I, like many, am very concerned that the President-Elect's business interests will interfere with the performance of his duties as President. While Trump may sincerely believe that the conflicts of interests posed by his sprawling business empire can be managed by, for example, allowing his children to run his company, virtually every decision involving a foreign nation in which he has investments will inevitably be subject to skepticism, undermining faith in the Presidency and the government as a whole. This is to say nothing of the matters that the Trump Organization currently has pending before the NLRB and other agencies.
Nevertheless, I respectfully disagree with Richard Painter and others who have argued that total divestment is the only solution to Trump's very serious conflicts. Indeed, divestment would hardly eliminate the conflicts and could even make them worse.
Divestiture or liquidation of one's assets, followed by transferring the proceeds to a blind trust, is the appropriate recourse for individuals whose wealth consists largely of liquid assets such as stock. For example, former Treasury Secretary and Goldman Sachs banker Hank Paulson liquidated his Goldman stock prior to joining the government. Of course, the mere fact that Paulson divested his Goldman holdings hardly ensures that he did not favor Goldman's interests while serving in the Treasury. Lost in all of the discussion of Trump's financial conflicts is that relational conflicts - which are ubiquitous in government circles - can be just as serious.
Let's assume that Trump does indeed decide to liquidate his substantial holdings. Three things are certain. 1) As Professor Bainbridge has argued, divesting from a business empire like Trump's will necessitate a lengthy process that likely cannot be completed within the course of a few months and without significant displacement of employees. 2) Some assets and holdings likely cannot be divested at all because of transfer restrictions and alike in membership / joint venture agreements whereas for those assets that are sold, Trump can likely avoid paying hundreds of million dollars in taxes by obtaining a certificate of divestiture. 3) Among the bidders for Trump assets will be foreign entities, including foreign government-owned entities. On this last point, were one inclined to try to curry favor with Trump, paying above market price for one of his hotels would probably a better strategy than planning a holiday party at one of those same hotels.
It is theoretically possible that the foregoing problems can be overcome (although I have yet to see an account that fully considers the implications of divestment in connection with Trump's vast and disparate holdings). But even if they can be, I am skeptical that Trump's conflicts would dissipate with the divestiture. After all, does anyone believe that Trump would not have an interest in ensuring the success of properties that bear his name, notwithstanding that he has relinquished an ownership interest? Might he not have loyalties to longtime employees, many of whom will continue to work for the new owners of his properties? Lastly, what is to prevent Trump for re-acquiring some of these properties at the conclusion of his Presidency, especially if they are sold - through an open bidding process - to individuals who are business associates or friends?
Trump's conflicts are undoubtedly a serious, potentially intractable threat to the Presidency. Rather than pushing for total divestment, which Trump has heretofore resisted and would not eliminate his conflicts of interest, an alternative approach would be for Trump to provide a full accounting of his holdings and to transfer all of his interests (and those of his family) into a voting trust to be managed by an unaffiliated and walled-off third party. The trust would terminate at the conclusion of the Presidency. This arrangement would not eliminate all of his conflicts, but it would allow for monitoring, separation of the Trump family from the Organization's operations, and perhaps more important, would avoid a messy and ethically fraught divestment process. Trump might also be more open to this possibility because he and his family could return to the empire that they built at the conclusion of his Presidency.
We are very much in unchartered territory when it comes to the President Elect's conflicts of interest, and I welcome readers' own thoughts and suggestions.
I highly encourage readers to review the excellent comments to this post. Below are some additional thoughts.
I believe that Douglas Levene is correct on the tax issue, although I assume that Congress would happily amend the law in question if Trump were to be open to divesting. The IRS may also have the discretion to treat this type of divestiture as a nontaxable event.
There has been a great deal of discussion as to the precise nature and extent of Trump's holdings. See, for example, here. The central issue is that the vast majority of Trump's assets are illiquid and cannot be divested easily. There is a market for luxury hotels, golf courses, interests in partnerships / joint ventures, and licensing agreements but closing these types of transactions usually takes many months (if not years). This is not to say that it cannot be done, but putting the new President's substantial worldwide holdings up for auction will create more problems than it solves.
I, like Tigran, recommend Richard Painter's new op-ed, but it is once again unclear to me how divestment addresses either the ethical issue or security challenges that Richard identifies. For example, if Trump sells off the licensing and branding agreements, the purchase price would presumably factor in the increase in value associated with Trump's assumption of the Presidency. Perhaps Trump should only be able to receive the fair market value of his assets (without considering any post-election appreciation) but this only begs the question of what these assets are worth. These are the types of questions that keep corporate lawyers and accountants busy for years. Similarly, divestment would not make Trump-branded properties any more or less of a target because the properties would presumably still bear his name. I very much share Richard's concerns, but I believe that my proposal is a better and more realistic alternative to total divestment.