In the week’s roundup of Trump-related conflicts: What trade restrictions would do to the first daughter’s business, two ethics enforcers resign and Jared Kushner is sued for not disclosing business ties.
As President Donald Trump slammed U.S. trade arrangements in advance of G20 talks in Brussels this week, American businesses warned of a global trade war.
Some companies that enrich the Trump family raised red flags. That suggests that Ivanka Trump could gain personally by exercising the purported softening influence she has on her dad.
Sales of Ivanka Trump’s clothing line have been booming lately. But the company that licenses her apparel brand has warned that her father’s anti-trade policies could hurt business. Meanwhile, the company making Donald Trump and Ivanka Trump perfume has suffered profit declines that the company says could worsen with trade restrictions or increased tariffs.
In advance of Brussels, Trump threatened to bar steel and aluminum imports on national security grounds. Europe and Japan announced a massive new trade deal. Additional pacts in the works involved China, India and Mexico, while excluding the United States.
American industries that rely on exports, like wheat and hog farmers, warned that they could lose out in the backlash.
And G-III Apparel Group, the textile conglomerate distributing Ivanka Trump’s line along with other brands, stated in an April 3 financial filing that “any action by the new administration in the United States to increase tariffs on imported goods would adversely affect our business.”
Net sales of Ivanka Trump wear were $29.4 million, $17.5 million more than last year, the report said.
Perfumania Holdings, which licenses Donald Trump and Ivanka Trump brand perfumes, did not break out sales numbers for individual product lines but noted that overall net sales had declined 13.5 percent. Risks going ahead included “trade restrictions,” and “changes in tariffs and taxes,” a recent Perfumania financial filing said.
G-III clothes are stitched in Vietnam, Indonesia, India, Bangladesh, Pakistan, Thailand, Myanmar and predominantly China, where the minimum wage is around $3 per day, and which Trump has threatened with trade retaliation.
In the past, the president has also threatened a broad tariff hike to 35 percent, a move that might not kill Ivanka’s line. But it could force her and G-III to move away from the discount market she now targets and into luxury niches.
According to G-III:
The new U.S. presidential administration has threatened to impose retaliatory duties against China in order to reverse what it perceives as unfair trade practices that have negatively impacted manufacturing in the U.S. The new administration has also discussed the implementation of a “border adjusted tax” that would impose an additional tax on imported goods regardless of origin. … Adoption of these types of measures by the U.S. or other governments could have a material adverse effect on our results of operations.
Two ethics enforcers quit
To those who fear what presidential aide Steve Bannon calls the “deep state” the term “government ethics” might seem like a contradiction.
But this week came reminders that the federal bureaucracy contains employees who care deeply about ethics, are bothered by Trump administration lapses, and put their jobs on the line.
Former U.S. Department of Justice lawyer Hui Chen is a Mandarin-, Russian- and Italian-speaking graduate of UC Berkeley and UCLA School of Law. She worked for two years as a federal prosecutor in Brooklyn, then spent nearly two decades as a lawyer for international corporations, ensuring they complied with laws, regulations and ethical standards.
In 2015, she went to work as a consultant to the Justice Department’s fraud unit, helping decide whether to indict accused corporate wrongdoers.
She wrote in a LinkedIn post that at first she loved the work, but after President Trump took office, not so much.
Trying to hold companies to standards that our current administration is not living up to was creating a cognitive dissonance that I could not overcome. To sit across the table from companies and question how committed they were to ethics and compliance felt not only hypocritical, but very much like shuffling the deck chair on the Titanic.
… On my mind were the numerous lawsuits pending against the President of the United States for everything from violations of the Constitution to conflict of interest, the ongoing investigations of potentially treasonous conducts, and the investigators and prosecutors fired for their pursuits of principles and facts.
Those are conducts I would not tolerate seeing in a company, yet I worked under an administration that engaged in exactly those (types of) conduct. I wanted no more part in it.
So she quit. And her post, titled “Mission Matters,” topped the Fourth of July holiday news cycle. The Justice Department declined comment.
Walter Shaub, the mild-mannered bureaucrat who forced the Trump administration to back down over ethical issues, also left the government this week.
Shaub was head of the usually low-profile Office of Government Ethics, administering rules for federal employees. He clashed with the president after Trump hired Washington lobbyists into key positions and waived ethics requirements.
Trump insisted the waivers were confidential. Shaub countered with a 10-page letter contending that his office – and the public – had a right to the information.
The White House backed down, and made public waivers granted to Bannon, Kellyanne Conway, Reince Priebus – and more than a dozen other top administration employees.
Shaub’s term was set to expire in January. But he was so mindful that he could be fired before then that he kept his office stripped of personal items, telling The New York Times, “I wanted not to be so attached to this office that I’d be afraid to lose it.” He resigned to join the nonprofit Campaign Legal Center, where he said he would work for “ethics reforms at all levels of government.”
Republicans accused Shaub of playing politics. But Karen Hobert Flynn of the watchdog group Common Cause regretted his departure.
“Shaub joins a growing list of government officials who tried the hold the Administration accountable who are now working in the private sector,” she said in a statement. “Shaub may not have been fired like James Comey and Sally Yates, but his departure, after a number of high-profile confrontations with the White House, is part of a disturbing pattern.”
Kushner sued for not disclosing his business
Presidential adviser and son-in-law Jared Kushner failed to disclose his part-ownership of an online real estate company and may have violated federal conflict of interest rules, a Washington-based nonprofit group says.
In a filing with the Office of Government Ethics on Thursday, the nonprofit Citizens for Responsibility and Ethics in Washington complained about what it said was Kushner’s continued ownership of Cadre, a real estate investment platform he founded with his brother Joshua. It’s now said to be worth $800 million.
Kushner didn’t disclose ownership of the company on his ethics filing, The Wall Street Journal reported in May, even though it apparently is among his biggest holdings. His lawyers recently told reporters that Kushner intends to file an amended ethics report, according to the complaint.
Kushner’s continued ownership of technology companies poses conflict-of-interest concerns, the complaint says. Kushner had agreed to sell off other technology holdings to avoid legal issues.
As presidential adviser, Kushner is likely to be involved in discussions about government policies on technology issues. If he owns technology companies, he could profit from his knowledge of those discussions – and he could help shape policies that would enrich him personally.
In a letter to the White House expressing concerns about Kushner and potential conflicts of interest, Democratic Sens. Elizabeth Warren of Massachusetts and Tom Carper of Delaware, and Rep. Elijah Cummings of Maryland wrote, “Federal conflict of interest laws prohibit a federal official, such as Mr. Kushner, from profiting off of his government work.”
Matt Smith can be reached at firstname.lastname@example.org, and Lance Williams can be reached at email@example.com. Follow them on Twitter: @SFMattSmith and @LanceWCIR.