Presidential Nepotism Conflict Laws

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President John F. Kennedy appointed his brother Robert Kennedy as attorney general, leading to a federal law that bars an elected public official from appointing a relative for a position in their administration. President-elect Donald Trump has appointed his son-in-law as a top advisor. Will the law apply to that case? Also, Trump has said he will sever his ties to his businesses to avoid even the appearance of any conflicts. Arizona State University presidential historian Brooks Simpson and attorney and legal analyst James Goodnow from Fennemore Craig will discuss those questions.

TED SIMONS: PRESIDENT-ELECT DONALD TRUMP HAS APPOINTED HIS SON-IN-LAW AS A TOP ADVISOR. THE PRESIDENT-ELECT ALSO SAYS HE WILL PUT HIS TWO SONS IN CHARGE OF HIS BUSINESSES TO AVOID CONFLICT OF INTEREST CONCERNS. IS ALL THIS LEGAL? HERE TO DISCUSS THE LAWS THAT APPLY TO THESE SITUATIONS IS ATTORNEY AND LEGAL ANALYST JAMES GOODNOW FROM FENNIMORE CRAIG. GOOD TO SEE YOU AGAIN. THANKS FOR BEING HERE.

JAMES GOODNOW: GOOD TO SEE YOU, TED.

TED SIMONS: SON-IN-LAW, SENIOR ADVISER POSITION. I KNOW THERE WAS AN ANTI-NEPOTISM LAW FOR THE KENNEDYS. TALK TO US ABOUT THIS.

JAMES GOODNOW: REWIND TO 1967, JOHN P. KENNEDY APPOINTS BOBBY KENNEDY TO BE ATTORNEY GENERAL AND THEN SUBSEQUENT TO THAT WE HAVE THESE LAWS THAT ARE PASSED THAT SAY ESSENTIALLY IF YOU ARE IN FEDERAL GOVERNMENT, YOU CAN'T APPOINT A FAMILY MEMBER. AND FAMILY MEMBER IS EXPRESSLY DEFINED AS INCLUDING A SON-IN-LAW. SO ON ITS FACE IT LOOKS LIKE WE HAVE A BIG PROBLEM. BUT TRUMP ADMINISTRATION COMES BACK THROUGH HIS LAWYERS AND SAYS NO, NO, NO, NO; NO PROBLEM HERE. THAT LAW REFERS TO APPOINTMENT TO A FEDERAL AGENCY. WE'RE TALKING ABOUT THE WHITE HOUSE. WHITE HOUSE ISN'T A FEDERAL AGENCY. NO PROBLEM HERE. THAT AT LEAST IS THE LINE. MANY DISAGREE.

TED SIMONS: WILL HE BE PAID FOR HIS SERVICES?

JAMES GOODNOW: HE WILL NOT BE PAID. AND THAT'S ANOTHER WAY TRUMP'S LAWYERS ARE TRYING TO DISTANCE THEMSELVES FROM THIS LAW. SO THE PENALTY IS IF YOU DO APPOINT SOMEONE, THAT PERSON MUST FOREGO THEIR SALARY. SO JARED KUSHNER COMES IN AND SAYS I'M NOT EVEN GOING TO TAKE A SALARY. SO I'M ALREADY TAKING ON THAT PENALTY FROM DAY ONE. AND HE SEEMS TO BE RIGHT. THERE IS REALLY NOT A LOT OF TEETH TO THIS LAW. SO, IT SEEMS LIKE THAT REALLY IS THE STRONGER ARGUMENT THAN THE WHITE HOUSE BEING AN AGENCY.

TED SIMONS: AND AGAIN IF SENATE APPROVAL ISN'T NEEDED AND IT'S NOT NEEDED TO BE A TOP ADVISOR IN THE WHITE HOUSE, THE TRUMP ADMINISTRATION, THE TRUMP FOLKS ARE SAYING NO PROBLEMO.

JAMES GOODNOW: NO PROBLEMO. THEY ACTUALLY RELY ON COURT CASE THAT INVOLVED HILLARY CLINTON. SO IN THE 1990S, BILL CLINTON, OF COURSE, APPOINTED HILLARY TO BE ON VARIOUS TASK FORM COMMITTEES DEALING WITH HEALTHCARE REFORM AND SHE WAS ON THESE TASK FORCES AND THERE WAS NOT A PROBLEM. AND, IN FACT, THEY IS A D.C. CIRCUIT CASE WHERE A JUDGE SAYS IN PASSING I DON'T REALLY THINK THESE ANTI NEPOTISM LAWS APPLY TO THE WHITE HOUSE. THAT WASN'T THE BASIS OF THE CASE BUT IN FACT NOW THAT'S BEING USED BY THE TRUMP ADMINISTRATION.

TED SIMONS: SO HE HAS PRETTY FIRM GROUND HERE AS FAR AS LEGALITY IS CONCERNED. THE LAWS SAY X AND SOUNDS LIKE HE IS FOLLOWING X. IS IT THE RIGHT THING TO DO?

JAMES GOODNOW: WELL, THAT'S THE KEY POINT. WHAT'S LEGAL AND WHAT'S RIGHT ARE CERTAINLY TWO DIFFERENT THINGS. ON THE JARED KUSHNER FRONT YOU HAVE THE PERCEPTION OF A DYNASTY THAT'S EVOLVING. THE EAST WING OF THE WHITE HOUSE IS GOING TO BE OCCUPIED BY THE FAMILY, IVANKA TRUMP IS GOING TO BE IN THERE. DONALD'S CHILDREN, DON JR. AND ERIC HAVE BEEN HIS CLOSEST ADVISORS. THE REASON THESE ANTI NEPOTISM LAWS ARE IN PLACE IS TO MAKE SURE THE PUBLIC HAS CONFIDENCE IN THE SYSTEM. AND THAT ABSOLUTELY APPLIES HERE BECAUSE JARED KUSHNER WHILE ADMITTEDLY A BRIGHT PERSON IS SOMEONE WHO HAS NO EXPERIENCE DEALING WITH THE TYPES OF ISSUES THAT A SENIOR ADVISOR WOULD. FOR EXAMPLE, REPORTS THIS WEEK SAY JARED KUSHNER MAY BROKER OR ATTEMPT TO BROKER SOME MIDDLE EAST PEACE DEAL. WELL THAT WOULD BE REMARKABLE BUT IS HE A REAL ESTATE PERSON AND A LAWYER BY BACKGROUND. SO HE HAS NO EXPERIENCE HERE WHICH REALLY PLAYS INTO THIS ARGUMENT THAT ARE YOU APPOINTING SOMEONE WHO IS QUALIFIED TO BE YOUR ADVISOR?

TED SIMONS: WELL, I THINK CORRECT ME IF I AM WRONG, IF YOU WERE TO CHALLENGE THIS IT WOULD BE WISE TO CHALLENGE IT QUICKLY. BECAUSE IF YOU WERE TO CHALLENGE IT AT A LATER DATE AFTER HE HAS DONE X, Y, AND Z, X, Y, AND Z COULD BE VOIDED IF A COURT SAYS GET HIM OUT OF THERE. CORRECT?

JAMES GOODNOW: POSSIBLY. CERTAINLY THAT WOULD BE THE ARGUMENT OF THOSE TRYING TO UNDO THE DECISIONS. I THINK MORE PARTICULARLY IT WOULDN'T BE UNDONE. YOU WOULD SEE JUST THAT JARED KUSHNER HAS TO RESIGN OR GO AWAY. I THINK THE POLICIES WOULD REMAIN IN PLACE. YOU ARE RIGHT. THIS NEEDS TO BE CHALLENGED IMMEDIATELY. ALREADY NO SURPRISE A LOT OF DEMOCRATS COMING FORWARD SAYING WE ARE GOING TO CHALLENGE HIM. EXPECT THIS TO PLAY OUT IN THE COURTS.

TED SIMONS: I'M WONDERING IF THE DEMOCRATS SHOULD BE CAREFUL WHAT THEY ARE ASKING FOR. IF THEY DO IT DOWN THE LINE THEN EVERYTHING HE HAS DONE OR BROKERED OR WHATEVER THE CASE MAY BE. YOU TELL ME IF IT COULD HAVE BEEN VOIDED OR NOT BECAUSE HE NEVER SHOULD HAVE BEEN IN THE FIRST PLACE.

JAMES GOODNOW: IT CERTAINLY CREATES A POLITICAL PROBLEM. YOU'RE GOING TO HAVE A DEBATE ABOUT THE LEGAL SIDE. YOU'RE GOING TO HAVE A POLITICAL PROBLEM AND PERCEPTION THAT THOSE DECISIONS, THOSE POLICY DECISIONS WEREN'T LEGITIMATE. THAT'S A REAL ISSUE THAT THE TRUMP ADMINISTRATION HAS TO CONTEND WITH.

TED SIMONS: AS FAR AS THE BUSINESS TIES, NOW HE HAS BOTH SONS, HE SAYS THERE IS NO CONFLICT -- FIRST OF ALL HE SAYS THERE IS NO CONFLICT OF INTEREST FOR THE PRESIDENT OR THE VICE PRESIDENT PERIOD, DOES HE HAVE A POINT?

JAMES GOODNOW: HE IS FLAT WRONG ON THAT ONE. THE ISSUE OF LAWS VERSUS THE CONFLICT OF INTEREST ARE TWO DIFFERENT THINGS. IN THIS CASE WE KNOW WHAT WOULD A CONFLICT OF INTEREST BE FOR THE PRESIDENT? THAT IS ANYTHING THAT WOULD PREVENT YOU FROM PUTTING AMERICA FIRST. ANYTHING. SO WE KNOW THAT DONALD TRUMP HAS VAST BUSINESS HOLDINGS. HE IS GOING TO CONTINUE TO HAVE AN OWNERSHIP INTEREST IN THESE HOLDINGS. SO THE CONCERN IS THAT HE WILL BE MAKING POLICY DECISIONS THAT WILL MAKE HIM RICHER AND NOT HELP THE AMERICAN PEOPLE. AND EVEN IF THERE'S NO CONFLICT AND HE REALLY NEVER SPEAKS WITH DON JR. OR ERIC, YOU HAVE A PERCEPTION PROBLEM THAT THAT COULD BE HAPPENING, WHICH I THINK UNDERMINES CONFIDENCE IN THE EXECUTIVE BRANCH.

TED SIMONS: SO SELL ASSETS, BLIND TRUSTS. HOW DO YOU -- IS A BUSINESSMAN JUST SIMPLY UNQUALIFIED TO RUN AS PRESIDENT? DO YOU HAVE TO DIVEST EVERY TIME YOU RUN FOR OFFICE? HOW DOES THAT WORK?

JAMES GOODNOW: YES. THE ANSWER IS IF YOU WANT TO BE PRESIDENT OF THE UNITED STATES, IF YOU WANT TO HAVE THE MOST POWERFUL POSITION IN THE WORLD, YOU NEED TO TAKE THE STEPS THAT ARE NECESSARY TO MAKE SURE THERE IS NOTHING STOPPING YOU FROM DOING THAT. IN THIS CASE, THE WAY YOU WOULD TRY TO GET RID OF THIS CONFLICT IS TO DIVEST AND SAY I'M NEVER STEPPING BACK INTO THE COMPANY. THAT HAS NOT HAPPENED. THE INDEPENDENT OFFICE OF GOVERNMENT ETHICS SAID THIS IS WHOLLY INADEQUATE. RICHARD PAINTER, ETHICS ADVISOR TO GEORGE W. BUSH SAYS NO WAY THIS DOESN'T PASS MUSTER. NO ONE EXCEPT TRUMP'S TEAM IS SAYING THIS IS GOOD ENOUGH.

TED SIMONS: TRUMP'S TEAM, HIS ATTORNEY WHO CAME OUT DURING THE PRESS CONFERENCE LAST WEEK SAID HE CAN'T BE EXPECTED TO DIVEST. HE CAN'T BE EXPECTED TO GET RID OF ALL OF HIS ASSETS AND JUST GET RID OF IT ALL BECAUSE HE WANTS TO BE PRESIDENT OF THE UNITED STATES. BUT YOU ARE SAYING AND IT SOUNDS LIKE YOU ARE SAYING OH YES, HE DOES.

JAMES GOODNOW: WELL, HE MADE A CRITICAL DECISION. HE DECIDED TO RUN FOR PRESIDENT. NO ONE MADE HIM DO THAT AND SO DON'T TAKE MY WORD FOR IT. THIS IS BIPARTISAN -- THIS IS THE OPINION OF ETHICS EXPERTS ON THE RIGHT AND THE LEFT WHO ARE SAYING YOU HAVE TO DIVEST. THAT MAY NOT BE ENOUGH BECAUSE EVEN THEN YOU MAY SAY I'M NEVER STEPPING BACK INTO THE COMPANIES. BUT AT A MINIMUM THAT WOULD BE THE STARTING POINT.

TED SIMONS: LAST QUESTION, FIRST DAY HE ENTERS OFFICE. FIRST DAY JANUARY 20TH, 21ST, WHENEVER HE SIGNS THE PAPER AND THERE HE GOES HE GETS THE KEYS TO THE HOUSE. IS HE VIOLATING THE CONSTITUTION?

JAMES GOODNOW: A LOT OF PEOPLE SAY YES. REALLY THE BIG DEBATE RIGHT NOW IS THE CLAUSE, PROVISION OF THE CONSTITUTION THAT SAYS YOU CANNOT AS A FEDERAL OFFICIAL, PRESIDENT, TAKE ANY GIFTS OR MONEY FROM FOREIGN GOVERNMENTS. NOW, DONALD TRUMP COME OUT AND SAID HEY, WITH MY HOTELS I'M NOT GOING TO TAKE ANY MONEY. THEY ARE FROM FOREIGN GOVERNMENTS. I'M GOING TO DONATE TO THE U.S. TREASURY. THE PROBLEM IS THOUGH THAT IS JUST THE TIP OF THE ICEBERG. WE HAVE SO MANY OTHER ISSUES AT STAKE HERE. LOANS FROM FOREIGN GOVERNMENTS, INCLUDING THE BANK OF CHINA. YOU HAVE REAL ESTATE HOLDINGS WHERE YOU'RE ACTUALLY LEASING THOSE PROPERTIES TO FOREIGN GOVERNMENTS. NONE OF THOSE WERE ADDRESSED. SO THE MOST PUBLIC ONE WAS AND I WOULD CALL THIS A SUPERFICIAL FIX BUT THE DEEPER STRUCTURAL PROBLEMS WEREN'T ADDRESSED.

TED SIMONS: ALL RIGHT. I'M GUESSING THEY WILL BE ADDRESSED THOUGH SHORTLY. GOOD TO HAVE YOU HERE.

JAMES GOODNOW: THANKS, TED.

James Goodnow: Attorney and legal analyst for Fennemore Craig

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