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Inside Trump's holdings: A web of potential conflicts

When he took the oath of office Friday, President Donald Trump carried with him a massive web of potential conflicts of interest not seen in modern American history.

The president's ethical quandary is the result of his refusal to divest himself of a sprawling network of more than 500 properties that he has amassed in more than three decades as a celebrity entrepreneur.

That conflict is at the center of a lawsuit, filed in federal court on Monday, by a group of lawyers who say Trump's business interests put him in violation of the Constitution by receiving payments from foreign governments.

In its filing in U.S. District Court in Manhattan, the nonprofit watchdog group, Citizens for Responsibility and Ethics in Washington, or CREW, said that Trump's global business interests "are creating countless conflicts of interest, as well as unprecedented influence by foreign governments" and "have resulted and will further result in numerous violations" of the U.S. Constitution.

At a long-awaited news conference this month, Trump dismissed the potential conflicts after his attorney laid out the broad outlines of a plan to separate himself from the day-to-day operations of his businesses.

The plan includes the establishment of a trust to be run by his two sons and a Trump Organization executive. The company will also hire an ethics advisor to clear any new domestic deals, and Trump pledged to donate any hotel profits generated from foreign governments to avoid the appearance of gifts.

But the plan doesn't go nearly far enough to head off major ethical conflicts, Walter Shaub Jr., director of the U.S. Office of Government Ethics, said earlier this month.

The new structure, he said, is "meaningless."

"This is not a blind trust — it's not even close. ... His sons are still running the businesses, and, of course, he knows what he owns,"Shaub said upon hearing the details of Trump's plan. "His own attorney said today that he can't 'un- know' that he owns Trump Tower. The same is true of his other holdings."

The Trump transition team did not respond to a request for comment.

On Friday, Pro Publica reported that the documents required to transfer ownership of Trump's properties had not been filed.

The scope of potential conflicts is as deep and wide as the next president's business interests.




Global holdings

The Trump Organization is not so much a company as a dense thicket of disparate properties, acquired and developed over more than three decades, linked in a complex network of interconnected individual corporations, limited liability companies and partnerships.

The list includes more than 500 separate entities — hotels, golf courses, media properties, books, management companies, residential and commercial buildings, a beauty pageant, airplanes and a profusion of shell companies set up to capitalize on licensing deals to harvest the full value of Trump's carefully cultivated celebrity.

But the full scope of his business interests remains unclear. The primary source of information consists of an unaudited filing with the OGE in May 2016 by Trump and other candidates running for the White House. Trump made a similar filling a year earlier.

These documents provide only a snapshot of his holdings and business connections, largely because the rules governing disclosure of financial interests did not anticipate a candidate like Trump. The value of his assets and the income they generate, for example, are listed in ranges, falling short of a full accounting.




Much of the company's most valuable assets consist of several dozen commercial and residential real estate properties and golf courses in the U.S. and overseas. Many of the other holdings are listed as having little or no value, or having value that is "not ascertainable." Some appear to be inactive, generating little or no income, according to the filing.

Still, these two filings — roughly 100 pages each — provide a window into the performance and organizational structure of the company built and managed by the next president.

Trump has kept his lawyers busy over the years creating and dissolving companies at a fairly rapid clip.

The byzantine structure is not unusual for companies that hold large portfolios of individual assets. Trump, like most people who make their living developing real estate, takes full advantage of a legal structure known as a limited liability company, an entity created for a specific purpose. If investors lose money in one hotel owned by a large holding company, for example, they have no claim to profits from another successful hotel held by the same portfolio.

Trump's legal advisors have also been kept busy with torrent of lawsuits, with Trump as both defendant and plaintiff.

Over last last three decades, the list includes more than 4,000 legal actions in state and federal courts naming both Trump businesses and the president-elect personally, according to an analysis by USA Today. The actions range from wrangling with his casino backers to personal defamation lawsuits.

The latest was filed last week by one of the more than a dozen women who have accused Trump of sexual misconduct, claiming that Trump defamed her when he branded her allegations a lie.

Once he took office, Trump gained some protection from the Constitution from lawsuits stemming from his official acts in the Oval Office. But that immunity doesn't apply to lawsuits over personal actions or those involving his businesses, including those that were filed before he took office.



In part because of the complexity of his holdings, Trump's assets presented his legal advisors with a major divestiture challenge.

But, in the end, he has dismissed calls to sell his holdings outright, saying that conflict of interest provisions don't apply to U.S. presidents.

"As you know, I have a no-conflict situation because I'm president, which is — I didn't know about that until about three months ago, but it's a nice thing to have," Trump told reporters last week

Trump is referring to Title 18, Section 208 of the U.S. Code, which governs the financial interests of government employees, and specifically exempts "the President, the Vice President, a Member of Congress, or a Federal judge."

But some legal experts note that other conflict of interest rules trump that law, including a section of the U.S. Constitution — known as the emoluments clause — which bans the president from accepting gifts or compensation from foreign governments.

With dozens of foreign holdings, any of which could benefit from Trump's new role as U.S. president, some ethics experts believe Trump will be in violation of the Constitution the minute he completes the oath of office.

"The president-elect's disregard for ethics and precedent and the Constitution in his press conference (last week) are going to precipitate an ethics and constitutional crisis from the day he's sworn in," Norman Eisen, a former top White House ethics lawyer under President Barack Obama, told MSNBC earlier this month.

Eisen, who said Trump is "walking through a minefield blindfolded" when he takes office Friday, has led calls for Trump to divest his businesses, along with former George W. Bush lawyer Richard Painter.

It's clear that the scope and complexity of Trump's holdings create a bigger divestiture challenge than other modern presidents. But at least three of Trump's Cabinet nominees, who are governed by federal financial interest restrictions, have pledged to sell large holdings that could interfere with their new roles.

Investor Wilbur Ross, nominated to head the Commerce Department, said last week that he would sell investments valued at up to about $300 million, including his stake in his private equity firm. And secretary of State nominee and former Exxon Mobil CEO Rex Tillerson has said he will sell his $180 million holdings of company stock, along with real estate and municipal bonds he holds with his wife.

Trump's nominee for Treasury secretary, Steven Mnuchin, has also pledged to sell his interests in 43 companies and investments. In a 42-page financial disclosure earlier this month, he reported plans to divest more than $50 million worth of common stock in CIT Group, a financial services group that bought his OneWest Bank in 2015. A former Goldman Sachs executive, he also promised to sell Goldman Sachs stock worth more than $5 million and Goldman Sachs Treasury investments worth more than $25 million.

Though Trump's net worth is larger than other U.S. president's, the total value of his business, despite his campaign bravado, is unremarkable compared with other global real estate companies. Trump has claimed his business is worth as much as $10 billion, but nothing in the federal ethics filings backs up that claim. Forbes recently estimated the value of his assets at $3.7 billion.

At that level, Trump's business doesn't make the top 100 global real estate companies, according to Global Real Estate Insight, a U.K. research firm.

By completely divesting his holdings, Trump would likely reduce the value of many of the assets that are tied so closely to his name. But for critics like Shaub, that's one of the sacrifices of public service.

"I appreciate that divestiture can be costly," he said. "(Trump is) going to be asking his own appointees to make sacrifices. He's going to be asking our men and women in uniform to risk their lives in conflicts around the world.

"So, no, I don't think divestiture is too high a price to pay to be the president of the United States of America."

WATCH: Trump's global business ties puts ethics laws to the test

UPDATED: This story was updated to include news of a lawsuit that was filed.

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