Transition 2016

Ethics Rules Are National Security Rules

By Susan Hennessey
Tuesday, January 10, 2017, 10:11 AM

The President-elect has failed to divest from his business holdings, refused to release his tax returns, and insisted that a federal anti-nepotism law won’t bar his children—who themselves retain private business interests—from serving in his White House. Days before scheduled confirmation hearings, the majority of his nominees have failed to complete statutorily-mandated ethics review. It’s for this reason that, over the weekend, former White House ethics counsel (and my Brookings colleague) Norm Eisen noted that the Trump transition is in the midst of an “ethics crisis” that is “unparalleled in modern U.S. presidential history.”

Readers may be wondering what federal ethics law and policy has to do with national security. The answer is a whole lot. Fundamentally, ethics policies governing the Executive and his cabinet are national security protections. As such, it is important that we recognize the national security implications of the incoming Administration’s positions on ethics.

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Lawfare’s focus on “hard national security choices” reflects something that is often lost amidst partisan and ideological debates—these choices are difficult. There are more close calls than obvious answers. Many national security decisions reflect a delicate balance of policies, values, and strategy. This means it can be difficult to understand, especially in retrospect, why exactly one choice prevailed over another. In areas in which there are many pros and cons, it can be nearly impossible to identify the existence and effect of improper bias.

Naturally, Republicans and Democrats have different policy views and security priorities. However, both share the common understanding that a President’s decisions must be guided by the best interests of the United States as the Commander-in-Chief understands them. Ethical transparency is critical to national security because it ensures that personal financial interests are not placed before the interests of the country.

Identifying conflicts is the first step in preventing harms. Once a conflict is disclosed and identified, it might be eliminated by either ending the financial relationship or requiring individual recusals. Where that doesn’t occur, the disclosure process allows for the public and other stakeholders to assess a government official’s judgment for indications of bias. The White House and the cabinet are charged with immensely consequential decisions; not infrequently, they determine matters of life and death. The legitimacy of the office of the presidency rests on public faith that the government is placing the interests of the country first.

The demand for adequate ethics disclosure and vetting reflects the national security strategy of—as Reagan put it—“Trust, but verify.” We ask for verification that our government officials are free from undue influence because it goes to the core of basic democratic legitimacy. There should be no questions regarding the purity of the motives of individuals we authorize to place our soldiers, foreign service officers, or intelligence agents in harm’s way. Because of the necessary secrecy that surrounds a great many of these decisions, full vetting and transparency at the outset are critical to ensuring the Executive branch is, in fact, placing country first and also to maintaining basic integrity and legitimacy in the eyes of the people.

This should be the backdrop against which the ethics practices of the current transition are understood.

Recently, the Director of the Office of Government Ethics (OGE) has sent a letter to Congress warning that not all of Trump’s nominees have submitted the paperwork required for the legally-mandated ethics review. A large number of consequential—and controversial—confirmation hearings have been scheduled for Wednesday. OGE cautions this schedule does not allow sufficient time to complete reviews, especially considering the complex financial backgrounds of Trump’s “Billionaire cabinet” and the necessity for highly-detailed reviews of individuals like Exxon Mobil CEO Rex Tillerson. Confirmation hearings are traditionally not scheduled before ethics review is complete, not only because Senators must be fully informed in their votes, but also because the confirmation process serves as important leverage in ensuring full compliance. Once a nominee is Senate-confirmed, there is little incentive for the individual to fully and timely comply with ethics disclosure, especially of potentially controversial matters.

The relationship between ethics and national security is perhaps most important when it comes to the President himself. President-elect Trump’s refusal to divest himself of his business interests invites conflicts, though Trump asserts that the President cannot have legally cognizable conflicts. That is a controversial legal argument, at best, but it also fails to recognize the distinction between a legal conflict and a conflict in fact. Because of his multinational business interests, President Trump will eventually face a decision where the interests of the nation run contrary to his personal financial interests, whatever his interpretation of legislation on conflicts might be. And a Politico poll this morning found that 65% of those polled believed Trump’s business interests will “affect his decision making.”

Taken to its extreme, as a separation of powers argument, Trump’s statement that “the President can’t have a conflict of interest” under the law effectively concludes that the only constraining forces on the President are political and constitutional. But Trump’s practices thwart both political accountability and constitutional constraint. Trump’s failure to release his tax returns makes it impossible for the American people to assess whether his conflicts undermine our collective security and exert political pressure. Moreover, Trump appears inclined to dispute constitutional constraints as well.

The Constitution itself views conflicts of interest, specifically those related to foreign countries, as a national security threat. The Emoluments Clause is, fundamentally, a national security provision. As Eisen, along with Richard Painter and Laurence Tribe, writes in a recently released brief:

Foreign interference in the American political system was among the gravest dangers feared by the Founders of our nation and the Framers of our Constitution. The United States was a new government, and one that was vulnerable to manipulation by the great and wealthy world powers (which then, as now, included Russia). One common tactic that foreign sovereigns, and their agents, used to influence our officials was to give them gifts, money, and other things of value. In response to this practice, and the self-evident threat it represents, the Framers included in the Constitution the Emoluments Clause of Article I, Section 9. It prohibits any “Person holding any Office of Profit or Trust under [the United States]” from accepting “any present, Emolument, Office, or Title, of any kind whatever, from any King, Prince, or foreign State.” Only explicit congressional consent validates such exchanges.

In short, the intention of the Emoluments Clause goes beyond mere safeguards against corruption. The founders viewed financial relationships between foreign nations and officials in offices of public trust as a threat to the existence of the Republic itself. The Office of Legal Counsel held as recently as 2009 that the Emoluments Clause applies to the President, though some commentators are not convinced the question is entirely settled. The validity of precise legal arguments are, of course, important. But even apart from the specific constitutional contours, Trump’s position is troubling. Trump is using highly controversial interpretations to reject the constraints of both statute and the Constitution. And his lack of transparency prevents meaningful public assessment and political accountability. The President-elect, therefore, rejects any ethical limitations. Considering the close relationship between security and ethics, this strategy should be viewed with alarm.

The national security implications of Trump’s disregard of ethics rules extend beyond the President-elect. Yesterday afternoon, media reports indicated that Trump intends to hire his son-law, Jared Kushner, as an (unpaid) senior advisor and that Kushner is assembling a staff. This follows a blockbuster story in the New York Times this weekend on Kushner’s business dealings, which reports that immediately following Trump’s election, Kushner met with Chinese nationals with whom he was negotiating a massive joint venture. Likewise, Kushner’s wife, Trump’s eldest daughter Ivanka Trump, has drawn criticism for participating in her father’s meeting with Japanese Prime Minister Shinzo Abe. It was later revealed that, at the time, Ivanka was “nearing a licensing deal” with a company that was “wholly owned by the Japanese government.”

The inherently compromising loyalty of family relationships is one reason why Congress passed 5 U.S.C. §3110, prohibiting any public official, including the President, from appointing or employing a relative. Reportedly, Kushner’s legal counsel WilmerHale has “has concluded” that §3110 doesn’t apply. Indeed, Trump campaign manager turned senior advisor Kellyanne Conway has asserted that “[t]he anti-nepotism law has an exception, if you want to work in the West Wing, because the president is able to appoint his own staff.”

The precise legal rationale behind this conclusion is not entirely clear. It appears that Trump’s team is intending to rely on a 1993 D.C. Circuit holding that suggests that White House might not qualify as an “agency” within the meaning of the anti-nepotism statute. It is critical to understand that this is not a matter of settled law. The Court in the relevant case based its actual holding on a reading of a separate law, the Federal Advisory Committee Act, and only addresses §3110 using qualified language in dicta. The relevant section is as follows:

Although section 3110(a)(1)(A) defines agency as "an executive agency," we doubt that Congress intended to include the White House or the Executive Office of the President. Cf. Franklin v. Massachusetts, --- U.S. ----, ----, 112 S.Ct. 2767, 2775, 120 L.Ed.2d 636 (1992) (holding that President is not "agency" for purposes of Administrative Procedure Act); Meyer, 981 F.2d at 1298 (President's advisers are not "agency" under FOIA); Armstrong v. Bush, 924 F.2d 282, 289 (D.C.Cir.1991) (President not APA "agency"). So, for example, a President would be barred from appointing his brother as Attorney General, but perhaps not as a White House special assistant. Be that as it may, it is not reasonable to interpret that provision to bring it into conflict with Congress' recognition of (and apparent authorization for) the President's delegation of duties to his spouse. The anti-nepotism statute, moreover, may well bar appointment only to paid positions in government. See 5 U.S.C. § 3110(c). Thus, even if it would prevent the President from putting his spouse on the federal payroll, it does not preclude his spouse from aiding the President in the performance of his duties.

The holding merely suggests that the law “perhaps” does not bar a spouse from a special assistant role. This is an open question, and the holding would not be binding even in the D.C. Circuit. The fact is that Presidents Bush and Obama never attempted to challenge it. And many ethics experts strongly disagree with the court’s suggested analysis.

Some argue, as the D.C. Circuit suggests (“may well”) that the anti-nepotism statute only bars relatives from paid positions. §3110(c) dictates that any “individual appointed, employed, promoted, or advanced in violation of this section is not entitled to pay, and money may not be paid from the Treasury as pay to an individual so appointed, employed, promoted, or advanced.” While that might be seized upon as a loophole, permitting employment without payment, that effectively reads §3110(c) as a liquidated damages provision. Under that reading the President is entitled to act “in violation of this section”—in other words, to break the law—so long as he is willing to live with the consequence. It is also unclear whether Kushner could serve in the White House without pay consistent with the Antideficiency Act, which bars most uncompensated federal service.

This may all seem like an academic legal discussion, related more to ethics and corruption than security. But the deep entanglements of Trump’s children and Jared Kushner with undisclosed foreign financial investments elevates the issue to one of national security. Indeed, the national security implications of foreign investments are so critical that there is an interagency committee tasked with reviewing the security risks: The Committee on Foreign Investment in the United States (CFIUS) was established by executive order and is “authorized to review transactions that could result in control of a U.S. business by a foreign person (“covered transactions”), in order to determine the effect of such transactions on the national security of the United States.”

And there are substantial national security risks in permitting Trump’s relatives to serve in even unpaid or informal roles. Donald Trump has reportedly sought high-level security clearances for some of his children, entitling them to access some of our nation’s most closely guarded secrets. If Trump’s family members are permitted to hold informal roles with extraordinary access, they are unlikely to adhere to the rigid rules governing federal employees who handle sensitive data. Indeed, most White House rules governing financial disclosure are directly related to compensation, so unpaid advisors could circumvent those rules. Individuals who hold security clearances are required to submit rigorous financial disclosures on an annual basis. That disclosure serves in part to ensure a cleared person isn’t receiving suspicious payment and in part to screen for any potential financial conflicts. For example, for obvious reasons, an individual could not be permitted to hold an interest in a foreign telecommunications company and also have access to signals intelligence data.

Considering the breadth of the Trump family members’ financial interests—and the opacity of those interests to the general public—it is not just inappropriate to grant them cleared access, it’s possibly dangerous. The risk of intentional or inadvertent disclosure (consider the information which might be gleaned by adversary nations closely watching the Trumps’ investment portfolios) could do substantial damage to the security interest of the United States and our allies.

Taken alone, any one of these issues—Trump’s lack of transparency, his rejection of statutory constraint, his rejection of the applicability of the Emoluments Clause, his employment of relatives, or lack of nominee vetting—might be tolerable. Certainly some variations have occurred individually with past presidents. But taken collectively, the current situation represents a genuinely novel threat. The peril goes far beyond the scope of traditional ethics—inviting waste, fraud, and abuse—and represents a profound threat not only to our national security but to the basic legitimacy of our government.