[This post was a Cape Cod Times op-ed column but includes historical material cut from the column for reasons of space.]
Even President-Elect Donald Trump’s staunchest supporters express concern about actual and potential conflicts of interest between his Presidential powers and his far-flung business activities. Trump may also try to work around the anti-nepotism statute to have his daughter or son-in-law help him in the government.
A conflict of interest exists whenever there is a conflict between the private interests and official responsibilities of a person in a position of public trust. There are many kinds of “private interests” that may create an actual conflict with one’s official duties but Federal laws regulating conflicts of interest are limiting to dealing with “private financial interests.” Generally Federal officials may not act – are disqualified or must recuse themselves from acting – on matters in which they have a personal financial interest. Presidents are exempt from these laws as the matters on which a President may act are governed by the Constitution and may not be limited by a mere statute.
In the last 170 years or so Presidents have generally been prosperous and frequently wealthy but nearly all were lawyers or career politicians and most were both. They typically did not have active or ongoing businesses. Hillary Clinton would have fit neatly into that pattern. That was not always so, however. Four of the first five and eight of the first 11 Presidents were plantation owners and slaveholders.
Although the federal government in those early days was not as involved in the daily lives of citizens and businessmen, two major areas of national policy directly affected the personal financial interests of slave-owning plantation owners. First, of course, was slavery itself and the extent to which it was permitted to extend into new territories and states. Second was the Tariff question.
From the beginning of the Republic until the arrival of the income tax in1914, the primary source of revenue for the national government was the tariff, duties charged on foreign imports. The tariffs were also used to protect developing domestic manufacturing, largely in the Northeast, from cheaper foreign imports, largely from Britain. The South and West of the country – including those Presidential plantation owners – desired access to cheaper foreign goods.
In more recent times though, Presidential wealth has typically been of the passive investment variety. Exceptions have been Warren Harding who owned a newspaper, Jimmy Carter’s peanut farm and, most notably, Lyndon Johnson whose wealth, accumulated during his time in Congress but kept in the name of his wife, was in television and radio stations, a federally regulated industry. His 1964 opponent and an enthusiastic pilot, Senator Barry Goldwater, was fond of pointing out that Austin Texas was the easiest large city to spot from the air because it was the only one with only one television station antenna.
Family members are another issue. There is no history of a President taking an action detrimental to the nation to benefit a family member but relatives have not always been shy about profiting from the perceived influence arising from the relationship. Certainly the relationships are occasionally tangled.
Woodrow Wilson’s Secretary of the Treasury, William Gibbs McAdoo was also his son-in-law, although the appointment occurred before the wedding.
FDR’s son, James Roosevelt, travelled to Britain with Joseph P. Kennedy in 1933 at the onset of both the New Deal and the repeal of prohibition Kennedy secured valuable distributorships to import Dewar’s and Haig & Haig Scotch Whiskey and Gordon’s gin as well as some lesser brands. For his trouble Jimmy Roosevelt got very expensive insurance on the flammable cargo placed through his newly established insurance agency.
An unfortunate Washington Post music critic who panned Presidential daughter Margaret Truman’s singing performance got a written Presidential response that was, well, Trump-like.
Major John Eisenhower served under his father, the Commander-in-Chief. Billy Carter famously became a paid representative of the Libyan government.
President Kennedy appointed his inexperienced young brother Robert to be Attorney General, joking “I see no harm in giving my brother a little legal experience before he goes out to practice law.” This appointment was the impetus behind the Federal anti-nepotism law that confronts Trump now. JFK’s popularity in his home state also helped get his even less experienced youngest brother elected to the U.S. Senate.
The distinction between conflicts of interest and conflicts with “personal financial interests” can get fuzzy. The interactions among Hillary Clinton’s State Department, the Clinton Foundation, Bill Clinton’s speaking engagements and the Clintons’ personal wealth were apparently not regarded, officially at least, as a conflict between official duties and “personal financial interests.”
The career politicians who have been nearly all our Presidents for the last century have been able largely to avoid conflicts of their official duties and their “personal financial interests.” To the extent that their personal interests include retaining political office or popularity, however, they all inescapably act on matters in which they had a conflict of interest. Few campaign donations are made without an expectation of favorable action that might not occur on the merits alone. Every time a politician has to choose between something that is best for the country and something that is politically popular, he faces a conflict between his official responsibilities and his personal interest.
The pull of a strong friendship or family ties too can be as strong as a political or financial interest. Contrary to the modern conceit, conflicts of interest cannot be eliminated by statutes or regulations.
Donald Trump’s fortune is not liquid and he cannot reasonably be expected to divest himself of it. It might be smart to sell it all to his children on credit, taking back a security interest analogous to a mortgage. That would not eliminate conflicts of interest, however, but merely obscure them.
The only remedy is disclosure or, that lately hackneyed word, transparency. The President, along with other high federal officers, is required to file periodic financial statements. Given President-Elect Trump’s recent history on the subject, it might be well to require the IRS to post online all filings by a President – especially including any returns under audit.
It will be for the press, the Congress and the public to watch closely Presidential actions on matters in which he or a family member has a personal interest. A conflict of interest is a bad thing only when the President acts in his personal interest to the detriment of the public interest. President Trump’s actions in cases in which he has a conflict of interest of any kind must be known so they can be debated and, if necessary, acted upon by the public and Congress.