WASHINGTON Donald Trump isn’t the only Trump with potential conflicts of interest in the White House.
Ivanka Trump — a senior White House adviser who is doing everything from lobbying the Senate on tax policy to representing her father at a G20 summit of world leaders — will pull in more than $1 million a year from the family business that has continued to develop luxury resorts across the globe during the Trump presidency.
Some of those Trump-branded developments are hiring state-owned companies for construction, receiving gifts from foreign governments in the form of public land or eased regulations and accepting payments from customers who are foreign officials.
Ivanka Trump’s continued relationship with the businesses affiliated with the Trump Organization creates potential conflicts of interest prohibited by federal law and federal ethics standards as she works as a special assistant to the president. And just like her father, she is being accused of violating the so-called emoluments clause of the U.S. Constitution that forbids government officials — not just presidents — from accepting gifts from foreign governments without the approval of Congress.
“To the extent she’s still taking money and she’s still in the West Wing she has many of the same issues,” said Stephen Spaulding, chief of strategy at Common Cause, a nonpartisan group that has examined Donald Trump’s conflicts of interest.
Much has been written about problems caused by Ivanka Trump’s brand of clothes, handbags and shoes, which are primarily made overseas by low-wage laborers, but little attention has been paid to trouble caused by her continued relationship with the Trump Organization, the sprawling family real estate empire now run by two of her brothers.
And her troubles go way beyond criticism that she is profiting off her father’s presidency. Trump, who just returned from a trip representing the United States in South Korea, faces serious questions as a result of her decision to be involved in both the family business and the White House: Is a foreign government gaining access to her through the business? Are business deals a factor in U.S. foreign policy? Are foreign governments able to build goodwill with her because of the company?
Ivanka Trump is believed to still have only an interim security clearance nearly 14 months into her father’s tenure because of the complex finances of her husband, top presidential aide and New York real estate developer Jared Kushner. But her continued ties to the family businesses, whose developent deals often involve international financing and buyers, could actually be causing the delay, according to former administration officials and attorneys familiar with clearance guidelines.
“If there are foreign financial obligations, commitments, reliances, that would be an item in a security clearance file,” said Paul Pillar, former deputy chief of the intelligence community’s counterterrorism center who served nearly three decades at the CIA.
Federal employees applying for clearance do not automatically have to sell their overseas investments but it’s not uncommon for them to be forced to divest larger stakes and resign positions at companies. The criteria for determining who is granted a clearance indicates businesses are a concern that could be disqualifying: “Substantial business, financial, or property interests in a foreign country, or in any foreign-operated business that could subject an individual to a heightened risk of foreign influence or exploitation or personal conflict of interest.”
“That can be a real problem,” said Mary Kuntz, a Washington lawyer who represents people going through the security clearance process, some of whom have had to sell investments.
When her father was sworn in, Ivanka Trump resigned her numerous vice president positions with the Trump Organization but she planned to continue to receive money from its businesses, according to her financial disclosure report filed last year, which outlined her future relationship to the companies.
Each year starting in 2017, she was expected to receive a total of $1.5 million from three companies affiliated with the Trump Organization. She was expected to receive more money from additional Trump Organization businesses but the other amounts were not detailed.
Ivanka Trump is required to file a financial disclosure report covering her 2017 financial assets and liabilities in May
The companies involve at least five projects that have come under scrutiny for possible ethics and legal violations:
- A major construction company owned by the Chinese government was awarded a contract to build a road as part of the residential piece of a Trump development in Dubai.
- A local government plans to build a road to shorten the drive between the main airport on the Indonesian island of Bali and the new high-end Trump resort and golf course.
- A construction company owned in part by the governments of Saudi Arabia and South Korea expects to build the Trump Lido City development in Indonesia that includes a Disney-like theme park
- Ivanka Trump’s brother, Donald Jr., recently visited India to promote new luxury housing projects, offering home buyers dinner and conversation for a booking fee of $38,000. But after criticism, he scrapped plans to give a foreign-policy speech alongside Indian Prime Minister Narendra Modi.
- The Trump International Hotel Washington D.C., which opened in a historic site in the capital, has been cited in lawsuits accusing the president of violating the Constitution by accepting money from customers who are foreign officials.
The Trump Organization argues that it doesn’t hire companies or benefit from governments because it generally does not own the overseas developments but rather earns money by licensing its name and managing the properties. But company officials, including Ivanka Trump and her brothers, have taken great interest in the projects, meeting with developers and walking the sites to check on progress.
Since she joined the White House, Ivanka Trump’s vague government responsibilities have led her to travel to Saudi Arabia and South Korea and meet with Chinese President Xi Jinping at Mar-a-Lago, a Trump resort in Florida.
The family’s foreign projects are moving forward despite the Trump Organization’s vow that it would not be involved in new foreign deals or transactions with a foreign entity other than “normal and customary arrangements” made before the inauguration. The company withdrew from some foreign projects but kept others.
The FBI is reviewing negotiations and financing surrounding the Trump International Hotel and Tower in Vancouver, a project that Ivanka Trump played a leading role in developing before her father’s presidential campaign, according to CNN. The project was developed by the Vancouver Holborn Group, whose CEO is wealthy Malaysian scion Joo Kim Tiah, whose father was convicted of making false reports to the Kuala Lumpur stock exchange.
Noah Bookbinder, executive director of Citizens for Responsibility and Ethics in Washington, said his group chose to focus its emoluments lawsuit on the most direct and important target, Donald Trump, but that everything that applies to the president applies to his daughter. “You really still have conflicts of interest for any matter concerning that company,” he said.
Officials at the White House and the Trump Organization did not respond to questions about Ivanka Trump’s relationship to the business.
But Peter Mirijanian, a spokesman for the attorney hired by Ivanka Trump and Kushner, told McClatchy that she would recuse herself from any decisions at the White House that could pose a conflict.
“The suggestion that Ms. Trump’s ‘continued relationship’ with the Trump family businesses creates prohibited conflicts of interests is completely false,” he said. “She has had no decision-making role in the family businesses since she resigned from all of her positions in those companies more than a year ago and has entered into an ethics agreement with the White House in which she will recuse herself from participating in any decision-making that could pose a conflict of interest with her family business. Any suggestion to the contrary is both false and a result of intentionally ignoring the basic facts of her situation.”
Mirijanian said Ivanka Trump modified her relationship to the Trump Organization last year based on advice she received from lawyers.
“When Ms. Trump became a federal employee, she transitioned from being an active investor and manager to being merely a passive investor,” he said. “She did this as a result of ethics advice she received, and has followed that advice.”
Ivanka Trump’s financial disclosure report states that the Office of Government Ethics asked that she receive lump-sum payments instead of a profit-driven fluctuating amount of money to reduce her interest in the performance of the business.
The cap does nothing to solve the problem. Her relationship to the entity remains the same
Austin Evers, former senior counsel in State Department who is now executive director of the watchdog group American Oversight
According to the 98-page financial disclosure report, Ivanka Trump was to receive these lump-sums from three Delaware incorporated companies, all affiliated with the Trump Organization. They are: $800,000 from TTT Consulting and $600,000 from TTTT Venture, both for consulting, licensing and management of real estate properties; and $100,000 from T International Realty for consulting work for the luxury real estate brokerage company.
Ivanka Trump also retains an interest in Ivanka Opo Hotel Manager LLC, which includes the Washington hotel project that she spearheaded before joining the White House. The hotel, which includes an Ivanka Trump branded spa, has quickly become a popular meeting place for Republican and conservative groups in the nation’s capital. The report does not indicate how much she will receive from the hotel.
Mirijanian said before she joined the White House, Ivanka Trump invested money in a number of different companies with her family members, sharing in any profits.
“She no longer provides any services to those companies, and she no longer receives any earned income or compensation from them,” he said. “Based on her prior financial investment in those companies, she now receives fixed income based on her passive investment in those companies, something not uncommon for federal employees with outside investments.”
Robert Kelner, a Washington attorney who represents federal employees who are required to file financial disclosure reports, said he has never had an agency or OGE ask one of his clients to switch to a fixed income. He criticized the practice, saying it only addresses the appearance of financial conflicts of interest and not actual conflicts of interest.
Some wealthy officials who served in current and previous administrations have divested their investments and holdings. But others have not, choosing instead to place their assets in a trust and recuse themselves on issues that could relate to their financial interests.
Penny Pritzker, secretary of Commerce for President Barack Obama, for example, held onto Hyatt stock worth millions of dollars but recused herself where necessary to avoid conflicts of interest, according to Ivanka Trumps’s attorney.
By comparison, Trump’s first secretary of State, Rex Tillerson, effectively “cashed out” $180 million worth of ExxonMobile shares that would have become vested over a decade after his planned March 2017 retirement. Those shares, earned retirement compensation for the long-serving executive, were sold in advance and then the money was put into a trust that will distribute the money to Tillerson over a 10-year period.
Ivanka Trump's disclosure differs, however, in that the Trump Organization is a collection of privately held companies that disclose little to the public, and none of the family members have made their recent tax returns public. That means there is no way to know what her lump-sum payments actually represent beyond a vague stake in the family business that is not tied to present profits.
An OGE official declined to speak about any specific case, but said that it’s “not uncommon” for the office to ask an employee to switch to a fixed income to alleviate concerns stemming from a federal law that forbid employees from participating in government matters if they or their family has a financial interest.
To further reduce Ivanka Trump’s interest in each of the companies, the fixed payments are being guaranteed by the other two companies.
The OGE official said that a so-called cross-guarantee doesn’t help conflicts of interests issues. “We don’t usually get involved with this,” the official said.
Ivanka Trump shifted her assets to various trusts while she serves in the White House, though many questions remain about the details of the arrangement, which have not been disclosed.
Her father, for example, did not fully separate from his business interests when he was sworn in as president. Instead he placed his holdings in a trust designed to hold assets for his “exclusive benefit,” which he can receive at any time. He also retains the authority to revoke the trust.
Editor’s note: This story has been updated to add further comment from a spokesman for Ivanka Trump’s attorney.
Kevin G. Hall and Ben Wieder in Washington contributed.
Anita Kumar: 202-383-6017, @anitakumar01