WASHINGTON – The rules are clear for nearly everyone who works in the executive branch: Officials are prohibited from playing even a minor role in a decision that directly creates a financial benefit for the employee or the employee’s immediate family.
But those rules do not apply to the president and vice president, the only executive branch officials who are exempt from a (criminal statute) and aseparate ethics regulationthat govern conflicts of interest.
That exemption is the reason President Trump could legally play a role in the selection of the Trump National Doral resort near Miami as the site of next year summit meeting of the Group of 7. If anyone in the executive branch other than Mr. Trump or Vice President Mike Pence tried the same thing, they would likely have been blocked by government lawyers, faced an ethics investigation and perhaps become the subject of a criminal inquiry, federal ethics lawyers from both parties said Friday.
Violating the law, which dates to 1962, is a felony punishable with a prison sentence of up to five years.
”Suggesting that your own business be used for an expensive government event over which you have control would violate the prohibitions, ”said Trevor Potter, a Republican and former chairman of the Federal Election Commission.
Steven L. Schooner, who served as the administrator for procurement law in the Office of Management and Budget during the Clinton administration, said Mr. Trump’s actions – if he were not exempt – would have “at least lead to a referral to the Justice Department.”
Besides this conflict-of-interest law, picking the 643 – room Doral resort near Miami for an event that will generate hotel room reservations and other related sales worth millions of dollars raises questions about whether other constraints might apply to the situation, the legal experts said. Those include federal competitivebidding requirementsandprovisions in the Constitutionthat ban even the president from taking certain kinds of payments from foreign governments and the federal government.
It also highlights how Mr. Trump has often swept aside the ethical standard he set for himself as he was preparing to take office in early 2017.
Nine days before Mr. Trump’s inauguration, one of his lawyers, Sheri A. Dillon, released a document detailing how Mr. Trump would avoid conflicts of interest after he was sworn in, even if he was not prohibited under law from taking actions that would benefit his family financially.
“President-Elect Trump, as well as Don, Eric, and Alan are committed to ensuring that the activities of The Trump Organization are beyond reproach, and that the Organization avoids even the appearance of a conflict of interest, including through any advantage derived from the Office of the Presidency, ”Ms. Dillon wrote in thesix-page document, referring to Mr. Trump’s two oldest sons and Alan Garten, the chief legal officer at Trump Organization.
But that same day , Mr. Trump made clear he was aware that he had a legal exemption that provided him considerable flexibility to decide for himself what would be permissible.
“I have a no-conflict-of-interest provision as president,”Mr. Trump said. “It was many, many years old, this is for presidents. Because they don’t want presidents getting – I understand they don’t want presidents getting tangled up in minutia; they want a president to run the country. So I could actually run my business, I could actually run my business and run government at the same time. ”
Bobby R. Burchfield, a lawyer who serves as the ethics adviser to the Donald J. Trump Revocable Trust – which technically owns the family hotels and other properties that are now managed by his sons – said on Friday he is examining the matter .
“We are looking at the situation” he said. “The President, the Trump Organization and I are committed to ensuring that this is done in compliance with the ethics standards.”
Mr. Trump himself, in late August, at the end of the G7 summit in France, first confirmed publicly that the Trump family resort in Doral, Fla., Was being considered for the June 2020 gathering.
“Having it at that particular place, because of the way it’s set up, each country can have their own villa, or their own bungalow, ”Mr. Trump said in August, before continuing later in his remarks that “I think it just works out well. ”
The acting White House chief of staff, Mick Mulvaney, said on Thursday that Mr. Trump was the first to recommend the Doral resort as a site for the G7.
“We were back in the dining room and I was going over it with a couple of our advance team, ”Mr. Mulvaney said. “We had the list, and he goes,‘ What about Doral? ’And it was like,‘ That’s not the craziest idea. It makes perfect sense. ”
These statements alone would likely be enough to create a conflict-of -interest problem for Mr. Trump if he were not president, ethics and procurement lawyers said.
“If this was the secretary of commerce who had the power to decide where an event like this would be held and he or she decides it should be held at a property he or she owns, and would generate income, that probably would be a conflict of interest ”said Jan W. Baran, who served during President George Bush’s tenure on a presidential commission that studied federal ethics laws, and also previously served as general counsel at the Republican National Committee.
It is a violation of the law if an executive branch employee “participates personally,” in a “decision, approval, disapproval, recommendation, the rendering of advice, investigation, or otherwise, ”In a matter that directly financially impacts a company owned by that employee’s spouse, children“ or an organization that he is serving as officer, director, trustee, general partner, ”the statue says.
A separate federalStandards of Conduct regulationissued by the Office of Government Ethics in 1992 says that ”employees shall not use public office for private gain,” although again these rules do not apply to the president.
The president and vice president are exempt, Mr. Baran said, because Congress generally cannot pass restrictions that apply to them as the president cannot be forced to recuse himself and delegate his constitutional powers to someone else.
Every president over the past four decades – with the exception of Mr. Trump – has placed his personal investments and assets in a blind trust while in the White House, or has sold everything and held cash equivalents, to avoid any potential conflicts, even though there has been no requirement to do this under the law.
Mr. Mulvaney on Thursday defended the approach the White House took in selecting the Doral, saying that a dozen locations were evaluated, which suggests that federal contracting rules might have been honored. But Mr. Mulvaney would not disclose the other locations or the process used to evaluate them.
He said the Doral would be the least expensive, because the Trump family will offer the hotel “at cost,” meaning it will not profit from the event.
But a Trump Organization spokesman on Friday declined to explain how the company is going to determine what “at cost” means or how it will calculate what part of a hotel bill paid by a foreign government official is considered profit.
Mr. Schooner said the Doral, during the off-season in June when it is hot and muggy in Florida, has a low occupancy rate. So even if otherwise empty rooms are sold at a discount, it is still a major financial benefit to the company, as would be the global publicity from an event like the G7 meeting.
“The leaders of the free world walking around in someone’s resort: That is priceless advertising,” he said.
At least three different lawsuits are pending in federal court that are testing if Mr. Trump is violating the Constitution’s emoluments clauses by continuing to own, through a trust, the collection of hotels, golf courses and resorts that at times are taking payments from foreign government officials and the United States government.
After a series of decisions both for and against the president,a case broughtby the state of Maryland and the District of Columbia will be heard by the full Fourth Circuit Court of Appeals. It alleges that the Trump International Hotel in Washington has illegally siphoned off business from hotels and convention centers in which the local governments have a financial interest.
Democrats in Congress who filed one of these cases will now revise the lawsuit to include the plan by Mr. Trump to have the G7 meeting at the Doral.
“He is certainly digging deeper in his failing defense by violating the Constitution in plain sight, in real time, ”said Senator Richard Blumenthal, Democrat of Connecticut, who is the lead plaintiffin the lawsuitthat involves more than 200 House and Senate Democrats. “It is really absolutely striking.”