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Donald Trump’s Feud With Nordstrom Sparks Warnings From Ethics Experts

Kellyanne Conway
Katie Kramer | CNBC
Kellyanne Conway

President Donald Trump is known for shattering political precedent, but experts say the White House's war on Nordstrom for dropping his daughter's clothing line is ordinary behavior.

Just not in America.

"This is so common in so many parts of the world that perhaps we shouldn't be surprised it eventually happened here," said Matthew Stephenson, a Harvard law professor who studies international corruption. "I'm hoping we find a way to nip it in the bud before it gets out of control."

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Trump counselor Kellyanne Conway got a strong bipartisan rebuke on Thursday for promoting Ivanka Trump's clothing brand in a TV interview.

But ethics experts say the broader conflict between the White House and Nordstrom is more worrisome, raising questions about whether the United States is entering a new environment in which presidents use government to steer money to their inner circles.

Around the globe, and especially in developing countries with weak government institutions, leaders frequently become enmeshed in scandals for allegedly mixing personal business with their public duties. Many cases involve friends or relatives who use official ties to land sweetheart deals.

Recent examples included Argentina under the Kirchner dynasty, South Africa under President Jacob Zuma and Thailand under Prime Minister Thaksin Shinawatra. In South Korea, President Park Geun-hye faces impeachment over charges that a family confidant used their relationship to extort millions of dollars from businesses.

"Over and over again, you see this pattern of populist leaders, often democratically elected, who use the power of office to enrich themselves, their families and their cronies," Stephenson said.

In that context, Stephenson said the White House's recent behavior was "extraordinarily and depressingly familiar."

Not a new issue

Trump and his family's vast holdings and his refusal to fully sever ties with his business have long prompted warnings from legal experts that his administration will be plagued by conflicts of interest.

Those fears reached new heights this week as Trump and his aides repeatedly attacked Nordstrom over its decision to remove Ivanka Trump's clothing brand from its stores. Ivanka Trump's husband, Jared Kushner, is also an adviser to the president.

The president said Nordstrom treated his daughter "unfairly" on Twitter on Wednesday, while Press Secretary Sean Spicer accused the company of a "direct attack on his policies," even as the department store chain insisted that the move was based on sales figures and not politics.

The White House response drew heavy criticism from ethics watchdogs, who complained that the president appeared to be intimidating a private business to pad a family member's profits.

"This is the behavior of a Mafia don defending his turf, not the president of the United States," Norm Eisen, chairman of Citizens for Responsibility and Ethics in Washington, told MSNBC. Eisen was the top ethics counsel under President Barack Obama.

'Wrong, wrong, wrong'

A tipping point came Thursday morning, when Conway gave what she said was a "free commercial" for Ivanka Trump's clothing line during a Fox interview from the White House briefing room, urging people to buy her products.

The comments appeared to violate federal ethics rules preventing federal employees from using their offices to endorse products or services. CREW and Public Citizen, another nonpartisan group, fired off letters to the Office of Government Ethics and the White House counsel demanding an investigation.

Conway's appearance also drew a rebuke from the Republican chairman of the House Oversight and Government Reform Committee, Jason Chaffetz of Utah, who has so far rebuffed Democratic calls for investigations of Trump.

"That was wrong, wrong, wrong," Chaffetz told NBC News. "It is wholly unacceptable — no ifs, ands or buts about it."

In a joint letter with Rep. Elijah Cummings of Maryland), the ranking Democrat on the committee, who frequently clashes with Republicans over investigations, Chaffetz asked the Office of Government Ethics to investigate Conway's behavior and recommend possible disciplinary action.

"I kept telling [Chaffetz] that there would come a time," Cummings told NBC News. "He kept saying things like 'we wait until we get to the bridge.' I told him, 'We are at the bridge.' Today he told me, he said, 'We are on the bridge together.' You just can't get a worse case than this. He had no choice, really."

Chaffetz faced particular pressure because he was one of the key politicians involved in investigating Hillary Clinton, whom Republicans frequently accused of ethical missteps based on what they claimed were potential conflicts.

The Republican National Committee, for example, warned during the campaign that Clinton would be compromised if she became president and left her daughter, Chelsea Clinton, on the board of her foundation because donors might try to buy access with charitable gifts. Now Trump and his staff appear to be openly promoting his daughter's private business, which benefits her directly.

Notably, "Clinton Cash" author Peter Schweizer — who previously teamed up with Trump's chief strategist, Steve Bannon, to investigate Clinton — also condemned the White House's behavior.

"They've crossed a very, very important bright line, and it's not good," Schweizer told The Washington Post.

Asked about Conway's comments, Spicer told reporters Thursday that she had been "counseled," but she did not elaborate on whether she faced any possible consequences. White House aides later told NBC News that they were still fully confident in Conway.

Overseas ramifications

Spicer's own remarks on Wednesday drew at least as much alarm as Conway's did, if not more, for implying that businesses decisions that detract from Trump family profits would be viewed as a personal affront.

Spicer framed Trump's comments on Nordstrom as those of an angry parent who had a right to "stand up for his family" rather than the reaction of a government official. That version of events offers little to console critics, however, given that Trump's own multibillion-dollar business empire is being run by his sons, Donald Trump Jr. and Eric Trump, in his absence.

The participation of White House aides in Trump's private feud also raised the question of whether a future business that pulls out of a deal — or a foreign official who issues an unfavorable ruling against a Trump property — might expect retaliation not only from the president's words but from government officials.

In addition to the comments by Conway and Spicer, the official White House account retweeted Trump's initial remarks on Nordstrom.

"The implication is if you cross one of his children, the power of the presidency will be used to retaliate against you," Kathleen Clark, a law professor at Washington University in St. Louis who specializes in government ethics, said of Spicer's remarks.

Trump has already drawn criticism for appearing to do the opposite: promoting a business that he views as favorable to him personally. During the transition, he tweeted "Buy L.L Bean" after the granddaughter of the clothing company's founder faced a boycott campaign for donating to a pro-Trump outside group.

As Trump has noted, he himself is exempt from most government rules regarding conflicts of interest, which apply to Cabinet officials and other appointees, like Conway. Until his election, however, it was assumed that presidents would take even greater care to avoid private entanglements, because they're directly accountable to voters and have an interest in avoiding any hint of corruption.

That assumption is scrambled now. Trump has refused to divest from his company or to release tax returns and other information that could allow the public to judge possible conflicts. And he has refused to place an independent figure in charge of his business rather than his children, who had previously advised the campaign and the transition.

Trump has said he will avoid discussing business with his sons, but it will be difficult to avoid news stories on the company. And there is nothing preventing private actors from buying a Trump property, making a favorable investment in a Trump business venture or buying a pricey membership at a Trump resort to try and win him over.

Watchdog groups have accused Trump of violating the "emoluments clause" of the Constitution — which bars presidents from receiving benefits from foreign governments — by maintaining a stake in hotels and other businesses that can do business with actors abroad.

Trump's attorney has maintained that their interpretation is mistaken as long as the businesses receive only market value for their services. CREW is engaged in a lawsuit over the issue, although it faces long odds.

Tara Malloy, deputy executive director of the Campaign Legal Center, a nonprofit election law organization, said the overall atmosphere created by Trump's actions was more troubling than any individual incident. She promised more issues in the future unless changes were made.

"They reveal what seems to be a complete indifference to all ethical standards applicable to Trump and the administration," she said.