Politics
Politics

Trump's Debt A Conflict Of Interest, Ethics Experts Say

| by Michael Howard

Financial disclosure forms released June 16 show that President Donald Trump owes tens of millions of dollars on various properties across the country, something government ethics experts say is problematic.

NPR reports that Trump has mortgages totaling more than $50 million on Trump Tower, an office building at 40 Wall Street, and a luxury resort in Miami. Other properties in Washington, D.C., Florida and Chicago add millions more to his personal debt.

Former White House ethics adviser and Brookings Institute fellow Norman Eisen said such debt can be perceived as a major conflict of interest.

"It's so profound that, actually, when I was working for President Obama, we wouldn't even let him refinance his modest home in Chicago, because of the appearance of conflict," Eisen told NPR.

Throughout his career in real estate, Trump has borrowed copiously from the big banks. Gwenda Blair, author of "The Trumps: Three Generations of Builders and a President," explained that when Trump first began taking out loans in the 1970s, his father, Fred, acted as cosigner.

"[Fred] was the gravitas, the guarantor, the force behind Donald, when Donald was still untested enough to need that kind of backing," she told NPR.

That changed in the 1980s following the construction of Trump Tower. By then, banks were prepared to lend him whatever he wanted, and he used the money to significantly expand his assets, purchasing casinos as well as an airline.

When Trump filed for bankruptcy in 1991, though, it became clear that the banks had been lending irresponsibly.

"The banks were lined up to loan him money did not really do due diligence," Blair said. "A lot of this was unsecured loans to [Trump] directly. And the banks were extremely reckless."

Since the Trump brand had become a fixture in New York City, his creditors refrained from seizing his assets, opting instead to take significant financial hits.

"They wanted his name on the buildings, because he still had this kind of allure," Blair explained. "So he was too big to foreclose on."

However, many of the major lenders saw Trump as a liability and were no longer prepared to do business with him. Trump was forced to look elsewhere for loans. NPR reports that he cultivated a relationship with Deutsche Bank Trust Company Americas, a subdivision of Deutsche Bank, to which he now owes millions of dollars.

The German-based institution was one of a number of banks investigated by the federal government for its role in the subprime mortgage crisis of 2007. Deutsche Bank Trust Company Americas still faces potential fines in relation to its activity during that period.

Trump is now in a position to enact policies that will directly affect his creditors, including Deutsche Bank Trust Company Americas. According to Eisen, this is a troubling circumstance.

"Here you have one of the world's largest financial institutions, Mr. Trump's principal lender, whom he owes many, many millions of dollars to. That creates a conflict that cuts across Mr. Trump's job as president," he told NPR.

According to Reuters, nearly 200 Democratic lawmakers have filed a federal lawsuit against Trump, citing violation of the Constitution's Foreign Emoluments Clause, which prohibits a sitting president from accepting money or gifts from foreign governments without congressional approval.

"President Trump has conflicts of interest in at least 25 countries, and it appears he’s using his presidency to maximize his profits," lead plaintiff and Democratic Rep. John Conyers said.

The White House has denied any wrongdoing.

Sources: NPR, Reuters / Photo credit: Gage Skidmore/Flickr

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