Trump International Hotel in Washington, D.C. (Photo: Diego M. Radzinschi/ALM)
Two days after the inauguration, liberal lawyers huddled in downtown Washington to issue a call to action to scour President Donald Trump’s web of businesses for any conflicts of interest that could provide fodder for a lawsuit.
Trump is under increasing scrutiny for his refusal to divest business interests that could be central to any claim that he is financially benefiting from the presidency. Liberal advocates organized what they described as a “counter-inauguration” conference Sunday in Washington to detail a strategy to confront the Trump administration.
“This is a guy who has properties all around the country. He has hotels, he has golf courses, he has all sorts of business. And I think we ought to start looking at what kind of entanglements he has with state governments,” Deepak Gupta, a public interest appellate litigator at Washington’s Gupta Wessler, said at the panel discussion Sunday. “If he is getting development grants, if he’s getting special tax credits, if those things are discretionary, if they’re not the result of generally applicable rules that apply to everyone, those are potential emoluments clause violations.”
Just hours after the call to action, the first salvo was fired in the U.S. District Court for the Southern District of New York. A lawsuit filed Monday alleged Trump is violating the Constitution by allowing his hotels and other businesses to accept payments from foreign governments.
The complaint, titled Citizens for Responsibility and Ethics in Washington v. Trump, anticipates two major hurdles in litigation over the Constitution’s emoluments clause, which prohibits federal officeholders, including the president, from receiving any “present, emolument, office, or title, of any kind whatever, from any king, prince, or foreign state.”
The first obstacle is proving that CREW has standing to sue Trump over the emoluments issue, by showing that Trump’s activities have caused injury to the organization. The suit claims Trump’s actions “have required CREW to divert and expend its valuable resources specifically to counteract those violations, impairing CREW’s ability to accomplish its mission.” Lawyers are questioning whether that claim is sufficient to prove any Trump conflict has harmed the group.
A second problem is showing that Trump himself—not just the companies he owns—is directly receiving emoluments from foreign governments. The complaint details foreign involvement in the full range of Trump’s holdings, including the recently opened Trump International Hotel in Washington. Almost every section of the lawsuit providing those details adds that “defendant regularly receives money—and, without judicial intervention, will continue to receive money during his presidency” from each entity.
From the complaint:
The Foreign Emoluments Clause was forged of the Framers’ hard-won wisdom. It is no relic of a bygone era, but rather an expression of insight into the nature of the human condition and the preconditions of self-governance. And applied to Donald J. Trump’s diverse dealings, the text and purpose of the Foreign Emoluments Clause speak as one: this cannot be allowed.
The conflicts suit was assigned Monday to U.S. District Judge Ronnie Abrams, a former Davis Polk & Wardwell lawyer who was confirmed in 2012.
The lawyers who filed the lawsuit on behalf of CREW include Gupta; Harvard Law School professor Laurence Tribe; Erwin Chemerinsky, dean of the School of Law University of California; and Zephyr Teachout of Fordham Law School. Tribe co-wrote an analysis of the Emoluments Clause for the Brookings Institution in December along with Norman Eisen and Richard Painter, who are listed on the complaint as chairman and vice chair, respectively, of the board of directors of CREW.
A press representative for Trump wasn’t immediately reached for comment Monday.
Trump’s lawyers have pushed back on the idea that Trump’s business interests expose him to any conflicts of interest. Still, Trump recently moved to distance himself from his companies, putting greater leadership in the hands of his two adult sons.
Sheri Dillon, a Morgan, Lewis & Bockius partner representing Trump, argued recently that the emoluments clause does not apply to fair-market-value transactions. “No one would have thought when the Constitution was written that paying your hotel bill was an emolument,” Dillon said at a news conference. “Instead, it would have been thought of as a value-for-value exchange; not a gift, not a title, and not an emolument.”
Sunday’s “Rise Above” panel discussions at the Mayflower Hotel in Washington examined conflicts of interest, women’s rights, civil and voting rights and the U.S. Supreme Court. Speaking with Gupta, Joshua Matz, an associate at Robbins, Russell, Englert, Orseck, Untereiner & Sauber, called Trump’s reasoning about conflicts “very unimpressive.”
“Ordinarily, people make profit in fair-market-value transactions. That’s why they enter into them,” Matz said. “And so if the Trump Organization is making substantial profits from foreign nations, the fact that it’s doing it at the local fair market rate doesn’t mean that the huge influx in business and therefore profit from said foreign power is not a benefit from a foreign power to Trump.”
Gupta acknowledged on Sunday the challenges posed by any lawsuit against Trump that alleged conflicts of interest.
“The merits are actually the easiest question you confront if you’re trying to construct one of these lawsuits, either under the domestic or foreign emoluments clauses,” he said. “The harder problems are going to be standing. So I think it’s really incumbent on folks like you and your networks to start investigating these Trump conflicts and to think about who’s affected and how they can have standing.”
CREW’s complaint is posted below.
