Thursday, June 15, 2017

Trump Emoluments Argument Mirrors His "Just a Hope" Comey Defense

by Michael Dorf

(cross-posted on Take Care)

The last week saw important developments with respect to Donald Trump's ongoing confrontation with the Constitution's Foreign Emoluments Clause. First, the Department of Justice (DOJ) filed a motion to dismiss the lawsuit brought by Citizens for Responsibility and Ethics in Washington (CREW) and others against President Trump. The government argues in its supporting memorandum that the plaintiffs lack standing because they have not been injured and that even if they have been injured, they are not within the zone of interest protected by the Emoluments Clause. In prior essays, I have argued that under the existing precedents, CREW has standing and so do the additional plaintiffs alleging that Trump's violation of the Emoluments Clauses redirects business away from them or their employers and thus injures them. The government's arguments for dismissal do not persuade me otherwise.

But even if the government's argument against standing by CREW and the competitor plaintiffs were persuasive, two new lawsuits filed this week--one by the State of Maryland and the District of Columbia, the other (initially) by 30 Senators and 166 Representatives--would make apparent the true nature of the DOJ argument on standing. (As noted here, the MD/DC lawsuit relies on the domestic Emoluments Clause as well as the foreign Emoluments Clause but for simplicity, I'll focus mostly on the foreign one.)

If, as we can expect, the DOJ argues that there is no standing in the new suits, then it will be clear that the DOJ believes that nobody can sue to enforce the Emoluments Clause, even to contest blatant violations. In other words, DOJ will essentially be taking the position that the Emoluments Clause is non-justiciable. Indeed, without expressly invoking the political question doctrine, the DOJ strongly hints at that position in the memo in support of the motion to dismiss in CREW, stating that "Congress is far better equipped than the courts to address whether particular arrangements violate the Clause."

Yet as Richard Primus noted last week, deeming the Emoluments Clause non-justiciable would be directly contrary to its text, which forbids the president from receiving foreign Emoluments unless Congress consents to them. The DOJ's approach would allow the president to receive foreign Emoluments unless Congress disapproves of them--perhaps even requiring Congress to do so by a 2/3 majority in each house, in order to overcome a likely presidential veto. That reversal of the default rule would strip Congress of its power rather than protect it.

So much for threshold questions of justiciability. What about the merits? Here the DOJ has offered a superficially appealing argument that, upon inspection, proves no more substantial than a Trump tweet.

According to the DOJ, the foreign and domestic
Emoluments Clauses apply only to the receipt of compensation for personal services and to the receipt of honors and gifts based on official position. They do not prohibit any company in which the President has any financial interest from doing business with any foreign, federal, or state instrumentality.
Even as the DOJ brief acknowledges that at the Founding "Emoluments" generally had a broad meaning that included "benefits," it argues that as used in the Constitution the term was narrower, pointing to ostensible historical examples and contemporary practice. If construed to cover purchases of goods and services for value--as when foreign diplomats stay at Trump-branded hotels, for example--the DOJ warns that the Clauses would lead to harsh results. Here is what I regard as the best example in the DOJ's parade of horribles:
[A] President could not hold United States Treasury bonds while in office because the accrued interest would be benefits "from the United States" under the Domestic Emoluments Clause. Likewise, royalties from foreign book sales received by a President or covered official while in office would offend the Foreign Emoluments Clause if any of them were attributable to purchase by a foreign government instrumentality, such as a foreign public university.
I agree that the foregoing should not be deemed Emoluments Clause violations absent consent. Yet in its rush to avoid this particular slippery slope, the DOJ brief dives headfirst over a cliff on the other side of the mountain. It does so because it sets up a false either/or choice.

The DOJ maintains that either all transactions between the president or other federal officer and any foreign entity are Emoluments within the meaning of the foreign Emoluments Clause or that none are. But as Marty Lederman notes there is a middle ground. I would frame the operative rule this way: market transactions that pose at most a de minimis risk of corrupt influence do not violate the foreign Emoluments Clause, but where the president or other officer has very substantial commercial holdings that are not in anything resembling a true blind trust and the market transactions thus pose a very serious risk of wealth transfers from the foreign government to the president or other officer, the Emoluments Clause is implicated.

The government memo in support of its motion to dismiss cites the familiar principle that no law, not even the Constitution, pursues its purposes at all costs, which is true but irrelevant in the current context. The various plaintiffs challenging Trump's Emoluments entanglements do not say that anything Trump does that smacks of corruption violates the Emoluments Clause. They say simply that the anti-corruption purpose of the Emoluments Clause must be taken into account in construing it. And that in turn leads to an anti-circumvention principle. If it would violate the Foreign Emoluments Clause for foreign governments to give the president a cash gift of $100--as it surely would--it makes little sense for the Clause to be construed to permit foreign governments to funnel millions of dollars worth of benefits to the president through his businesses, that is, to disguise a gift as a purchase of goods or services.

Note the similarity between the government's position in the CREW litigation (which we can also expect it to assert in the MD/DC and Congressional litigation) and the contention that various Trump defenders (such as Idaho Senator James Risch) have offered in response to former FBI Director Comey's testimony last week. They say that when President Trump expressed to Comey the "hope" that Comey would not pursue the investigation of Mike Flynn, Trump was not directing or ordering Comey to do anything; he was merely expressing a wish.

During the hearing Comey could not cite any cases off the top of his head in which an "I hope" statement was treated as more than a hope, but NY Times reporter Adam Liptak soon did, pointing to an Eighth Circuit opinion affirming a sentence enhancement for obstruction of justice based on an "I hope" statement. Writing on Take Care, law student Ryan Hayward explained that additional case law goes in the same direction. And of course that is just common sense. Mafiosi and others trying to avoid legal responsibility for otherwise illegal actions often use veiled language and subterfuges to disguise those actions, but the law rightly looks through their ploys.

Likewise the Constitution should look through Trump's efforts to use his opaque business enterprises as a means of extracting wealth from foreign governments and others who wish to curry favor with his administration. A threat or order disguised as a hope remains a threat or an order notwithstanding the label. And a gift disguised as a purchase (or, as with respect to various other Trump transactions, a regulatory approval) remains a gift, despite the label. In neither context should anyone be fooled by the disingenuous formalism of Trump and his defenders.


Shag from Brookline said...

With regard to the "market transactions" argument, to what extent does the actual pricing therefor reflect the value of President Trump's ownership of the selling firm to the foreign buyer? During Trump's presidency, might the concept of fair market value include the factor of Trump's presidency? In other words, might the Trump brand have one value as a private citizen and another value as President? Maybe Neil might address this with his economist hat.

Also, is there a "connect" of the DOJ's position with the approach of AG Jeff Sessions in his Senate Committee testimony as to executive privilege possibly being asserted at some point by the President?

Joe said...

"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 President shall, at stated Times, receive for his Services, a Compensation, which shall neither be increased nor diminished during the Period for which he shall have been elected, and he shall not receive within that Period any other Emolument from the United States, or any of them."

The person "holding any office" etc. shall not accept etc. The idea that Napoleon could have given Jefferson let's say Louisiana itself if it was done to Jefferson's personal land business takes parades of horribles to the other direction. Anyway, there is and always was a clear concern that the person's position will cause corruption with regard to such "private" transactions.

As to trivial, if -- to take a recent case -- we are going to worry about phrasing of "cash or credit" transactions at the grocery store because "speech" might be infringed, I'm not overly concerned about taking things too far. The clause specifically provides a means to get a waiver. But, I'm fine with some "de minimis" rule, which is common for constitutional provisions. Even if I'm wary of "In God We Trust" being on our coinage etc., it is noted that is not a violation of the First Amendment under current doctrine. This also might be a matter of practice -- that is, practice involving presidential book sales etc.

Joe said...

I believe the "brand" issue was addressed at some point in the discussions -- it's an interesting point. Note the concern is not just some sort of net profit either.

Michael C. Dorf said...

1) W/r/t Shag's question, my view is that when calculating market value, one should subtract what I have called the "corruption premium."

2) My main reason for proposing a de minimis exception rather than simply letting Congress deal with all of those cases is that the domestic Emoluments Clause does not permit Congress to consent to otherwise-forbidden emoluments. So w/o a de minimis exception (or something like it), one would end up with an overbroad rule. I could be persuaded that this isn't a terrible problem, I suppose, because while the foreign Emoluments Clause applies to all federal officers, the domestic EC applies only to the president.

Scott said...

The operative "rule" that you propose is not very rule-like. How would a political official decide in advance whether his conduct carries a "very serious risk" of corruption, or whether the amount of money at issue is very substantial"? Would the latter inquiry depend on the individual's net worth, on the theory that $50,000 matters a lot to most people but probably not to, say, Bill Gates? And wouldn't the nebulous nature of the rule cause political officials to self-regulate by avoiding transactions that, on a proper reading of the clause, are perfectly legal?

Shag from Brookline said...

Scott's closing question:
"And wouldn't the nebulous nature of the rule cause political officials to self-regulate by avoiding transactions that, on a proper reading of the clause, are perfectly legal?

And wouldn't the nebulous nature of the rule cause political officials to self-regulate by avoiding transactions that, on a proper reading of the clause, are perfectly legal?"

might raise the question as to how political officials successfully self-regulate as a norm? Perhaps the norm should be that political officials' self-regulation should avoid even the possible appearance of corruption? Is it clear what is "perfectly legal" under the foreign Emoluments clause without the approval/consent of Congress?

Michael C. Dorf said...

Scott makes a fair point that I probably should not have referred to an "operative rule" because what I then propose is more of a standard. Courts enforce standards in many contexts but for those who think that this is an area where a bright-line rule is preferable, that would be fine as well. Any such rule is arbitrary as compared with a reasonably close alternative but again, that's not all that unusual.

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Shag from Brookline said...

I recall the brouhaha back in 2009 regarding the Nobel Price warded to President Obana and did some Googling regarding the foreign Emoluments Clause Issues had been raised at the VC as to the legality of receipt of this price. This is the link:

to the DOJ's 12/7/09 "Memorandum Opinion for the Counsel to the President" which I found of interest. Is there a DOJ Memorandum Opinion regarding the Trump Organization in place before legal proceedings were commenced? Was there litigation against Obama on the Nobel Prize? As I recall President Obama addressed this issue head-on.

Joe said...

A key issue in the Obama memorandum is the assumption that it is obvious that the President is covered, something a few challenged. As to the Nobel Peace Prize, the judgment was: "As we previously explained in our oral advice and now explain in greater detail, because the Nobel Committee that awards the Peace Prize is not a “King, Prince, or foreign State,” the Emoluments Clause does not apply."

Some did push back:

And, personally, I would apply the rules strictly but have Congress provide a waiver. Past practice here as to the Nobel, however, suggests legitimacy. OTOH, past practice (Carter's peanut farm etc.) does not help Trump. Plus, the breadth of the problem is larger.

Given all the litigation these days, a lawsuit against Obama on emoluments grounds is not hard to imagine, but there is a problem of standing. (The same as to extreme hypos on money he received on bonds or even book sales though maybe someone can figure something out there.)

Here's as noted in the Take Care etc. discussion that is handled fairly well.