In May, 2006, President George W. Bush nominated Hank Paulson, the C.E.O. of Goldman Sachs, as Treasury Secretary. By then, Paulson had accumulated about five hundred million dollars in Goldman stock. For Richard Painter, a law professor at the University of Minnesota who was the chief ethics lawyer in the White House, this presented a problem: there is a federal conflict-of-interest statute that prohibits employees of the executive branch from participating in any action, or policy decision, that directly affects their financial interests. As Treasury Secretary, Paulson could conceivably do things that would benefit Goldman and, therefore, himself. Painter told Paulson that he would have to divest. The day after the Senate voted to confirm Paulson’s appointment, he filed to sell his Goldman stock.
The law at issue—Title 18 U.S.C. Section 208—is still on the books. It doesn’t apply to the President, but prior to 2016 Presidents acted as if it did, and placed their wealth in conflict-free investment vehicles, such as a blind trust, while they were in office. Donald Trump has flouted this convention, parking his fortune in a revocable trust that is managed by his sons, who are themselves busy dabbling in ventures and industries that intersect with the government, including cryptocurrency, nuclear fusion, drones, and lucrative real-estate deals in foreign countries. We have now learned that during the first three months of this year, financial firms acting for the President made more than thirty-six hundred stock trades, with a combined value, per Reuters, of between two hundred and twenty million and seven hundred and fifty million dollars.
According to Trump’s financial-disclosure forms, a handful of these trades were in Goldman stock. Worth less than $1.5 million, they represented a drop in a capacious bucket that contained much larger plays in companies that have been directly affected by the Trump Administration, including Nvidia, Boeing, and Oracle. But the irony wasn’t lost on Painter. “It turns out, you can have a President who owns stock in Goldman Sachs and other banks and many other companies with interests before the government,” he deadpanned, when I spoke to him last week.
In a statement released to the media, the Trump Organization said that the trades were executed by “third-party financial institutions,” and that Trump and his family members “receive no advance notice of trading activity and provide no input regarding investment decisions or portfolio management of any kind.” Even if that’s true—and questions have been raised about whether it is—the fact remains that the President, through outside financial managers, is buying and selling individual stocks on a daily basis, rather like a hedge fund. And, arguably, this isn’t even the most egregious example of how Trump is flouting ethics concerns to enrich himself and those around him.
That honor surely goes to the Justice Department’s settlement of a ten-billion-dollar lawsuit that Trump brought against the I.R.S., demanding recompense after his tax returns were leaked by an outside contractor. The most publicized element of the settlement was the establishment of a $1.8-billion “Anti-Weaponization Fund” that appears poised to reward allies of the President who claim to have been victimized by the federal government. Likely of more direct financial consequence to Trump was another part of the agreement, in which the I.R.S., which is part of the Treasury Department, agreed to grant him, his family, and his businesses immunity from any tax claims or charges arising from ongoing tax audits of the family and its business. This grant appears to be sui generis. Danny Werfel, who served as commissioner of the I.R.S. from March, 2023, to January, 2025, said that he was aware of no precedent for the agency agreeing “in advance to permanently forgo examination of previously filed tax returns for a specific person or business.”
I asked Painter if he could think of historical parallels to these latest developments. He couldn’t. “Nixon had his issues, but I don’t think there is anything like this,” he said. “The President is specifically precluded from getting any financial favors from the Treasury while in office.” Painter was referring to the domestic-emoluments clause of the Constitution, which bars the President from receiving any compensation from the government beyond his salary. Critics have focussed on the prospect of Trump, or members of his family, receiving money from the anti-weaponization fund—something that Vice-President J. D. Vance, for his part, has said won’t happen. But the immunity grant from the I.R.S. demands close inspection, too. Notoriously, Trump paid barely any taxes for many years, and he appears to have been under audit for much of that time. If he does owe back taxes, the I.R.S is agreeing to save him a great deal of money—something that, to Painter’s eye, amounts to a blatant contravention of the emoluments clause. “The Founders anticipated this type of challenge,” he told me.
Last week, Trump said he “wasn’t involved” in the legal settlement with the I.R.S., which, in any case, is only the most recent chapter of a long-running story. He is still promoting crypto while a firm he co-founded, World Liberty Financial, does billions of dollars’ worth of business in the industry. He’s preparing to host the annual G-20 summit at his golf resort in Doral, just outside Miami. And his Administration is busy rewarding businesses and individual donors with access and favorable actions. Setting aside the issue of why more Americans aren’t out protesting all this self-dealing, the burning question is what can be done to contain it and make sure that future Presidents can’t repeat it. Ethics experts have a long list of suggestions.
“First and foremost, Congress needs to do its job as the first branch of government and a check on the President,” Donald Sherman, the head of the watchdog group Citizens for Responsibility and Ethics in Washington, told me. “It could say, ‘We are not going to confirm any of your appointees until you end this self-dealing with the government. You are not going to get a dime for your ballroom and your other priorities.’ ”
True and admirable as these sentiments are, they run into the reality that Republicans control Congress. For at least some of them, the thought of January 6th rioters who stormed the Capitol receiving taxpayers money seems to be a grift too far. Senator Bill Cassidy described the $1.8-billion anti-weaponization fund as lacking “legal precedent or accountability.” Senator Mitch McConnell called it “morally wrong.” Senator Thom Tillis called it “stupid on stilts.” But it’s worth noting that none of those three senators will be back next year, and it remains to be seen if Republicans take any definitive action to block the fund.
Even if they did, that wouldn’t resolve the broader issue of restraining Presidential power and preventing corruption. “I think after Trump goes, we need a serious reset,” Painter said. He brought up the post-Watergate era, when, in response to revelations about how Richard Nixon had misused campaign funds and directed the I.R.S. to investigate his enemies, Congress passed the Ethics in Government Act of 1978. Among other things, this bipartisan legislation mandated financial disclosures by government officials, including the President; established the Office of Government Ethics; and created a mechanism for the Attorney General to appoint a special prosecutor to investigate wrongdoing in the executive branch. “There was a real effort to clean things up,” Painter said. “Over the years, it all got steadily eroded. Biden didn’t fix it, and Trump has trampled on it.”
What would a new ethics framework look like? Painter told me that the first task is to make the President and Vice-President subject to the federal conflict-of-interest law, and require them to divest their conflictive assets. Another obvious and necessary reform is a ban on trading individual stocks, one that applies to Presidents and members of Congress alike. Last year, Republican Senator Josh Hawley joined Democrats in supporting a proposal of this nature, but it stalled after Trump, in an online post, said that he didn’t think Republicans wanted their President targeted “because of the ‘whims’ of a second-tier Senator.”
Such reforms would surely represent progress. However, passing them would, again, require congressional action. So, too, would giving some bite to the emoluments clause, which dates back to 1787. “How do you enforce the emoluments clause?” Painter asked. “By impeachment in Congress. We already tried that twice and failed.” Ultimately, then, it comes back to politics, where there are structural problems that run even deeper than Trump. In the post-Citizens United world, Presidents—Republican and Democrat alike—sit atop political parties and allied fund-raising entities that can gin up practically unlimited sums, which can be used to crush dissidents. (This month, in Kentucky, Representative Thomas Massie, a Republican willing to criticize Trump, was defeated in what became the most costly House primary on record.) The weight of money shifts the balance of power away from individual members of Congress, insuring that for many of them the default position is submission.
What we’ve learned during the past decade is that when the Supreme Court puts democracy up for sale, Congress is utterly beholden to a President, and if that President is a malign actor, the U.S. Constitution is no longer fit for purpose. Trump is ruthlessly exploiting this weakness, but he didn’t create it. Assuming that the Republic does eventually get past him and his grifting, it will need radical surgery, not merely a reset. ♦
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