Tuesday, 14 February 2017

Draining the Swamp

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Will Hutton has some great turns of phrase in this piece from The Observer in which he pours scorn on Donald Trump's promise to drain the Washington 'swamp' of its vested, all-powerful business interests.

In fact the new President has nominated a cabinet of American millionaires and billionaires, the wealthiest in his country's history, as Hutton says the opposite of what Trump promised as during the election campaign:

"Far from draining the swamp, he is opening the sluicegates; the money men are not so much being hurled out as in full occupation of the economic citadel." 

A timely piece and powerfully argued piece, if you ask me.

  


https://www.theguardian.com/commentisfree/2017/feb/12/not-draining-swamp-trump-money-mens-best-friend

Instead of draining the swamp, Trump has become Wall Street’s best buddy

By Will Hutton - The Observer

The president promised a radical overhaul of banking, but is encouraging the money men’s worst excesses
 

‘In office, Trump has proved to be a great deal friendlier to the titans of Wall Street and their interests than he suggested he would be as a candidate.’ Photograph: Evan Vucci/AP

President Trump was an accident waiting to happen. The US had entered a zone of fragility: there were too many inequalities, grievances and accompanying disillusion in a system felt not to work .

A chief reason for that economic and social fragility was the behaviour of the American financial system. It is still astounding how close to disaster high finance brought the US and global economy in 2008. It provoked a vast bailout, and the recovery that followed has been one of the most anaemic sort, during which the wages of average Americans have scarcely grown.

The hangover of debt and legacy of banks trying to rebuild their shattered balance sheets has held the economy back. Meanwhile, some of the weak links in the system, like the sheer scale and opacity of the derivative markets, plus business models riddled with conflicts of interest, have remained unaddressed. Fortunes are still being made and very few have paid the price for cataclysmic mistakes.

On the campaign trail, Trump unfailingly tarred Clinton as compromised by, and enmeshed with, Wall Street and its mega banks. Goldman Sachs had “total control” of her; she was in thrall to a “global power structure that is responsible for the economic decisions that have robbed our working class, stripped our country of its wealth and put that money into the pockets of a handful of large corporations and political entities”.

Trump would drain the swamp, he claimed, and reinstate a “21st-century” version of the law separating main street banking from Wall Street – Roosevelt’s Glass-Steagall Act – which was scrapped by President Bill Clinton, in one of his worst decisions. Trump would throw the money men out of the temple, he said. He would reshape finance for the “little guy”. His audiences roared him on.



Draining the Swamp (20/01/17)

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Donald Trump's pick for the office of Treasury secretary, Steven T. Mnuchin, is a very wealthy man, so much so that he 'forgot' to declare $100 million of his assets ahead of a confirmatory hearing with the American Senate's Finance Committee.

Mr Mnuchin who is a former partner of Goldman Sachs bank and hedge fund manager also 'forgot' to mention his role as a director of an investment fund in a tax haven located in the Cayman Islands.

Mr Mnuchin came under pressure from Senators to investigate and report back on the extent to which the debts of Donald Trump's various business enterprises is held by foreign countries, given the potential for a conflict of interest going forward.

Meanwhile Donald Trump claims to be continuing his efforts to rid Washington of its political elite and the vested interests which have dominated the American government for years - often referred to by the incoming President as 'draining the swamp'.  

  

Trump's Achilles Heel (19/01/17)



I said in a recent Twitter post that Donald Trump's business interests could prove to be his Achilles heel because the President-elect seems unwilling to divest himself of his many business interests around the world.

Handing things over to his sons or other family members is a bit of a joke if you ask me, since who would believe that Daddy Trump is really capable of keeping his hands off the tiller, so to speak.

Everyone knows Trump can't keep his paws off Twitter for more than 10 minutes, so this may all end in tears.

The BBC has come up with a list of the potential conflicts that Donald Trump will face as he assumes the office of President on Friday, and there is still time for him to wise up and the right thing.

  

http://www.bbc.com/news/world-us-canada-38069298

Donald Trump: A list of potential conflicts of interest

BBC US & Canada

Image copyright - REUTERS

Donald Trump's extensive, international business holdings mean he will have to make decisions as leader of the US that also affect his businesses. Here's a look at some of his potential conflicts of interest.

The Trump Organization is an umbrella company for Donald Trump's hundreds of investments in real estate, brands and other businesses.

As head of the executive branch and a business owner, he would have the ability to influence both US policy and government agencies to benefit his bottom line.

Presidents are not subject to the same conflict of interest rules as other government employees, and previous commanders-in-chief have placed their investments into a blind trust to prevent any question of corruption.

Mr Trump has said his adult sons will run the Trump Organization during his presidency, but they are also members of his transition team and have sat in on meetings with foreign leaders.

The president-elect has also said he will "be leaving my great business in total," but has not specified what this means in practice nor announced any major changes.

Ethics experts have urged Trump to liquidate his business holdings so that he can avoid any appearance of a conflict.
Read more here about how the Trump Organization's business works and what it means for the presidency.

Below is a list of known conflicts of interest for Mr Trump, both foreign and domestic. Because his business is private, the full extent of his holdings - and the potential for conflicts - is not known.

Many of these conflicts were reported before Mr Trump won the election, but have become more pressing as his transition team begins to make decisions about his presidency.

American conflicts of interest

40 Wall Street

Image copyright - GETTY IMAGES

The Trump Organization owns the right to lease the space in this office building in Manhattan - and makes money from the rent paid to the building.

According to Bloomberg News, there are five ongoing federal investigations into current or former tenants of 40 Wall Street, mostly for securities fraud.

Those investigations are headed up by the Securities and Exchange Commission (SEC), and Mr Trump will appoint a new SEC chair once he takes office.

Dakota Access Pipeline
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Sioux tribes and allies have been protesting for months to prevent the Dakota Access pipeline from being built under water supplies near the Standing Rock reservation.

Trump had a partial investment - somewhere between $500,000 and $1m - in the parent company of the firm building Dakota Access pipeline, Energy Transfers Partners.

Trump spokeswoman Hope Hicks says Mr Trump has sold his stock in Energy Transfer Partners. But another one of Trump's stock holdings, Phillips 66, owns a 25% share in the project.

It's unclear if the president-elect has also sold his stock in Phillips 66, as his last financial disclosure was in May.

The US Army Corps of Engineers and the interior department have delayed a decision on the future of the pipeline until they can consult further with other local communities.

Mr Trump's political appointee to head the interior department could ultimately be responsible for the decision.

Deutsche Bank

One of Trump's major lenders on his real estate projects is Deutsche Bank.

The bank is currently in negotiations with the US justice department to settle a case involving misleading buyers when it sold mortgage bonds backed by risky loans.

If Deutsche Bank does not settle by inauguration day, Mr Trump's administration would be in charge of the negotiations.

The FCC

The president-elect will have another job title beyond "commander-in-chief": executive producer. He will continue to have a "big stake" in The Celebrity Apprentice, which airs on NBC, linking Mr Trump's business interests with the network.

NBC and its parent company, Comcast, is regulated by the Federal Communications Commission (FCC). Mr Trump will need to appoint two commissioners to the agency.

General Service Administration
Image copyright - GETTY IMAGES - Image caption Donald Trump (C) and his family prepare to cut the ribbon at the new Trump International Hotel in October 2016

The Trump Organization leases the Old Post Office Building from US government's General Services Administration (GSA) for the Trump International Hotel in Washington, DC.Trump as president is both "landlord and tenant" of this building, says Steven Schooner, who along with Daniel Gordon, has called on Trump to end the lease.

The 60-year lease will likely involve renegotiations - and the person responsible for setting the rent prices would ultimately report to the head of the GSA, a Trump appointee.In addition, the lease bars any federal employee, including elected officials, from benefitting from contracts with the government.

Meanwhile. the hotel has already been pitched to foreign diplomatsas a place to stay while in Washington, raising concerns that foreign governments could see booking expensive rooms at the Trump International as a way to gain favour with the Trump administration.

National Labor Relations Board

On 3 November, the National Labor Relations Board (NLRB) ruled that Trump International Hotel Las Vegas - which Trump co-owns - broke the law by refusing to negotiate with a hotel workers' union.

The hotel appealed the case to a higher court. But eight other labour disputes involving the Las Vegas hotel are currently before the board.

Trump will appoint two empty seats on the five-person board after he becomes president, and the NLRB is facing an unprecedented situation on how to rule on disputes that will affect the president's business.

Secret Service
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During the campaign, Trump's airplane company, TAG Air, billed the Secret Service for flying on Trump's Boeing 757 while protecting the candidate. It is standard for Secret Service to pay their own way on private aircraft, and during the campaign, this was tracked by the Federal Election Commission through campaign finance reports.

While Mr Trump will fly on Air Force One and other US aircraft as president, if Trump or Pence family members are assigned protective detail and decide to fly on Trump planes, the Secret Service would need to reimburse TAG Air - and ultimately Mr Trump - for the flights.

In addition, Secret Service will reportedly pay the Trump Organization for the space they use in Trump Tower while protecting Melania and Barron Trump as they stay in New York for part of this year.

Such amounts are part of Secret Service's normal budget and are unlikely to be disclosed.

Stocks 

Jason Miller, the transition team's spokesman, has said the president-elect sold all his stocks in June, a month after the required financial disclosure, but the campaign has furnished no proof.

Since his election, Mr Trump has singled out specific companies for criticism on Twitter, causing price swings on the stock market. If Mr Trump still owns these stocks, he could make money off of selling and buying before and after such tweets.
Foreign holdings

According to Trump's financial disclosure, he has investments in or owns companies in at least 20 countries. Unlike his domestic business, Mr Trump could run afoul of a clause in the US constitution by continuing to profit from these deals.

The emoluments clause specifically prevents anyone who holds a US "office of trust or profit" from accepting gifts, payments or any benefit from a foreign nation.

Even routine business benefits like tax breaks would likely violate the emoluments clause once Mr Trump becomes president.

One former White House ethics lawyer has argued Mr Trump would be violation of the constitution "on day one", if he keeps his business.

In addition to emoluments, Mr Trump's foreign policy decisions could be called into question in any country in which the Trump Organization does business, especially when his policies would benefit the firm's holdings overseas.Here are some of Mr Trump's larger business deals that intersect with US foreign policy.

BBC Monitoring contributed to this report

Argentina

An Argentine broadcaster reported that Mr Trump allegedly asked President Mauricio Macri for his support to build an office tower in Buenos Aires while on call during Mr Trump's transition period.

Mr Macri's office and the Trump campaign have denied the report.

However, several days later, the Buenos Aires firm building the tower announced construction of the project was going ahead after years of delays.

Brazil
A waterfront property in Rio de Janeiro, branded with the Trump name through a licensing deal, is the subject of a federal inquiry after two small Brazilian pension funds invested heavily in the unfinished project, with allegations of bribery.

Update: The Trump Organization has reportedly cancelled their licensing deal with the developers in Rio. Trump lawyer Alan Garten told the AP in December this and a few other cancellations were "normal housekeeping" and not part of a strategy to reduce potential conflicts of interests.

Canada

The Trump Organization has licensing deals with two hotel towers in Canada - one in Toronto and one in Vancouver.

The Vancouver building will open in early January, but the Toronto tower is up for auction after the developer went bankrupt and was put into receivership by a Canadian judge in November.

China

The Bank of China is one of China's largest banks and also majority state-owned. It holds the title on a $950m loan for a New York Building in which Trump is a part owner. Mr Trump has previously labelled China a currency manipulator.

Another largely government-owned Chinese bank - the Industrial and Commercial Bank of China - has space in Trump Tower, paying rent to the Trump Organization.

The Trump Organization has also previously attempted to open a series of hotels in the country, and Trump Hotels chief executive Eric Danziger told a Hong Kong media outlet in October they wanted to open 20 to 30 hotels in the country in 2017.

Meanwhile, Trump's son-in-law and now senior adviser, Jared Kushner, is negotiating a deal with China's Anbang Insurance Group to redevelop 666 Fifth Avenue in New York City.

Mr Kushner has been given a senior role inside the White House, and his lawyer told the New York Times he "would recuse from particular matters that would have a direct and predictable effect on his remaining financial interests" without giving specifics.

India

Trump has a licensing deal for buildings in Mumbai and Pune.

One of his deals is with the Lodha Group, whose founder, Mangal Lodha, is also a vice-president in the ruling government party, BJP.


Shortly after Mr Trump won the presidency, some of his Indian business partners flew to the US to congratulate Mr Trump, who took time out of transition meetings to discuss "US-India relations".

Indonesia


Two building projects with Trump licensing and management deals have not begun construction in earnest but the Trump Organization continues to be part of the venture.

Mr Trump's partner on the resort projects is Hary Tanoesoedibjo, who ran for vice-president and is well-connected politically in Indonesia. Mr Hary is forming a political party in anticipation of the 2019 elections, the New York Times reports.

In addition, one of Trump's advisers, Carl Icahn, is a major shareholder of Freeport, which is looking to extend a mining contract with the Indonesia government.

Japan

Ivanka Trump sat in with a meeting with her father and Japanese Prime Minister Shinzo Abe. Ms Trump is currently finalising a licensing deal with Japanese clothing company Sanei International.

The firm's largest shareholder is the Japanese government through the Development Bank of Japan. Ms Trump's company says the deal has been in the works for a while, and the terms were agreed before the election.

Philippines
Philippines' newest trade envoy to the United States is the same man who is building Trump Tower Manila. Like many of Trump's branding projects, Mr Trump does not own the building himself, but licenses his name to the building in return for regular payments.

Trump family members have previously promoted the project, including a promotional video.

The trade envoy/business partner reportedly flew to US to hold a private meeting with Mr Trump after the election.

Saudi Arabia

During the course of the campaign, Trump created eight business ventures tied to a potential real estate deal in Saudi Arabia.

Mr Trump told Fox News earlier this year, he "would want to protect Saudi Arabia. But Saudi Arabia is going to have to help us economically".

Update: A Trump Organization lawyer has told the AP the eight firms have been dissolved or shut and that there is "no deal" in Saudi Arabia. However, the firm could easily re-establish business ties there.

Taiwan

In September, a woman claiming to be an envoy for the Trump Organization discussed potential real estate developments in Taiwan with the mayor of Taoyuan.

The Trump Organization has denied any plans for expansion there and said there were no "authorised visits" to discuss business in the country. The Taoyan mayor's office said the woman had "authorisation documents" but did not specify what kind, the New York Times reported.

A month after his election, Trump called the president of Taiwan directly, breaking decades of existing US foreign policy. It still unclear if the woman is connected with the Trump Organization

Turkey
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In 2008, Trump entered a licensing partnership with Turkish conglomerate Dogan Holdings, who were planning to build two residential and business towers in Istanbul's business district.

Relations between Dogan Holdings and Turkish Prime Minister Tayyip Erdogan have turned sour since the towers opened in 2012.

The Dogan family, also own a paper critical of Mr Erdogan.

An earlier story from Newsweek argues the poisoned relationship between Mr Erdogan and the Dogans means Mr Trump would have a direct conflict between his business interests and his relationship with a US ally.

Turkey's importance in the fight against IS and the Syrian civil war makes the stakes much higher.

UK golf courses
Image copyright - GETTY IMAGES - Image caption Trump visits the golf course he owns in Aberdeen, Scotland

Mr Trump owns two golf courses in Scotland and has recently asked Nigel Farage to oppose wind farms, not because he believed they were bad for the UK or contradicted US energy goals, but because a wind project would potentially lower the value of one of his golf courses.

"He did not say he hated wind farms as a concept; he just did not like them spoiling the views," Andy Wigmore, the Leave.EU communications director at the meeting told the New York Times and the Express.

The golf courses could also be affected as part of Brexit negotiations or a second Scottish independence referendum.