The US president-elect, Donald Trump, has made his name as a businessman. His empire extends well beyond American shores, as far afield as Azerbaijan, Turkey, the UAE and Indonesia. The potential this brings for possible conflicts of interest to both Trump and his administration, both home and abroad – whether it’s legislating tax breaks for business or negotiating trade deals – are incredibly wide ranging.
To overcome the problem, Trump has said he will use a “blind trust”. Of course, nobody can unknow what they already know about their company’s dealings. But, in a bid to show non-corruption, blind trusts involve severing ties with your business dealings, putting them all under somebody else’s control and having “no knowledge” of what is happening in the business.
This is not a legal requirement for presidents, but it is a longstanding convention. Reagan and Bush used this kind of arrangement – both appointing independent parties to administer of their business affairs. The Clintons also created one when they entered the White House in 1993. They then dissolved it in 2007, converting all their stocks to cash to avoid financial conflicts when Hillary ran for president.
The difference with Trump is that he has said his blind trust will be run by his son, Donald Trump junior. It will certainly be efficient, in terms of keeping Trump business stationery pretty much the same. But is it sufficient to prevent conflicts of interest?
Conflicts of interest are a regular risk in business. With many people holding multiple jobs and positions – whether it is on boards or in voluntary work – managing this is a standard task for the executives and the HR function of an organisation. Even within higher education, considering this potential for conflict of interest is commonplace when staff of a university serve on other bodies such as research council committees or grant review panels. Similarly, researchers must disclose any “significant financial interest” or other relationship with the manufacturers of any commercial products or providers of commercial services discussed in the manuscript – and any financial supporters of the research.
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Full disclosure tends to be the first port of call when it comes to circumventing conflicts of interest. In the UK parliament, disclosure rules are a key part of the code of conduct for MPs. The general principles are this code are described as selflessness, integrity, objectivity, accountability, openness, honesty and leadership. Whether the disclosure register has achieved this trust among the UK public in their politicians is debatable, however.
Interestingly, the first principle “selflessness” states that holders of public office must make decisions “solely in terms of public interest … and avoid any financial or other material benefits for themselves, their family, or their friends”. This again puts the spotlight on Trump’s decision to have a family member run his business and appoint friends or relatives to his administration.
The Trump empire is diverse and – surprisingly despite a highly personal presidential campaign – it is still not entirely understood by most people. Of the 515 companies that Trump has a part in running, only just over half (268) bear his last name, according to a filing with the Federal Election Commission.
This is compounded by the complexity of the Trump business model which has been involved in selling many products, but in recent years has sold its brand to companies across the world in exchange for franchise or royalty benefits. Trump Towers Istanbul, for example, is not owned by Donald Trump, but his company has sold the franchise to property developer Aydin Dogan.
With business arrangements across the world, even if Donald senior has nothing to do with his business going forward, distancing the business’s interests from foreign policy might be difficult for the administration and its international counterparts. Particularly if it has a significant Trump investment in its country.
The same applies domestically. Trump’s mandate to “Make America Great Again” must apply to the country across the board. Business plays a big part in this, especially with infrastructure and regulation high on Trump’s agenda. So his administration must be careful to show they are making decisions based on the whole country, not the president’s business interests.
It’s not just Trump who must manage his conflicts of interest. An estimated 6,000 government and high-profile appointments, including supreme court judges, are up for grabs. For these roles, a complex set of conflict of interest rules exist to prevent executive branch officials from profiting from their responsibilities – or even appearing to profit. Managing this will be a major HR challenge.
For the public to have faith in Trump’s blind trust, it will require clarity and robustness from the new administration to distance itself from any decisions that benefit the business interests of the Trump empire and its partners across the world.
On a practical level, any discussions at the Trump dinner table will either be very muted or will need a team of lawyers present. National Security will significantly constrain what the president can bring home from his day at the Oval Office. And a requirement of the blind trust will completely shut down any talk surrounding the business that Donald senior spent 45 years growing.