Trump or a conflict of interest in a modern democracy

With his global portfolio of business projects, loans and deals, Donald Trump is forcing the United States to confront an unprecedented number of entanglements. Never before in American presidential history has there been such a high degree of apparent conflicts of interest, and the issue will likely gain in importance in Switzerland in the view of Martin Naville, CEO of the Swiss-American Chamber of Commerce.

A functioning democracy particularly depends on whether its government representatives are free of conflicts of interest and, therefore, can carry out the duties of their office without pursuing their personal agendas.

It is crucial for a functioning democracy that representatives of the state are not involved in any conflict of interest so they can exercise their office without clashing with personal goals, be they financial or of another nature.

But it is equally important for citizens to be aware of this absence of conflicts of interest.

The state authority must be free of real but possibly also (wrongly assumed) perceived conflicts of interest. 

Martin Naville has been with the Swiss-American Chamber of Commerce since 2004. He is a close to the Republicans but not to Trump Keystone

The election of property magnate Donald Trump as president of the United States has given added importance to the issue, which is not new to Switzerland either.

The allegations of cronyism over the grounding of Switzerland’s former national airline, Swissair, prompted passionate debates in the media and among citizens. As did Christoph Blocher’s decision to transfer his majority shareholding in his speciality chemicals group to his children when he was elected to the Swiss government. Or Moritz Leuenberger’s board membership in the major Swiss construction company, Implenia, when the former transport minister stepped down from office.

The case of the Trump administration has of course a much bigger dimension. Donald Trump is the first billionaire businessman who is taking such a high office. Silvio Berlusconi’s conflicts of interest seem ridiculously minor in comparison.

Trump’s business empire comprises 515 companies in about two dozen different countries with commercial activities ranging from private and commercial properties to hotels, magazines, wines, fashion articles, steaks, golf courses and more.

As rich as the lower third

The new cabinet of the Trump administration is made up of a considerable number of super-rich and of entrepreneurs. Combined they are about as wealthy as the lower third of the US population. Possible conflicts of interests can hardly be ruled out.

Heavy weight

The US is one of Switzerland’s most important trading partners.

Switzerland is the second biggest exporter of goods and services to the US, which represents the market with the biggest growth potential (nearly 50% since 2011).

Swiss exports to the US outnumber combined exports to France and Italy.

The US is the leading foreign investor in Switzerland, providing an important contribution for knowhow and innovation.

Switzerland is among the top six foreign investors in the US. The presence of Swiss companies is crucial in a global competition for talent, markets and innovation capacity.

With the exception of the president and the vice-president, members of the government and Congress are subject to very strict rules to avoid conflicts of interest. They have to sell all their assets and hand them over to a blind trust.

They are not allowed to accept gifts of any sort. There was a case of a US senator visiting Zurich who insisted on paying the CHF25 ($24.70) bill for a canteen meal himself! A senior member of the government had his Swiss pocketknife sent back to me.

But even these rigorous regulations can’t prevent often alleged conflicts of interest. What will citizens and the media think if Rex Tillerson, a former CEO of ExxonMobil who is Trump’s choice to be US secretary of state, closes a deal with Russia which benefits the oil companies? Or if Andrew Puzder, the former CEO of a major fast food chain who is Trump’s pick for US secretary of labor, tried to block efforts to raise the minimum wage?

Family business

President Trump, his vice president, Mike Pence, and their advisors, claim these tough rules don’t apply. At a news conference on January 11, Trump and his lawyer went to considerable lengths to demonstrate what they say is being done to avoid conflicts of interest.

However, these concerns will persist as long as his sons run the business conglomerate and Trump is able to re-take control of the companies and wealth at the end of his presidency.

It won’t take much to raise allegations of inadmissible shared interest, or even of corruption, for instance, in the case of a decision to levy a tax which benefits property dealers or of particular projects for a golf course that are awarded to the Trump Group.

The business activities of the advisors will also be critically viewed no doubt. 

On January 9, Trump’s son-in-law, Jared Kushner, concluded a major deal with a Chinese bank. A day later, he was appointed Senior Advisor to the President.

Conflicts of interest, even if they are possibly and mistakenly perceived as such, will be in the focus of the public and the media over the next weeks and months.

What lessons can Switzerland learn from all this? Firstly, the issue will not go away but extend across the Atlantic and influence our media and political debates. Secondly, a broad discussion over suitable and pragmatic concepts should be launched at an early stage, aimed at preventing a populist-style witch-hunt of all the politically exposed persons.

Lastly, we have to ensure that there will be no “Swiss finish”, a Swiss trait of always wanting to go beyond the call of duty to be more precise and perfectionist than others, which makes everything more expensive.

Because there is no such thing as a “perfect” solution. Only more or less suitable ones.

The views expressed in this article are solely those of the author, and do not necessarily reflect the views of swissinfo.ch.

Translated from German by Urs Geiser