Thursday, May 25, 2017

Trump Group Says Donating Profit from Foreign Officials is Complicated

As Trump prepared to assume the Presidency, he unveiled an Ethics Plan promising that his company would Donate to the United States Treasury “All Profits” from foreign Government patronage of his Hotels. Several months later, the Trump Organization is finding that Pledge daunting to keep.

The Company told Congress in a recent submission that it was all but impossible to Identify every Foreign Government Official who walked through the doors of its Hotels. And investigating all its patrons, the Organization argued, would interfere with its business and ask too much of customers. “To fully and completely identify all patronage at our properties by customer type is impractical in the service industry,” the Company wrote in a nine-page pamphlet outlining its policy. “Putting forth a policy that requires all guests to identify themselves would impede upon personal privacy and diminish the guest experience of our brand.”

The Trump Organization shared the document this month with Members of the House Committee on Oversight and Government Reform in response to a request for information about how the Policy would be put into effect. The Committee’s top Democrat, Elijah E. Cummings, released the document publicly on Wednesday, along with a letter to the Trump Organization in which he said he had “grave concerns” about the policy, and “deficiencies in this approach are obvious.”

The Public disclosure of the document has now set off new questions about whether the President could potentially run afoul of the Foreign Emoluments Clause, which essentially prohibits Federal Government Officials from accepting Gifts from Foreign Governments. But included in the Clause, Congress can Waiver each Gift. The Clause has become a cudgel for Trump’s critics, who argue that the Presidency of a Businessman, who still maintains ownership of his Properties, raises a host of potential Conflicts of Interest, leading some Groups to Sue. “Complying with the United States Constitution is not an optional exercise, but a requirement for serving as our nation’s president,” Mr. Cummings wrote in a letter to George Sorial, the Trump Organization’s Chief Compliance Counsel. “If President Trump believes that identifying all of the prohibited foreign emoluments he is currently receiving would be too challenging or would harm his business ventures, his options are to divest his ownership or submit a proposal to Congress to ask for our consent.”

In a statement, a spokeswoman for the Trump Organization said: “We have received and are in the process of reviewing the letter. We take these matters seriously and are fully committed to complying with all of our legal and ethical obligations.”

Later on Wednesday, the top House Judiciary Committee Democrats sent a letter to the President himself, asking that he provide a “Full Accounting” of all possible Foreign Emoluments he had received.

One Legal Case over these Profits is Pending in Federal District Court in Manhattan, where Trump’s first formal response, being handled by the Justice Department, is due on June 9th. By Donating all profits paid by Foreign Government Officials to the Trump Organization, the Company could potentially eliminate vulnerability to at least part of the Claim that the President and his family were benefiting Financially from Payments by Foreign entities.

For their part, the Trump Organization and Trump’s Lawyers say the Emoluments Clause does not apply to his business Empire, a range of Hotels, Golf Courses, and Real Estate across the Globe. They argue that a Hotel Guest paying Market Rate for a room does not amount to a Gift or Payment. Even so, Trump’s Lawyer, Sheri A. Dillon, said he had voluntarily adopted the Profit Donation policy “to put to rest any concerns.”

The Company Plans to Donate the Foreign Government Profits to the Treasury in a Lump Sum at the end of the Fiscal Year. The Company also said it was Calculating the Profits based on the Lodging industry’s Accounting Standards. But if they accumulate the Foreign Profit in a separate Interest barring Account, will the keep or add the interest amount to the Donation?

In a letter that Mr. Sorial sent the Committee this month, he declined to answer a question from Lawmakers about whether Trump planned to Claim the Profit Donations as a Tax Deduction. Mr. Sorial said it was “premature to respond at this time.”

As part of the broader Ethics plans, Trump handed the Management of his business, but not the Ownership, over to his oldest sons, Donald Jr. and Eric Trump, and other Executives. He also instituted a Ban on new deals in Foreign Countries during his Presidency. To compensate the Business, the Trump Organization will open two new Hotel chains in the U.S. This will then bring the Domestic Emoluments Clause into play. This Clause, Congress can not be Waiver.

From the beginning, the Profit Donation Policy appeared to be a difficult undertaking. It may not be feasible to Identify every person who sits at a Trump Hotel Bar or Eats in one of his Restaurants. “It is not customary in the hospitality industry to identify and calculate profits from a particular customer group,” the Company’s Policy said.

In the Submission to Congress, the Trump Organization laid out its Plans to Track and Identify Foreign Government Customers. In essence, the Plan hinges on whether the Customer self-identifies as a Foreign Government Official.

The Policy, the Company said, does not “attempt to identify individual travelers who have not specifically identified themselves as being a representative of a foreign government entity.” The Company said it intended to “make commercially reasonable efforts” to identify when a Trump Property has received Revenue from a Foreign Government Entity or Customers Representing a Foreign Government. But looking at their Passport would indicate if they were a Foreign Government Employee.

That effort will include Tracking “all direct billings from the property to a foreign government,” as well as all banquet and catering business that the company received from a foreign government. The company also plans to identify any checks or electronic wire transfers “from a reasonably identifiable foreign government entity.”

These Entities include a foreign Government Agency, Embassy, Political Party, Members of a Royal Family or a sovereign Wealth Fund. In countries where the Government Controls the Corporations, the Company said that Government Officials “may not be reasonably identifiable”.

Andy Grewal, a Law Professor at the University of Iowa, who has Disputed the notion that Trump is in danger of Violating the Foreign Emoluments Clause because his Hotels accept certain Payments, said, “The Trump Organization plan strikes me as a reasonable approach.” He said that it was unreasonable for Mr. Cummings to expect more and that he was essentially demanding that “when anyone who walks into the Trump Tower grill and orders a taco bowl, they should be asked if they are a member of a foreign government.”

Norman Eisen, the top White House Ethics Lawyer in the first years of the Obama Administration and an outspoken critic of Trump’s Ethics Plan, said that the measures being taken always seemed “woefully inadequate” and that the process of Donating the Profits from Foreign Government sources lacked Feasibility. Mr. Eisen said the new information revealed on Wednesday “demonstrates that the plan is full of loopholes” and falls short of the original pledge. “Frankly, it doesn’t seem like Trump is even trying,” he said.

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