President-elect Donald Trump,  walks with his wife Melania Trump, and Senate Majority Leader Mitch McConnell after a meeting at the U.S. Capitol Nov. 10, 2016 in Washington, DC. 
Photo by Mark Wilson/Getty

Why Trump’s confusion about what a ‘blind trust’ is matters

Updated
It’s a problem that Donald Trump and his team are confused about what a blind trust is. The consequences of this, however, represent a far bigger problem than is generally appreciated.

Politico reported late yesterday on the future of the president-elect’s private-sector holdings, and the Republican’s lawyer using a phrase he doesn’t fully understand.
Donald Trump’s vast business holdings will be placed into a blind trust with his oldest three children in charge, according to the president-elect’s attorney. […]

Asked who would run the Trump Organization, a privately held company with international and U.S. dealings in everything from hotels to real estate, golf courses to investments, [Trump attorney Michael Cohen] explained that Trump’s adult children Donald Jr., Ivanka and Eric would take charge through a blind trust.
“They’re really intelligent,” Cohen said. “They’re really qualified.”

And while I’m sure Trump’s children appreciate the praise, their intellect and qualifications aren’t especially important in the larger context. What matters here is that Trump’s lawyer has described a blind trust that isn’t the least bit blind.

Politico’s report added, “[While Trump’s] lawyer Thursday used the term ‘blind trust’ when discussing the family’s upcoming financial arrangement, putting Trump’s children in charge of a set of assets that their father is aware of does not constitute a blind trust. Under the legal definition of a blind trust, a public official places his finances under the management of an independent party. The official would have no knowledge of what is in the trust or how it is managed.”

In fact, at some level, Trump seems vaguely aware of the problem – though he doesn’t actually care enough to handle the matter in a responsible way.

As Rachel noted on the show in September, the issue came up during a GOP primary debate earlier this year, when Fox’s Maria Bartiromo asked Trump. “Are you planning on putting your assets in a blind trust should you become president? With such vast wealth, how difficult will it be for you to disentangle yourself from your business and your money and prioritize America’s interest first?”

After saying he “couldn’t care less” about his company, Trump pointed to three of his adult children and told them, “Run the company, kids, have a good time.”

Bartiromo followed up, seeking clarification. “So you’ll put your assets in a blind trust?” she asked. Trump responded, “I would put it in a blind trust. Well, I don’t know if it’s a blind trust if Ivanka, Don and Eric run it. If that’s a blind trust, I don’t know.”

Even at the time, the answer was a bit jarring. Trump, who presents himself as some kind of business genius, seemed utterly baffled about what is and isn’t a blind trust.

And if that were the end of the story, it’d be just another example of Trump not having any idea what he’s talking about. But now that he’s managed to win the presidency, we’re looking at a far more important – and potentially scandalous – situation.

The reason modern presidents put their investments in blind trusts is to avoid potential corruption and/or conflicts of interest. If the person in the Oval Office has literally no idea what he or she is invested in, that president won’t – and can’t – make policy decisions based on the potential effects on his or her personal finances.

With Donald J. Trump, it’s even more complicated: unlike most presidents, the wealthy Republican has vast business interests here and abroad. Disentangling his investments with his official duties would be difficult under the best of circumstances.

That is precisely why it matters that Trump is apparently adopting the worst of circumstances: his business interests will be managed by his own kids – people with whom he’ll speak regularly, people who can routinely update him on what his enterprise owns, and people who can change the enterprise’s investment portfolio based on instructions from their powerful father who’ll have unique access to international information unavailable to practically anyone else.

Americans have already seen Trump use his campaign to boost his business interests. By adopting a blind trust that isn’t blind, the president-elect is setting the stage for a controversy that’s likely to dog him for as long as he’s in office.