Under the Foreign Emoluments Clause, a person holding an office of profit or trust under the United States (a U.S. Officer) cannot, without Congressional consent, accept an “emolument . . . of any kind whatever” from a foreign government. The clause has received many legislative and executive interpretations over the years, but it has only recently drawn wide public attention, principally in connection with concerns over President Trump’s business holdings. Though I have extensively analyzed the issues here, I will repeat some of my analysis to clear up some continued confusion over the clause.

Regarding the continued confusion: Some commentators believe that the prohibition on emoluments prevents a U.S. Officer from exploiting the prestige of his or her office to extract benefits from a foreign government. The most thoughtful exposition of that view comes from Jane Chong, in a post on Lawfare. She argues that the constitutional prohibition regarding emoluments applies to benefits “attributed to the prestige or influence conferred by” the U.S. Officer’s position under U.S. law. She also argues that foreign government benefits can be accepted by a U.S. Officer when “they have nothing to do with and cannot possibly have been affected by his U.S. office.” However, Chong’s approach reflects a misunderstanding of the Foreign Emoluments Clause.

To understand the analytical error, one should first recognize that the reference to U.S. Officers in the Foreign Emoluments Clause simply defines the scope of persons subject to its prohibition.* No language in the clause broadly prohibits a U.S. Officer from exploiting his office for personal gain (though other provisions of law may do so). Chong concludes otherwise, largely by invoking the “practical ‘spirit’” of the Foreign Emoluments Clause, though she also makes a textual argument regarding the definition of “emolument.”**

However, when the Foreign Emoluments Clause speaks of prohibited emoluments, it is referring to the compensation a U.S. Officer would receive through holding an office or employment position with a foreign government. It does not refer to benefits received through the exploitation of his U.S. position. For example, the Foreign Emoluments Clause would prohibit the U.S. Secretary of State from acting as the Minister of Finance for Canada and accepting the compensation associated with that office. The Foreign Emoluments Clause would not, by contrast, categorically prohibit the Secretary from selling flowers to the Canadian Embassy via his family-owned flower shop, even if he (contrary to ethical restrictions) touted his U.S. government position in the flower shop’s advertisements.

Virtually every available authority confirms this understanding. Consider, for example a Constitutional amendment passed by Congress in 1810 and nearly ratified, which would have expanded the Foreign Emoluments Clause:

If any citizen of the United States shall . . .accept and retain any present, pension, office or emolument of any kind whatever, from any emperor, king, prince or foreign power, such person shall cease to be a citizen of the United States, and shall be incapable of holding any office of trust or profit under them, or either of them.

This proposed amendment would have prohibited all U.S. citizens from accepting an “emolument of any kind whatever” from a foreign government. Yet if the quoted language referred to the exploitation of one’s official position with the U.S. government, the proposed amendment would make little sense. The vast majority of persons covered by the clause (all U.S. citizens) had no official U.S. government positions to exploit. Consequently, the prohibition against the acceptance of an “emolument of any kind whatever” must have referred to something else — namely, the compensation associated with a citizen accepting a position with a foreign government. (For similar reasons, the separate prohibition against the acceptance of a “pension” is naturally understood as reaching pensions associated with employment positions under a foreign government, not pensions created by foreign governments for all U.S. citizens (?!).)

Every single legislative and executive branch interpretation of the Foreign Emoluments Clause follows this view, and not the one advocated by Chong. Thus, for example, the Comptroller General concluded that the Foreign Emoluments Clause applied to a U.S. federal court crier’s receipt of a pension from the British government for services he previously provided as part of the British Army. See 37 Comp. Gen. 138, 140 (1957). And this compensation obviously had nothing to do with the recipient’s U.S. position. The British paid the pension on account of the recipient’s service during the war, not to offer him additional benefits for being a U.S. federal court crier. See also, e.g., Ward v. United States, 1 Cl. Ct. 46 (1982) (advisory opinion issued in connection with congressional reference procedures, 28 U.S.C. §§ 1492, 2509, involving a former Chief Petty Officer of the Coast Guard who, more than a decade after his retirement, was subjected to the Foreign Emoluments Clause on account of a teaching position taken with a foreign public school). Chong’s view, that a U.S. Officer can accept foreign government benefits when those benefits “have nothing to do with and cannot possibly have been affected by his U.S. office,” cannot be reconciled with a longstanding, consistent line of authorities. 

Every single time the Foreign Emoluments Clause has been applied to a U.S. Officer, it has been in the context of that officer providing services, directly or indirectly, to a foreign government, whether or not those services related to his or her official position with the U.S. government. And 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. See, e.g., Memorandum for S.A. Andretta, Administrative Assistant Attorney General, from J. Lee Rankin, Assistant Attorney General, Office of Legal Counsel, Re: Payment of Compensation to Individual in Receipt of Compensation from a Foreign Government at 8 (Oct. 4, 1954) (concluding that “the term ‘emolument’ . . . particularly since it is modified by the phrase ‘of any kind whatever,’ was intended to cover compensation of any sort arising out of an employment relationship with a foreign state” and rejecting the extension of the Foreign Emoluments Clause to payments not arising out of an employment relationship); Department of Defense General Counsel, Standards of Conduct Office, Application of the Emoluments Clause to DoD Civilian Employees and Military Personnel (a U.S. Officer “may not accept a compensated position (an ’emolument’) from a foreign state unless Congressional consent is obtained”).*** For many other citations to similar effect, please see the beginning footnotes to my full-length article.

Some commentators point out that, even if prior authorities address only circumstances where a U.S. Officer performs services for a foreign government, no Comptroller General Opinion or Office of Legal Counsel Opinion expressly blesses a U.S. Officer’s acceptance of benefits derived from transactions with foreign governments through a business he owns. But that is because, until November 9, 2016, no one ever dreamt that such transactions came within the Foreign Emoluments Clause, even though many U.S. Officers, beginning with George Washington, openly maintained expansive business enterprises during their times of public service. We have, in fact, had many, many U.S. Officers with expansive business interests during our nation’s history. See, e.g., Justin Fox, “George Washington Had Business Interests, Too”, Bloomberg View (Nov. 22, 2016) (The Framers “didn’t make any rules constricting officials’ investments and business interests. If they had, much of the nation’s nascent commercial activity might have ground to a halt. The U.S. was short on both potential government officials and potential investors, so combining the two activities was common.”) (summarizing historical works); Janet Novak, “Obama Nominates Forbes 400 Member Penny Pritzker As Commerce Secretary”, Forbes, (May 2, 2013).

Even recent Presidents apparently defied the Constitution, if Chong’s exploitation-of-office definition of “emolument” is to be believed. During his time in the Senate and White House, for example, Barack Obama secured or monetized copyright protections from the U.S. and 20+ foreign countries, profiting greatly from these government-conferred benefits. See, e.g., Forbes, How Barack Obama Has Made $20 Million Since Arriving In Washington (Jan. 20, 2017) (“The former president didn’t waste much time capitalizing on his story once he got to the nation’s capital.”). It is hard to believe that Barack Obama would have made these many millions “but for” the prestige associated with his positions in the Senate or White House, and under Chong’s definition, the income Obama derived from U.S. and foreign government purchases of his books would be unconstitutional. See USA Today, State Dept. buys $70K of Obama books (Oct. 26, 2011). And under the theory of a pending lawsuit, Obama’s acceptance or enjoyment of intellectual property rights from various governments would also be unconstitutional. See NPR, China OKs 38 Trump Trademarks; Critics Say It Violates Emoluments Clause, (Mar. 8, 2017). Of course, the income that Obama derived from benefits conferred by U.S. and foreign governments could raise fair ethical and conflict-of-interests questions. But no Office of Legal Counsel opinion or Comptroller General opinion would have supported Obama’s impeachment, even though some government purchases of Obama’s books were surely motivated by his Presidency. See Should Congress Impeach Obama for His Emoluments Clause Violations?, Yale. Reg. Notice & Comment (Dec. 16, 2016). 

Chong’s and other commentators’ incorrect interpretation may stem, in part, from an improper conflation of the Foreign Emoluments Clause with the Domestic Emoluments Clause. Under the Domestic Emoluments Clause, the President must “receive for his services, a [fixed] compensation” from the federal government and no “other emolument from the United States, or any of them.” When applying this clause, determining whether any payments relate to the recipient’s position under under U.S. law (i.e., the Presidency) is exceptionally important. The Clause expressly prohibits additional emoluments related to the President’s “services.” Thus, when the President receives a benefit from a state or from the federal government, the factual relationship between the payment and services provided in his official position must be examined. If the requisite factual relationship exists, the President has received an emolument prohibited by the Domestic Emoluments Clause. See Letter of Milton J. Socolar for Comptroller General of the United States to Senator George Mitchell, 1983 WL 27823 (Jan. 18, 1983) (explaining that Domestic Emoluments Clause did not apply to state government payments from California to President Reagan when those payments had “no connection, either direct or indirect, with the Presidency”).

If a court reaches the merits in any of the pending lawsuits against President Trump, it should recognize the distinction between the two emoluments clauses. The Foreign Emoluments Clause applies broadly to all compensation for services provided by a U.S. Officer to a foreign government, whether or not the services relate to his position with the U.S. government. Any focus on allegations regarding “profiting off of the Presidency” will lead to a cramped and incorrect analysis. However, for the Domestic Emoluments Clause, the court should scrutinize whether any state or federal government payment reflects compensation for the services Trump provides as President.

Of course, a court will adopt this framework only if a party or amicus presents it. Unfortunately, the DOJ, in its opening brief in CREW v. Trump, sometimes muddles its analysis and does not explicitly recognize the distinction between the Foreign Emoluments Clause and the Domestic Emoluments Clause. See my prior post. If the DOJ does not clarify its position then, as Professor Marty Lederman explains elsewhere, a loss on the merits is a distinct possibility.

For complete analysis, please see my full-length article, The Foreign Emoluments Clause and the Chief Executive, 102 Minn. L. Rev. 639 (Dec. 2017)

Follow me on Twitter:  @AndyGrewal

(This post was updated on August 16, 2017).

FOOTNOTES:

* This point may be more easily understood through a simple example. Suppose that the Constitution stated that “No U.S. Officers may play on a foreign country’s Olympics team.” In these circumstances, the prohibition would apply to all U.S. Officers, regardless of whether their U.S. government duties had anything to do with athletics. And the same approach applies to the Foreign Emoluments Clause — U.S. Officers simply cannot, without Congressional consent, accept compensation for services performed for a foreign government, regardless of whether the services performed have anything to do with their U.S. government duties.

** See Jane Chong, LawFare (July 1, 2017) (“[E]ven accepting the Justice Department’s insistence that ‘emolument’ is best read to mean ‘profit arising from an office or employ’ (Barclay’s A Complete and Universal English Dictionary on a New Plan (1774)), it doesn’t follow that all ordinary business transactions are okay: What if those transactions are, in number or value, enhanced by the prestige of the president’s office? Couldn’t the profit thereby derived then constitute ‘profit arising from an office or employ’?”).

***In her Lawfare post, Chong argues that a 1986 OLC opinion authored by now-Justice Samuel Alito shows that the fact that a U.S. Officer “would be acting in an employment or personal services capacity [does not] automatically render the payment an emolument.” However, Chong misreads the opinion. The opinion quite plainly states that compensation for the performance of services constitutes an emolument. The opinion ultimately concludes that the U.S. Officer in question could accept the compensation at issue, but not for the absence of an “emolument.” Rather, the OLC concluded that the payment could be accepted because it did not come from a foreign government. See OLC Opinion, 1986 WL 1239553, *1 (May 23, 1986) (“[A] stipend or consulting fee from a foreign government would ordinarily be considered an ‘emolument’ within the meaning of the constitutional prohibition. 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.’”). The OLC Opinion, in fact, states that the government “must” presume that the potential for improper influence “exists whenever a gift or emolument comes directly from a foreign government or one of its instrumentalities.” See id (emphasis supplied). Absolutely nothing in the OLC Opinion inoculates compensation for services rendered directly to a foreign government from the Foreign Emoluments Clause.

Chong correctly argues that various OLC opinions, including the 1986 one, consider the purpose or spirit of the Foreign Emoluments Clause in justifying their conclusions. However, treating such extra-textual considerations as dispositive would overstate the OLC’s reliance on them. See, e.g., Office of Legal Counsel, Memorandum for James H. Thessin, Assistant Legal Adviser for Management, United States Department of State at n.2 (Aug. 29, 1988) (“[T]he application of the Clause . . . does not turn upon the existence of any actual conflict of interest.”); 11 U.S. Op. Off. Legal Counsel 89 (Jul. 30, 1987) (finding that Foreign Emoluments Clause restricted a government employee, but disclaiming any suggestion that he would be subject to improper foreign influence).