Bill Would Require Trump to Address Conflicts of Interest with Business and Family
Congresswoman Katherine Clark Introduces Presidential Accountability Act
December 25, 2016
Congresswoman Katherine Clark has introduced legislation to ensure that U.S. Presidents are required to resolve any conflicts of interest with regard to financial interests and official responsibilities.
Current law prohibits federal office holders from engaging in government business when they stand to gain profit. The President and Vice President are currently exempt from this statute. Clark's Presidential Accountability Act removes this exemption and requires the President and Vice President to place their assets in a certified blind trust or disclose to the Office of Government Ethics and the public when they make a decision that affects their personal finances. This issue has been elevated to greater importance as concerns of conflicts of interest have surfaced in the first week of the President-elect's transition period. From the Trump Organization's federal contract to operate the President-elect's hotel in the Old Post Office Pavilion in Washington, D.C. to the scale of his debt to foreign banks, the President-elect's business interests present an unprecedented level of conflict. Trump has also appointed his children to serve in leadership positions on both the President-elect's transition team and his businesses. Clark's Presidential Accountability Act prohibits the President from engaging in government responsibilities from which they or their families can benefit financially.
"The President of the United States has the power to affect how our tax dollars are spent, who the federal government does business with, and the integrity of America's standing in a global economy," said Clark. "Every recent president in modern history has taken steps to ensure his financial interests do not conflict with the needs of the American people. The American people need to be able to trust that the President's decisions are based on the best interests of families at home, and not the President's financial interests."
Previous American presidents including Lyndon Johnson, Jimmy Carter, Ronald Reagan, George H.W. Bush, Bill Clinton, George W. Bush and Barack Obama have all used some form of blind trust or placed their assets in an investment vehicle over which they had no control.
Below is the full text of H.R. 6340:
To extend conflict of interest provisions to the President and Vice President of the United States.
Be it enacted by the Senate and House of Representatives of the United States of America in Congress Assembled,
Section 1. Short Title.
This Act may be cited as the 'Presidential Accountability Act'.
Section 2. Acts affecting a personal financial interest of the President or Vice President of the United States
(a) In General.-Chapter 11 of title 18, United States Code, is amended by inserting after section 208 the following:
"§208A. Acts affecting a personal financial interest of the President or Vice President of the United States
"(a) Except as permitted by subsection (b) hereof, whoever, being the President or Vice President of the United States, participates personally and substantially, through decision, approval, disapproval, recommendation, the rendering of advice, investigation, or otherwise, in a judicial or other proceeding, application, request for a ruling or other determination, contract, claim, controversy, charge, accusation, arrest, or other particular matter in which, to their knowledge, the President or Vice President of the United States, their spouse, child, general partner, organization in which they are serving as officer, director, trustee, general partner or employee, or any person or organization with whom they are negotiating or has any arrangement concerning prospective employment, has a financial interest shall be subject to the penalties set forth in section 216 of this title.
"(b) Subsection (a) shall not apply-
"(1) if the financial interest that would be affected by the particular matter involved is held in a qualified blind trust as defined by subsection (g);
"(2) if the President or Vice President of the United States first advises the Director of the Office of Government Ethics of the nature and circumstances of the judicial or other proceeding, application, request for a ruling or other determination, contract, claim, controversy, charge, accusation, arrest, or other particular matter and makes full disclosure of the financial interest and receives in advance a written determination made by the Director of the Office of Government Ethics that the interest is not so substantial as to be deemed likely to affect the actions of the President or Vice President or undermine the public's confidence in the integrity of their office.
"(c) In the event that a national emergency necessitates the President or Vice
President taking any immediate action that affects their personal financial interests prior to receiving an exemption under subsection (b)(2), the President or Vice President shall, in addition to the information required by subsection (b)(2), notify the Director of the Office of Government Ethics of the circumstances requiring action to be taken prior to the receipt of an exemption and shall make a retroactive request for an exemption under subsection (b)(2) within 48 hours of taking the action. The Director of the Office of Government Ethics shall then make a written determination as to whether an exemption under subsection (b)(2) would have been issued had the President or Vice President requested an exemption prior to taking the action. Should the Director of the Office of Government Ethics determine that an exemption would not have been granted, the President or Vice President shall, to the extent practicable, return, repay, remit, or refund any benefit gained as a result of that action. Any financial gains that cannot be repaid shall be gifted to reduce the public debt pursuant to section 3113 of title 31 United States Code.
"(d) The Director of the Office of Government Ethics shall complete the written determination required under subsection (b)(2) and subsection (c) as soon as practicable, but in no event shall the determination be made later than 10 days following a request for an exemption. Any request for exemption under subsection (b)(2) and subsection (c) not receiving a written determination within 10 days will be deemed to have been denied.
"(e) A copy of any request for an exemption and a copy of any determination made in response to a request for an exemption, including exemptions under subsections (b)(2) or (c) and any determination deemed to have been denied under subsection (d), shall be made available to the public by the Office of Government Ethics within 10 days of the receipt of a request for an exemption pursuant to procedures set forth in section 105 of the Ethics in Government Act of 1978. In making such determination available, the agency may withhold from disclosure any information contained in the determination that would be exempt from disclosure under section 552 of title 5.
"(f) A violation of subsection (a) shall constitute a high crime and misdemeanor for the purposes of Article II, Section 4 of the United States Constitution.
"(g) For the purposes of this section, the term "qualified blind trust" shall include any trust in which the President or Vice President of the United States, their spouse, or any child has a beneficial interest in the principal or income, and which meets the following requirements:
"(1) In General.-
"(A) The trustee of the trust and any other entity designated in the trust instrument to perform fiduciary duties is a financial institution, an attorney, a certified public accountant, a broker, or an investment advisor who-
"(i) is independent of and not associated with any interested party so that the trustee or other person cannot be controlled or influenced in the administration of the trust by any interested party;
"(ii) is not and has not been an employee of or affiliated with any interested party and is not a partner of, or involved in any joint venture or other investment with, any interested party; and
"(iii) is not a relative of any interested party.
"(B) Any officer or employee of a trustee or other entity who is involved in the management or control of the trust-
"(i) is independent of and not associated with any interested
party so that such officer or employee cannot be controlled or influenced in the administration of the trust by any interested party;
"(ii) is not a partner of, or involved in any joint venture or other investment with, any interested party; and
"(iii) is not a relative of any interested party.
"(2) Any asset transferred to the trust by an interested party is free of any restriction with respect to its transfer of sale unless such restriction is expressly approved in writing by the Director of the Office of Government Ethics.
"(3) The trust instrument that establishes the trust provides that-
"(A) except to the extent provided in subparagraph (2) of this subsection, the trustee in the exercise of his authority and discretion to manage and control the assets of the trust shall not consult or notify any interested party;
"(B) the trust shall not contain any asset the holding of which by any interested party is prohibited by any law or regulation;
"(C) the trustee shall promptly notify the reporting individual and the Director of the Office of Government Ethics when the holdings of any particular asset transferred to the trust by any interested party are disposed of or when the value of such holding is less than $1,000;
"(D) the trust tax return shall be prepared by the trustee or his designee, and such return and any information relating thereto (other than the trust income summarized in appropriated categories necessary to complete an interested party's tax return), shall not be disclosed to any interested party;
"(E) an interested party shall not receive any report on the holdings and sources of income of the trust, except a report at the end of each calendar quarter with respect to the total cash value of the interest of the interested party in the trust or the net income or loss of the trust or any reports necessary to enable the interested party to complete an individual tax return required by law, but such report shall not identify any asset or holding;
"(F) except for communications which solely consist of requests for distributions of cash or other unspecified assets of the trust, there shall be no direct or indirect communication between the trustee and an interested party with respect to the trust unless such communication is in writing (a copy of which shall be provided to the Director of the Office of Government Ethics), and unless it relates only (I) to the general financial interest and needs of the interested party (including, but not limited to, an interest in maximizing income or long-term capital gain), (II) to the notification of a trustee of a law or regulation subsequently applicable to the reporting individual which prohibits the interested party from holding an asset, which notification directs that the asset not be held by the trust, or (III) to directions to the trustee to sell all of an asset initially placed in the trust by an interested party which in the determination of the reporting individual creates a conflict of interest or the appearance thereof due to the subsequent assumption of duties by the reporting individual; and
"(G) the interested parties shall make no effort to obtain information with respect to the holdings of the trust, including obtaining a copy of any trust tax return filed or any information relating thereto except as otherwise provided in this subsection.
"(4) The proposed trust instrument and the proposed trustee are certified in
writing by the Director of the Office of Government Ethics to be in compliance with the requirements of this section. The Director of the Office of Government Ethics shall conduct an annual recertification of the trust instrument and trustee to verify that they remain in compliance with the requirements of this section. If at any time the Director of the Office of Government Ethics determines that the trust instrument or trustee are no longer in compliance with requirements of this section, the Director of the Office of Government Ethics shall notify the Committee on Oversight and Government Reform of the House of Representatives and the Committee on Homeland Security and Governmental Affairs of the Senate, and provide written notification to the interested parties that they are no longer eligible for an exemption under subsection (b)(1) until the trust instrument and trustee are recertified.
"(5) For the purposes of this subsection, "interested party" means the President or Vice President of the United States, their spouse, and any child; "reporting individual" means the President or Vice President of the United States; "broker" has the meaning set forth in section 3(a)(4) of the Securities and Exchange Act of 1934 (15 U.S.C. 78c(a)(4)); and "investment adviser" includes any investment adviser who, as determined under regulations prescribed by the Office of Government Ethics, is generally involved in their role as such an advisor in the management or control of trusts.
"(6) Any written certification or notification made pursuant to subsection (g) shall be made available to the public within 10 days of the certification or notification being made.
(b) In General.-- Section 216 of title 18, United States Code, is amended- (1) in paragraph (a) by inserting "208A," after "208,";
(2) in paragraph (b) by inserting "208A," after "208,"; and
(3) in paragraph (c) by inserting "208A," after "208,"
(c) Clerical Amendment.-The table of sections at the beginning of chapter 11 of title 18, United Sates Code, is amended by inserting after "Sec. 208. Acts affecting a personal financial interest" the following new item:
"Sec. 208A. Acts affecting a personal financial interest of the President or Vice President of the United States"
Section 3. Contracts by the President or Vice President of the United States
(a) In General.-Section 431 of title 18, United States Code, is amended by inserting "the President or Vice President of the United States," after "Whoever, being".