President Donald Trump is facing a new potential scandal as reports surface suggesting his administration may have pressured the government of Panama into helping one of his businesses in that country.
The issue traces back to a decision in February by Orestes Fintiklis, the majority owner of Trump’s hotel business in Panama, to fire Trump’s hotel management so that the owners’ association could control the property, according to the Associated Press. Although the Trump Organization tried to avoid needing to remove its personnel, the Panamanian judicial branch wound up siding with Fintiklis, sending police officers to order the Trump employees out of the building in March.
All of this would have been standard in terms of the world of business disputes — but then, on March 22, attorneys representing Trump’s hotel businesses sent a letter to Panamanian President Juan Carlos Varela and copied Panama’s Foreign Secretary Isabel de Saint Malo, asking the executive branch to intervene on their behalf.
“It is a letter that urges Panama’s executive branch to interfere in an issue clearly of the judicial branch. I don’t believe the executive branch has a position to take while the issue is in the judicial process,” de Saint Malo told reporters. The letter argued that the eviction of Trump Organization personnel could violate the Bilateral Investment Treaty and included a suggestion that the Panamanian government could face adverse consequences if the Trump Organization does not prevail in the dispute.
“We appreciate your influence in order to avoid that these damages are attributed not to the other party, but to the Panamanian government,” the letter said, implying that the Panamanian government, rather than the new management team, would be held responsible.
Further complicating matters, the United States Embassy in Panama said that “matters related to the Trump Organization are sent directly to the White House,” according to the Panamanian newspaper La Prensa.
“This is exactly what our Founding Fathers were concerned about when they wrote the Emoluments Clause — Presidents trying to use the levers of power to help themselves financially,” Rep. Elijah Cummings, D-Md. and Ranking Member of the House Committee on Oversight and Government Reform, told Salon by email. “Panama should not give the Trump Organization special favors just because this involves the President’s company, and President Trump’s company should never ask for them. Why are U.S. embassies reportedly sending these matters to the White House if the President is supposed to be walled off? The President, the White House, our embassies, and our government should not be playing any role whatsoever in this dispute.”
Independent ethics experts expressed similar concerns.
“I think there are serious ethical implications here and a lot of questions raised,” Lawrence M. Noble, Senior Director and General Counsel of the Campaign Legal Center, told Salon. “First of all, this is exactly what people were concerned about with Trump keeping his interests in the Trump Organization and the hotels. This really presents a potential conflict with his business interests and his role as president.”
He added, “A couple of things that really stuck out at me: One was that the embassy said that matters related to the Trump Organization are sent directly to the White House. Why that is going on I have no idea, because Trump has kept the financial interest in his organization, refused to divest his business interests, but said that the management of it would be turned over to his kids. So why are they sending information regarding the Trump Organization to the White House? That even suggests some sort of subtle pressure.”
Noble’s concerns were echoed by Jordan Libowitz, communications director of Citizens for Responsibility and Ethics in Washington.
“We believe all presidents should divest themselves from their assets,” Libowitz told Salon by email. “The fear if they don’t is what could happen if there is some kind of incident between their business interests and a local or foreign government. That appears to be exactly the case here. When the president’s business puts pressure on a government, are they using the force of the American government to apply that pressure? When the president makes foreign policy decisions, does he have his business in mind or the American people? These are questions we should not have to be asking but President Trump has forced us to ask.”
Noble also elaborated on the dangers that the Trump Organization’s actions pose in terms of the US’s relationship with Panama.
“The reference to the situation possibly damaging the Panamanian state presents a lot of problems,” Noble told Salon. “Something like from a regular business could just be seen as some sort of suggestion that they’d get a bad reputation. But being written by a company that is still owned by the President of the United States has very serious implications. . . that the U.S. government might want to do something that will affect relations with Panama. That’s not explicit, but it could be read that way, and it just shows you the serious ethical conflicts that are involved with the president still keeping interest in his businesses.”
Noble also acknowledged that — in light of stories such as one last month, which suggested Trump’s son-in-law Jared Kushner may have supported a blockade against Qatar as punishment for its refusal to invest in a property owned by the Kushner family at 666 Fifth Avenue in Manhattan — a troubling pattern may have emerged.
“I think there has been a pattern here of the Trump Organization and the family doing things to leave the impression that the government is involved, and that if you do favors for the Trump Organization, you might get some benefit from the government,” Noble told Salon.
There have been other occasions in which there have seemed to be uncomfortable ties between Trump’s business interests and policymaking, such as when countries that are involved with the president’s real estate and licensing empire were left off his controversial Muslim travel ban and when Donald Trump Jr. promised to meet investors in a Trump real estate project in India. The ramifications of Trump’s ongoing conflicts of interest are not limited to the foreign policy sphere either.
“Congress must be vigilant against the potential for President Trump to enrich himself and his family at the expense of the average American,” said Sen. Martin Heinrich, D- N.M, in a report released in June on the economic impact of Trump’s alleged corruption. “The president and his family’s conflicts of interests are inexcusable and unacceptable, and could depress economic output by over $1,000 per person just in one year. Not only are these practices dangerous, but harmful to the economic security of American families across the country.”
As Heinrich told Salon at the time, “The stakes are high and the risks are real. It’s not just about how the president, his family, and his administration benefit from these conflicts of interest — but how they could hinder economic growth in the long term.”