Donald Trump made repeated threats not to move forward with additional investment ($300 million) at his Turnberry Golf Resort in Scotland if he was banned from the country. While this is totally understandable as a businessman, is this appropriate as a candidate for president of the United States?
Are there messages from Trump's confrontation with the British Empire that could be meaningful in a Trump presidency? Will there be major conflicts of interest between his investments, his tax strategy, and/or his partners' tax strategies and appropriate policies and action by the United States of America?
Like most former presidents of the United States, the answer for Trump cannot be found in the creation of a blind trust.
A president of the United States does not have to form a blind trust for his or her investments. The president is permitted to manage his or her own investments during their presidency. That is the law. For Trump, the issue is moot. While presidents have generally formed blind trusts, with respect to Trump, there is no avoiding the reality that his investments are already well known to anyone with the time to read existing published information. (Re-naming investment properties with Trump as the first word and creating properties with Trump as the first word does not provide for anonymity. The building signs also are not helpful.) There is no avoiding that the world will know where Trump is or was the owner. (The sale of the Trump Empire is an unlikely scenario as realistically, such a liquidation would take years to accomplish and the tax ramifications would be enormous.)
There is a wow factor in the potential conflicts of interest for Trump. No president has ever owned and/or managed property around the world. Few individuals have ever-so-visibly owned so many major assets. With investments and management contracts probably worth billions in Brazil, Canada, China, Dominican Republic, Dubai, Iceland, Ireland, Panama, Philippines, Scotland, South Korea, Turkey, and Uruguay, how would anyone be able to separate their presidential obligations from their investments?
Imagine Trump’s response if the government of Dubai determined to use eminent domain (or Dubai's equivalent to eminent domain) to acquire a Trump owned property. Imagine if international terrorists decided to occupy a Trump property in Dubai, Panama or the Dominican Republic? What if Occupy Wall Street people determined to trash a Trump property? Are these acceptable pressure points? Would either the initial actions or a Trump presidential response be the same if the events took at place at property owned by "regular" citizens?
Trump's investments in Wall Street rival the size and scope of small public mutual funds. His list of stocks owned is over 100 separate stocks and funds. Pick an industry, and it’s likely Trump directly or indirectly owns shares in a company in the industry. It would also appear that he is an investor in hedge funds where the management teams take advantage of the perfectly legal, but often strongly condemned, carried interest opportunities in the Internal Revenue Code. With carried interests, investors and operators pay taxes at capital gains rates rather than ordinary income rates. Does Trump have any carried interest for himself in his current portfolio? (The answer here almost has to be yes, but only Trump and his advisors know the answer.) Do Trump's partners in his investments pay capital gains taxes on carried interests? How can someone with this portfolio be in a position to determine, approve or disapprove federal tax policy?
Trump lists his liabilities at over one half a billion dollars. Many of these debts mature over the next five years and many have interest rates that are dependent upon international interest rates. In other words, significant changes in interest rates governed or influenced by the Federal Reserve would impact his ability to re-finance his investments and/or his annual interest costs. Could an individual with this portfolio of debt appoint the appropriate members of the Federal Reserve or rein in the CFPB?
One also might raise the concern that any building with the Trump name on it could instantly become a terrorist target. Has Trump considered that people might expect the federal government to provide additional security for properties closely associated with the president of the United States?
Perhaps the FOX debate tomorrow night will touch on the issue of conflicts of interest and the potential of Trump's assets being used to impact any decision making if he becomes the president.