Emoluments and Implications from Conflict of Interest Laws and Private Sector Fiduciary Duty

Abstract

In this article, the ethics of public service and the relatively untested Emoluments Clause of the U.S. Constitution will be considered and contrasted with the jurisprudence surrounding conflict of interest in the private sector. Part I establishes the framers’ understanding of law and ethics for U.S. public service. Part II considers the clause itself, and whether it applies to the office of the President. Part III relates just a few of the foreign-based business interests of the 45th U.S. President and how they could compromise his loyal discharge of duties to the nation he serves. Part III also analyzes the President’s plan to avoid conflicts of interest, finds it inadequate, and concludes that only full disclosure of his tax returns would reveal the complete range of conflicts that might color his judgment as President of the United States.

Moving beyond the descriptive to the more normative business ethics issues, Part IV describes the insights of behavioral psychology to demonstrate how common it is for people and politicians to overlook their own conflicts of interest, even where those conflicts strongly influence their decisions. Part V summarizes observations related to conflict of interest laws and fiduciary duties in business, lending support to the conclusion that Trump’s attempt to hold the office of president would be untenable in other contexts. Returning to legal issues raised by the President’s conflicts of interest, Part VI describes the federal lawsuit filed by Citizens for Responsibility and Ethics in Washington (CREW). CREW seeks an injunction on Mr. Trump’s holding office while holding various assets subject to foreign governmental influence, and Part IV offers insight into how a challenge to standing could be overcome. Both courts and Congress — the ultimate judges of the President’s conflicts of interest, at least until the next election cycle — should support the original intent and plain meaning of the Emoluments Clause. Without Congressional action, however, it is unlikely that the President’s conflicts of interest will be resolved early in his term of office.

Keywords: Constitution, U.S. Constitution, Emoluments, Conflict of Interest, Fiduciary Duty, Donald Trump, Trump, Ethics

JEL Classification: K00, K10, K19, K22, K29, K3, K39