— -- Amid growing concerns about how Donald Trump can distance himself from his vast business enterprise, the president-elect tweeted yesterday that "legal documents are being crafted which take me completely out of business operations." Trump said he will elaborate on his plans at a press conference with his children on Dec. 15.
Ethics experts tell ABC News that merely taking himself out of “operations” -- without selling businesses, creating blind trusts and establishing firewalls -– would be inadequate to prevent potential ethical conflicts, if not legal ones.
Here are some of Trump’s options for separating from his business interests, from most ethically sound to least, according to experts:
Sell everything and place all proceeds in a blind trust or equivalent
Trump could sell his entire business empire -– that is, his ownership stakes in 564 companies worldwide –- and place all proceeds in savings accounts, U.S. treasury bonds, or blind trusts administered by an independent person or group who does not communicate with Trump about business or investments.
Experts say that while this is the most ethical course of action, Trump would likely take a huge financial hit, since he would have to quickly sell off illiquid assets in a “fire sale.” However, some financial pain could be alleviated if the Office of Government Ethics offered him special incentives, like a one-time exemption from paying capital gains tax on those sales.
Keep the company running, but put it in a blind trust
Alternatively, Trump could place the Trump Organization and all other business interests into a blind trust, which would be managed by an independent party who has no financial ties or business communication with Trump or his family.
Sell some businesses and pass others onto to his children
A middle ground might be to sell some of his businesses -– perhaps all foreign companies or those located in countries with diplomatic controversies -– to third parties, and then sell or give control of the rest of his company to his children. The money from the sales could go into a blind trust run by an independent person or group.
To separate himself from the business, “he could enact a ‘firewall’ policy that would prohibit him and his White House staff from discussing business matters with anyone running his former businesses and then keep his children out of any formal or informal adviser positions,” said Matthew Sanderson, a Republican lawyer with Caplin & Drysdale.
Also, the Trump Organization should “prohibit all its personnel from making any reference to the Administration in any sales pitches to prevent instances like the meetings that recently occurred at the Trump International Hotel in DC,” added Sanderson.
Pass everything to his children
In the Jan. 14 Republican primary debate, Trump suggested that his children could run the Trump Organization if he wins. “I would probably have my children run it with my executives and I wouldn't ever be involved because I wouldn't care about anything but our country, anything," he said.
Ethics experts who spoke to ABC News all said that simply passing the business to his children will probably not prevent potential conflicts-of-interest. There is no “blind trust” if his kids tell him anything about his businesses, if he discusses his job with them or gives them any access to his Administration. They could pledge in writing not to communicate about off-limit topics, but “this would be exceedingly difficult to police,” said Paul Rothstein, Georgetown University Law Center.
While Trump has indicated that he is in the process of distancing himself from his company, he has also said that legally he does not have to.
“The law is totally on my side,” Trump told the New York Times in an interview. “The president can’t have a conflict of interest.”
“He could legally manage his business while in the White House. I don’t think he can do that politically, but he can do that legally,” said Trevor Potter, an attorney and a former Republican Federal Election Commission chairman.
While Trump is correct that as president he is exempt from a conflict-of-interest law that prohibits other federal officials from working on government matters in which they or their family members have a financial stake, he is still subject to bribery laws, nepotism laws and the Emolument Clause of the Constitution which prohibits him from accepting “gifts” from foreign powers.
Still, every ethics expert who spoke to ABC News said that continuing to run his businesses while president - even if potentially legal - would be highly unethical.