The left wing group Citizens for Responsibility and Ethics (CREW) is taking the lead in filing a lawsuit “alleging that President Trump is violating the Constitution by allowing his hotels and other business operations to accept payments from foreign governments,” according to the New York Times. The Trump-haters’ tiresome efforts to delegitimize the Trump presidency goes on.
Leading funders of Citizens for Responsibility and Ethics include groups affiliated with George Soros. Previously run by Hillary Clinton’s attack dog, David Brock, CREW’s chairman today is Norman Eisen, who is one of the leading lawyers on the anti-Trump case. Eisen had “bundled” donations between $200,000 and $500,000 from other contributors for Obama in 2008, for which he was rewarded with an appointment as special advisor to former President Obama for “ethics.”
The provision in the Constitution the plaintiffs are relying on to press their case, filed in the Southern District of New York, is known as the Foreign Emoluments Clause (Article I, Section 9, Clause 8), which states: “No Title of Nobility shall be granted by the United States: And no Person holding any Office of Profit or Trust under them, shall, without the Consent of the Congress, accept of any present, Emolument, Office, or Title, of any kind whatever, from any King, Prince, or foreign State.”
The plaintiffs allege that President Trump is violating the Foreign Emoluments Clause through his continuing ownership interests in Trump hotels, buildings and other real estate ventures in which foreign governments, or businesses controlled by foreign governments, are customers, tenants, lenders or business partners. President Trump, the theory goes, is illegally receiving monetary benefits from foreign states or their controlled entities without congressional consent. The lawsuit seeks a court order compelling President Trump to cease receiving such benefits.
The plaintiffs face an uphill battle. To begin with, their lawsuit may be dismissed out of hand because they lack standing to bring the suit in the first place. Standing is a legal threshold plaintiffs must meet for the court to hear their case, requiring plaintiffs to demonstrate they have suffered a direct and concrete injury as a result of the actions they are complaining about. According to the New York Times, the ACLU “hopes to find a hotel or bed-and-breakfast that might compete against a Trump hotel as a party with standing to sue.” Presumably such competitors would claim they have suffered some sort of economic injury from foreign government favoritism shown towards Trump hotels, motivated by a desire to please Mr. Trump in his presidential capacity. The so-called “competitor standing” theory may succeed in getting a lawsuit with the right plaintiffs past the courthouse door, but that is as far as they should get.
The next hurdle the plaintiffs must overcome is whether the Foreign Emoluments Clause even applies to the president of the United States and, if so, whether Congress has already given blanket consent to all presidents in terms of their business dealings, including with foreign governments and their controlled entities, when it exempted presidents and vice presidents from its conflicts of interest laws.
The Foreign Emoluments Clause refers to “Person holding any Office of Profit or Trust,” which arguably at the time was not intended to refer to elected officials in the legislative or executive branches. The same phrase “holding any Office” is used earlier in Article I, Section 6, where it is clear that such phrase refers only to appointees. It is only when the Constitution uses the term “Emolument” a second time, in the compensation clause of Article II, Section 1, that we see a specific reference to “the President.” This textural interpretation is bolstered by the fact that when Alexander Hamilton was directed by the Senate to provide a list of persons holding office under the United States and their salaries, his response included only appointed officers, not any elected persons.
Thus, both the text, and the actions of one of the Founding Fathers involved in the drafting, indicate that the plaintiffs’ suit against President Trump should be dismissed because the constitutional provision they are suing under does not apply to him.
Consider also the purpose of the Foreign Emoluments Clause. It is in essence intended to protect against conflicts of interest if people working in the U.S. government were to receive personal economic benefits from foreign governments or their controlled entities. Such benefits could conceivably be in the form of gifts or in the form of compensation for services, especially if such compensation is beyond what would be expected in a standard commercial arms-length business transaction. However, no court has had the occasion to interpret exactly what the term “emolument” means as used in the Foreign Emoluments Clause, much less how it would apply to a sitting president. President Trump’s lawyers have argued that the term should apply only to gifts from foreign governments or a special benefit.
“No one would have thought when the Constitution was written that paying your hotel bill was an emolument,” Sheri A. Dillon, a partner at Morgan Lewis who drafted the president’s trust documents, said at a news conference earlier this month. She said that as an extra precaution, all profits from overnight stays by foreign government employees in Trump hotels would be paid to the U.S. Treasury.
A law professor examining legal precedents in other contexts involving emoluments concluded that the term refers to payments related to the office the government worker holds, not simply payments for unrelated goods or services sold at fair market value.
Whatever “emoluments” are determined to encompass, President Trump’s lawyers claimed to have set up a structure, with outside compliance oversight, to isolate him from his businesses. If President Trump is not taking compensation himself in any form from any of the Trump businesses that still may be profiting from their ongoing relationships with foreign governments or their controlled entities, and is not participating in the running of such businesses, then what exactly is there left for the court to do?
It is also difficult to imagine a court interjecting itself into a matter that Congress has more direct authority under the Constitution to oversee. After all, it is Congress that is given the consent power under the Foreign Emoluments Clause in dealing with potential conflicts of interest involving foreign states. And Congress has arguably given its broad consent to compensation arrangements involving potential conflicts of interest already, when it exempted the president and vice president, along with members of Congress and federal judges, from its own statutory conflicts of interest prohibitions.
The one circumstance in which the president and vice president must receive specific consent from Congress is their acceptance of “gifts” from foreign governments. A “gift” is defined in the relevant statute as “a tangible or intangible present (other than a decoration) tendered by, or received from, a foreign government.” There are well established procedures that presidents have followed, even before the passage of this statute, to disclose any foreign gifts for the purposes of obtaining congressional consent.
If Congress believes it has not provided the requisite consent for foreign emoluments it believes is required by the Constitution and that President Trump is willfully violating the Foreign Emoluments Clause, then it is up to Congress to exercise its impeachment powers under Article II, Section 4. In the meantime, the left wingers’ lawsuit should be summarily dismissed.