Trump Organization prepares for a fight if Democrats win
Posted September 19, 2018 6:02 a.m. EDT
(CNN) — The Trump Organization, already hamstrung by self-imposed restrictions and costly legal bills, could face new headaches if Democrats take control of either the House or Senate this fall and demand the company divulge closely guarded information, including reports on profits and operations.
Over the past two years, congressional Democrats have targeted President Donald Trump's business in the name of fighting possible corruption and ensuring his personal bottom line doesn't factor into public policy.
If Democrats secure a majority in either chamber, they'll lead important committees and have the power to launch inquiries and compel testimony and records from the Trump Organization and its executives. So far, Democrats have had to resort to asking for voluntary cooperation from Republicans since they don't have subpoena power. They've also launched an unsuccessful lawsuit to obtain documents related to Trump's hotel in Washington, DC.
"The worst thing for the business would be a change of control in Congress," said one source familiar with the family business. "Business and politics are separate, but they impact each other."
The firm has been documenting transactions and organizing records, bracing for a fight over allegations the President is violating anticorruption clauses in the Constitution, according to the source.
The Trump Organization did not respond to CNN's numerous requests for comment for the issues raised in this story.
When Trump took office in January 2017, he put his assets in a trust and handed over day-to-day management of his business to his two adult sons, Donald Jr. and Eric.
One source close to the business described it as running on "autopilot."
Trump Jr. has become a frequent presence on the campaign trail in recent months, appearing at fundraisers and rallies on behalf of Republican candidates running in the midterm elections. A GOP donor said Trump Jr. was spending more time campaigning for Republican lawmakers in part because "he can't do much on the business side."
Since Trump took office, the Trump Organization has only signed a handful of new deals, according to two sources familiar with the business.
The firm imposed a ban on new international deals, previously a major potential source of expansion, in an effort to address criticism that foreign countries could curry favor with the President by striking deals with his sons. As for new domestic agreements and projects, the company hired an outside counsel to vet some of those opportunities for potential ethical problems.
Trump Org in the spotlight
A Trump Organization business associate said the Trump brothers have "purposefully" sought to keep the business "out of the limelight" -- an effort that has not been successful.
The Trump Organization has also been addressing legal matters on multiple fronts that have ensnared some of the firm's executives. In August, Trump's former personal lawyer and Trump Organization executive Michael Cohen pleaded guilty to eight felony counts, including two for campaign finance violations related to pre-election payments to two women who alleged affairs with Trump. Since Cohen's guilty plea, federal prosecutors in the Southern District of New York are asking if Trump Organization executives violated campaign finance laws, according to a source familiar with the matter. The New York State Tax Department is investigating the Trump Organization as well for potential tax fraud, CNN reported earlier this month.
Trump Jr. is under scrutiny for his involvement with the now infamous Trump Tower meeting in the summer of 2016. Special counsel Robert Mueller is examining that meeting as part of the investigation into Russian collusion in the 2016 election.
The President has an "ethical blind spot," said Maryland Rep. John Sarbanes, who chairs a Democratic "task force" billed as an effort to blunt the power of special interests and combat "corruption" in the administration.
So far, ethics issues have amounted to little more than a nuisance for the Trump Organization. Without power to force witnesses to testify before Congress, Democratic lawmakers have resorted to writing letters to the Trump Organization, the White House and their Republican counterparts.
Congress hasn't held serious investigations of these issues because GOP members are "acting like members of a religious cult that doesn't question their leader," said Rep. Jamie Raskin, D-Maryland.
Since the election, House Judiciary Democrats have previously asked for Republican support to conduct hearings and have proposed legislation that would compel the "President and Vice President to disclose and divest any potential financial conflicts of interest", according to a review of congressional correspondence by CNN.
At the same time, the House Oversight Committee Democrats have demanded answers to questions about the President's business and sought oversight of the President's personal and corporate tax returns, the Trump Organization's balance sheets and income statements as well as information about deals with foreign adversaries, including Russia.
The Trump Organization has responded to some of those letters, including a rebuttal to Democratic Sen. Richard Blumenthal that details how the firm tracks payments from foreign governments at existing properties, such as Trump's Washington hotel. Critics claim the hotel is a hotbed for potential violations of anti-corruption clauses in the Constitution.
The allegation stems from provisions in the Constitution that bar the President from accepting so-called emoluments from foreign governments or compensation from any federal or state government other than a salary.
In the letter obtained by CNN, a Trump Organization executive disputes the notion that the founding fathers "would draft, approve, and advocate a Constitution that restricted transactions with domestic and foreign governments."
A recent Democratic attempt to go beyond letter-writing failed when a judge rejected House Democratic Oversight Committee members who sued for records related to the DC hotel.
But the setbacks aren't breaking the Democrats' resolve to press the issue of potential financial conflicts between the President and his business, said one Democratic congressional aide.
"There are scandals in the shadows that are waiting to break out should Democrats have the power to unearth them," the aide said.