President-elect Donald Trump said he would put his assets into a trust and relinquish control of his business to his two adult sons in an effort to avoid conflicts of interest during his presidency.
Mr. Trump will sever management ties to the Trump Organization and play no role in its operations, under the terms of the trust. While he is in office, his real estate empire will abide by “severe restrictions on new deals,” an attorney retained by Mr. Trump said. If foreign governments make payments to his hotels—including a new one near the White House—Mr. Trump plans to donate all profits to the U.S. treasury, the attorney said.
Mr. Trump’s sons, Eric and Donald Jr., will be running the Trump Organization.
In a news conference Wednesday, Mr. Trump said he is legally entitled to serve as president and run his business, but has opted not to do that.
“My two sons… are going to be running the company,” he said, adding that “they’re not going to discuss it with me.”
On a table next to the lectern, the Trump transition team piled huge stacks of paper laying out the terms of the trust.
Under the agreement, Mr. Trump will also add to the Trump Organization management team an ethics adviser who will give written approval of new deals and transactions that could raise concerns about conflicts of interest.
No new foreign deals will be permitted, Ms. Dillon said. In his remarks, Mr. Trump said that over the past weekend, he turned down an opportunity to do a $2 billion deal in Dubai because he wanted to avoid creating an ethics issue.
New domestic deals will be allowed but will go through “a vigorous vetting process,” Ms. Dillon said.
Some ethics experts say the trust and other measures envisioned by Mr. Trump don’t create the firewall needed to fully insulate him from his holdings.
The trust he is creating to hold all his businesses will continue to receive millions from their profits and will be run by family members—not an impartial third party. An analysis by The Wall Street Journal of Mr. Trump’s financial disclosures last year estimated his 2016 pretax income at $160 million. A spokeswoman for the Trump campaign said this figure was wrong by “a lot,” but didn’t elaborate.
Mr. Trump also will continue to be aware of the sources of this income and could be influenced by business considerations as president.
For example, Mr. Trump’s financial disclosures said that he received $1 million to $5 million from his licensing deal with the Trump International Hotel and Tower in Panama. If the U.S. were to get into a dispute with that country during the Trump administration, his desire to maintain this revenue stream could influence his decision making.
Ethics experts have called on Mr. Trump to sell his assets, citing a constitutional clause that addresses payments from foreign governments and other potential conflicts they say could put the president’s personal financial interests out of step with the interests of the U.S. more broadly.
Norman Eisen, a former Obama White House counsel who dealt with ethics issues, said that the steps outlined by Mr. Trump amount to “an inadequate and scantily detailed ethics wall.”
He added: “ Mr. Trump’s ill-advised course will precipitate scandal and corruption. I and many others will respond strongly in defense of ethics and our Constitution.”
Richard Painter, formerly an ethics attorney for president George W. Bush and a critic of Mr. Trump’s business plan, said in an interview Wednesday that he still has serious concerns.
“Nobody should be doing deals with assets owned by the president of the United States other than a blind trustee,” Mr. Painter said. “This is a major issue about a president with financial exposure outside the United States and is a serious conflict of interest.”
The Trump attorney, Ms. Dillon, said that selling the business would give rise to a host of other problems.
Mr. Trump would still be entitled to royalties from the use of his brand name, she said. And the price paid would inevitably be subject to scrutiny, with critics asking if the buyer overpaid “to curry favor with the president-elect,” Ms. Dillon said.
She also said putting his assets into a blind trust managed by someone outside the family, as other presidents have done before taking office, isn’t feasible.
“President Trump can’t unknow that he owns Trump Tower, and the press will make sure that any new developments at the Trump Organization are well publicized,” Ms. Dillon said.
She also rejected the contention that Mr. Trump risks violating the Constitutional clause that forbids government officials from accepting gifts and benefits from foreign countries. To make the point, she mentioned a scenario in which people rent rooms in a Trump hotel.
“No one would have thought when the Constitution was written that paying your hotel bill was” a gift, she said. Instead, it would have been thought of as a value-for-value exchange.”
Mr. Trump has vast business interests that dwarf those of previous modern presidents. Particularly unique are his foreign holdings, which include deals to license the Trump brand and manage hotels in foreign countries under development partners who themselves have diverse business interests.
Most of the major deals announced by the Trump Organization in recent years have been foreign licensing deals.
Under pressure from ethics attorneys and others, the Trump Organization has canceled deals in the countries of Georgia, Brazil and Azerbaijan with partners who were under government corruption probes or the subject of media reports of past corruption issues.
Yet company executives have said they don’t intend to or have the ability to cancel other deals with buildings under construction, which they say are under tight contracts.
Mr. Trump’s sons, along with their sister Ivanka Trump, have increasingly assumed leadership positions at the Trump Organization over the past decade, engaging in new deals on the company’s behalf and running much of the business while Mr. Trump was campaigning for president.
Ms. Trump, who is expected to play a role in the new White House at some point, will no longer be involved in management of the Trump Organization, attorneys for the family said.
In certain respects, the Trump Organization is very much a family business. The Trump children said in depositions last year that they continued to consult with their father on key business decisions and to seek his advice.
Donald Trump Jr. and Eric Trump have also helped their father on the political side throughout the campaign and transition period and have sat in on transition meetings ahead of Mr. Trump’s presidency. They helped vet Mr. Trump’s vice president-elect, Mike Pence.
Wall Stree Journal