Should the President and Vice President Have to Put Their Assets In a Blind Trust? (H.R. 6340)

What is H.R. 6340?

(Updated December 28, 2017)

This bill — known as the Presidential Accountability Act — would require the president and vice president to place their assets in a certified blind trust or make a disclosure to the Office of Government Ethics and the public when they make a decision that affects their personal finances.

A blind trust is intended to prevent conflicts of interest arising between the performance of a politician’s official duties and their personal financial interests. They are set up in such a way that the people whose assets go into the trust have no knowledge of what the trust has invested in and no right to intervene in how those assets are handled.

Under current law, federal officeholders are prohibited from engaging in government business when they stand to personally profit, but the president and vice president are exempted. This bill would eliminate that exemption, and also prohibit the president and vice president from engaging in government business which they or their families can benefit financially from.

Presidents and vice presidents would be able to retroactively request an exemption from this rule if a national emergency necessitates that they take immediate actions which affect their personal financial interests if they ask for the exemption within 48 hours of taking the action. If the Office of Government Ethics finds that an exemption wouldn’t have been granted under the circumstances, the president and vice president would be required to repay whatever benefit they gained.

Argument in favor

The president and vice president should be legally required to either put their assets in a blind trust or make a disclosure every time government business creates a conflict of interest with their finances. Just because recent presidents have used blind trusts doesn’t mean all will willingly do so.

Argument opposed

Avoiding conflicts of interest is a desirable goal, but Congress shouldn’t be placing restrictions on how the president and vice president manage their financial assets. Besides, the number of genuine conflicts of interest that could arise because of actions taken by the president is small.

Impact

The Office of Government Ethics; entities managing blind trusts; and the president and vice president.

Cost of H.R. 6340

A CBO cost estimate is unavailable.

Additional Info

In-Depth: Sponsoring Rep. Katherine Clark (D-MA) introduced this bill because of President-Elect Donald Trump’s business interests, which include a federal contract to operate a hotel in the D.C. Old Post Office Pavilion, debt to foreign banks, and the presence of his children in leadership positions in both the transition team the Trump Organization:

“The President of the United States has the power to affect how our tax dollars are spent, who the federal government does business with, and the integrity of America’s standing in the global economy. Every recent president in modern history has taken steps to ensure his financial interests do not conflict with the needs of the American people. The American people need to be able to trust that the President’s decisions are based on the best interests of families at home, not the President’s financial interests.”

President-Elect Trump has said he would leave his three oldest children — Donald Jr., Ivanka, and Eric — in charge of his business interests during his administration despite their serving on his transition team.

Of Note: The first president to use a blind trust was Lyndon Johnson, which he used so that he and his wife, Lady Bird, could maintain ownership of a TV station in Austin, Texas. Since then, most presidents have put their assets into a blind trust or a similar investment arrangement to avoid potential conflicts of interest.

In 1978, the Ethics in Government Act required the president, vice president, and other executive branch offers to make financial disclosures to the Office of Government Ethics. The legislation also defined a “qualified blind trust,” which stipulates that the trustee have no association with the whoever puts their assets in.

Media:

• Sponsoring Rep. Katherine Clark (D-MA) Press Release
  
• Boston Herald
  
• MassLive
  
• Politico