President-elect Donald Trump speaks during a news conference in the lobby of Trump Tower in New York, Wednesday, Jan. 11, 2017. (Photo: Evan Vucci/AP)
During a raucous political news conference that was unusually heavy with tax law theory, Donald Trump and Morgan, Lewis & Bockius partner Sheri Dillon outlined Wednesday how the president-elect would distance himself from his companies.
In short, the lawyers plan to help Trump move his business assets to a trust, shift company leadership to his two adult sons and a third corporate executive, and add both a management-level ethics adviser and a chief compliance officer to the company. Dillon also said Trump’s companies, known collectively as the Trump Organization, would make no new foreign deals during his time in office.
“He directed me and my colleagues at the law firm Morgan, Lewis & Bockius to design a structure for his business empire that would completely isolate him from the management of the company,” Dillon said in prepared remarks during the televised conference. “He instructed us to take all steps realistically possible to make it clear that he is not exploiting the office of the presidency for his personal benefit.”
Dillon provided reasons why Trump wouldn’t divest from his companies, as many critics have suggested he must. A sale even to Trump’s children could create further financial and ethical complications, because his children would need to find lenders for the purchase, she said. A sale of the Trump brand to a third party would mean the president would continue to earn royalties.
“President Trump can’t un-know he owns Trump Tower,” she said.
The Morgan Lewis tax lawyer further highlighted the firm’s work for Trump. She introduced Fred Fielding, a former White House counsel and Wiley Rein name partner-turned Morgan Lewis attorney, as a key part of the legal team, and she presented six piles of manila folders of legal paperwork on a table next to the speaker’s podium.
Aside from Fielding, Morgan Lewis’ tax department is well-known because of its acquisition of Bingham McCutchen lawyers in 2014, including many who had come from the elite tax boutique McKee Nelson five years earlier. The firm has handled tax work for Trump and the Trump Organization since 2005. After the Bingham acquisition, Morgan Lewis became the fourth-largest law firm in Washington, D.C.
Dillon compared Trump’s business interests to those of magnate Nelson Rockefeller, the vice president under President Gerald Ford. “But at that time, no one was so concerned,” she said.
Dillon also spoke about the conflicts of interest statute and the emoluments clause of the Constitution, which prohibits federal officials from accepting gifts. Regarding conflicts, Trump’s decision to distance himself is voluntary and not required by Congress, she said. And, she added, “Trump will donate all profits from foreign government payments made to his hotels to the United States Treasury.”
Trump followed Dillon’s remarks by taking questions from reporters. His answers included an overview of his approach to changing national health care policy and making a deal with Mexico to pay for a border wall. He called two of his cabinet nominees facing Senate confirmation hearings this week, Rex Tillerson and Sen. Jeff Sessions, “brilliant.”
He also addressed the allegations of Russian hacking and the possibility that Russian intelligence services could be attempting to blackmail him. He lashed out at news organizations that had published reports on the unsubstantiated intelligence claims.
When asked about his tax returns, Trump reiterated that he would not release them.
“Actually, people have learned a lot about my company. And now they realize my company is much bigger, much more powerful than they ever thought,” he said.
Trump also noted that he would make a decision on a U.S. Supreme Court nominee to fill the seat vacated by the late Justice Antonin Scalia within two weeks following his inauguration.
Originally published on National Law Journal. All rights reserved. This material may not be published, broadcast, rewritten, or redistributed.