What the Law Is vs. What the Executive Is Willing to Argue: Understanding the Stakes of the Emoluments Debate, by Jane Chong

by Guest Blogger — Wednesday, July 5, 2017

Editor’s Note: This post is a response to a recent post by Andy Grewal.

Three lawsuits recently filed against President Donald Trump for allegedly unlawfully profiting from his financial empire do more than breathe new life into some obscure constitutional provisions. They serve as an important reminder that, under the Trump administration, the battle over norms and the rule of law is being waged on two fronts.

So far, one front has gotten disproportionate attention: Much of the anxiety about unprecedented executive conduct has been channeled through heated debates about what the law requires. For example, did Trump commit obstruction on February 14 when he asked then-FBI Director James Comey to cool the investigation into former national security adviser Michael Flynn? Did Trump violate a federal statute or his constitutional oath on May 10 when he shared highly classified intelligence with Russian officials during his closed-door meeting in the Oval Office? And, with respect to his alleged financial conflicts, does Trump’s continuing refusal to liquidate his business assets violate the Constitution’s Foreign and Domestic Emoluments Clauses?

But Trump’s unusual insistence on repeatedly pushing up against the line of legality is no less important than the business of ascertaining precisely where that line lies. Repeatedly, when asked to weigh his personal interest or personal idiosyncrasies against the public interest, Trump has reduced the parameters of acceptable presidential conduct to a set of highly technical legal questions about what he may and may not do as a matter of “right.” There is an argument to be made that this self-interested stance is, by itself, fundamentally at odds with the trust that the office confers.

This is the necessary backdrop for understanding the significance of the unprecedented litigation now embroiling the President of the United States, his multi-billion-dollar company, and the Justice Department. The three federal lawsuits in question—filed by the government accountability watchdog group Citizens for Responsibility and Ethics in Washington (CREW), the attorneys general of Washington D.C. and Maryland, and 196 congressional Democrats, respectively—assert that Trump is unconstitutionally profiting from his business empire. Last month, the Justice Department filed a motion to dismiss the CREW suit that largely echoes the argument previously promulgated by Trump’s personal lawyers in a public white paper: The Emoluments Clauses bar “only the receipt of compensation for personal services and to the receipt of honors and gifts based on official position.” See Memorandum of Law in Support of Motion to Dismiss, Citizens for Responsibility and Ethics in Washington v. Trump, No. 1:17-cv-00458 (S.D.N.Y. 2017). That is, President Trump may profit from the Trump Organization’s many transactions with foreign and domestic government entities because the Clauses only those benefits received for services provided to a foreign state in his official capacity as president, or “in a capacity akin to an employee of a foreign state.”

Recently at Lawfare I asserted that this line of argument marks a decisive departure from the executive branch’s historically more conscientious efforts to protect the United States against undue influence. Confining my inquiry into the Clauses’ meaning to whether and to what extent the Justice Department’s current position on the permissibility of Trump’s business holdings accord with the views espoused over the years by the Office of Legal Counsel and the Comptroller General, I determined that the executive branch has quite consistently opted against a permissive interpretation of either the Foreign or Domestic Emoluments Clause. Specifically, I concluded that “[n]one of the opinions approves the receipt of benefits that can even arguably be attributed to the prestige or influence conferred by an office.”

I don’t deny the limitations of my project. Whereas the Justice Department and all of the plaintiffs have marshaled a host of arguments about the meaning of the Emoluments Clauses based on text, the Framers’ intent, historical application, and purpose, I have restricted my own analysis to OLC and Comptroller opinions. Bounding the inquiry in this way amounts to a kind of normative assertion about the importance of the executive branch’s historical posture on issues of risk and positions of public trust. The objective of such an inquiry is not merely, or even primarily, to achieve elucidation of what the Constitution “actually means.” Rather, the purpose is to uncover critical insights about which side of the line the executive branch has typically come down on when confronting emoluments-related issues of personal versus public interest.

But in his recent Notice & Comment post, Andy Grewal does not acknowledge the circumscribed nature of my examination of the OLC and Comptroller opinions. He chooses instead to refute my position largely by recapitulating wide-ranging arguments in support of the Justice Department’s current narrow interpretation of the Clauses.* My answer is that this amounts to conflating the question of what the law is with how the executive branch has traditionally interpreted the constitutional limitations on undue foreign and domestic influence. It is a conflation that is symptomatic of greater analytical confusion about the metrics for assessing presidential conduct.

To start, Grewal criticizes my decision invoke the practical “spirit” of the Foreign Emoluments Clause. But this is not my invocation—it is the invocation repeatedly made by the OLC and the Comptroller. See, e.g., 34 Comp. Gen. 331 (1955) (“As a final point, I deem it appropriate to consider here whether acceptance of such payments would contravene the spirit of the constitutional provision involved.”); 1981 OLC Memorandum re: President Reagan’s Ability to Receive Retirement Benefits from the State of California (“Similarly such receipt does not violate the spirit of the Constitution because they do not subject the President to any improper influence.”). And that invocation is worth emphasizing, I argue, because it is a significant and telling indication that, historically, both offices have been less interested in highly technical, up-to-the-line interpretations of what profits officers may collect and far more interested in ensuring that officers in positions of public trust be precluded from accepting any payments not in accord with the overarching purpose of the Foreign and Domestic Emoluments Clauses. By extension, it is interesting and significant that Trump has chosen to pursue a different, far narrower interpretation—one that favors himself.

In general, Grewal mixes up arguments about what the law is with arguments about how the OLC and Comptroller General have interpreted what the law is, on the assumption that these are necessarily the same. They are not. One can accept—as Grewal insists we must—that George Washington was given a lot of leeway when it came to his private business enterprises, and also accept that the OLC and Comptroller have made no indication that they care.

Grewal’s central argument is that “when the Foreign Emoluments Clause speaks of prohibited emoluments, it is referring to a the compensation a U.S. Officer would receive through holding an office or employment position with a foreign government.” This is also the key argument made by the Justice Department in its brief defending Trump’s right to profit from his vast business interests as long as the transactions are “fair-market-value.” My own modest rejoinder is that nothing in the OLC or Comptroller opinions squarely supports the Justice Department’s insistence that this is the only possible reading of “emoluments”—and that in many respects the opinions cut against it.

This is perhaps best demonstrated by analyzing those memoranda that Grewal cites—and misinterprets.

Take then-Deputy Assistant Attorney General Samuel Alito’s 1986 OLC opinion, in which Alito concludes that a NASA scientist may accept a fee from an Australian university for reviewing a candidate’s PhD thesis. Grewal argues that I “misread[] this opinion” when I suggest it evidences that whether a U.S. officer is acting in an employment capacity is not necessarily dispositive for determining whether the payment is an emolument. Grewal argues instead that Alito concluded “that the payment could be accepted because it did not come from a foreign government.”

This is correct—if you read only the first half of the opinion. (“The question in this case, however, is whether the consulting fee from the University of New South Wales can be said to be from a ‘foreign state.’”). In the second half of the opinion, Alito decides he does not have enough to make a determination either way. “In the absence of any authoritative guidance” on that question, “but with the underlying purpose of the constitutional prohibition in mind,” Alito turns his attention to “the factual circumstances of the proposed consultancy.”

This is an inquiry Alito initially confines to the nature of the university and its relationship to the Australian government, but within a page he determines that notwithstanding these facts, “it is not so clear” whether this “clearly . . . public institution” should be regarded as a foreign state under the Emoluments Clause. Thus, Alito turns to the even broader factual “circumstances of the proposed consultancy, to determine whether the consultancy would raise the kind of concern . . . that motivated the Framers in enacting the constitutional prohibition.”

Those circumstances were patently not confined to whether the university could ultimately be deemed a foreign state. They were instead as follows: The NASA scientist was not invited to review the thesis “because of his position with the U.S. government”; the consulting fee was of “an amount ordinarily paid by departments to outside experts for services of this kind”; there was no reason for the scientist “to have any direct contact with officials of the University”; and the consultancy was “by its terms limited both in time and in substantive scope,” such that no “continuing relationship between the University and the NASA employee” was anticipated. After considering these facts “in light of the Framers’ concerns expressed in the Emoluments Clause, Alito concludes that the fee does not “present the opportunity for ‘corruption and foreign influence’ that concerned the Framers and that we must presume exists whenever a gift or emolument comes directly from a foreign government or one of its instrumentalities.”

This opinion reveals at least three things. First, Grewal is simply incorrect to argue that this opinion hinged on whether the Australian university constituted a foreign state. This was a subject of great interest to Alito, but one that ultimately proved indeterminate, such that he was forced to turn to a far broader, functional inquiry into the purpose of the Foreign Emoluments Clause.

Second, the fact that Alito made such a turn is itself significant. The move is analytically incoherent if indeed the only thing that matters for purposes of assessing the constitutionality of a payment is whether it is rendered by a foreign government for personal services or employment. On the other hand, it is an entirely reasonable move if the OLC’s guiding principle is to protect the United States against undue foreign influence, broadly conceived.

Third, Grewal’s argument that Alito cared not at all about the prestige or influence conferred by the NASA scientist’s U.S. office doesn’t hold up. If this is true beyond question, then why did Alito take care to begin his recitation of what he identified as the relevant facts with the observation that the scientist was not invited to review the thesis “because of his position with the U.S. government”?

Grewal’s interpretation of the Alito opinion makes little sense as a technical matter, but far more significant for purposes of the lawsuits Trump now faces is Grewal’s more sweeping assertion that “every single time a government official has been asked to interpret the meaning of ‘emolument,’ that official has concluded that the term refers to the compensation associated with an official or employment relationship with a foreign government, to the exclusion of other payments.” To support this argument, Grewal cites a 1954 opinion in which the OLC concluded that a former German judge may accept damages that he was awarded from the German government prior to his taking U.S. office. Without elaboration, Grewal argues that this opinion “reject[s] the extension of the Foreign Emoluments Clause to payments not arising out of an employment relationship.”

I agree this is one way to interpret that opinion. But certainly it is not what the opinion actually says, nor do I think it is the best reading. Riffing off the Supreme Court’s construction of “emolument” as it appears in a federal statute dealing strictly with employment-related payments, the 1954 opinion makes clear that the term extends to “compensation of any sort arising out of an employment relationship with a foreign state.” However, this definition is not clearly articulated as a limitation on emoluments; rather, it seems to be offered as a baseline—that is, in light of the fact that “the purpose of the clause was the prevent undue influence.” The opinion then goes on to state that the Foreign Emoluments Clause “would not prevent an officer of the United States from receiving damages arising from some wrongful act of a foreign state.” Contrary to Grewal’s suggestion, the opinion never reasons that this is because such damages do not arise out of an employment relationship; given the opinion’s explicit reference to the general purpose of the clause, it seems more likely that such an award of damages was deemed to pose no threat of “undue influence.”

Even if you disagree with my interpretation, the fact that the opinion is not entirely clear on the point is itself significant. This opinion, like all of the OLC and Comptroller General’s (public) opinions on emoluments, is relatively brief. Among other things, these opinions do not wrestle with the historical definition of “emoluments” at exhaustive length. And all of them ultimately cut to the chase with a highly pragmatic—and I think expansive—approach to the question of what kind of payments require congressional consent. In short, they err on the side of protecting the United States against undue influence of various kinds, foreign and domestic, rather than engaging in the kind of bottomless rooting-around that the plaintiffs, and now the Justice Department, have been forced to conduct in an attempt to get at what the Emoluments Clauses really, truly mean. That choice reflects a principle: when in doubt, or when short on time, public interest first.

On a last note, Grewal alleges that the only reason we have no opinions “expressly bless[ing] a U.S. Officer’s acceptance of benefits derived from transactions with foreign governments through a business he owns” is that until now, “no one ever dreamt that such transactions came within the Foreign Emoluments Clause.” This is one way to interpret the gap in the literature—but notice Grewal must resort to a reference to Washington to get there. The other way to understand the gap, of course, is to note that no modern president appears to have attempted anything approaching Trump’s conduct (the Comptroller General has only been around since 1921; the OLC was established in 1934). For example, so far as we know, Jimmy Carter did not demand an OLC opinion on whether he could keep his peanut farm; certainly he did not deploy the Justice Department to fight in court for it. Recognizing that maintaining the public trust turns not on a stingy conception of legality but rather requires generous embrace of even the appearance of propriety, he gave the farm up, apparently without serious protest.

Presently the American public is engaged in a vociferous debate over what it means to be “presidential”—but this conversation has so far been largely confined to assessing the appropriateness of the President’s startling tweets. I suggest that the public would be well served by a more wide-ranging discussion of what it really means to uphold the dignity of the country’s most powerful office. The president’s insistence on protecting his own personal financial interests using a highly exacting conception of constitutional provisions designed to protect the country may well serve as an example of “unpresidential” behavior of the highest import. What we are witnessing is legal reasoning befitting an ordinary private litigant, whose chief interest is protecting himself and his wealth, not conduct and a litigation strategy befitting the President of the United States.

And my view is that the OLC and Comptroller opinions on the subject support that assessment.

*Some of the other arguments Grewal makes are neither here nor there on the question of the OLC and Comptroller’s historic views, and moreover cut against his narrow interpretation of “emolument.” For example, he cites an 1810 constitutional amendment that Congress failed to ratify which would have expanded the Foreign Emoluments Clause. That proposed amendment, by Grewal’s own account, “would have prohibited all U.S. citizens from accepting an ’emolument of any kind whatever’ from a foreign government.” Grewal reasons that this language proves that “the exploitation of one’s official positions with the U.S. government” was not a driving concern behind the emoluments prohibition, since ordinary citizens have no such position. But there are at least two problems with this line of argument. First, it is a strawman: I did not argue, and none of the plaintiffs argue, that exploitation of a U.S. position is the only kind of harm that the Foreign Emoluments Clause is designed to protect against. We merely argue it is one example encompassed by an expansive definition of “emolument.” (For the same reason, the Comptroller and OLC opinions that Grewal cites to support his assertion that emoluments may be forbidden even where unrelated to the individual’s official position with the U.S. government in no way undercut my reading.) Second, Grewal’s argument seems to concede that “emolument” should be understood in expansive terms and is not limited to U.S. officers or even people in a position to exert influence whatsoever on the U.S. government. This is a choice that does not really serve his bottom line—that “emolument” should be narrowly construed.

Jane Chong is Deputy Managing Editor of Lawfare and National Security and Law Associate at the Hoover Institution. She served as a law clerk on the U.S. Court of Appeals for the Third Circuit and is a graduate of Yale Law School and Duke University.

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