Democrats delayed stimulus bill to tighten ban on Trump family profiting
The Senate was about to approve the largest recovery bill in U.S. history on Wednesday night when Minority Leader Chuck Schumer hit pause, realizing something was missing — revised language designed to bar President Donald Trump from getting money for his own businesses.
Democrats and Republicans had already agreed to a rewritten clause, but the update had somehow not made it into the final printed legislation, according to two people familiar with the situation.
For two hours, Schumer and fellow Democrats held up the bill — written to boost a faltering economy amid the coronavirus outbreak — while the stricter language was inserted. The Senate passed the $2 trillion package just before midnight.
The change was meant to close a loophole in the original clause that barred loans to businesses that were at least 20 percent owned by presidents or their children, spouses and in-laws. The updated language extended the ban to businesses in which several family members collectively have a 20 percent stake, even if each person's individual stake is below the 20 percent threshold.
For Democrats, it was a small victory after three years of fruitless efforts to block Trump from linking his private business interests with America’s highest public office.
“Now is a time to come together as a nation to provide a desperately needed lifeline to American families," said House Oversight Chairwoman Carolyn Maloney (D-N.Y). "It is not time to bail out the private businesses of President Trump and his family or any other top policymakers."
The Trump family business interests have not been immune from the economic devastation that has blanketed the country. Hotels and tourism have been among the hardest-hit industries, and the president's properties have suffered. Across the country, his hotels and resorts have either partially or completely shut their doors, likely costing his family millions of dollars even as they lay off thousands of employees.
Mar-a-Lago, Trump's South Florida home away from the White House, has closed. The restaurant at Trump’s Washington hotel, a popular gathering spot for candidates, lobbyists and congressional aides, isn't serving food or drinks. And the spa at the Trump International Hotel & Tower New York is not accepting customers.
“Various facilities are temporarily closed given local, state and federal mandates,” a Trump Organization spokesman said. “We anxiously await the day when this pandemic is over and our world-class facilities can reopen.”
Trump, who has met with various industries looking for bailouts, including hospitality executives, has said he would like to re-open businesses by mid-April, despite public health officials warning that much more time is needed.
Some of Trump's properties were initially slow to respond to government calls to limit business activities that involved large gatherings of people. Some kept advertising banquets and spa services, for instance. Other properties remain open in a limited capacity and are still promoting some activities, such as rounds of golf.
The Trump International Hotel in Washington remains open even though only about 5 percent of its rooms are occupied, according to John Boardman, executive secretary-treasurer of the D.C. affiliate of Unite Here, which represents 172 employees at the hotel. About 160 employees, including bartenders, housekeepers, doormen, were laid off, he said.
Earlier this week, Trump didn't rule out accepting the taxpayer money from the expected stimulus package.
“Let’s just see what happens because we have to save some of these great companies that can be great companies literally in a matter of weeks," he said. "We have to save them."
The White House and Trump Organization did not respond to questions on Thursday.
Schumer pushed the original provision about the president's businesses during negotiations with Republicans and Treasury Secretary Steven Mnuchin. Both sides later agreed to change the language to address the collective ownership issue.
Yet the tweak was somehow missing from the final bill. A Republican source familiar with the situation said it was an oversight and that both sides were fine with the updated language.
“To suggest it is anything other than a clerical error is wrong,” the person said.
The clause doesn’t just address the president. It also pertains to the vice president, the heads of executive departments and members of Congress.
The new language was designed to prevent Trump, his adult children, Ivanka, Don Jr. and Eric, or even his son-in-law, Jared Kushner, who is also personally wealthy, from selling their stake in a company to a family member to escape the bill's restrictions.
The bill also was missing a second provision that Schumer and Sen. Elizabeth Warren (D-Mass.) had pushed, indicating that the Treasury Department had to publish the companies receiving the loans every seven days.
“We told Republicans it was unacceptable to omit strict prohibitions on Trump businesses having access to the Treasury lending, as well as critical transparency measures, and that we would hold up the bill until they included them in the final text,” Schumer told POLITICO. “They relented and these important accountability provisions were successfully added to the final bill.”
Some House Democrats and numerous watchdog groups have been arguing for three years that Trump is violating the Constitution's little-used emoluments clauses, which forbids presidents from receiving gifts from foreign governments or money from U.S. taxpayers beyond their salaries.
Before he was sworn into office, Trump ignored calls to fully separate from his namesake company, which is comprised of more than 500 businesses. Instead, he placed his holdings in a trust designed to hold assets for his benefit. He can withdraw money from it at any time without the public’s knowledge.
Shortly after Democrats took control of the House, they launched investigations into whether the arrangement violated the emoluments clause. But lawmakers eventually cut the allegations out of their articles of impeachment, choosing to narrowly focus on Trump pushing Ukraine to open an inquiry into Democratic political rival Joe Biden.
“The fact that President Trump accepts payments from foreign governments and corporate lobbyists who are willing to spend money at his hotels is a massive scandal hiding in plain sight," said Rep. Dina Titus (D-Nev.), chairwoman of the House Transportation and Infrastructure subcommittee with jurisdiction over Trump's Washington hotel. "Taxpayers should not be forced to partake in it. This provision is one way to stop that.”
The Trump Organization has responded to the scrutiny by donating $350,000 to the U.S. Treasury that it said came from foreign governments. But watchdog groups say there is little accountability and that the amount should be higher.
Trump denies he is using the presidency to promote his resorts and claims he receives unfair scrutiny because of the "phony emoluments clause.” It's a defense that his critics dismiss, noting how often Trump discusses and stays at his own properties.
“Every decision made by this president has been tainted by his rampant conflicts of interest. His unwillingness to divest from his properties and his abuse of taxpayer dollars at Trump properties necessitated this action," said Rep. Gerry Connolly (D-Va.), a House Oversight Committee member.
The Senate provision won’t completely prevent Trump businesses from getting money. They could still be eligible for small-business loans or benefit through a $15 billion change to the tax code. And the provision also doesn’t cover the many businesses branded or managed by Trump, but not owned by the family.
“This provision helps ensure President Trump and his family can’t benefit from the coronavirus pandemic, but there are some loopholes,” said Aaron Scherb, director of legislative affairs at Common Cause, an advocacy group that works closely with House committee staffers. “They could benefit in indirect ways.”
The Senate unanimously approved the $2 trillion emergency package after more than five days of negotiations. The House is expected to pass it soon. The legislation will authorize direct checks to many Americans, a massive fund for beleaguered industries, immediate aid for hospitals and back-up cash for state and local governments.
Meridith McGraw contributed to this report.