Trump's Business Conflicts

Much has been written about Trump’s potential conflicts of interest, and they are valid concerns.

But I must side with Trump on this issue.  Unlike our previous presidents, Trump’s assets do not consist of stocks, bonds, and other easily liquidated assets.  Instead, his assets are the Trump Organization itself, something that is inextricably tied to him personally.

Let’s be clear on what a Blind Trust really is.  To setup a Blind Trust, Trump would need to turn over all his assets to a trustee, who would sell them for cash to unknown buyers.  The trustee would take that cash and purchase new assets that would be completely unknown to Trump.  That is clearly not possible in this situation.

Here is why:

It would take years to sell all of Trump’s assets. Selling a single asset such as Trump Tower would take more than a year to properly market, find a buyer, arrange financing, and close.  It has been reported that Trump is involved in over 500 businesses.  Most likely, he would be out of office long before all his assets would be even be sold in order to setup a Blind Trust.

Because each of the assets are one-of-a-kind assets and easily identifiable, we all would know who the buyers of the assets would be.  They could even use that as a way to funnel money to Trump.  Indeed, any asset that Trump sold would immediately bring out the critics who would complain that the sale was just another hidden bribe for Trump.

Much of the value of Trump’s assets is the Trump Name itself.  Divesting an asset without the Trump name could decimate its value, causing Trump significant financial losses.  Because so many of his assets are heavily mortgaged, it might not even be possible to find a buyer to take the asset without the Trump Name at a price sufficient to retire the mortgage.   Without Trump or his family managing the businesses, the Trump Name would lose much of its value, so even selling a business with the name still attached could be a dismal prospect.

Some assets may prove impossible to sell.  For example, Trump does not own the new hotel in Washington.  He only leases it from the government.  Yet he has spent over $200 million renovating it.  It would be hard for him to recoup that investment when he doesn’t even own the hotel.  All he has to sell is the lease itself.

Much of Trump’s income now is generated by licensing his name.  Are we really expecting him to sell the rights to his own name?   And what value would his name be without him?

All of these assets together constitute the Trump Organization.  Broken apart, they will lose much of their value.  Even intact, they would lose value if the Trump family were removed from its operation and ownership.

Physically, it’s not possible to sell Trump’s assets in a timely manner, nor could they be sold anonymously.  Ethically, each and every sale would be subject to the same potential income conflicts that are the issues if he does not sell.  Finally, it would not be fair to require Trump to destroy a business started by his father, and that he has spent his own lifetime building.

So what is the answer?

Trump’s own plan announced today was a step in the right direction.   Putting his kids in charge frees up Trump’s time, but we all know that he will still know of every decision that the kids make, and probably still will be approving them.   Stopping all new foreign deals is also a very good idea.

At the very minimum, he should make every effort to be completely transparent on all his dealings.  He absolutely should release his tax returns, and it would be a great sign of good faith for his kids to do so as well.