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- President Donald Trump’s business is under intense scrutiny unlike any other time in his presidency.
- Robert Mueller, the special counsel leading the Russia investigation, has subpoenaed the Trump Organization for documents.
- The adult-film star Stormy Daniels is also seeking documentation from the company related to the $130,000 payment she received from the Trump lawyer Michael Cohen.
- And a federal judge recently allowed what could be a huge lawsuit over the Constitution’s emoluments clause to go forward.
Never before has President Donald Trump’s business come under the kind of fire it has in recent weeks.
Simultaneously, the Trump Organization is faced with three pieces of high-stakes litigation:
- The special counsel Robert Mueller has subpoenaed the company for documents as a part of his investigation into Russia’s interference in the 2016 US presidential election.
- Stormy Daniels, the adult-film star whose legal name is Stephanie Clifford, is seeking all internal company documents related to the $130,000 payment she received from the top Trump attorney Michael Cohen before the election to ensure her silence about her claims of an affair with Trump.
- The attorneys general for Maryland and Washington, DC, filed a lawsuit accusing Trump of taking gifts from state and foreign government officials, known as emoluments, in violation of the Constitution. A federal judge recently ruled that the case could move forward, meaning it cleared an initial hurdle that no similar suit had passed.
All three of those cases could open the door to closely guarded Trump Organization documents – perhaps even Trump’s own tax returns – becoming public.
“The Mueller subpoena of the Trump Organization and the potential discovery in the Stormy Daniels case and the Maryland and DC emoluments case do present Trump and his family businesses with the greatest challenge to their efforts to hide their business affairs from public scrutiny during his presidency,” Larry Noble, the senior director and general counsel of the Campaign Legal Center, told Business Insider.
The stakes are ‘much higher’ for Trump
Noble said interest in the president’s business and potential conflicts of interest was highest early in his presidency because “the issue was new to many.”
“But what we could find out was largely limited to what he was willing to say – which was little – and the press could determine,” he said. “Now, Trump is facing demands for information in legal proceedings, which are not as easy to evade and for which there are penalties for lying.”
“The stakes for him are now much higher, and the chances of us learning the truth about his business dealings are greater.”
The Washington Post reported over the weekend that the series of inquiries was “exposing the risks Trump took on when he made the decision to maintain ownership” of the Trump Organization.
Before taking office, Trump opted to pass his stake in the company to his two sons and a senior executive at the business instead of divesting himself of the assets, as past presidents had done and as ethicists implored him to do.
Though the issue garnered much attention in the administration’s early days, it soon fell by the wayside as the Russia investigation ramped up and as Trump moved to change the government’s course and cement his legacy.
As a result, Trump was, for the most part, able to handle his business entanglements on his terms without much blowback. That could now change, especially if the Trump Organization is legally required to release sought-after documents.
“President Trump’s insistence on holding onto his business interests invites scrutiny of his business dealings and partners,” Jordan Libowitz, a spokesman for the watchdog group Citizens for Responsibility and Ethics in Washington, told Business Insider. “Scrutiny has continued to grow into the matter, but it was most likely inevitable.”
- Alex Wong/Getty Images
What is under examination
The Post reported that Mueller’s request was “broad” and that he was most likely seeking information on the president’s business dealings in Russia, particularly as they relate to the company’s plans for a Trump Tower in Moscow.
Those plans did not come to fruition, seemingly ditched amid Trump’s presidential campaign.
Meanwhile, Michael Avenatti, Clifford’s attorney, insists that the Trump Organization has “unmistakable links” to his client’s lawsuit. He has asked the company to preserve all paperwork about Clifford.
The Trump Organization has denied any involvement in the episode, though Cohen is said to have used his company email in facilitating the payment while another top Trump Organization official was included in an email correspondence. The company said that official, an attorney named Jill Martin, was not representing it.
The third bit of litigation, which could prove especially tricky for Trump and his business, accuses him of violating the emoluments clause of the Constitution by taking payments from state and foreign government officials via his hotel in Washington, DC.
US District Judge Peter J. Messitte ruled last week that the attorneys general had legal standing to sue the president, though his decision is likely to be appealed. If it stands, Maryland’s attorney general, Brian Frosh, and DC’s attorney general, Karl Racine, may be able to seek Trump Organization documents related to the hotel.
- Frazer Harrison/Getty Images
On Sunday, New York magazine’s liberal pundit Jonathan Chait argued that, rather than the wide-ranging Russia investigation, the conflicts of interest and appearance of “corruption” would be Trump’s biggest liability that Democrats could capitalize on ahead of the midterm elections.
“Trump represented himself as a rich man feared by the business elite,” Chait wrote. “He had spent much of his life buying off politicians and exploiting the system, so he knew how the system worked and could exploit that knowledge on behalf of the people. In fact, his experiences with bribery opened his eyes to what further extortion might be possible.
“Trump was never looking to blow up the system. He was simply casing the joint.”