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Despite trust, Ivanka Trump still wields power over her brand

Despite trust, Ivanka Trump still wields power over her brand

Says trust was part of voluntary pledge to follow rules
Despite trust, Ivanka Trump still wields power over her brand
Ivanka Trump looks on as her father, President Donald Trump, speaks.
Photographer: Doug Mills/The New York Times

What role Ivanka Trump plays in her father’s White House is among the pressing questions at the intersection of politics and business under the Trump administration.

Since Donald Trump became president, Ivanka Trump has sat in meetings with political and business leaders at the White House, drawing criticism that she is using her access to enrich herself and her business.

To address those concerns, Trump handed over day-to-day control of her company to her top executive, Abigail Klem, and transferred its assets to a new trust overseen by relatives of her husband.

But details of the arrangement, which have not been disclosed, indicate how much power Trump continues to hold over the brand that bears her name.

Under the trust, which was executed in the first week of March, Trump may address potential conflicts in one of two ways: recuse herself from related White House business or veto a potential business deal for her company, said Jamie Gorelick, a longtime ethics lawyer in Washington who is an independent adviser to the Ivanka M. Trump Business Trust.

Ivanka Trump is the sole beneficiary, said Gorelick, who provided details of the trust in interviews.

On Monday, Ivanka Trump, who is acting as an informal adviser to her father, said the trust was part of a voluntary pledge to follow rules placed on government employees.

For about a decade, Trump has licensed her name to partners who manufacture her clothes, shoes and other items. Trump, who appeared in her own advertisements, was the face of it all. Her brand is privately held, meaning that its inner workings, partners and investments are not subject to public disclosure.

Under the new arrangement, Trump will no longer appear in advertisements, Gorelick said, and she has separated her business and personal social media accounts. Photos of her posing next to Prime Minister Justin Trudeau of Canada or the chief executive of Boeing have replaced pictures of her shoes and handbags on her personal Instagram account.

Trump could have put assets into a blind trust, which keeps beneficiaries in the dark about their assets — a move favored by modern presidents but not commonly used by employees in the executive branch, said Richard W. Painter, the chief White House ethics adviser under President George W. Bush.

That was an untenable option for Trump, Gorelick said, because it would have forced her to sell the company, giving another owner the ability to use the family name.

“Ivanka created the trust to separate herself from the business and implement controls and processes that facilitate compliance with ethical requirements,” Gorelick said.

In a statement, Trump said she would continue to offer “candid advice and counsel” to her father, who has resisted calls to create a blind trust. Instead, Donald Trump has moved his business interests into a trust overseen by his eldest son, Donald Trump Jr., and Allen H. Weisselberg, the chief financial officer of his real estate company, the Trump Organization. The president will continue to receive reports on the company’s profit and loss.

Ivanka Trump will receive regular financial reports on her company. Her brother-in-law, Josh Kushner, and her sister-in-law, Nicole Meyer, are her named trustees.

“While there is no modern precedent for an adult child of the president, I will voluntarily follow all of the ethics rules placed on government employees,” Ivanka Trump said in a statement.

But even if Trump is trying to tread carefully, her trust raises questions about how effectively a voluntary arrangement can minimize conflicts, said Norman L. Eisen, the chief White House ethics adviser under President Barack Obama.

“There’s no enforcement,” he said. “If this is voluntary, what if she voluntarily decides not to do it?”

Gorelick is acting purely as an adviser and does not have the power to make decisions about deals on Trump’s behalf.

Questions about Trump’s potential conflicts of interest have trailed her from nearly the moment her father won the presidency.

She was criticized over the promotion of a $10,800 bracelet from her fashion line that she wore during her family’s Nov. 13 interview on “60 Minutes” on CBS. Klem blamed a well-intentioned marketing executive. In December, The New York Times reported that she had joined her father’s meeting with Prime Minister Shinzo Abe of Japan even as her brand was completing a deal with a company whose largest shareholder was a bank owned by the Japanese government. The deal was called off after the Times article appeared.

Unlike her husband, Jared Kushner, who is a top adviser to Donald Trump, Ivanka Trump does not hold a formal job at the White House and therefore is not likely to be considered a federal employee under ethics rules, which prohibit government workers from participating in matters that can enrich their personal business interests, according to government ethics specialists.

But the more Ivanka Trump participates in White House affairs — sitting in on meetings, conducting business from an office in the West Wing — the more likely it is that she could cross that line, Painter said.

As such, he said it was “wise” for Trump to pre-emptively act as though she were already subject to such rules.

The trust prohibits her brand from reaching agreements with foreign governments or state-owned enterprises. But deals with domestic companies could also present problems, and offer the sort of example that Trump might need to weigh in on.

Macy’s and other stores sell Ivanka Trump’s clothes and accessories in the United States. At the same time, the retail industry has been lobbying against a tax on imports that the president is considering.

“She ought to stay away from anything to do with trade,” Painter said.

Painter and Eisen praised the appointment of Gorelick as an ethics adviser. A former deputy attorney general under President Bill Clinton, Gorelick was independent and “tough-minded,” Eisen said.

“Whatever questions I and others may have about the arrangement,” Eisen said, “I think it speaks well of Ivanka and of the process that has been set up to manage the conflicts that the trustees’ monitor is one of the most prominent Democratic lawyers in the country.”

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