How Donald Trump’s Business Ties Are Already Jeopardizing U.S. Interests
In The Philippines
By Kurt Eichenwald On 12/13/16 at 6:50 AM
Donald Trump hasn’t been sworn in yet, but he is already making decisions and issuing statements to world leaders that radically depart from American foreign policy, all to the benefit of his family’s corporate empire. Because of this, the next president of the United States is already vulnerable to undue influence by other nations, including through bribery and even blackmail.
Given the vast scope of the clashes between the Trumps’ extensive business dealings and the interests of America, the president-elect vowed during the campaign to eliminate potential conflicts by severing ties to his company–yet, with only weeks to go until he takes the oath of office, he hasn’t laid out a credible plan. Trump’s sole suggestion to date–a “blind trust” run by his children—would not eliminate the conflicts, given that the money generated would still go to his family. Moreover, such a trust would be anything but blind: If Trump Tower Moscow goes under construction, Trump will see it while in Russia and know that his kids are making millions of dollars from it. That is why foreign leaders hoping to curry favor will do everything they can to help Trump’s family erect more buildings, sell more jewelry and make money through any means possible. Even if the family steps away from its company while Trump is president, every nation on Earth will know that doing business with the Trump Organization will one day benefit the family. The only way to eliminate the conflicts—sell the company, divvy up the proceeds—has been rejected by Trump, whose transition team refused to respond to any questions from Newsweek for this article.
Foreign governments and lobbyists have rushed to book rooms at the new Trump International Hotel in D.C., expecting to curry favor with the president-elect. (see: Is It Starting Already? Kuwait cancels major event at Four Seasons, switches to Trump’s D.C. hotel)
Some of the most egregious conflicts that have emerged involve countries in Asia and its subregions, particularly the Philippines. Global policy on the Philippines has been fraught with tension since the election in May of Rodrigo Duterte as the country’s president. Duterte, who boasted to voters during the campaign that he had shot a fellow law school student for teasing him, has championed the killing of suspected criminals and street children by vigilante death squads. In 2015, he said that if he became president, up to 100,000 people suspected of links to illegal drugs could be killed. Just months after his election, Duterte said he was eager to lead a genocide of up to 3 million drug addicts. “I’d be happy to slaughter them,” he said. “At least if Germany had Hitler, the Philippines would have [me].” And in September, an admitted hit man testified to a Senate committee in the Philippines that Duterte presided over a killing campaign when he was mayor of Davao City.
As president, Duterte rapidly showed he was little concerned with the legal protections afforded to Filipinos suspected of crimes. During his first three months in office, 850 Filipinos were killed by death squads, apparently on little more than the suspicion that they were drug users and dealers. Since then, the estimated death toll has climbed to 4,500. The carnage has been condemned throughout the Western world; the Parliament of the European Union and two United Nations human rights experts have urged Duterte to end the massacre. One of the experts even appeared to suggest that Duterte and his government could be held legally accountable for committing mass murder in violation of international law. “Claims to fight illicit drug trade do not absolve the government from its international legal obligations and do not shield state actors or others from responsibility for illegal killings,” said Agnes Callamard, the U.N. special rapporteur on summary executions. In response to the denunciations, Duterte lashed out at the United States, threatening to align his country more with China.
Despite universal condemnation of the ongoing slaughter of Filipinos, Trump signaled his approval of Duterte’s policies during a phone call on December 2. According to Duterte—an account that has gone uncontested by Trump—the president-elect endorsed his tactics as “the right way.” Duterte added: “[Trump] was wishing me success in my campaign against the drug problem.” (He also said Trump invited him to the White House, a courtesy not yet extended to Theresa May, the prime minister of Britain, America’s most important strategic ally.)
The Trump transition team did not respond to Newsweek when asked if the president-elect had intended to signal his approval of the carnage in the Philippines; did not believe the conclusions of the U.N. and Western nations that Duterte ordered the killings; or simply did not understand the magnitude of his comments. One thing, however, is clear: The Trump family has an enormous financial interest in keeping Duterte happy. Trump Tower at Century City in Makati, Philippines, is on the verge of completion, with potential buyers having placed deposits on at least 94 percent of the condominiums, according to Century Properties, the Trump Organization’s business partner there. During the U.S. presidential campaign, Trump’s sons Donald Jr. and Eric traveled to Makati to shovel some dirt in a ceremony to celebrate the structural completion of the building; a photograph of the two men shoveling alongside top Century Properties executives was posted on the building’s website. (On that same website, a line of jewelry by Trump’s daughter Ivanka is offered for sale, and it is expected to be available for purchase at the $150 million property.) As with almost every property with Trump’s name on it built over the past decade, his company is not the developer; it merely sold its name to Century Properties to use on the building. Although details of the transaction are not public, contracts for other Trump branding deals reviewed by Newsweek show that they require a multimillion-dollar up-front payment as well as up to 25 percent of the developer’s revenue, year after year. So, under the deal, Trump’s children will be paid millions of dollars throughout their father’s presidency by Jose E.B. Antonio, the head of Century Properties.
Duterte recently named Antonio the special government envoy to the United States. The conflicts here could not be more troubling or more blatant: President Trump will be discussing U.S. policy in Southeast Asia with one of his (or his children’s) business partners, a man who is the official representative of a foreign leader who likens himself to Hitler. Also note that the Trump family has an enormous financial interest in Duterte’s deadly campaign: Rooting out crime in the Philippines is good for the real estate values.
The Trump family’s dealings in the Philippines will set off a constitutional crisis on the first day of Trump’s presidency, if anyone in the federal government decides to abide by the law. There is serious debate as to whether Trump will be violating the Constitution’s Emoluments Clause—which prohibits office holders from accepting gifts from foreign states—since the majority of his company’s business is with other corporations and developers. That is not the case in the Philippines. The man writing millions of dollars’ worth of checks to the Trump family is the Duterte government’s special representative to the United States. To argue that these payments will be constitutional if they are paid to the Trump children, and not to Trump personally, is absurd. This conflict demands congressional hearings, and could be an impeachable offense.
This unyielding principle that foreign powers cannot be allowed to hold sway over a president dates back to the Founding Fathers. In Federalist 68, Alexander Hamilton wrote of the dangers of such a scenario. “Nothing was more to be desired than that every practicable obstacle should be opposed to cabal, intrigue, and corruption,” he wrote in reference to the powers bestowed in the Constitution. “These most deadly adversaries of republican government might naturally have been expected to make their approaches from more than one quarter, but chiefly from the desire in foreign powers to gain an improper ascendant in our councils.”
Trump’s conflicts of interest in the Philippines cannot be resolved so long as anyone in his family has an interest in the building there. Even if his business partner, Antonio, is removed as Duterte’s special envoy, Trump won’t simply forget that the Makati building exists, that the authoritarian Philippine president has the power to damage the Trump family’s financial interests there and that the protection of what is now a high-profile target for attacks is in Duterte’s hands. (In the past three years, there have been nine strikes in the Philippines. The most recent, in September, was a bombing that killed 15 people and injured 70; in response, Duterte declared that the country was in a “state of lawlessness” and ordered police and the military to search all cars and citizens at checkpoints.)
The result of all this is that Duterte has extraordinary leverage against Trump, and no one will know what impact that might have on the future president’s decision-making. For example, will Trump ignore the promises he made during the campaign on immigration when it comes to the Philippines, given the devastating impact it could have on the economy there?
A report by the research division of Nomura Securities concluded that, under Trump’s declared policies, “the Philippines’ economy stands to lose the most” of all countries in Southeast Asia. And because many Filipino guest laborers in the United States are undocumented, the report said that a tightening of immigration policies could lead to fewer migrant workers from that country. “This could impact remittances inflows back to the Philippines,” the report says. “The U.S. is host to 34.5 percent of the total overseas Filipino population, and we estimate accounts for about 31 percent of total worker remittances.” According to the Philippine Statistics Authority, remittances from the United States totaled almost $6 billion in the first seven months of 2016. Translation: Under Trump’s immigration policies, huge supports for the Filipino economy could collapse. On November 15, Moody’s announced that Trump’s policies would negatively affect the Philippines’s credit rating, which could thwart Duterte from keeping his campaign promises of tax cuts and greater spending on infrastructure. Duterte could easily punish Trump for undermining his domestic agenda in the Philippines by taking actions against the family’s business interests. And Trump knows that anything he does to alienate Duterte or harm the Philippine economy could threaten his family’s wealth.