TRUMP’S CONFLICTS PLAN – Part 1

Someday, Sheri Dillon and her colleagues at Morgan, Lewis & Bockius may regret her performance at Donald Trump’s January 11 press conference. Public relations people saw the event as “beautiful” and “the best thing ever.” It wasn’t. For the legal profession, it was ugly.

Everyone Gets a Lawyer

Dillon represents a controversial client. So did Clarence Darrow. That’s part of any attorney’s job description. Like all citizens, Donald Trump is entitled legal counsel. In fact, the country’s best hope is that he heeds sound advice from lawyers who aren’t afraid to tell Trump when he’s wrong.

Sheri Dillon is Donald Trump’s tax lawyer. Again, that’s fine. His complex financial affairs require capable tax counsel. But on January 11, Dillon allowed herself and her great law firm to become Trump’s prime public defender of a patently insufficient plan to address his business conflicts of interest and wholly separate Emoluments clause problem under the U.S. Constitution.

Future installments in this series will detail the flaws in the Dillon/Morgan Lewis plan. Based on Dillon’s remarks and an accompanying Morgan Lewis memo, here’s a bottom-line preview from Office of Governmental Ethics Director Walter Shaub:

“[T]he plan does not comport with the tradition of our Presidents over the past 40 years.”

The Lawyer’s Role

Like any client, Trump set the parameters of Sheri Dillon’s engagement and the limits of her authority. Faced with those constraints, she did what lawyers do: Dillon created a plan and then defended it. On January 11, she made a closing argument, just as an attorney would to a judge, a jury, or the IRS.

But this time her audience was the American people. And she had no adversary arguing the other side of the case. In fact, her opposition was a central norm of democracy, namely, an Office of the President free of even the appearance of institutionalized corruption. Until Office of Government Ethics Director Walter Shaub responded with his accurate observations of the plan’s wholesale failures, no one was representing that norm.

This is the first in a series that examines the myriad problems with the Dillon/Morgan Lewis plan and Dillon’s effort to defend it. Along the way, Sheri Dillon morphed into yet another public relations spokesperson for Trump’s talking points.

A Summary of the Plan’s Major Failures

The press conference came complete with theatrical props — piles of papers on a large table near the podium. But Dillon did not provide the pubic with any documents implementing the Dillon/Morgan Lewis plan. Without the ability to scrutinize the various trust instruments and related materials, it’s impossible to verify any of the claims she made about her plan’s ability to do any of the things she promised. But even based on her description, a brief summary of the fatal shortcomings include:

— Trump is not divesting. He will retain all benefits that flow from owning assets that create his massive conflicts of interest. Those conflicts compromise the integrity of the Office of the President. While in that Office, Trump and his family will benefit from any increase in the value of those assets.

— Trump’s children remain active managers of his assets.

— Trump plans to resume management of those assets after his presidency.

— Trump’s agreement to give away hotel profits from foreign governments does not solve his wholly separate Emoluments clause problem. And it’s a red herring that doesn’t even attempt to address the issues arising from his numerous other foreign entanglements — bank loans on Trump structures, payments from building tenants, royalties, and the like.

Dillon was more precise, but Trump conflates his conflicts and Emoluments clause problems. He lumps everything together and talks about “conflicts” that he “cannot have” because he’s president. The truth is that the scope and magnitude of both problems remain unknown because Trump has not revealed the detailed financial structure behind his empire. That includes loans, investors, and other information that even his personal tax returns would not disclose.

About Those Tax Returns

Trump hasn’t released those returns, and he probably never will. At his press conference, Trump reiterated, “I’m not releasing the tax returns because as you know, they’re under audit….”

As he spoke, Sheri Dillon stood nearby. She had co-signed a March 2016 letter, stating that the IRS audits had been completed through 2008. He hasn’t released those earlier returns, either. Her letter explaining why probably presages the argument that Trump will make to withhold all of them forever:

“Your returns for these years report items that are attributable to continuing transactions or activities that were also reported on returns for 2008 and earlier. In this sense, the pending examinations are continuations of prior, closed examinations.”

Hers was a lawyer’s argument. And not a particularly good one for a client who was seeking — and now has won — the Presidency of the United States.

Dillon As Trump’s Newest Minion

Dillon’s completed her transformation from legal adviser to just another Trump spokesperson with her concluding lines:

“We believe this structure and these steps will serve to accomplish the president-elect’s desire to be isolated from his business interests and give the American people confidence that his sole business and interest is in making America great again, bringing back jobs to this country, securing our borders and rebuilding our infrastructure.”

The final words in that sentence — “bringing back jobs to the country, securing our borders and rebuilding our infrastructure” don’t appear in the accompanying “White Paper” on Morgan Lewis letterhead. They’re certainly extraneous to any reasoned professional legal opinion. So are Dillon’s concluding sentences:

“The American people were well aware of President-elect Trump’s business empire and financial interests when they voted. Many people voted for him precisely because of his business success.

“President-elect Trump wants to bring this success to all Americans.”

Donald Trump, Kellyanne Conway (who has a JD), or some other Team Trump person probably wrote that ending. But Dillon spoke it, so whatever fees Trump paid Morgan, Lewis & Bockius for this assignment, he got his money’s worth.

Specifically, Dillon confirmed publicly the soundness of a fatally flawed plan. When things go badly for Trump under that plan, he’ll have lawyers to blame. For him, it’s a win-win. For Dillon and the reputation of a great law firm, not so much.

By The Way…

OGE Director Walter Shaub’s reward for his uncommon courage in speaking the truth about the Dillon/Morgan Lewis plan was an immediate summons to the principal’s office of Rep. Jason Chaffetz (R-UT), chairman of the House Committee on Oversight and Government Reform. After the infamous Access Hollywood tape surfaced, Chaffetz declared that he would not vote for Trump. Three weeks later, he reversed himself and reboarded the Trump train, promising years of investigations into Hillary Clinton if she won.

In light of Dillon’s performance at Trump’s press conference, the most ironic sentence in Chaffetz’s letter to Shaub was this: “Your agency’s mission is to provide clear ethics guidance, not engage in public relations.”

Then came the most threatening passage: “OGE’s statutory authorization lapsed at the end of fiscal year 2007 and the Committee has jurisdiction in the House of Representatives for reauthorizing the office.”

Just when you think Trump’s conflict of interest and Emoluments problems can’t descend to some frighteningly new level, they do.