Bradford Malt, the Boston lawyer who served as trustee for Mitt Romney’s blind trusts while he was governor and twice ran for president, has some advice for Donald Trump: You don’t get to be the leader of the free world and cling to all your business interests.
“It’s a basic tenet of democracy, that public servants owe their undivided loyalty to the government, and the decisions they make are in the public interest,’’ Malt said. “It’s about integrity.”
The trouble is, there’s no law requiring Trump to turn over his assets to a blind trust. In fact, presidents are exempt from the conflict-of-interest rules that apply to others in the Executive branch.
Nonetheless, presidents are expected to divest themselves of businesses or assets that create the appearance of conflicts while holding office. Malt says it comes down to this — presidents must appoint a trustee to sell off any such holdings and allow their money to be reinvested, out of their sight.
If Trump fails to do this, Malt said, “It’s going to undermine confidence in the government. It’s going to undermine his campaign promise to `drain the swamp.’’’
Most other presidents have followed this unwritten rule, Malt said. One exception is Barack Obama, who owns plain vanilla securities like Treasury bonds and index mutual funds, which are not considered a conflict.
Trump has a particularly complex array of business assets, including hotels, golf courses, and large residential towers. But he is hardly the first wealthy person to run for higher office.
When Romney was Massachusetts governor from 2003 to 2007, he was able to retain, in a blind trust, holdings worth hundreds of millions of dollars in Bain Capital, the Boston private equity firm he helped start.
But had Romney, a Republican, won the presidential election in 2012, Malt would have sold those stakes, he said. He would have sought to ensure that Romney could not be seen as profiting from policies related to private equity investments and the buying and selling of large companies both in the United States and abroad.
In Trump’s case, the billionaire businessman so far has said he will transfer management of his operations to his children. Critics say that falls far short of the standard.
“We are in the process of vetting various structures with the goal of the immediate transfer of management of the Trump Organization and its portfolio of businesses to Donald Jr., Ivanka, and Eric Trump as well as a team of highly skilled executives,’’ Trump campaign spokeswoman Hope Hicks said in a statement on behalf of the “Trump Organization.” The statement continued, “This is a top priority at the organization and the structure that is ultimately selected will comply with all applicable rules and regulations.’’
However, under the scenario presented by Trump, Americans could reasonably question whether his policies to cut corporate taxes or push pro-business measures or get along with China were aimed at helping America or intended to boost his children’s portfolios.
“It’s human nature to have that in the back of your mind, what your own self interests are,’’ said Christine Fletcher, a partner at the Boston firm Burns & Levinson. She said she believes there should be a law requiring presidents to divest of their business assets.
“There should be a lot of continued political pressure” for Trump to give up his business interests, Fletcher said. “His holdings are so extensive. We don’t even know what they all are; they’re global and throughout the world.’’ Transferring the business to his children would mean he’d no longer have to list those assets on his annual financial disclosure form, lawyers said. But it would not relieve the conflict-of-interest problem.
Malt said Trump should step back and ask himself, “What’s good government? What avoids the appearance of impropriety?”
Selling such a large pool of assets all at once may not be ideal, Malt acknowledged. But, “Nobody asked him to be president. He made his choice.”