Constitution Daily

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Does the Constitution put limits on a president’s private business ties? 

November 22, 2016 by Lyle Denniston

 

Lyle Denniston, Constitution Daily's Supreme Court correspondent, explains why the American people must rely upon Congress – no matter which party controls the House and Senate – to monitor the relationship between a president and a family business.trumptwitter456Even Americans who have only a passing acquaintance with their Constitution tend to understand that it provides a system of checks and balances and those supposedly answer almost every problem that crops up in the functioning of their government.  But the reality is that, even where a check does exist, there has to be some way to put that into motion, to make it work.  As a basic example, a president cannot conduct a war unless Congress puts up the money to pay for it, so a refusal to approve a Pentagon budget could actually stop a war (however politically risky that might be).

The Constitution, in other words, is generally not self-executing; it creates a series of government mechanisms, but someone must put them in operation.  That fact is now central to the widening public discussion in Washington, and elsewhere in America, about an obscure provision in the founding document – the so-called “Emoluments Clause.”

There is a lot of talk about employing that Clause as a check upon President-elect Donald Trump as he apparently plans, while in the White House, to keep within his family the management of their global holdings in a private business enterprise, rather than disposing of the enterprise or putting it into a “blind trust” over which the family would have no control.

Such an unprecedented, ongoing linkage of a president with a commercial operation is regarded as potentially unethical and may even be illegal.  Some of those potential woes led President Jimmy Carter, for example, to put his Georgia peanut business into a trust arrangement, although his brother continued to have a job in it.

Problems arising from having presidents as business operators could arise both domestically, and internationally.

On the home front, any number of official government policies could contribute to the success, or hamper the operations, of stateside Trump companies.  For example, a major new public works project – an “infrastrure” rebuilding program – could provide facilities that serve Trump properties.  For another example, a government edict on overtime pay could have a direct impact on those properties’ business costs.

The Constitution has nothing to say about those domestic situations.  A more-or-less independent arm of Congress – the General Accountability Office – has the power to investigate any such links involving the use of government funds, but only Congress would have the authority to take specific action to correct any conflicts of interest over money.  It would take an extreme situation, however, for Congress to be willing to directly confront a president – especially, a president of the same party.

There is also the possibility that a citizen could find a way to sue, under an old Civil War-era law, the False Claims Act, if government money was paid out improperly to a Trump business entity.  The Act specifically allows for citizen enforcement.

The Constitution, though, may have something to say if problems arose abroad for the Trump enterprise.  That is the Emoluments Clause, a part of Article I and the powers of Congress.  It says specifically that “no person holding any office of profit or trust…shall, without the consent of Congress, accept…any present, emolument, office, or title, of any kind whatever, from any king, prince, or foreign state.”

That was written into the Constitution by unanimous vote at the Philadelphia Convention in 1787, and it was explained – by James Madison, for example – as a necessary provision to “exclude corruption and foreign influence.”  At that time in America, there was deep concern that the king of France might try to use his riches to illicitly influence the new young America.

It at least can be argued that this provision could come into play as a result of interaction between the Trump companies and foreign business interests – if those interests are a part of foreign governments, and if their operations affect the value of the Trumps’ overseas properties or make payments that directly benefit the family business.  The exact scope of the overseas activity of the Trump business is not known publicly (but might be revealed if the President-elect’s tax returns were to be made public).

The Emoluments Clause, though, has only one enforcement mechanism: Congress has the authority to pass specific legislation to authorize – or to prohibit – financial dealings between a foreign government and any federal official, including the president, according to rulings over many decades by Justice Department lawyers in advisory opinions.

Most of those advisory opinions have dealt either with the receipt of medals or awards by federal officials -- including, for example, President Obama’s Nobel Peace Prize (he was allowed to take the medal and the prize money of about $1.4 million because the prize was awarded by a non-government entity), or actual employment by a federal official by a foreign government operation (in most instances, not allowed).

Justice Department lawyers, in their rulings, have concluded that the Clause works not only in the context of actions by foreign government agencies as such, but also in relation to enterprises that a foreign government actually runs, such as a public business corporation.

No citizen can try to put the Emolument Clause to work; basically, it has been interpreted within the government only when a legal opinion is sought for a particular factual situation.

The Library of Congress’s authoritative volume, the Annotated Constitution, records no court rulings interpreting the Emoluments Clause, so the primary source of how tight, or loose, the Clause may be construed depends upon Justice Department advisory opinions (which do not have binding legal force).

Overall, then, it appears that, so far as the Constitution is concerned, the American people must rely upon Congress – no matter which party controls the House and Senate – to monitor the relationship between a president and a family business.

Of course, the ultimate constitutional check would be an impeachment proceeding.  But that is such a seldom-used check upon the president (twice in history) that it probably would only be attempted in the most scandalous kind of business misconduct linked to the White House.  The Constitution does not define what impeachment charges can be brought (other than “high crimes and misdemeanors”), so it is up to the House of Representatives to decide what it believes would be appropriate.  The Senate actually tries the charges, but cannot decide what to charge.

Legendary journalist Lyle Denniston is Constitution Daily’s Supreme Court correspondent. Denniston has written for us as a contributor since June 2011 and he has covered the Supreme Court since 1958. His work also appears on lyldenlawnews.com.

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