×

Donald Trump Is Said to Intend to Keep a Stake in His Business

President-elect Donald J. Trump is considering formally turning over the operational responsibility for his real estate company to his two adult sons, but he intends to keep a stake in the business and resist calls to divest, according to several people briefed on the discussions.

Under a plan now being considered by the Trump family and its lawyers, Ivanka Trump, Mr. Trump's elder daughter, would also take a leave of absence from the Trump Organization, in the surest sign that she is exploring a potential move to Washington with her husband, Jared Kushner. Mr. Kushner is discussing an as-yet undetermined role advising his father-in-law, and Ms. Trump plans on being an advocate on issues in which she has a personal interest, like child care.

Before deciding how to separate from her father's business, Ms. Trump is also assessing how to disentangle from her apparel and licensing brands, which are named for her, two people briefed on her plans said. She plans on appointing a president of her company to run the day-to-day operations.

More from the New York Times:
Wary Corporate Chiefs Keep an Ear Tuned to Trump's Messages
Business Since Birth: Trump's Children and the Tangle That Awaits
Jared Kushner, Cast as Potential Player on Israel, Is Little Known There

The Trumps are exploring what was described by one person briefed on the discussions as a "legal structure" that would give Mr. Trump and his daughter separation from the company. The New York Times spoke to two people involved in the transition process who were granted anonymity to speak candidly about continuing negotiations.

None of the plans have been completed, and it remains uncertain precisely what the president-elect will reveal next week at an expected news conference at which he has said he will discuss "leaving my great business in total in order to fully focus on running the country."

Aides to Ms. Trump and to Mr. Trump's transition team declined to comment.

In announcing on Twitter last week that he would hold a news conference, Mr. Trump acknowledged that leaving his business was "visually important, as President, to in no way have a conflict of interest with my various businesses."

Still, the Trump family is facing enormous external pressure to do as much as it can to ensure a bright line between the president-elect's business brand and his role leading the country.

And any arrangement in which Mr. Trump derives a financial interest in his business could add to criticism about potential conflicts that could arise from the Trump Organization's global ties.

The Office of Government Ethics has told Mr. Trump's lawyers that only a divestiture would resolve ethical concerns, guidance that was made publicin an extraordinary stream of posts on the office's Twitter feed. Officials with the office did not immediately respond to requests for comment on the plan under consideration.

The federal law that prevents federal employees from making decisions involving their financial interests exempts the president and vice president, though no recent sitting president has maintained foreign financial holdings as extensive as Mr. Trump's.

At a meeting with The Times last month, Mr. Trump pointed out the absence of laws governing conflicts of interest for a sitting president. "The law's totally on my side, the president can't have a conflict of interest," Mr. Trump said, defending his decision to remain attached to his business, even with a loosened grip.

He said then that he preferred to turn it over to his children, with his elder daughter taking the lead.

Some on the transition team have privately expressed concern over how foreign and domestic interests could seek to curry influence with the president by doing business with his adult sons, Donald Jr. and Eric, that ultimately accrues to Mr. Trump's financial benefit.

At least part of Mr. Trump's reluctance to sell off his holdings stems from tax liability concerns, according to a person briefed on the plan. Government officials can defer capital gains taxes on assets they sell to avoid conflicts, providing they reinvest the money in government securities or certain approved mutual funds. But the bill comes due if those assets are sold after a person leaves office.

Ivanka, Donald Jr. and Eric Trump, who grew up in their father's business and are currently executive vice presidents, have told people that complaints about appearances of impropriety could be a continuing distraction for their father as he puts together his administration.

Jan W. Baran, a leading Republican ethics lawyer, said that even though the law was clearly on Mr. Trump's side, there were no easy answers on what he should do about his financial holdings.

If he keeps a stake in his company, persistent questions about whether he is acting in the country's interest or his business interest will be "unavoidable," Mr. Baran said.

On the other hand, Mr. Baran said, if Mr. Trump decides to divest, that raises other questions. "Who are you going sell it to?" he said. "Does selling his stake eliminate the ethical issues, or does it compound them?"

There will also be lingering questions related to Mr. Trump's children, depending on the structure the family settles on for running the company, Mr. Baran added.

As outlined, the plan could leave in place many of the potential conflicts of interest growing out of a real estate and licensing business that spans at least 20 nations, in places like India, Indonesia and Turkey.

Richard W. Painter, who served as the chief White House ethics lawyer under President George W. Bush from 2005 to 2007, and who is planning to police the Trump administration in a role with the watchdog group Citizens for Responsibility and Ethics in Washington, noted that the Emoluments Clause of the Constitution prohibits government officials from accepting gifts and payments from foreign governments or corporations controlled by foreign governments.

Investments or loans from foreign state-controlled financial institutions, even diplomats staying at or hosting events at Trump hotel properties, could run afoul of that clause, Mr. Painter said.

Mr. Trump will also have to take care to ensure that concessions that benefit his company are not construed as a bribe intended to influence official action. Mr. Painter said that even setting aside the legal questions, everything Mr. Trump does will be filtered through the lens of how he stands to benefit financially.

"There are ways to make it work legally, but the appearances are going to be terrible and it's going to be a four-year ethical challenge," Mr. Painter said.

Presidents Ronald Reagan, Bill Clinton and both Mr. Bush and his father held their assets in blind trusts while in office. President Obama did not use one, but he had minimal investments and they were unlikely to pose direct conflicts. His wife, Michelle Obama, gave up her professional responsibilities before he took office.

While it is unclear what structure Mr. Trump proposes to set up to wall himself off from decision-making, the continuing involvement of two of his children in the business would complicate matters. And for a trust to be truly blind, experts say that the assets would have to be liquidated — and that Mr. Trump, who will be the wealthiest president in American history, would have to have no knowledge of how the proceeds were invested.

Follow CNBC International on Twitter and Facebook.