WASHINGTON ― In an extraordinary move, Office of Government Ethics Director Walter Shaub publicly stated on Wednesday that President-elect Donald Trump did not consult with his office to formulate his plan to hand his billion-dollar real estate and licensing company off to his two adult sons.
Shaub said in an online livestream conducted by the Brookings Institution that Trump’s plan “doesn’t meet the standard that the best of nominees are meeting and that every president of the past four decades has met.”
“OGE’s primary recommendation is that he divest his conflicting assets,” he said. “Nothing short of divestiture will resolve these conflicts.” He added, “I don’t think divestiture is too high a price to pay to be the president of the United States of America.”
Trump announced at a Wednesday press conference that he would hand off control of his company to Donald Jr. and Eric Trump and other company executives. Sheri Dillon, his tax lawyer, said the company would make no new foreign deals and would vet any new domestic deals. Trump would still maintain his full stake in the company and will be able to walk directly back into the top job at the Trump Organization when he leaves office. This is a far cry from divestiture.
Shaub’s decision to speak out on Trump’s plan and his refusal to work with the ethics office in vetting and resolving his conflicts indicates how out-of-the-ordinary Trump’s decisions are in this area. All previous presidents from both political parties have worked with OGE to avoid entering office with significant conflicts of interest in the modern era.
As Shaub noted, OGE is not an enforcement body but a “prevention mechanism” to ensure individuals enter office without conflicts. He said he hoped that by going public he could help Trump “make some adjustments that will help him resolve his conflicts of interest.”
Shaub declared the announced plan woefully inadequate to deal with the issue of Trump’s conflicts. Trump’s decision to step back from day-to-day control is “meaningless,” Shaub said. “The idea of setting up a trust adds nothing to the equation,” he added.
“This is not a blind trust, it’s not even close,” Shaub said.
Shaub further criticized Dillon’s defense of Trump’s plan that the president-elect will be so out of the loop with his business that he will only learn about new deals if he reads about in the newspaper or see it on the television. “That wouldn’t happen in a blind trust,” Shaub said.
OGE had previously recommended divestment for Trump in a series of tweets written in the diction of the president-elect’s own Twitter feed. Those tweets were later revealed to have been directed by Shaub. On Wednesday, he said he was trying to convey the agency’s message that Trump must divest his holdings in the “vernacular” people routinely use on the social media platform.
It was clear from Shaub’s statements that the Trump team did not consult with OGE before Wednesday’s announcement. “I wish she had spoken to us before,” Shaub said about Trump’s tax lawyer Dillon.
“I was especially troubled that the incoming administration is going to demand that OGE approve a diversified portfolio of assets,” Shaub said. “No one’s talked to us about this and there’s no legal mechanism to do that.”
He explained that Congress authorized OGE to oversee and approve blind trusts in the Ethics in Government Act, passed in 1978.
“Under that law anyone who wants a blind trust has to work with OGE from the start, but OGE has been left out of this process,” he said. “We would have told them that this arrangement fails to meet the statutory standards.”
As for whether the president cannot have a conflict of interest, which Trump has repeatedly asserted, Shaub said this was “obviously not true.”
“A conflict of interest is anything that creates an incentive to put your own interests before the interest of the people you serve,” Shaub said.
Shaub noted that this was not about imposing some kind of penalty on the president-elect. “Our goal, our reason for existing is to guard the executive branch against conflicts of interest,” he said. He praised secretary of state nominee Rex Tillerson for agreeing to a strong ethics plan to avoid conflicts and said that other Trump nominees were also willing to sacrifice to serve in public office. (He did add, “Some of them haven’t quite gotten there yet.”)
The point of getting approval from OGE is not to please OGE, but to protect the public trust embodied in the public offices that Trump and his Cabinet will soon occupy. That may involve some sacrifice, Shaub said, but that’s the price to be paid to serve the public as the president of the United States.
Technically, the ethics statute requiring Cabinet officials to divest from financial holdings that could pose conflicts of interest does not apply to the president. Every president in the modern era, however, has acted as though it does. Shaub noted that the example of each of these presidents in engaging in the OGE process and fully divesting their conflicts set a standard that made it easier for OGE to demand the statutorily required divestiture from Cabinet nominees and other government appointees.
“The signal the president sets a tone across the executive branch,” Shaub said. “The tone at the top matters.”
He added, “Should a president hold himself to a lower standard than his own appointees?”