Their enterprises are creating new avenues for corruption at the White House.
The Trump Organization and Jared Kushner’s family company are quietly doing business together — and government ethics experts are alarmed that it’s adding yet another dimension to the Trump administration’s conflict of interest problems.
The New York Times reports that the two companies have signed a letter of intent to have the Trump Organization manage at least one of the hotels in the Kushner Companies’ new oceanfront development in Long Branch, New Jersey. That development is poised to potentially benefit from tens of millions of dollars in local and federal government investment. The Trump Organization has also apparently been managing a Kushner Companies-owned hotel in Livingston, New Jersey, since last year.
Trump hasn’t divested from the Trump Organization — he has only handed over the responsibility of running it to his family. Kushner has divested himself from some of his Kushner Companies assets, but he still holds a majority of his stake and has an ownership interest in the Long Branch development. (He has, however, divested from the Livingston property.)
And analysts say the private collaboration between the two companies raises a whole host of ethical red flags.
Trump has financial incentives to keep Kushner in government
There were already concerns that Kushner’s role as a senior adviser in the White House, despite having no relevant policy experience, was the product of nepotism — that he received favorable treatment because he’s the son-in-law of the president.
Now it seems that Trump also has a financial incentive to keep Kushner in the White House. Kushner is in charge of several major policy initiatives, including Middle East policy, US-Chinese relations, and bringing tech solutions to public policy. If Kushner does a terrible job, firing him or taking some of those projects away from him might be the smarter move in terms of running the country effectively.
But the fact that Trump is making money from business deals with Kushner might make him less likely to remove Kushner — essentially putting Trump’s personal financial interests before the interests of the country.
“If Trump wasn’t doing business with Kushner’s business, would he still be in the job?” Lawrence Noble, the general counsel of the Campaign Legal Center, a nonpartisan watchdog group, asks.
Another concern is that Kushner Companies could exploit its links to the White House to pressure local and federal officials for more support and investment. Virginia Canter, a former government ethics lawyer in the Obama and Clinton administrations, told me that local and federal officials could be afraid of turning down or angering the company out of fear of retaliation from the most powerful politician in the world.
Trump himself stands to benefit from that fear if his company gets business when Kushner’s does. Experts say that could even potentially violate the domestic emoluments clause of the US Constitution, which prohibits the president from receiving gifts from the government.
Another worrying possibility is that Trump could make Kushner the White House’s point man on upcoming infrastructure legislation. Kushner could push for policies designed to give advantage to certain kinds of infrastructure (say, piers near oceanfront properties) or infrastructure in certain regions of the country that could boost both of their bottom lines.
The New York Times reports that the Kushner Companies’ deal with the Trump Organization hasn’t yet been finalized, nor do the companies have to notify the city if it ever is. But the fact that it’s a real possibility — and that the businesses already have at least one other reported partnership — is troubling.
Trump and Kushner could be using their power for private gain
We’re already seeing real-world examples of how Trump and Kushner’s collective weight could sway public policy related to their real estate investments.
The New Jersey City Council approved $20 million in bonds in September to support the Long Branch oceanfront development (called Pier Village). The funds are for the infrastructure surrounding the development and will likely boost the value of the property.
It’s a situation that’s ripe for corruption. Noble says it creates a scenario in which the city “may be willing to cut them a better deal or enter a deal that they wouldn’t otherwise enter into because they want to be on the good side of the president.”
There are possible legal concerns here too: Trump could effectively be receiving a gift from the government, raising the possibility of an emoluments clause violation. While the Constitution’s emoluments clause technically refers to states, Noble says there is a strong legal argument that cities are also covered by that clause.
The Long Branch development also stands to benefit from federal support. The Associated Press reported last week that Long Branch government officials are in talks with the Federal Transit Authority about applying for funds to help develop a pier and ferry service right by Pier Village that would likely give a big boost to its value.
Canter, the former government ethics lawyer, said that Trump’s affiliation with the Pier Village project could put officials in a tough spot. “It will be very hard for a federal official or state official to say, ‘No, we should ignore this project,’” she explained.
In all of these situations, there doesn’t need to be documented evidence of corruption to do damage to the public’s faith in government. The simple fact that the president and his staff have created scenarios where it’s possible is in and of itself dispiriting for anyone concerned about making sure government officials have the public’s best interests — and not their personal financial gain — in mind when making policy.
Trump ran for the White House promising to drain the Washington swamp of special interests. But in his time in office, he’s made it clear he’s perfectly fine with setups that advance interests of his own.
Mar 15, 2018, 9:10am EDT