Make us your home page
Instagram

PolitiFact.com | Tampa Bay Times

PolitiFact: Giuliani correct that President Trump will be exempt from conflict-of-interest laws

NEW YORK, NY - NOVEMBER 22: Former New York City mayor Rudy Giuliani arrives at Trump Tower, November 22, 2016 in New York City. President-elect Donald Trump and his transition team are in the process of filling cabinet and other high level positions for the new administration. (Photo by Drew Angerer/Getty Images) 682090847

NEW YORK, NY - NOVEMBER 22: Former New York City mayor Rudy Giuliani arrives at Trump Tower, November 22, 2016 in New York City. President-elect Donald Trump and his transition team are in the process of filling cabinet and other high level positions for the new administration. (Photo by Drew Angerer/Getty Images) 682090847

The statement

Financial conflict-of-interest "laws don't apply to the president, right? So, the president doesn't have to have a blind trust."

Rudy Giuliani, Nov. 13 on CNN's State of the Union

The ruling

President-elect Donald Trump has said his children will manage his business dealings. Many presidents in the past have put their assets in a blind trust, which is when an independent trustee manages another person's assets without the person's input.

But Trump doesn't actually have to do any of this because the financial conflict-of-interest laws don't apply to him as president, said former New York City Mayor Rudy Giuliani.

Giuliani has the law pretty much right. Trump, as president, has no legal obligation to detach himself from his businesses and financial interests.

The law at issue is Title 18 Section 208 of the U.S. code. It says federal executive branch employees can't participate in government matters in which they or their immediate family have a financial interest.

Because of this law, some federal employees put their investments in a blind trust. This allows them to sidestep the regulation and participate in a matter that might otherwise pose a conflict of interest.

But the president and the vice president, despite being executive branch employees, are exempt. According to the law's definitions, Title 18 Section 208 does not apply to them, and it also doesn't apply to members of Congress or federal judges.

"It appears that presidents have mostly escaped the normal web of ethics and conflict-of-interest laws," said Scott Amey, general counsel at the Project on Government Oversight, a nonpartisan government accountability watchdog.

Amey added that presidents are allowed to accept gifts in many cases, too.

It's been this way since at least 1974, when the Justice Department issued a letter saying Title 18 Section 208 did not apply to the president. Congress expressly codified the exemptions in 1989.

In the 1974 letter, the Justice Department said the legislative history of this conflict-of-interest provision indicated that it was never intended to apply to the president. Additionally, the Justice Department said placing conflict-of-interest laws on the president could constrain him in a potentially unconstitutional manner, though it did not give specific examples.

"As the head of the executive branch, the president may not be able to — and arguably under the Constitution it might not be possible to require the president to — recuse from government decisions," said Richard Briffault, a professor of legislation at Columbia Law School.

While Title 18 Section 208 is the primary conflict-of-interest provision, there are other relevant rules, including a couple that don't exempt the president.

Trump and Vice President-elect Mike Pence will have to disclose their finances, which is required of all high-level federal employees, Briffault said. But the disclosures are not as detailed as federal tax returns, which Trump has not released.

Then there's the Constitution's Emoluments Clause, which bans U.S. government employees from accepting presents or compensation from foreign governments, noted Kathleen Clark, an expert on legal ethics and a law professor at Washington University in St. Louis.

The Trump Organization has numerous foreign ties, including several overseas real estate deals with possible foreign government connections.

"If any of Trump's business arrangements involve the receipt of payments from foreign governments, I believe that he, or his entities from which he receives money, would have to forgo those payments, or he would have to detach from those entities," Clark said.

We rate Giuliani's claim True.

Edited for print. Read the full version at PolitiFact.com.

PolitiFact: Giuliani correct that President Trump will be exempt from conflict-of-interest laws 12/02/16 [Last modified: Friday, December 2, 2016 4:44pm]
Photo reprints | Article reprints

© 2017 Tampa Bay Times

    

Join the discussion: Click to view comments, add yours

Loading...
  1. SeaWorld shares drop Monday to 2017 low after disclosure of federal subpoena

    Tourism

    The Orlando parent company of SeaWorld and Busch Gardens theme parks saw its stock drop 3.5 percent Monday to $15.10, its lowest price of this year.

    Killer whales perform at Shamu Stadium at SeaWorld in Orlando in 2011, before public pressure was placed on the theme park company to curtail its orca shows.SeaWorld has since announced an end to the traditional killer whale entertainment  at its theme parks. [AP Photo/Phelan M. Ebenhack]
  2. Rick Scott appoints longtime ally Jimmy Patronis as Florida CFO

    State Roundup
    Rick Scott appoints Jimmy Patronis (background) as CFO. [STEVE BOUSQUET | Tampa Bay Times]
  3. Local gas prices plummet as Fourth of July holiday travel approaches

    Tourism

    TAMPA — Local gas prices are enjoying an unseasonal dip around the $2 mark just in time for the hectic Fourth of July holiday travel weekend.

    The price of regular unleaded gasoline has dropped to $1.99 at a Rally station on Pasadena Ave. South and Gulfport Boulevard South, South Pasadena.
[SCOTT KEELER   |   Times]

  4. Air bag recalls, lawsuits lead Takata to file for bankruptcy

    Autos

    Shattered by recall costs and lawsuits, Japanese air bag maker Takata Corp. filed Monday for bankruptcy protection in Tokyo and the U.S., saying it was the only way it could keep on supplying replacements for faulty air bag inflators linked to the deaths of at least 16 people.

    Japanese air bag maker Takata Corp. CEO Shigehisa Takada bows during a press conference in Tokyo on Monday. Takata has filed for bankruptcy protection in Tokyo and the U.S., overwhelmed by lawsuits and recall costs related to its production of defective air bag inflators.
[(AP Photo/Shizuo Kambayashi]
  5. Airbag maker Takata bankruptcy filing expected in Japan, U.S.

    Corporate

    DETROIT — Japanese airbag maker Takata Corp. has filed for bankruptcy protection in Tokyo and the U.S., overwhelmed by lawsuits and recall costs related to its production of faulty air bag inflators.