How a Blind Trust Would Cripple Donald Trump in the White House

Every president since Harry Truman, with the notable exceptions of Richard Nixon and Barack Obama, has placed his assets into a blind trust. Truman, Eisenhower, Kennedy, Johnson, Reagan, Carter, George H.W. Bush, Bill Clinton, and George W. Bush all sequestered their assets in trusts administered by third parties. Some of  them made money, some of them lost money. Barack Obama’s case, however, is unique.

In Obama’s case, he maintained that no blind trust was needed because he wasn’t heavily invested in the stock market. In fact, most of his assets are invested in U.S. Treasury Bonds and the family’s private homes which means that, if the country does well, Barack Obama will do well but, if the economy falters, Obama would feel it where it hurts most…in his stock portfolio.

It is surprising that Obama’s decision not to place his assets into a blind trust has created absolutely no controversy, but that is probably because his decision to allow open access to his financial matters makes him more transparent than a blind trust would.

The fact that the right wing nut rumor mill has not grabbed onto this fact is quite surprising and probably reflects the probability that either they, or their audience, wouldn’t understand the point in the first place: Barack Obama bet his family’s financial security on his ability to salvage a ravaged economy. Think about that for a moment.

Donald Trump, as usual, is a completely different matter because his holdings are, for the most part, invested in high visibility construction projects that would be impossible to include in a blind trust. This also means that, for the first time in our history, we would have had (notice the tense there) a president who was actively engaged in making deals while serving as president of the United States, which is rather like an officer playing craps with enlisted men with loaded dice.

Officers do not gamble with their enlisted men. It is just not done, but that in effect would be what Donald Trump would have been doing had he continued his business activities in the White House.

Can you imagine having a president having business meetings about private matters in the Oval Office? It must have happened from time to time, human beings being human, but how could we tolerate the use of the Oval Office for Donald Trump’s private business dealings?

Remember that everything said in the Oval Office is recorded for posterity. No one talks about it, but every word the president of the United States utters is recorded in one way or another, which is why it is so terribly important that presidents of the United States say what they mean and mean what they say in private as well as in public.

A president of the United States must operate under a conundrum in which he (or she) must assume that everything he or she says in a public meeting will eventually become public knowledge while at the same time never speaking secrets that presidents know but cannot talk about. This is a unbelievable tightrope act, with the president constantly under public surveillance, constantly being challenged and never being able to say, “No comment” in response to any question he or she is asked.

Reports indicate that the Obamas have done quite nicely with their blind trust, largely due to the financial strength of the  nation, since they are mostly invested in treasuries, to the point where we might consider it a law that presidents MUST put their personal assets into Treasury Bonds during their tenures, which would reduce any conflict of interest that a rich person might have with respect to the rule of law.

The current front runner in the presidential horse race, Hillary Clinton, has already lived with her personal assets, and those of her husband, sequestered in a blind trust for the eight years of Bill Clinton’s presidency, emerging from those eight years almost dead broke. The Clintons, true to the American dream that the Republican party used to talk about, have done very, very well since leaving the White House, but there’s no doubt that they would be willing to put their assets back into a blind trust, perhaps even into Treasury Bonds.  That takes nerve, but the Clintons have plenty of that.

Now, put Donald Trump into that role. (We both know you were envisioning Hillary Clinton in that role, whether you wanted her to be there or not.) Imagine him conducting business meetings under the same conditions of public scrutiny and secrecy.  You cannot con people when the eyes of the world are on you 24-hours a day, every day, and every word you say is being recorded, and Donald Trump is first and foremost a con man.

When you play poker, the chances are that the  guy with the biggest wad when you sit down to play will also be the guy who leaves the table with the most money.  That’s the nature of real gambling, because real gamblers know that you can’t beat a guy who can buy back his bluffs when he has to.  That’s why professional poker tournaments start all the players off with the same amount of money.

If Donald Trump’s assets were sequestered in a blind trust, Trump would not be able to wheel and deal in the manner to which he is accustomed because everyone he tries to do business with would know, first of all, exactly how much he is really worth, and how much of that wealth is liquid. In the meantime, while his assets were in that blind trust, Trump couldn’t do any wheeling and dealing because he wouldn’t have ready access to the funds. That’s what it means to put your money into a blind trust. You can withdraw operating expenses from the trust, but you cannot make capital investments with those funds because that requires a decision by the trustee, and the trustees are always charged with mitigating losses, not generating profits.

What that means, in effect, is that Donald Trump would have to live on the $400,000 plus walking around money for expenses that he is allotted as president of the United States. It would also mean that his progeny could no longer be active players in their father’s company because the disclosure requirement also covers the immediate families of presidents. (Something that Jimmy Carter learned the hard way when his wastrel brother tried to capitalize on the Carter name.)

So, there’s a real conundrum for you. Donald Trump has to sequester his personal wealth to avoid the suspicion that he might not have his mind fully on his official work as president of the United States, but he can’t sequester his personal wealth because doing so would destroy his financial empire.

This answers the question of whether Trump was ever really serious about being president of the United States. He has “spent” an estimated $50 million out of his own pocket in the form of loans he made to his campaign, which he has since written off as non-deductible contributions, which means that he has spent $50 million to win a job that pays $400K per year, along with free plane rides, a limousine service, and a couple of houses that are much smaller than the ones he is accustomed to.

Aside from all of the other questions that have been raised about his sanity, how sane is it to invest $50 million in order to earn back between $1.6 million and $3.2 million?  The only way that investment makes sense is if Trump believes that somehow or other he can parlay his position  as president into increased earnings from his brand marketing efforts.

Let’s be fair. Presidents always capitalize on their fame after their terms of office have expired. They accept high paying seats on boards of directors, they write books, they give speeches. That’s what they do.  They do not, however, sell their names in branding schemes. (Actually, that was done to Ulysses S. Grant behind his back by his son, who traded on his father’s name to launch a stock brokerage, which later failed, bankrupting the former president, who was always unlucky in business.)

However, presidents – with the possible exception of Richard Nixon – do not go into the presidency with the intention of making it into a money-making operation. There was some evidence that Nixon was trying to do that, until the Watergate disaster brought him down from public office, after which he had no name recognition to sell.

Question: Do you think that there should be a law requiring all presidential candidates to disclose their tax returns, and another one stipulating that presidents must put their assets into blind trusts?

By Alan Milner