 and March 2017, and put the value of her stake at between $5 million and $25 million.

The disclosures were part of a broad, Friday-night document release by the White House that exposed the assets of as many as 180 senior officials to public scrutiny. The reports showed the assets and wealth of senior staff members at the time they entered government service.

Those disclosures included the assets of Gary D. Cohn, the former president of Goldman Sachs who now leads the National Economic Council, Kellyanne Conway, the pollster and counsel to Mr. Trump and Stephen K. Bannon, the chief strategist to the president.

Mr. Bannon disclosed $191,000 in consulting fees he earned from Breitbart News Network, the conservative media organization, $125,333 from Cambridge Analytica, a data firm that worked for the Trump campaign, and $61,539 in salary from the Government Accountability Institute, a conservative nonprofit organization. All three are backed by Robert Mercer and his daughter Rebekah, financiers and major Republican donors.

Mr. Bannon’s most valuable asset was Bannon Strategic Advisors Inc., a privately held consulting firm into which income from his other investments appeared to flow. It was valued at between $5 million and $25 million. He also held bank accounts valued at up to $2.25 million, and rental real estate worth as much as $10.5 million.

Ms. Conway earned at least $842,614 last year, and perhaps slightly more, the filings show. Her assets are valued at between $11 million and at least $44.2 million.

Mr. Cohn is far wealthier, with assets valued between $253 million and $611 million, and income last year as high as $77 million. Another White House official, Reed Cordish, who heads up technology initiatives, accumulated assets as a Maryland developer valued as high as $424 million.

Mr. Trump’s administration is considered the most wealthy in American history, with members of his senior staff and cabinet worth an estimated $12 billion, according to a tally by Bloomberg. The Friday filings will add voluminous detail to that top-line figure. The White house chief of staff, Reince Priebus, for example, earned at least $1.18 million — nearly half of which came from the Republican National Committee, which he formerly led. His assets totaled between $604,008 and at least $1.26 million.

“I think one of the really interesting things that people are going to see today — and I think it’s something that should be celebrated — is that the president has brought a lot of people into this administration, and this White House in particular, who have been very blessed and very successful,” said Sean Spicer, the White House press secretary. The officials “have given up a lot to come into government by setting aside a lot of assets,” he said.

Until January, Mr. Kushner was the chief executive of Kushner Companies, a family-run real estate investment firm with holdings across the country. It is a growing business that has taken part in at least $7 billion of acquisitions over the past decade.

Late Friday, the White House released details of the plan devised by his advisers to avoid conflicts of interest between Mr. Kushner’s government role and the wide-ranging business empire he ran with his father. That business depends on foreign investment from undisclosed sources, as well as billions of dollars in loans from the world’s biggest financial services firms.

Although Mr. Kushner has stepped down from his management positions at the more than 200 entities that operated aspects of the family real estate business, he will remain a beneficiary of a vast majority of the business he ran for the past decade, through a series of trusts that already owned the various real estate companies.

The plan laid out on Friday “is not sufficient,” said Larry Noble, a former general counsel and chief ethics officer for the Federal Election Commission. “While removing himself from the management of the businesses is an important step, he is still financially benefiting from how the businesses do. This presents potential for a conflict of interest. Given his level in the White House and broad portfolio, it’s hard to see how he will recuse himself from everything that may impact his financial interest.”

While the filing discloses Mr. Kushner’s personal lenders, it does not provide information on his business partners or lenders to his projects.

His real estate firm has borrowed money from the likes of Goldman Sachs, the Blackstone Group, Deutsche Bank and the French bank Natixis. It also received loans from Israel’s largest bank, Bank Hapoalim, which is the subject of a United States Justice Department investigation into allegations that it helped wealthy Americans evade taxes using undeclared accounts.

Most recently, his firm’s flagship property at 666 Fifth Avenue in Manhattan was the subject of controversy: Around the time his father-in-law received the Republican nomination last spring, Mr. Kushner’s firm began conversations with a Chinese company with ties to some of the Communist Party’s leading families about a plan to invest billions of dollars in the troubled office tower.

Mr. Kushner’s company and the firm, Anbang Insurance Group, agreed to end the talks on Wednesday after weeks of negative publicity about the deal, criticized as a bailout of the Kushners. The building had already been rescued by a number of prominent firms, including the private equity giant Carlyle Group, and Zara, the Spanish fashion retailer founded and owned by Amancio Ortega, one of the world’s wealthiest men.

Mr. Kushner has divested his stakes in any businesses connected to that property.

The disclosures do not reveal the names of investors and lenders to ventures that Mr. Kushner is retaining a stake in. For example, the form shows Mr. Kushner is retaining a stake in a limited liability corporation that owns a Trump-branded luxury rental high-rise building in Jersey City worth as much as $5 million. That project was financed with tens of millions of dollars from wealthy Chinese investors through a controversial visa-for-sale program called EB-5.

However, the filing does not disclose the names of any of those investors — or partners in any of his other projects.

“We don’t know who the business partners are in many of these investments,” Mr. Noble said, “and those business partners may also have interests that will be affected by how he advises the government. And that’s a concern.”

“He could have foreign business partners who have a real interest in policy, and he may be advising the president on those policies,” Mr. Noble added. “This is a dark area where we just don’t know what’s going on.”

In all, the Kushner company owns more than 20,000 apartments and approximately 14 million square feet of office space.

Previous disclosures by the United States Office of Government Ethics showed that Mr. Kushner had divested his interests in several entities, mostly partnerships connected to a venture capital firm run by his brother, Joshua, called Thrive Capital, that invests in technology firms like Instagram.

He also shed his interests in funds run by the private equity giant Blackstone Group — whose chief executive, Stephen A. Schwarzman, is an economic adviser to Mr. Trump — as well as BlackRock, the world’s largest asset manager.

Over all, he has shed his stakes in 58 businesses.

He is still the sole primary beneficiary of a majority of the trusts that will retain assets, with his children as the secondary beneficiaries.

Mr. Kushner was required to submit some limited financial information for his wife, Ms. Trump, who will continue to receive payments from the Trump Organization as well as her fashion brand.

Ms. Trump, who now serves as an assistant to the president, resigned from her leadership roles at both companies. Instead of performance-based payments, Ms. Trump will receive fixed payments from T International Realty, the family’s luxury brokerage agency, as well as fixed fees from two entities related to real estate projects, the documents show.

Ms. Trump had previously rolled her fashion brand into the Ivanka M. Trump Business Trust, which is overseen by her brother-in-law, Josh Kushner, and sister-in-law, Nicole Meyer. The documents released on Friday valued the trust at more than $50 million.

The brand is largely a licensing operation, meaning that it sells the use of Ms. Trump’s name to partners who manufacture her clothes, shoes and other accessories. Since it is privately held, little is known about the company’s financials, but The New York Times has previously reported that revenues were roughly between $4 million and $6 million in 2013, before the debut of a major partnership.

The disclosure forms released Friday for less senior White House staff members were not reviewed by the federal Office of Government Ethics. Only the White House Counsel’s Office examines their assets to determine if there are potential conflicts, and to decide what steps employees must take to sell assets, resign positions or recuse themselves from decisions.

Already, a complaint has been filed against at least one White House staff member for taking actions that might benefit his own financial interests. Christopher P. Liddell, an assistant to the president and the director of strategic initiatives, had been the chief financial officer of companies including Microsoft, International Paper and General Motors before taking his White House job. Until recently, he also owned stock in General Motors, according to disclosure forms, among more than 750 other companies.

But in late January and early February, according to a complaint filed by Citizens for Responsibility and Ethics in Washington, Mr. Liddell participated in meetings that involved several of the companies in which he still owned a total of about $2 million in stock, including International Paper and General Motors. Mr. Liddell, according to disclosures, sold these stock holdings by mid-February.

“It is Ethics 101 — the most basic thing you are not supposed to do: using your official capacity to benefit your financial interest,” said Norman Eisen, who served as a White House ethics lawyer during the Obama administration and now is a co-chairman of Citizens for Responsibility and Ethics in Washington.

The White House did not respond Friday when asked about the complaint.

(h/t New York Times)

Icahn Raises Ethics Flags With Dual Roles as Investor and Trump Adviser

Since Carl Icahn, the billionaire investor, was named by President Trump as a special adviser on regulatory matters, he has been busy working behind the scenes to try to revamp an obscure Environmental Protection Agency rule that governs the way corn-based ethanol is mixed into gasoline nationwide.

It is a campaign that fits into the charge Mr. Trump gave Mr. Icahn, to help the nation “break free of excessive regulation.” But there is an additional detail that is raising eyebrows in Washington: Mr. Icahn is a majority investor in CVR Energy, an oil refiner based in Sugar Land, Tex., that would have saved $205.9 million last year had the regulatory fix he is pushing been in place.

Mr. Icahn, known internationally for his pugnacious and persistent approach to activist investing, has brought that same technique to his new role. He quizzed Scott Pruitt, a former Oklahoma attorney general, about the ethanol rule when Mr. Icahn helped interview Mr. Pruitt for the E.P.A. job. Mr. Icahn later reached out to Gary D. Cohn, Mr. Trump’s top economic adviser, to raise the issue. Mr. Icahn said he even had a telephone conversation in February with Mr. Trump himself.

The blitz has already generated at least one clear outcome: Since Mr. Trump was elected president with Mr. Icahn’s very vocal support and nearly $200,000 in political contributions to Republican causes — the stock price of CVR Energy has soared. By late December, it had doubled. It is still up 50 percent from the pre-election level, generating a windfall, at least on paper, of $455 million as of Friday.

The merging of private business interest with government affairs — aspects of which have previously been reported by Bloomberg, but which The New York Times has found further evidence of — has generated protests from ethics experts in Washington, as well as certain Senate Democrats. They consider Mr. Icahn’s dual roles perhaps the most troubling conflict of interest to emerge so far in the new administration.

“This is a mile out of bounds by any standard,” said Senator Sheldon Whitehouse, Democrat of Rhode Island, who, along with other Democrats, sent a letter Monday to Mr. Icahn, the Office of Government Ethics and the Department of Justice to object to Mr. Icahn’s dual roles, and to ask new questions. “Were the shoe on the other foot, Republicans would be having fits about any Obama relationship like this.”

Mr. Icahn, 81, in a series of interviews in the last week, was unapologetic. He said he was not subject to conflict of interest rules because he is an informal, unpaid adviser to Mr. Trump, not an official government employee.

“I’m not making any policy,” Mr. Icahn said. “I am only giving my opinion.”

Kelly Love, a White House spokeswoman, also dismissed the criticism. She pointed to the December news release when Mr. Trump first named Mr. Icahn “special adviser to the president” on regulatory matters. “He is simply a private citizen whose opinion the president respects and whom the president speaks with from time to time,” Ms. Love said in a written statement. “Mr. Icahn does not have a position with the administration nor a policy-making role.”

Both compared Mr. Icahn’s role to corporate executives serving on federal advisory commissions, who are expected to argue for changes in federal policies while remaining corporate officers. But CVR Energy, of which Mr. Icahn owns 82 percent, is just one entry on a growing list of potential conflicts that have surfaced since his December appointment.

Mr. Icahn has provided input to the White House on the selection of the new head of the Securities and Exchange Commission. He is a major investor in companies that have recently been targeted for enforcement action or investigation by the S.E.C., including CVR Energy and Herbalife, the nutritional beverage company, of which he owned about 24 percent at the end of last year.

Mr. Icahn has also pressed Freeport-McMoRan, the global mining company he helps run as a result of his large investment, to more aggressively fight back against the government of Indonesia, the company’s chief executive, Richard Adkerson, said in an interview Friday. Indonesia is challenging Freeport’s contract to extract gold and copper from one of the world’s largest mines.

The company, as that pressure from Mr. Icahn and other investors has intensified, has been asking for help from the State Department, Commerce Department and White House, Mr. Adkerson said.

Mr. Icahn is “very concerned about what is happening in Indonesia,” Mr. Adkerson told reporters in Indonesia last month, adding that he was “confident the U.S. government will want to see Freeport treated fairly.” (Both Mr. Adkerson and Mr. Icahn said that Mr. Icahn, who controls two of eight seats on the company’s board, had not directly intervened with the Trump administration on this matter.)

And while the Trump administration imposed a broad freeze on the adoption of new regulations — holding up dozens of new rules affecting everything from hybrid cars to furniture manufacturing — it surprised industry officials by allowing one Internal Revenue Service rule to go into effect in late January. The rule expands a special kind of oil and gas business organization with tax advantages, known as a master limited partnership, that Mr. Icahn cited as a primary reason he first made his big investment in CVR Energy back in 2012.

What is clear is that Mr. Icahn has an unusual position in the Trump administration. During his campaign, Mr. Trump repeatedly boasted of his ties to Mr. Icahn — calling him “my very dear friend” and citing Mr. Icahn’s support as a sign that “many of the great businesspeople are endorsing me.”

His fortune, $16.6 billion, according to a Forbes estimate, is greater than those of all the other members of Mr. Trump’s cabinet combined, with investments in companies as diverse as Hertz, Xerox and PayPal, as well as A.I.G., the multinational insurance company, and most recently Bristol-Myers Squibb, the global biopharmaceutical company.

Mr. Trump’s cabinet appointees, many of whom are very rich, had to undergo stringent reviews by the Office of Government Ethics that negotiated personalized asset sales agreements for each of them to help them avoid conflicts of interest. But Mr. Icahn is not required to take any such steps, given that he is an unpaid adviser rather than a formal government employee.

Mr. Icahn has long fought against the ethanol rule, known more formally as the Renewable Fuel Standard. In August he wrote an unusually personal 11-page letter to Gina McCarthy, who served as President Barack Obama’s head of the Environmental Protection Agency, and one of Ms. McCarthy’s top deputies, with an all-capital-letter headline: “PROGRAM IS BROKEN AND NEEDS TO BE FIXED IMMEDIATELY.”

He pushed the federal government, in this letter and other appeals, to eliminate the requirement that refiners be held responsible for ensuring that ethanol is blended into gasoline, given that the actual blending is often done by gas station owners, closer to the point of sale. Other merchant refiners like the San Antonio-based Valero Energy joined Mr. Icahn in pressing the E.P.A.

“This is a terrible, flawed rule,” said LeAnn Johnson Koch, a lawyer representing a group of smaller refiners, who joined the effort.

Major oil companies, like Exxon Mobil, own both the refineries and service stations, so they can handle this requirement. But CVR Energy and other so-called merchant refiners no longer handle the gasoline once it leaves their refineries. So they must buy renewable fuel credits — nicknamed RINs — to prove to the E.P.A. that they have complied with the blending of the ethanol and gasoline, a requirement that cost CVR $637.5 million over the last four years.

“You are robbing refineries so that gas station owners and other players can make windfall profits,” Mr. Icahn said in an interview Friday, barely able to contain his anger at the arrangement.

But the Obama administration, in November, moved to reject the request to revamp the system.

“We were not persuaded that the program would be appreciably better at accomplishing its goals, with the approach that he was advocating,” said Janet McCabe, the E.P.A. administrator who oversaw the program.

So after Mr. Trump won, Mr. Icahn took up the campaign again, this time gaining much higher access. First, Mr. Trump asked Mr. Icahn to help him screen candidates for the E.P.A. job, so when Mr. Icahn interviewed Mr. Pruitt, he asked him specifically about his position on the ethanol rule.

“The E.P.A., in my opinion, has gone way too far, has sort of run amok with these crazy regulations,” Mr. Icahn said in an interview with Bloomberg television in early December, explaining why he supported Mr. Pruitt for the job. Mr. Icahn then added that Mr. Pruitt had made clear to him that “he feels pretty strongly about the absurdity of these obligations, and I feel that this should be done immediately,” referring to the ethanol rule.

In February, Mr. Icahn set up a telephone call with Mr. Trump. The conversation, which took place in the lobby of Mr. Icahn’s New York apartment building as he was returning from walking his dog, involved a plan he had hatched to force the E.P.A. to revamp the rule, details of which were confirmed by Mr. Icahn, after being first reported by Bloomberg.

Mr. Icahn confirmed in an interview Friday that he had follow-up conversations with Mr. Cohn, Mr. Trump’s top economic adviser, and Mike Catanzaro, a top Trump White House aide on energy policy (and a former oil industry lobbyist).

But Mr. Icahn’s plan has run into intense opposition from other industry players, including the powerful American Petroleum Institute, and a trade association that represents major ethanol producers like Iowa-based Poet. In an interview last week, Poet’s chief executive, Jeff Broin, called the plan a “back-room” deal. “It seems like self-dealing to me and a clear conflict of interest,” he said.

The White House, in a statement, said no policy change was imminent.

But Mr. Icahn’s actions have already generated calls for investigations, including a complaint filed this month with congressional officials by Public Citizen, a liberal nonprofit group.

Not uncharacteristically for Mr. Icahn, he shows no sign that he intends to back down in his push for the policy change.

“All my life I have fought the establishment — from U.S. Steel, to eBay, to Apple,” he said last week, listing some of his famous battles to force management changes at companies in which he has invested. “I have never shied away from it. I am not going to now.”

(h/t New York Times)

President Heads to Trump Golf Club in Virginia for “Meetings”

President Trump went to Trump National Golf Club in Virginia on Saturday for meetings.

It was not immediately clear from pool reports who the president was planning to meet with.

It is the president’s eighth weekend in a row making a trip to a Trump-owned property.

Trump frequently criticized former President Obama for golfing on weekends and vacations during his presidency.

Trump’s visit to Virginia comes one day after House Republicans pulled legislation to repeal and replace ObamaCare moments before a planned vote. Repealing ObamaCare was a key campaign promise of Trump and most GOP lawmakers and candidates over the last few election cycles.

(h/t The Hill)

Eric Trump Says He Will Keep Father Updated on Business Despite ‘Pact’

Eric Trump has said he will give his father “quarterly” updates on the family’s businesses – which the president has refused to divest from – in spite of the sons’ promises to separate the private companies from their father’s public office.

In an interview with Forbes magazine, Donald Trump’s middle son at first said the family honored “kind of a steadfast pact we made” not to mix business interests with public ones.

“There is kind of a clear separation of church and state that we maintain, and I am deadly serious about that exercise,” he said. “I do not talk about the government with him, and he does not talk about the business with us.”

But he went on to say that he would keep the president abreast of “the bottom line, profitability reports and stuff like that, but you know, that’s about it”.

He said those reports would be “probably quarterly”.

“My father and I are very close,” he added. “I talk to him a lot. We’re pretty inseparable.”

Since their father handed day-to-day management of the Trump Organization to his adult sons, Eric and Donald Jr, the family has insisted they do not discuss the business with president. Ethics attorneys of both parties and the nonpartisan Office of Government Ethics have called the arrangement a failure to prevent potential conflicts of interest – for instance, Trump hotels selling rooms to foreign diplomats.

Eric Trump’s statement alarmed ethics experts, including Lisa Gilbert, a director at the not-for-profit watchdog Public Citizen. “It confirms our worst assumptions about the lack of separation between his business and current office,” she said. “There’s no way to reconcile quarterly updates from your son.”

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Gilbert said there were signs that the Trump family was already profiting from the presidency, including increased business at his golf clubs. His south Florida club, Mar-a-Lago, doubled its entrance fee to $200,000 in January, and in February the first lady, Melania Trump, filed court documents arguing that the White House was an opportunity to develop “multimillion-dollar business relationships”.

“It’s not a single thing,” Gilbert said. “Their businesses are doing better because there is more cachet around them.”

The watchdog released a report this week analyzing the first two months of the Trump presidency. It concluded that Trump had broken several promises to “isolate” himself from the business, that his White House was “clouded by corruption and conflicts”, and that he had surrounded himself “with the same major donors and Wall Street executives he claimed he would fight if elected”.

A Washington DC wine bar sued Trump and his new hotel this month, alleging that his ownership provides an illegal competitive advantage. The president still holds direct ties to his businesses, DC liquor board documents show, as the sole beneficiary of a revocable trust.

The White House and Department of Homeland Security have declined to answer questions about whether taxpayer dollars have profited the Trump family, for instance through Secret Service rental payments to Trump properties.

“Eric Trump and his father the president are doing what we thought they would do all along,” said Richard Painter, who served as chief ethics attorney for George W Bush. “This of course makes no difference for conflict of interest purposes because it is his ownership of the businesses that creates conflicts of interest, regardless of who manages them.”

Painter added that Trump’s remarks show that “the businesses is an important concern for the president”.

Gilbert compared the arrangement to other possible conflicts in the White House. Trump has appointed his son-in-law, Jared Kushner, as a senior adviser, despite anti-nepotism laws, and the president’s daughter, Ivanka, has acquired a security clearance and an office in the White House, although she has no official role. In November, Trump denied that he had sought security clearances for his children.

“We don’t really have a mechanism to enforce the ethics rules,” Gilbert said. “It’s left us without a lot of ground to stand on.”

Like the president, Kushner and his wife have said they will separate themselves from their family businesses, but have only done so partially, if at all. Kushner retains parts of his billionaire family’s real estate empire, White House documents show, and Ivanka Trump has so far failed to resign, as promised, from the family business, according to documents acquired by ProPublica.

Possible conflicts have already arisen for both of the president’s family confidantes: Kushner’s family is negotiating a $400m deal with a Chinese firm connected to Beijing’s leadership, and one of Ivanka Trump’s brands was promoted, in violation of ethics rules, on national television by another of the president’s advisers.

In Dallas this month, Donald Jr told Republican fundraisers that he had “basically zero contact” with his father. His brother, similarly, told Forbes that he tries to “minimize fluff calls that you might otherwise have because I understand that time is a resource”.

But he also echoed an earlier boast about the family brand being “the hottest it has ever been”.

“We’re doing great in all of our assets,” he said, before arguing that being the family in the White House also entailed “great sacrifices” for the business, especially “when you limit an international business to only domestic properties, when you put hundreds of millions of dollars of cash into a campaign, when you run with very, very tight and strict rules and the things that we do every single day in terms of compliance.

“I don’t know,” he concluded. “You could look at it either way.”

(h/t The Guardian)

Ivanka Trump’s Expanded White House Role Raises Ethical Issues

After months of attending meetings of world leaders and visiting factories with her father, the role of first daughter Ivanka Trump is officially expanding – creating new ethical issues for an administration that has been heavily criticized over its potential conflicts of interest.

She will not have a specific title, but Trump will have an office in the West Wing, a government-issued phone and computer and security clearance to access classified information, and she will advise her father.

“While there is no modern precedent for an adult child of the president, I will voluntarily follow all of the ethics rules placed on government employees,” she told Politico in a statement.

But following the ethics guidelines should not be voluntary, said Richard Painter, a law professor at the University of Minnesota who served as chief ethics lawyer for George W Bush between 2005 and 2007.

“Given what she’s going to do, I don’t think she has any choice,” he said. “She has a West Wing office, she has equipment, she has a White House email address, she’s going to be doing policy work,” said Painter.

“For purposes of the conflict of interest statute, I believe she is a government employee,” he added.

Ivanka Trump’s lawyer, Jamie Gorelick, argues that since she will earn no salary and not be sworn in, she does not count as a government employee. There is no precedent for adult children whose father is president working in the White House, although two presidents – Andrew Jackson and James Buchanan – had their nieces serve in the role of first lady since Jackson was a widower and Buchanan a bachelor.

Trump has handed control over the day-to-day running of her eponymous clothing business to an executive and its assets are maintained by a trust managed by two of her husband’s siblings.

As part of the trust rules, outlined in the New York Times, Trump can veto any potential business deals for her clothing company that might create a conflict with her political work.

That means, points out Painter, that Trump has to know about any new deal that might put her at risk of breaking the statute, meaning she can be held responsible.

“She’s got accountability on that stuff. She can’t just blame the trustee,” he said.

Trump’s marriage to her father’s senior adviser, the real estate developer Jared Kushner, poses additional potential problems, because both could benefit financially from each other’s businesses.

Painter warned that the pair should avoid official political discussions involved with trade agreements regarding textiles, real estate and even bank deregulation, since that can affect real estate.

That means if the premier of China visits the White House – most of Ivanka Trump’s clothing line is made in China and Hong Kong – it is fine for her to attend the meeting, but she should not mention trade and if the discussion begins to focus on trade, she should excuse herself, says Painter.

The ethics expert noted approvingly that Ivanka Trump engaged Wilmer Cutler Pickering Hale and Dorr, the same legal services used by the secretary of state, Rex Tillerson, former head of ExxonMobil, to handle issues of conflict of interest. Kushner also used the DC-based lawyers to manage his potential conflicts of interest with his family business after taking the role of adviser in the Trump administration.

“It’s a criminal statute, so people better not mess up under it. But I think she’ll do the right thing,” said Painter.

(h/t The Guardian)

Betsy DeVos Hands Victory to Loan Firm Tied to Adviser Who Just Quit

Americans who default on some of their federal student loans are likely to pay more after Education Secretary Betsy DeVos reversed an Obama administration directive limiting some fees. But it turns out the Trump administration decision has some beneficiaries—including the father of a key DeVos lieutenant who just quit.

DeVos’s decision, announced Thursday in a memorandum to the student loan industry, allows companies known as guaranty agencies to charge distressed student debtors fees equivalent to 16 percent of their total balance, even when borrowers agree within 60 days to make good on their bad debt.

The reversal is almost certain to hand United Student Aid Funds Inc., the nation’s largest guaranty agency, a victory in its two-year legal battle against her department. The fees could translate into an additional $15 million in annual revenue for the company, filings in a related lawsuit suggest. Until Jan. 1, United Student Aid Funds was led by Bill Hansen, who served as Deputy Secretary of Education under President George W. Bush. His son, Taylor Hansen, a former for-profit college lobbyist, was until three days ago one of the few DeVos advisers with professional experience in higher education.

The younger Hansen resigned from the Education Department on Friday, department spokesman Jim Bradshaw said in an e-mail. Hansen couldn’t be immediately reached for comment on his departure.

Ben Miller, senior director for postsecondary education at the Center for American Progress, a persistent critic of the new Republican administration, said on Twitter the rule change was “an early Father’s Day gift in the Hansen household.” U.S. Senator Elizabeth Warren, a Massachusetts Democrat, was equally blunt: “There’s no question” that Taylor Hansen’s family ties posed a conflict of interest.

Tens of millions of dollars in revenue was at stake for companies such as United Student Aid Funds, which until 2015 had regularly charged borrowers the fee. A senior executive there last year warned in a court filing that the Obama administration’s decision to prohibit the fees—and to remind the industry that such fees had long been banned—generated “potentially massive retroactive liability” for companies such as United Student Aid Funds in the form of federal fines and lawsuits from aggrieved debtors. The company reckons it levied as much as $119 million in these fees from 2007 to 2015, or about $15 million annually.

Meanwhile, other companies active in student loan matters faced the prospect of having to reverse years of assessed fees and unravel tens of thousands of borrowers’ accounts to recalculate their balances, according to a legal filing last year by the National Council of Higher Education Resources, a Washington trade association. Had the Obama administration’s decision stood, a federal judge warned in 2015 that the entire student loan industry faced the prospect of being sued for allegedly violating anti-racketeering laws by imposing the fees.

DeVos’s decision is likely to put those concerns to rest.

With almost all senior positions at the Education Department vacant—and few political hires with professional experience in higher education—the younger Hansen may have wielded significant influence on DeVos’s policies. With his departure, the department has yet another post to fill.

“We have no idea what Betsy DeVos thinks about or wants to do on higher education policy. If one of the key people advising her is someone whose close family member is hoping to charge defaulted borrowers a lot more money, that’s not a good sign of her agenda,” Miller said before the department announced Taylor Hansen’s exit.

Both the Education Department and Bill Hansen’s current organization, of which he is chief executive, Strada Education Network (formerly known as USA Funds), said there’s no impropriety. Taylor Hansen recused himself from “all matters” related to United Student Aid Funds’ lawsuit challenging the Obama administration directive, Bradshaw said. “He served ably and without conflict and decided his service had run its course,” Bradshaw said Monday, declining further comment. But it’s unclear whether Taylor Hansen’s recusal extended to internal department discussions over the appropriateness of the fees. Bradshaw didn’t answer additional questions, and Taylor Hansen didn’t respond to emails, phone calls, and a message sent on social network LinkedIn seeking comment.

Bob Murray, a spokesman for Bill Hansen, said no one representing the company had asked Taylor Hansen to intervene on its behalf in its dispute with the department. Furthermore, he said, United Student Aid Funds is now owned by Great Lakes Higher Education Corp. Murray said that Bill Hansen declined to comment.

United Student Aid Funds said in court filings that the Obama administration unfairly changed longstanding Education Department policy when it announced in 2015 that fees added to quickly resolved defaulted loans were illegal. For example, according to industry lobby National Council of Higher Education Resources, the department had never flagged the fee as inappropriate in any of the more than 135 audits or reviews it conducted of companies such as United Student Aid Funds since 1992. The feds, the group said, “knowingly acquiesced for years.” In the eyes of the industry, DeVos is simply righting a wrong by reversing Obama’s move.

Bill Hansen nonetheless benefits from DeVos’s decision. Strada is still liable for potential costs stemming from United Student Aid Funds’ lawsuit against the Education Department, as well as a related class action lawsuit filed by borrowers over the same issue, said Richard George, chief executive of Great Lakes.

United Student Aid Funds reached a proposed settlement in January to resolve the proposed class action, filed by Minnesota resident Bryana Bible in 2013 on behalf of borrowers charged what she alleged to be illegal fees. The deal calls for 35,516 borrowers, and their lawyers, to split $23 million to partially reimburse them for as much as $119.1 million in fees assessed over eight years that, under Obama administration guidelines, they shouldn’t have been charged. A federal judge is due to decide on the proposed settlement in June.

The now-permissible fees could also beneficially impact Strada’s future revenue under an agreement that calls for Great Lakes to give Strada grants partly based on how United Student Aid Funds’ loans perform, a person familiar with the matter said. When annualized, the fees represent about 13 percent of United Student Aid Funds’ average annual income over the past five years, according to its financial reports.

For struggling borrowers, said Rohit Chopra, a senior fellow at the Consumer Federation of America who previously advised Obama’s Education Department and was the top student loan official at the federal Consumer Financial Protection Bureau, “this just adds insult to injury.”

(h/t Bloomberg)

Trump to Spend 7th Consecutive Weekend at Trump-Branded Property, at Enormous Cost to Taxpayers

President Trump doesn’t want to spend federal dollars on after-school programs, meals for poor people, or heating assistance that helps keep folks alive.

But he has no problem wasting more than $3 million a pop to spend weekends at his private Mar-a-Lago club in Florida. Trump has already made four trips there since becoming president on January 20, and on Friday he confirmed he’s headed there this weekend for the fifth time.

Despite vowing during his campaign that he “would rarely leave the White House because there’s so much work to be done” and “would not be a president who took vacations” because “you don’t have time to take time off,” Trump has visited Trump-branded properties each of the past six weekends. That streak will hit seven when Trump lands at Mar-a-Lago later Friday.

In fact, Trump has spent time at Trump-branded property every weekend of his presidency other than the very first, when he created chaos throughout the country by signing a Muslim ban executive order that was later stayed by a federal court.

As Quartz reported on Friday, after this weekend, Trump will have already spent about $16.5 million on trips to Mar-a-Lago. For that amount, Meals on Wheels could feed 5,967 seniors for a year and after school programs could feed 114,583 children for a year.

On Thursday, Office of Management and Budget director Mick Mulvaney defended the draconian cuts included in the Trump administration’s proposed budget by arguing that the federal government can’t ask “a coal miner in West Virginia or a single mom in Detroit to pay for” programs like the Corporation for Public Broadcasting. But one wonders whether those struggling Americans would rather have public radio or dole out their share of the $3.3 million a self-proclaimed billionaire is spending each weekend to mingle with his ludicrously wealthy club members down in Florida.

(h/t ThinkProgress)

Media

China Approves 38 New Trump Trademarks for His Businesses

China has granted preliminary approval for 38 new Trump trademarks, paving the way for President Donald Trump and his family to develop a host of branded businesses from hotels to insurance to bodyguard and escort services, public documents show.

Trump’s lawyers in China applied for the marks in April 2016, as Trump railed against China at campaign rallies, accusing it of currency manipulation and stealing U.S. jobs. Critics maintain that Trump’s swelling portfolio of China trademarks raises serious conflict of interest questions.

China’s Trademark Office published the provisional approvals on Feb. 27 and Monday.

If no one objects, they will be formally registered after 90 days. All but three are in the president’s own name. China already registered one trademark to the president, for Trump-branded construction services, on Feb. 14.

If President Trump receives any special treatment in securing trademark rights, it would violate the U.S. Constitution, which bans public servants from accepting anything of value from foreign governments unless approved by Congress, ethics lawyers from across the political spectrum say. Concerns about potential conflicts of interest are particularly sharp in China, where the courts and bureaucracy are designed to reflect the will of the ruling Communist Party.

Dan Plane, a director at Simone IP Services, a Hong Kong intellectual property consultancy, said he had never seen so many applications approved so quickly. “For all these marks to sail through so quickly and cleanly, with no similar marks, no identical marks, no issues with specifications – boy, it’s weird,” he said.

The trademarks are for businesses including branded spas, massage parlors, golf clubs, hotels, insurance, finance and real estate companies, retail shops, restaurants, bars, and private bodyguard and escort services.

Spring Chang, a founding partner at Chang Tsi & Partners, a Beijing law firm that has represented the Trump Organization, declined to comment specifically on Trump’s trademarks. But she did say that she advises clients to take out marks defensively, even in categories or subcategories of goods and services they may not aim to develop.

“I don’t see any special treatment to the cases of my clients so far,” she added. “I think they’re very fair and the examination standard is very equal for every applicant.”

Richard Painter, who served as chief ethics lawyer for President George W. Bush, said the volume of new approvals raised red flags.

“A routine trademark, patent or copyright from a foreign government is likely not an unconstitutional emolument, but with so many trademarks being granted over such a short time period, the question arises as to whether there is an accommodation in at least some of them,” he said.

Painter is involved in a lawsuit alleging that Trump’s foreign business ties violate the U.S. Constitution. Trump has dismissed the lawsuit as “totally without merit.”

China’s State Administration for Industry and Commerce, which oversees the Trademark Office, and Trump Organization general counsel Alan Garten did not immediately respond to requests for comment.

(h/t NBC News)

Following Sessions’ Mar-a-Lago Appearance, New Ethics Questions Arise

At some point during the Obama era, conservatives convinced themselves that the Democratic president took an outrageous amount of time off, traveled constantly, and vastly preferred golfing to working. The criticisms were always quite silly – especially after George W. Bush broke every modern record for time off taken by a sitting president – but the right nevertheless embraced the nonsense with great enthusiasm.

Vox recently talked to a series of CPAC attendees, many of whom continued to complain bitterly about Obama’s travel costs and downtime. Told that Donald Trump is actually spending more on travel and enjoying more downtime, conservatives were incredulous. The facts “can’t possibly be right,” one said. “That absolutely can’t be right.”

Reality, however, is stubborn. Trump headlined a political fundraiser on Friday night, before heading to Mar-a-Lago, the for-profit club he still owns, for another relaxing weekend. Over the last five weekends, the president has visited his luxury resort four times – each trip costs American taxpayers about $3 million – and as of last night, Trump had spent 31% of his presidency at Mar-a-Lago.  He’s now played golf eight times since taking office six weeks ago.

In October 2014, Trump whined via Twitter, “We pay for Obama’s travel so he can fundraise millions so Democrats can run on lies. Then we pay for his golf.” A year later, as a presidential candidate, Trump declared that if he were in office, he’d dispense with breaks. “I’d want to stay in the White House and work my ass off,” he told voters.

Like so many of his claims, Trump apparently didn’t mean a word of it. (Last week, the White House even gave the press misleading information about one the president’s golf outings.)

But this latest trip was a little different – because as the Palm Beach Post noted, Trump this time brought along some powerful friends.

President Donald Trump mingled with guests outside a charity ball at his Mar-a-Lago Club on Saturday night. As attendees danced inside the ballroom where the Bascom Palmer Eye Institute held its gala, the president was spotted nearby, shaking hands and talking with club members and guests.

Earlier, Attorney General Jeff Sessions also took a few moments from high-level meetings to greet guests at the estate.

Oh good, we’ve reached the point at which the attorney general of the United States is a prop for members at the president’s for-profit club.

What’s more, Sessions wasn’t alone. Two other members of Trump’s cabinet – Homeland Security Secretary John Kelly and Commerce Secretary Wilbur Ross – were also on hand in Florida over the weekend.

I appreciate the fact that there are a variety of very serious scandals surrounding this White House, but the conflicts surrounding Trump and Mar-a-Lago are tough to defend. I’m reminded anew of this recent New York Times piece, which noted that Team Trump has created “an arena for potential political influence rarely seen in American history: a kind of Washington steakhouse on steroids, situated in a sunny playground of the rich and powerful, where members and their guests enjoy a level of access that could elude even the best-connected of lobbyists.”

… Mr. Trump’s weekend White House appears to be unprecedented in American history, as it is the first one with customers paying a company owned by the president, several historians said.

“Mar-a-Lago represents a commercialization of the presidency that has few if any precedents in American history,” said Jon Meacham, a presidential historian and Andrew Jackson biographer. “Presidents have always spent time with the affluent,” he added. “But a club where people pay you as president to spend time in his company is new. It is kind of amazing.”

And it’s not just Trump. Those who pay the $200,000 membership fee also, evidently, get access to the U.S. attorney general and other powerful cabinet secretaries, and even get front-row seats to see officials respond in real time to national security challenges, conducted in full view of civilians.

The club’s managing director conceded to the Times that Trump’s presidency “enhances” club membership – which may help explain the increase in entrance fees – adding, “People are now even more interested in becoming members.”

If you voted Republican because you were worried about Hillary Clinton and pay-to-play controversies, I have some very bad news for you. Trump is profiting from the presidency in ways no one has been able to credibly defend.

As we discussed a couple of weeks ago, we’re looking at an ethical nightmare. A president who refuses to divest from his many business ventures still owns a for-profit enterprise, in which undisclosed people pay hundreds of thousands of dollars for exclusive access – and the facility itself openly acknowledges the financial benefits of exploiting Trump’s presidency.

How many lobbyists or agents of foreign governments are signing up to take advantage? We don’t know – because Mar-a-Lago doesn’t disclose its membership list.

The Washington Post’s Greg Sargent talked recently to Norm Eisen, the chief ethics czar under President Obama, who pointed to Trump’s dramatic use of his for-profit club as a serious problem.

Eisen argued to me … that you cannot divorce this latest story from Trump’s seemingly reflexive or deliberately thought out use of his position as president to promote his business interests or those of his family. After all, Eisen notes, the very act of inviting [Japanese Prime Minister Shinzo] Abe to Mar-a-Lago itself must be evaluated as, potentially, an effort to promote his resort, given the pattern of behavior we’ve seen from this White House, which has included repeated efforts by Trump and his aides to punish Nordstrom for declining to carry Ivanka Trump’s clothing line or to drive customers to Ivanka.

“We’ve had a lot of presidents who hosted foreign leaders away from the White House,” Eisen said. “But we’ve never in history had one do it in a place where he’s selling memberships for hundreds of thousands of dollars a pop. Trump just could not resist the opportunity to make an infomercial for his property. He’s worked hard all his life to generate free media. Now he’s hit the mother lode, and he’s not going to stop.”

There’s no reason to go along with this as if it were somehow normal.

(h/t MSNBC)

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