Sunday, November 27, 2016

A Framework for Understanding Presidential Conflicts of Interest

A conflict of interest is potentially created when there is a overlap between a federal government official's duties and his or her personal financial interests:  official duties + person financial interests = potential conflict issue.

There is a complex set of civil and criminal federal laws, regulations, and processes that relate to gift giving, personal financial holdings, and bribery.  Yet, they all boil down to small number of core principles, which I summarize below.  I'll also explain below why the President is exempted from some, but not all, of the legal rules governing conflicts of interest.  

Why Conflicts of Interest Rules Exist

In 1989, the Office of Government Ethics, under President George H.W. Bush, published a set of 14 ethical standards that apply to all government agencies, codified in the Federal Regulations, 5 CFR 2635, and that begin with the following statement:  "Public service is a public trust, requiring employees to place loyalty to the Constitution, the laws and ethical principles above private gain."

Said a different way, the simple reason for the longstanding tradition of conflicts of interest rules is that government officials must act impartially and in the best interests of the US generally, and not in their own person financial interests.  (See US v Miss. Valley Generating Co. (1960)(conflict created when the gov't hired a consultant to work on a power plant transaction, and the consultant was also an employee of a bank that was financing the power plant)). 

From the perspective of the country as whole, the rules recognize a need for decisions to be free of even the potential of a conflict to avoid having the validity of decisions eroded.  From the perspective of the individual government official, the rules recognize that even the most honest person could have their independent judgment impaired in subtle ways by personal financial interests.  

Different Types and Severities of Conflicts - Gifts, Financial Interests, and Bribery

There are a range of potential conflicts that a government official may face, including: 

(i) minor gifts (like a President getting a signed sports jersey from a winning pro team) which the regulations pre-authorize as not creating a conflict; 

(ii) more valuable gifts that exceed pre-authorized acceptable $ values and categories, 

(iii) conflicts created by overlaps between an official's government responsibilities and his or her financial interests which may impact impartiality, and 

(iv) outright bribery (which is a express agreement to give or receive money or something of value in exchange for corruptly doing an official act). 

See 18 USC 203 (criminal conflicts and bribery), 5 CFR 2601 (gift giving regulations), and the"emoluments" clause of the US Constitution.

The 3 Primary Ways to Fix Conflicts of Interest

Depending on the individual facts and circumstances, conflicts may be fixed by: 

(i) disqualification (under certain circumstances, the person with the conflict just has to be removed from making the decision), 

(ii) transparency/disclosure and approval (under certain circumstances, being transparent and disclosing the underlying issues can result in approval by an authorized government entity), or 

(iii) divestiture (in some circumstances, rather than the individual being removed from making the decision, the decision-maker removes the person financial interest).  

In sum, either the government official removes himself from the decision (item i above), the person removes his financial interest, such as with a divestiture and blind trust (item iii above), or the person gets clearance from a third party after transparently demonstrating that there's no conflict (item ii above).  

If a conflict doesn't get fixed in 1 of the 3 ways described above, then there are potential legal and ethical ramifications - even for a President - as described below.  

Why is the President Exempt From Certain Conflicts Rules?

It may seem counter intuitive, but the President is exempted from most of the federal conflicts laws because the President sets policy that effectively could impact everything.  Thus, if a President were not exempted, then all of his decisions might need to be subject to review in a way that could be disruptive and inconsistent with the separation of powers.  Since there is no easy way to do this, we have what is in part an honors system that depends on the President do the right things even when not compelled to do so.

There is a body of law regarding Presidential immunity, which for example prevents the President from being sued civilly (for $) by anyone who wants to drag him into court for matters relating to a President's official duties.  The President is not above the law, but as a matter of public policy, we don't want the President spending inordinate time defending lawsuits or having private citizens second guess Presidential policy in court actions.  (Presidents are, however, subject to lawsuits for non-official duties - see Clinton v Jones, 520 US 681 (1997)).

The Emoluments and the Impeachment Clauses of the US Constitution 

The "Emoluments Clause" of the US Constitution, Article I, Section IX, states:

No Title of Nobility shall be granted by the United States: And no Person holding any Office of Profit or Trust under them, shall, without the Consent of the Congress, accept of any present, Emolument, Office, or Title, of any kind whatever, from any King, Prince, or foreign State.

There are very few court cases interpreting the Emoluments Clause, but on their face, the words are a prohibition of the receipt of gifts from foreign governments, absent the consent of Congress.   (Webster's Dictionary defines "emolument" as "the returns arising from office or employment usually in the form of compensation or perquisites.")  

The Impeachment Clause, in Article II, Section IV of the Constitution, states that the President can be impeached for “Treason, Bribery, or other high Crimes and Misdemeanors.”  

For a typical citizen, a criminal prosecution involves investigation, the decision to bring a formal charge (typically by a prosecutor or grand jury), and then a trial by jury.  In a similar way, for the President, the impeachment process is set forth in Article I, Sections II and III. The House of Representatives after investigation, acts as the prosecutorial body - the House can initiate, based on a majority vote, an impeachment action against a sitting President, which is essentially the decision to formally charge the President with a crime constituting "treason, bribery or other high Crimes and Misdemeanors".  The Senate, in turn, acts as a judiciary, hearing the case against the President, and determining innocence or guilt, which requires a 2/3rd vote of the Senate to remove the President.

What Ramifications Are There for Presidents with Conflicts of Interest?

The media has reported that Presidents are exempt from conflicts of interests rules, but there are in fact some limits.  The above-described exemptions do not apply to criminal bribery - thus, a President who were engaged in outright bribery would be subject to impeachment both under the federal law and under the Constitution.

For the majority of potential conflicts created by a Trump Presidency (those caused by the existence of the Trump Organization's financial holdings, and by the giving and receiving of gifts broadly defined including to mean anything of value received from a foreign government), there are 2 key limitations:

(i) the Emoluments Clause, with investigation by the House of Representatives, and the threat of Impeachment, and

(ii) the honors system, meaning the expectation that Trump will follow norms and precedent, and do what other modern Presidents have done - including creating a blind trust and disclosing tax forms - even thought the law may not clearly compel him do do so.

The House of Representatives Oversight Committee / Emoluments Clause

The Federal Government body most responsible for overseeing potential conflicts of President-elect Trump and his family is the House Committee on Oversight and Government Reform.

If there is one person who is most directly responsible for overseeing potential Trump conflicts, it is the House Oversight Committee Chairman, Jason Chaffetz, Republican from Utah.  Under the Committee rules, Representative Chaffetz controls the Committee's investigative agenda, meaning he can investigate the President-elect, and put significant pressure on him to divest his financial interests to eliminate conflicts.

On November 14, Representative Elijah Cummings, Democrat from Maryland, and the Ranking Member of the Committee (meaning the one with the most seniority) sent a Letter to Chairman Chaffetz asking that he initiate an investigation into potential Trump conflicts.

On November 17, two former lead ethics attorneys - one who worked for President George W. Bush and one worked for President Obama - collectively sent an open letter to Trump, asking that he divest his financial holdings.  The two leading experts - from both political parties - stated:

"Mr. Trump, you were elected to the presidency with a promise to eliminate improper business influence in Washington, to break the stranglehold that commercial interests impose on government.  There is no way to square your campaign commitments to the American people - and your even higher, ethical duties as their president - with the rampant, inescapable conflicts that will engulf your presidency if you maintain connections with the Trump Organization, including by maintaining ownership with control transferred to your children."

If any individual citizen is or becomes concerned about Trump's potential conflicts, the most direct way to engage is to reach out to the Committee and/or your representative on the House Committee on Oversight and Government Reform.

The Honors System / Precedent / Norms

As a practical matter, there are 2 strong factors that have motivated essentially every modern President to follow the ethical rules, despite being technically exempt and not obligated by the letter of the law.  First, most Presidents care about the appearance of conflicts causing the validity of decisions to be questioned.  Second, given that every other employee in the federal government has to follow the rules, basic elements of leadership would cause most people to lead by example and not expect everyone else to follow the rules which the President in turn ignores.  This is why all recent Presidents - Democrats and Republicans - have voluntarily chosen the honors system (including by instituting blind trusts).

President-elect Trump's words and actions to date suggest that his approach is and will be to try to get away with as much as the law permits, rather than to internalize the ethical norms of the most important leadership job in the world.










Tuesday, November 22, 2016

The 1st Amendment, and the Tweets of a President

The First Amendment to the Constitution states:  

“Congress shall make no law respecting an establishment of religion, or prohibiting the free exercise thereof; or abridging the freedom of speech, or of the press; or the right of the people peaceably to assemble, and to petition the government for a redress of grievances.

The First Amendment ensures freedom from government intrusion of freedom of speech, freedom of religious belief, freedom of the press, and freedom of petition and assembly.  These protections apply only to government laws and actions that restrict such freedoms, not to actions by private citizens or entities.  


As Oliver Wendell Holmes said, the First Amendment is premised on a free market of ideas.  It ensures that the government does not get to control the truth by asserting control over the media or by suppressing protest, which is what happens in many other countries (such as Russia, China and countries in the Middle East) that do not share the principles, freedoms and beliefs reflected in the US Constitution.  


Throughout American history, in a large number of cases, the courts have generally interpreted the First Amendment broadly, including carving out the freedom to do or say vile and abhorrent things to ensure that all Americans are kept free, including minorities and people with extremely unpopular views.  (see TX v. Johnson).  Since, at some point in a person's life, anyone can potentially be a minority or hold a minority view, protecting such vile views means that all US citizens are more free to have and express their own beliefs without being persecuted by the government.  


The First Amendment has also been interpreted to require a very high degree of media freedom from government influence (NY Times v. US, no “prior restraint” – government not permitted to preempt what the media plans to publish).  Laws that sought to restrict the criticism of the government have also been struck down as unconstitutional (NY v Sullivan). 


It is a common assumption – including based on media coverage of abortion and other social issues – that the Supreme Court is entirely a partisan political institution.  Although all humans are influenced by their politics and ideologies, Supreme Court justices adhere to the Constitution, law and precedent.  In some cases, interpretations of core First Amendment freedoms may not be partisan at all, and conservatives have sometimes been more vigorous defenders than liberals.  When free speech is attacked, conservatives and liberals alike on the Supreme Court should be expected to uphold the Constitution and precedent, and not just line up on a partisan basis.  (see US v Nixon, unanimous court – liberals and conservatives - required production of the Nixon tapes).


On January 20, 2017, Donald Trump will take the following oath of office, found in Article II of the Constitution:


“I do solemnly swear (or affirm) that I will faithfully execute the office of the of the President of the United States, and will to the best of my ability, ​preserve, protect and ​defend the Constitution of the United States.”  


At that moment, he will no longer merely be a citizen; rather, he will be responsible as President for upholding the Constitution, including the First Amendment.



President-elect Trump has threatened to seek to change the libel laws to make it easier to bring lawsuits against the press.  This doesn't make much sense, as there is no federal libel law (each state has it's own libel law...), and in any event, any such attempts would be subject to the limits of the First Amendment (which requires a heightened "actual malice" standard to prove libel against public officials - see NY Times v. Sullivan).

Short of talking about hypothetical laws that violate the First Amendment, perhaps a more important question will be:  what will President Trump's role be in the free market of ideas? With the rise of social media, and his expertise at using it, President Trump has his own media platform - Twitter - and he essentially has the loudest voice.


President Trump's use of Twitter may create new risks to, and legal interpretations of, the First Amendment.  He is likely to take the position that his Tweets are merely his personal opinion, rather than the type of "state action" needed to trigger the First Amendment.   He has also used Twitter to engage in pointed attacks on media outlets - i.e. the "failing NY Times".   We will see if the law is  interpreted to permit him the freedom to direct negative Tweets at those who oppose him, and to direct attacks on media outlets that critique him.  But as the lead custodian of the Constitution, should he do so?   







Sunday, November 20, 2016

Constitutional Lessons from the 1st Meeting Between Trump and Obama

There are various petitions going around Facebook seeking to have electors in the electoral college reverse the outcome of Trump's win, including because Hillary won the popular vote.  For me, there is a legitimate discussion about changing the process in the future, but not post-facto changing the rules for this election.  If roles were reversed, supporters of Hillary would view that as profoundly unfair.  ​In short, Trump won more electoral votes than did Hillary, and the outcome of the election has been determined​..

Although it is true that the country is divided with respect to Trump, it is equally true - and a lesson of this election - that groups of people are not predictable and monolithic based on their demographics.  It is also worth remembering that we are one country bound by common history, law and economic and foreign policy interests.  As Nelson Mandela is sometimes credited with saying, “holding on to grudges is like drinking poison and waiting for the other person to die.”  

Whether you like Obama or not, I believe there is much to be learned from the civics lesson that he delivered to Donald Trump, the country and the world about how America handles the peaceful transition of power when the two first met on November 10.  Consider that Trump had attacked Obama personally, claimed for years in a bigoted way that Obama's national origin was suspect and he might be disqualified from being President, and then reversed that position without explanation or apology.  He further attacked in very personal ways many of Obama's policies, which Trump promises to dismantle.  Given the brutal tone of this election, most of humanity would not have handled that initial transition meeting the way Obama did.  That’s the point – because Obama understands our laws, institutions and history, he put country before personal interests and insults, and demonstrated why he has the character to be President.  

No matter your politics or ideology, most Americans can or should respect the way Obama conducted himself to preserve and protect our Constitution, and indeed, Trump agreed, finding himself uncharacteristically awed by his first meeting with the President.  

The Government We Deserve

A wonderful historian, J. Rufus Fears, once said that in a democracy, we get the government "that we deserve".  Whether you support or oppose Donald Trump, those words strike me as relevant at this time in American history. 

The election of Trump has caused both celebration of the potential for change, and horror based on his words and actions during the campaign.  Like many, my reaction to Trump is anything but apathetic - and I found myself asking:  how should I engage in response to a Trump Presidency?

For me the answer - and the premise of this blog - is to simplify and explain the constitutional and legal issues raised by Trump's words and actions.  To get the government we deserve - and to make good policy in a complex world - all Americans (Republicans, Democrats and others) should understand how our government works, and demand that our elected officials act as custodians of the Constitution, the law, our institutions, norms, and a stable world order.  

Consider the approach the Founding Fathers took when they created our Constitution.  They gathered the most thoughtful people of their time, and despite ideological disagreements, they purposely attacked governance questions from multiple disciplines: (i) history (they studied the experiences of past democracies and other types of governments from ancient times to the then present day), (ii) philosophy (they studied frameworks for human rights, political systems, and allocation of power), (iii) religion (although most were deeply religious personally, they studied the impacts of religion of political systems), and (iv) humanities (they studied how different groups of people with different interests interact, and what circumstances are optimal for making sound decisions and policy).   

Today, politicians jump immediately to surface level slogans without sufficient concern for objective truth, and then wage coarse and partisan attacks on social media.  Citizens, in turn, are not holding politicians accountable for the truth.  Peter Thiel famously said (regarding his disappointment with technology innovation and referencing Twitter) that "we wanted flying cars and instead we got 140 characters".  To borrow from Mr. Thiel, "we need virtuous custodians of our modern constitutional democracy and instead we too get 140 characters..." 


This is the first of a series of articles that I plan to write about topics such as the following:
  • What the First Amendment says, how it has been interpreted and how it may be applied to the tweets of a President.
  • A simplified framework of the federal conflict of interest laws and norms, how they are enforced and how they apply to the President.
  • How disputes between different branches of government are resolved under the Constitution.
  • The role of the media in a democracy, and the need for a common fact base from which to set policy.  
  • The Constitutional balance between majority rule and minority protections and tolerance.  
This blog contains my person views.  It is not in my character to write blogs, but I feel compelled by recent events to communicate.  I hope it's useful for you.  

- Andrew Cohen