Everything you need to know about the emoluments clause

PHOTO: Republican presidential nominee Donald Trump arrives for the final rally of his 2016 presidential campaign at Devos Place in Grand Rapids, Michigan, on Nov. 7, 2016.PlayMandel Ngan/Getty Images
WATCH Emoluments Clause: The basics

Attorneys general for the District of Columbia and the state of Maryland have filed a lawsuit alleging that President Donald Trump is violating the emoluments clause of the Constitution, which prohibits the president from profiting from foreign governments.

The lawsuit, first reported by The Washington Post, centers on the president having continued ownership of his global business empire even as he is also president, the D.C. Attorney General's office confirmed to ABC News.

"The emoluments clauses command that ... the president put the country first and not his own personal interest first," Maryland Attorney General Brian E. Frosh told the Post, referring to the part of the Constitution that prohibits the president from accepting foreign gifts or payments without consent from Congress.

The Trump Justice Department has argued in response to a separate lawsuit on the same issue that Trump's business earnings do not represent a constitutional violation of his responsibilities as president.

“Neither the text nor the history of the clauses shows that they were intended to reach benefits arising from a president’s private business pursuits having nothing to do with his office or personal service to a foreign power," government lawyers argued in calling for the dismissal of the lawsuit brought against the president by political watchdog Citizens for Responsibility and Ethics.

The president has called that lawsuit "totally without merit," having handed management control -- though not ownership -- of his global real estate empire to his sons Donald Trump Jr. and Eric Trump and to a longtime business executive.

The Trump Organization has previously provided ABC News with paperwork demonstrating steps that have been taken to separate the president from the operations of his business.

Sheri Dillon, a partner at Morgan, Lewis & Bockius, the law firm she said Donald Trump Sr. directed “to design a structure for his business empire,” told reporters in January that the president signed a financial trust that would “completely isolate [Trump] from the management of the company.”

“The Constitution does not require President-elect Trump to do anything here, but just like with conflicts of interest, he wants to do more than what the Constitution requires,” she said earlier in January. “He is going to voluntarily donate all profits from foreign government payments made to his hotels to the United States Treasury. This way it is the American people who will profit.”

Legal experts, however, tell ABC News that the plan fails to comply with the Constitution by not adequately separating the new president from his myriad business interests. Earlier this year, ABC News talked with some of the top lawyers behind the argument.

Constitutional law expert and Harvard professor Laurence Tribe argues that Trump will be “a walking, tweeting violation” of the Constitution from the moment he takes office.

“His lawyer wouldn't get a passing grade in constitutional law,” Tribe told ABC News. “From the very moment he takes the oath, he will be violating a provision of the Constitution that he takes an oath to uphold every minute of every day."

It all comes down to the emoluments clause of the Constitution, which forbids elected officials, including the president, from accepting gifts from a foreign government.

What is the emoluments clause?

Article I, Section 9, Clause 8 of the Constitution reads, “No person holding any office of profit or trust under them, shall, without the consent of the Congress, accept of any present, emolument, office or title, of any kind whatever, from any king, prince or foreign state.”

“Emolument” is a fancy word that means compensation, profit or benefit.

With a business empire that spans the world and includes a network of real estate properties and hotels that are patronized by representatives of foreign governments, ethics experts say Trump needs to divest himself from the company to be in compliance with the nation's laws.

“To satisfy the Constitution, he needs to make sure he does not own companies that are accepting payments from foreign governments or corporations owned by foreign governments,” Richard Painter, a former ethics lawyer for President George W. Bush, told ABC News.

Steve Schooner, a government procurement law expert who teaches at George Washington University, said the legal defense presented by Trump’s lawyer was “too cute by half.”

He explained that Trump's hotels, especially the Trump International Hotel in Washington, would have difficulty isolating the money spent by foreign governments.

“The profits all get swallowed up in the bookkeeping somehow,” said Schooner. “If there’s a low vacancy rate one month and a big foreign delegation comes in and the hotel loses money that month but has a great weekend, there’s no profit.”

He continued, “If the hotel is losing money and it loses less as a result, that's an emolument. There are significant benefits to the Trump business whether or not profits are recognized, not least of which is you have foreign governments hosting events there, and that's free advertising, which promotes further business with others who may want to curry favor with the president."

One aspect of his business operations where Painter says Trump is safe legally from a constitutional perspective is where the business only engages with U.S. citizens or private foreign clients. He offered the example of an office building in which the tenants are only American firms or privately owned foreign companies as a permissible business venture.

Tribe goes further in his interpretation of the emoluments clause, arguing that complete divestment is necessary to truly adhere to the constitutional guideline set by the framers of the Constitution.

“The Constitution was deliberately written to forbid a U.S. official, particularly a president, from accepting a profit from a foreign government or from some entity representing a foreign government. The reason for that was the long experience of European corruption,” Tribe said.

“Every minute of every day, one of his hundreds of enterprises around the world will be receiving benefits from foreign governments,” he continued.

It’s a principle that Tribe argues extends to Trump’s adult sons.

“The whole history of European corruption that our founders were trying to get away from was based on the understanding that the best way to get to the king is to give benefits to the prince,” Tribe said. “The whole point of the emoluments clause is to prevent foreign governments from greasing the palm of an American official, and whether it’s his own palm or the extended palm of his daughter or son doesn’t make the slightest difference.”

Painter, in contrast, doesn’t believe the clause extends to Trump’s adult children, even though he says “the appearances politically are still very questionable,” should foreign payments continue to flow to Trump’s children.

“Can we hold the officeholder in violation of the Constitution because his grown children are doing business with foreign governments? I can’t imagine that that would happen,” Painter said.

The problem, Painter says, arises with the appearance created by Trump’s adult children sitting in on meetings with foreign leaders because there is no way to ensure that they are not “mixing Trump business with government business.”

What can Congress do, and is there a risk of impeachment?

There is one solution under which Trump can avoid the risk of violating the emoluments clause altogether: Congress can give him permission to maintain his business empire.

“The emoluments clause specifically says that Congress is in charge. It can give the president permission to have what might otherwise look like a conflict of interest,” Tribe said.

Painter suggests that it would be an “excellent solution” if Trump could work out a deal with Congress in which it shrinks the application of the emoluments clause and lays out the terms under which Trump may continue owning businesses.

The big catch in that scenario, of course, is that Congress would have to go along with it -- a politically risky venture for Republicans who may not want to be held responsible down the road.

Painter said that it is unlikely that Trump could be sued over the matter. The enforceable body in the case of the emoluments clause is Congress.

But without congressional sign-off, Painter cautions, Trump could find himself facing a hugely risky -- although highly unlikely -- situation: impeachment.

“It Congress doesn’t affirmatively give permission, he runs the risk that the next Congress is going to come back and accuse him of something,” Painter said. “It’s a big risk.”

And even though Trump may appear safe from impeachment with a Republican-controlled Congress, Tribe doesn’t rule out the possibility that Trump’s party could turn on him.

“We don’t know what Congress will do,” Tribe said. “If they decide Mike Pence might be a safer president for them in terms of their re-election prospects, they might well bring the sword down on Donald Trump.

“The very fact that he’s in that day-to-day threat really distorts the whole American system of government,” Tribe added. “He is a walking impeachable offense.”

ABC News' Ryan Struyk and Karma Allen contributed to this report.