Trump Ethics Judge Doesn’t Rule But Hints: Emolument Update


(Bloomberg)—A federal judge in Greenbelt, Maryland, heard almost five hours of arguments in an unprecedented case pitting the attorneys general of Washington D.C. and Maryland against a Justice Department lawyer in a fight over what a sitting president can do in his capacity as a private businessman and whether the court has authority to force him to step away from his ventures.

Here are the latest developments:

Judge Hints He’ll Try to Move Case Ahead (6:01 p.m.)

U.S. District Judge Peter Messitte, a 1993 Bill Clinton appointee, didn’t rule after Thursday’s proceedings. His questions and comments suggested he’d look for a way to let the AGs’ case move forward, at least incrementally, by finding they were legally entitled to sue the president.

The crux of the dispute are two constitutional provisions known as the emoluments clauses that substantially prohibit a president from receiving gifts from a foreign government without the permission of Congress and from being similarly enriched domestically.

Messitte, for a time, fixated on the AGs’ decision to sue Trump in his official capacity, as president, and not individually as a businessman.

The emoluments clauses apply only to the president as president, somebody the court can’t enjoin without setting up a separation of powers conflict, Justice Department lawyer Brett Shumate told the court.

DC lawyer Loren AliKhan said she agreed to a point, because it’s by virtue of his holding the office that Trump’s trying to get the emoluments. Still, the judge suggested the AGs consider amending their complaint to cover their bases, if not for him, then for other courts that may look at the case in the future.

Messitte also sharply rebuked Shumate for claiming that any remedy was pointless because third parties are deciding whether to do business with Trump.

“Your argument seems to completely destroy the clause,” Messitte shot back, asking the DoJ lawyer how it could ever be enforced.

AliKhan maintained Maryland and D.C. are injured by the president’s dealings and that the court has the power fashion a remedy.

Near the end of the proceedings, the District’s lawyer waded into what would happen if the case is allowed to move forward, telling the judge her side would make a narrowly tailored demand for Trump Hotel business records with the intent to buttress their case and, perhaps, learn of other transactions that may qualify as emoluments. Her Maryland co-counsel, Steven Sullivan, quickly added that Trump organization business records may be sought too.

Not so fast, Shumate responded. He noted the issue of whether Maryland and the capital have legal standing to sue was only one half of the administration’s motion to dismiss. Still to be argued: whether or not they’ve stated an actionable claim.

Maryland Judge Doesn’t Buy New York Ruling (2:48 p.m.)

U.S. District Judge Peter Messitte in Greenbelt said he wasn’t persuaded by New York federal Judge George Daniels’s rationale for dismissing a government-ethic group’s challenge to the benefits the president gets from his hotels, buildings and other ventures. The case was brought under the U.S. Constitution’s emoluments clauses.

The judge said he’ll need to be convinced that there’s something that disqualifies the case from going forward. Otherwise, another step may be necessary he said.

“By accepting emoluments, the president creates a constitutionally prohibited market,” Maryland lawyer Steven Sullivan told Messitte. The president’s business draws away customers from companies competing directly with Trump’s hotel, including the capital’s convention center and the National Harbor hotel and retail development on Maryland’s eastern shore.

Brett Shumate, a Justice Department attorney, called the Maryland-DC lawsuit “an abstract political disagreement.” He said it should be thrown out just as the New York lawsuit was.

When the judge asked if Trump doesn’t get a competitive advantage from his dual role of president and business owner, Shumate dismissed it as speculation.

Why the Emoluments-Clause Lawsuits Matter

Trump Seeks to Sink Suit Over Profits From Office (9:00 a.m.)

Fresh off a victory in New York, Trump administration attorneys will reprise their argument that the president can’t be sued for benefiting from his business interests by people who can’t prove they’ve been harmed.

Last time around, President Donald Trump’s lawyers persuaded a New York federal judge to reject claims pressed by an ethics-in-government group. Now, the fight is closer to home as Justice Department attorneys seek to convince a Maryland judge that Trump’s ownership of a posh Washington hotel blocks from the White House isn’t drawing customers away from tax-paying businesses there and in the District of Columbia.

DC Attorney General Karl Racine and his Maryland counterpart Brian Frosh, both Democrats, sued the president in June seeking an order compelling him to divest his business interests. They accused him of breaching U.S. constitutional provisions barring the nation’s chief executive from profiting from his office.

“Previous presidents have taken great care to comply with these core anti-corruption provisions,” the AGs said in court papers opposing the administration’s request to dismiss the case. “President Trump, however, has done the opposite. He has not only continued to accept financial benefits from governments, but has actively targeted their business, thereby fostering a market for influence over the nation’s chief executive.”

Accepting the attorneys general’s arguments would disqualify the president from serving while maintaining commercial business interests, Trump’s lawyers said.

“Those claims falter on threshold grounds: neither plaintiff has alleged an injury” that would allow them to sue, government lawyers said. “In fact, within the two jurisdictions, the president has an ownership interest in only one active business, the Trump International Hotel.”

Messitte has scheduled a 5 1/2-hour hearing for Thursday in Greenbelt for the two sides to make their arguments.

Seth Barrett Tillman — an American law professor who teaches at Ireland’s Maynooth University — sided with Trump, arguing in a court filing that business transactions for value don’t count as constitutionally prohibited “emoluments.”

Twenty-two former government officials, including former U.S. secretaries of state John Kerry and Madeleine Albright — both Democrats — and Republican Chuck Hagel, the defense secretary under President Barack Obama, backed the attorneys general.

The government’s argument “would give the president license to engage in a wide range of financial entanglements that could leave vulnerable even the most important national security and foreign policy interests of the United States,” they said in a Nov. 28 submission to the judge.

In November, Messitte ordered 23 Trump businesses, including the Mar-a-Lago Club in Florida, to retain records in response to subpoenas received from the attorneys general. That would preserve evidence if the lawsuit is allowed to go ahead.

Last month, U.S. District Judge George Daniels in New York threw out a lawsuit by the Citizens for Responsibility and Ethics in Washington, concluding they hadn’t sufficiently alleged they’d been harmed by the president.

The administration is also seeking dismissal of a Washington federal court case lodged by scores of Democratic lawmakers. — Andrew Harris.

The case is District of Columbia v. Trump, 17-cv-1596, U.S. District Court, District of Maryland (Greenbelt).

To contact Bloomberg News staff for this story: Andrew Harris in Washington at [email protected] To contact the editors responsible for this story: David Glovin at [email protected] Elizabeth Wollman, Joe Schneider


© 2018 Bloomberg L.P

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