Donald Trump

Not All Interests Are Conflicts

The Washington conflict-of-interest game has become a gotcha charade.

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New Year's 2017 at Mar-a-Lago Club
Meghan McCarthy/ZUMA Press/Newscom

There's a difference between an interest and a conflict of interest, and between the appearance of a conflict of interest and an actual conflict of interest.

Remembering those distinctions, understanding them, and keeping them in mind is the key to making sense of the ongoing political uproar over the financial assets and income streams of President-elect Trump, his son-in-law and adviser Jared Kushner, and his team of wealthy choices for cabinet positions.

You wouldn't know that from the press coverage, which seems predicated on the absurd idea that being rich, owning real estate, or having business interests, is or ought to be somehow disqualifying from government service. It's a principle that would have required George Washington to sell his Virginia farmland and put the proceeds in a blind trust before becoming president or serving as commander in chief of the Continental Army, or have required President Kennedy's family to sell the Chicago Merchandise Mart and put the proceeds in a blind trust before Kennedy became president. It's a principle that would have required Henry Morgenthau Jr. to sell Fishkill Farms and put the proceeds in a blind trust before serving as chairman of the Farm Credit Administration or Treasury secretary in President Roosevelt's administration.

The idea that only those who have taken vows of poverty—say, Buddhist monks, or mendicant friars, or newspaper editorial writers—are acceptable candidates for government service is a conceit that, when you think about it, is both unworkable and unwise. Unworkable, because there doesn't tend to be vast overlap between the ranks of the penniless and those with the financial acumen and management skill to run the American government. And unwise, because, if anything, Americans should want public servants with skin in the game, with a big ownership stake in American economic growth and success.

The attacks on would-be-public servants with business interests show how far America has strayed from its revolutionary origins. We've gone from a place where property ownership was a requirement for voting to a country where property or business ownership has become grounds for disqualification for public office. I'm glad the franchise has expanded, but I sometimes worry we've gone too far in the other direction, demonizing ownership rather than honoring it.

If it sounds like I am exaggerating, or being too abstract, let me give some specific examples of what I am talking about.

Example number one is Trump's Mar-a-Lago club in Palm Beach, Florida. Hardly a day goes by without some dire warning in The New York Times about the dangers of Trump's supposed "denial" of the dangers of human-caused global climate change. Since one of the risks of that climate change is sea level rise, is it a conflict of interest that Trump owns an expensive piece of oceanfront property in Florida? Or is it a confluence of interest, that is, the fact that he owns a pricey property in Florida makes it more likely that he will act in the public interest when it comes to countering the risks of climate change?

Example number two is Jared Kushner's businesses, which, according to a long and breathless report in The New York Times over the weekend, have taken loans from French, German, and American banks, and from Chinese investors under the EB-5 visa program that, as the Times put it, "grants two-year visas and a path to permanent residency in exchange for investments of $500,000." Again, is this a conflict of interest, or a confluence of interest? Hardly a day goes by without someone accusing Trump of racism or xenophobia, or Kushner of enabling the same in his father in law. It's certainly possible that Kushner's experience with Chinese immigrant investors will decrease the chances of a counterproductive American conflict with China and increase the chances that the Trump administration doesn't slam the door shut on immigrants.

The Ethics in Government Act of 1978 requires certain disclosures of administration officials, and officials of the incoming administration will have to comply with that law. But as Kushner's hiring of Risa Heller—a former spokeswoman for Sen. Charles Schumer and Gov. David Paterson, both Democrats of New York—and former Clinton administration official Jamie Gorelick to guide him through the "ethics" process makes clear, the Washington conflict-of-interest game has become a gotcha charade about paying the right revolving-door-insider compliance lawyers and consultants, rather than a means to honest government. It's about the appearance of ethics, rather than actual ethics.

No one wants self-dealing or genuine corruption. But why muddy that issue with a lot of unrelated nonsense? In lots of cases, asset ownership and government service aren't in conflict; they complement each other. And the best check on all this isn't a lot of long and complicated disclosure forms to be filled out by lawyers and accountants; it's the ability of the voters to throw out the politicians if they turn out to be so crooked they do a bad job for the public.

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  1. I thought for a minute this article seemed to make sense, but then I realized Ira Stoll is an editorial writer with a conflict of interest in that he gets paid to produce articles that seem to make sense. Booo! You can’t fool me that easily.

  2. Why does Reason keep giving Trump a free pass on everything? Closet Trumpets, that’s why!

    1. Because the secretly want America to be Great Again!

    2. Trump will make his private jet ambassador to australia. Because he doesn’t have a horse.

  3. Yeah,we need people that only want to be in office their whole adult life. And if they have and law degree that’s a plus.

    1. So you believe Charles Manson would make a better office-holder.

  4. It’s a principle that would have required Henry Morgenthau Jr. to sell Fishkill Farms

    Who wants to pick their own apples?

  5. For people who are horrified that people were going to keep their assets while in office, the chattering classes seemed remarkably complacent about Hillary keeping her Foundation in operation while she was in office.

    1. It’s a NON-PROFIT, silly.

      The Clinton Foundation does not make icky profits (at least not in the usual way), so all its activities are as clean as the driven snow.

    2. remarkably complacent about Hillary keeping her Foundation in operation while she was in office.

      Umm, all human organization can be internally corrupt. But unlike Trump. nonprofits cannot profit immensely and directly from any number of government actions.

      For example, Trump’s tax plan includes a 65% tax cut for HIMSELF. His highest rate, at 15%, would be well below his own supporters. How could the Clinton Foundation have done anything even close to that, if Hillary was was President? Please be specific.

      P.S. She was SecState, not President.

  6. What nonsense. Just whom not could be in a potential conflict of interest? Take some homeless wino and make him president and there’s a danger he’ll advocate for free mansions and Two Buck Chuck for the poor as a “right.” I suppose some barista with a degree in puppetry might qualify to run the Dept. of Education but one could never be sure she wasn’t giving out sweetheart student loans to performance art students like mattress girl.

    1. Charles Shaw isn’t a right? I’m beside myself.

  7. You wouldn’t know that from the press coverage, which seems predicated on the absurd idea that being rich, owning real estate, or having business interests, is or ought to be somehow disqualifying from government service.

    Everyone in the press knows that these are all things you are supposed to do while in government service.

  8. I’ve noticed over the years that leftists are quick to call out a perceived conflict of interest among their opponents, but they either ignore or summarily dismiss any possible conflicts of interest on their own side.

    Public sector unions donate almost exclusively to Democrats, and the Democrats in turn oppose any policies whatsoever that reduce the size or power of government or even keep the pay and benefits of government workers within halfway realistic limits.

    Wind and solar companies also donate to Democrats, and the Democrats push to restrict or outlaw fossil fuels and “subsidize” wind and solar companies.

    But you won’t hear them complaining about THOSE conflicts of interest. Those are A-OK.

    1. Give it some time? the Republicans will figure out that game.

    2. Hi Akira:

      I posted below on the same issue of public sector unions before noticing your post. You are absolutely right. And this is a conflict of interest that probably runs into the trillions.

  9. Here’s a question: It strikes me that by far the greatest potential conflict of interest is the conflict between state and local politicians (predominately Democrats) who receive backing from public sector unions and who then participate in negotiations over compensation for the members of those unions. This is a clear conflict of interest and a huge temptation for the politicians to bribe their supporters with public funds, especially with deferred compensation such as pensions, which is difficult for voters to monitor. My question is: are there laws against this? Have there been any studies done on this subject, trying to statistically link support for politicians with pay rewards for public employees? This strikes me as a major factor in the looming public pension fund disaster, which has already claimed victims in places like Detroit.

  10. Hmmm, Reason now denies that the federal government influences every aspect of American society,

    The idea that only those who have taken vows of poverty?say, Buddhist monks, or mendicant friars, or newspaper editorial writers?are acceptable candidates for government service is a conceit

    It’s not a conceit … it’s a totally crazy strawman fallacy. Shame on you, And shame on Reason for publishing it. Only a dedicated goober would see any of this as an attack on wealth, Keep sucking up to the Trump/Paulista authoritarians.

  11. Code Red (aaaoooooggggaaaaa), it’s a HIHNFECTION…….

    1. Great Minds discuss ideas.

      Average Minds discuss events.

      Small Minds discuss people.

  12. up to I saw the paycheck which had said $8845 , I have faith that my friends brother woz like actualy erning money part-time on their apple labtop. . there aunt had bean doing this 4 only 7 months and resently took care of the morgage on there mini mansion and bought themselves a Lancia . view it now….

    ========http://www.joinpay40.com

  13. Cincinnatus can’t be leading an army. Those soldiers have to eat, and where does the food come from?

  14. Nevaeh. I agree that Richard`s storry is shocking… last wednesday I got a great BMW M3 from earning $5318 this-past/4 weeks and just a little over 10/k lass month. without a question it is the most comfortable job Ive ever had. I began this 10-months ago and pretty much straight away got me at least $83, p/h. see here now

    +_+_+_+_+_+_+_+_+ http://www.homejobs7.com

  15. Ella . although Margaret `s article is super, on friday I got a new McLaren F1 after having earned $4887 this-past/four weeks and just over ten grand last-month . this is actually my favourite-work Ive had . I actually started six months/ago and right away began to earn minimum $82 p/h
    . Read more on this site…..

    ================= http://www.homejobs7.com

  16. I can see what your saying… Raymond `s article is surprising, last week I bought a top of the range Acura from making $4608 this-past/month and-a little over, $10,000 this past month . with-out any question its the easiest work I’ve ever had . I began this five months/ago and almost straight away startad bringin in minimum $82 per-hr
    . Read more on this site…..
    ==================
    http://www.homejobs7.com

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