Updated: Jan 5, 2021
October 28, 2018
By Luke Brussel President Trump’s financial ties to foreign governments and leaders have once again come under scrutiny as Trump equivocates on the United States response to the murder of Saudi journalist and critic, Jamal Khashoggi, even as calls grow from Congress for retaliatory sanctions against the Saudis responsible for the murder. Trump continues to raise questions about his motives as he provides cover to the Saudi government and the Saudi Royal Family by backing their shifting explanations and disavowals of responsibility by Crown Prince Mohammad Bin Salman Al Saud (“MBS”) for the Khashoggi murder despite a widely held skeptical response. The criticism and dialogue about whether President Trump is primarily motivated by United States policy interests or his own financial interests in his response to Khashoggi’s murder have taken a familiar path to that of his prior reactions to international events: the focus has been on possible issues of ethics and violation of the Constitution’s Emoluments Clause arising from conflicts of interest in Trump’s business dealings with the Saudis. Such focus misses a much more consequential legal dimension to this issue: were President Trump to use the Presidency to block sanctions or other United States government action against the Saudis in response to the Khashoggi murder on the basis of Trump’s financial ties to the Saudis, it would violate Federal Anti-Corruption laws, constitute a felony, and stand as an enumerated Constitutional basis for impeachment. The same is true for other instances in which the President may have taken government action because of or for his personal enrichment over the public interest. From his actions in response to Russian interference in the 2016 election to the favorable change in U.S. treatment of the Chinese ZTE Corporation, the issue of public corruption by Trump for his personal enrichment from foreign powers is one that runs through the Trump Presidency. It arguably represents the greatest threat to the Presidency, but has yet gone without the level of scrutiny given to his conflicts of interest and whether such conflicts violate the Constitution’s Emoluments Clause. With the real possibility of Democratic control of the House of Representatives and its investigatory powers looming, President Trump’s ability to evade the open question of whether he is engaging in public corruption may be coming to an end. How then do we know if President Trump has violated anti-corruption law? Consider the following indisputable facts: (1) President Trump is a Federal Official, (2) he has knowingly and intentionally received personally financial benefits from the Saudis through Saudi business with the Trump Organization, and (3) he has or will take official acts as President in relation to the Saudis. These facts alone represent all but one requirement for criminal violation of the principal Federal Corruption Law, Bribery of Public Officials and Witnesses, 18 U.S.C. Section 201. Blocking sanctions proposed by Congress or a federal agency, failing to complete an investigation under the Global Magnitsky Human Rights Accountability Act[1] as required by law, if ordered by Congress, or ordering or pressuring others in his Administration to do so, would meet even the stringent requirements for an “Official Act” set by the Supreme Court in McDonnell v. United States, the landmark and widely criticized case limiting the breadth of the principal United States criminal anti-corruption statute on the basis of a narrow reading of what constitutes an “Official Act”.[2] The only open question under the Bribery of Public Officials law is: What motivates Trump’s actions? If Trump were to block sanctions or other adverse action against the Saudis in response to the Khashoggi murder because of the financial benefits he received from the Saudis, President Trump will have satisfied all requirements of the Bribery of Public Officials law and committed a felony: Bribery and/or illegal acceptance of gratuities. Under the same set of facts, so too would President Trump commit Honest Services Fraud under 18 U.S.C. Sections 1343, 1346 and 1349, and violated the Hobbs Act, 18 U.S.C. Section 1951. It is a familiar pattern of events, and under strikingly similar facts the same legal result is met with respect to President Trump’s refusal to implement lawfully mandated sanctions against the Russian Federation under the Countering America’s Adversaries Through Sanctions Act (CAATSA), having personally received benefits from the Russian Federation, including in the course of Russian interference in the 2016 Presidential election on behalf of Trump; and Trump causing the removal of United States’ penalties on ZTE Corporation, a large Chinese-owned telecommunications company from a bill then pending in Congress, thereby ending a then seven year imposition of penalties on ZTE, contemporaneous with the Chinese government granting valuable intellectual property rights to President Trump’s daughter and White House Advisor, Ivanka Trump. The only element of the crimes not fully established by publicly available facts from credible sources is knowledge by Trump that the things of value were provided to him for or because of acts he may take or has taken as President and/or Trump’s intent to act as President for or because of what was given to him. But on multiple occasions, President Trump has provided evidence of his state of mind and that his personal enrichment from the Saudis does in fact influence his political positions. In a campaign speech in 2015 he said, “Saudi Arabia, I get along with all of them. They buy apartments from me. They spend $40 million, $50 million. Am I supposed to dislike them? I like them very much.” Similarly, in 2016, on the same day that the Russian Federation first began hacking the Democratic National Committee, Trump, referring to then Democratic Presidential nominee Hillary Clinton’s emails, stated: “Russia, if you’re listening, I hope you’re able to find the 30,000 emails that are missing.” Why then has there not yet been serious consideration of how President Trump may have violated these laws in his dealings with Russia and China, and now possibly with respect to the Saudis and the murder of Khashoggi? For one, the legal difference between conflicts of interest and criminal corruption are not well understood outside of a small group of legal experts specializing in this area of the law. President Trump’s conflicts of interest and whether the conflicts violate the Emoluments Clause has been the subject of considerable attention and underlie civil claims in two lawsuits now making their way through the courts. But conflicts of interest are not the same as corruption. The difference, in short, is that conflicts of interest are relationships deemed to inherently present strong temptations to commit corruption (acting in favor of one’s personal interests at the expense of the interests one is duty-bound to represent) and thus are prohibited as unacceptable risks in certain circumstances; In contrast, corruption is committed when a public official acts on a conflict of interest in favor of their own personal interest over those to whom the official owes a public duty, the citizens. Acting on a conflict of interest is treated much more severely under the law than mere conflicts. The “penalty” for a federal official holding a conflict of interest is usually voluntary termination of the relationship or position that poses a conflict. The penalty for corruption in violation of the Federal Anti-Corruption laws is up to 15 years in prison; and impeachment and removal from office under Article II of the Constitution (together with Treason, the only enumerated grounds for impeachment). There is also a broadly held misunderstanding of the nature of what constitutes bribery and corruption under federal law. A bribe does not need to be the proverbial suitcase filled with cash. United States law prohibits the giving and receiving of anything of value [3], directly or indirectly[4], in return for official action; and under the gratuities clause of 18 U.S.C. 201(c), there does not need to be a quid pro quo as for bribery under Sec. 201(b),[5] mere knowledge by Trump that the Saudis provided benefits or financial gain to him for or because of their wanting official acts by Trump or to thank him for a past act, and his acceptance of such benefits or gain would constitute a felony, even if he never takes action or had already taken action in return for the gratuities. The value can take any form, tangible or intangible. It can be as intangible as an opportunity or good will, or it can be tangible financial gain like increased business, such as the Saudis spending a reported $270,000 to reserve rooms at the Trump Hotel in Washington D.C. in 2017 and patronizing Trump hotels in New York and Chicago over the past year, reported to represent the difference between increased business in such hotels and decreased business overall in Trump’s other hotels during the same period, and purchasing Trump properties (as they have done and which has been well documented). Nor does the bribe have to be provided contemporaneous with the official taking action in return. The value provided as a bribe can be a “stream of benefits”: as the Supreme Court explained in the McDonnell case, bribes can be “payments, loans, gifts, and other things of value” given for an official to take action “on an as-needed basis, as opportunities ar[i]se, to” act in return for the bribe.[6] Thus, the payments by the Saudis to the Trump Organization in 2017, 2018, promises of future business with the Trump Organization (an indirect means of provided the improper payments), and the campaign benefits provided by the Russian beginning in 2016, would under federal law all fall within the definition of “anything of value” in return for official acts once President Trump was in office. In addition to the Bribery of Public Officials and Witnesses law, 18 U.S.C. Section 201, the principal Federal Anti-Corruption laws used to prosecute bribery and public corruption in the United States include the Hobbs Act, 18 U.S.C. Section 1951; and Honest Services Fraud/Conspiracy against the United States. The Hobbs Act, 18 U.S.C. Section 1951, prohibits public corruption as a form of illegal extortion, and is frequently used to charge officials for bribery.[7] The Hobbs Act defines extortion as “the obtaining of property from another, with his consent . . . under color of official right.”[8] The prosecution of bribery as a form of extortion stem from “common law, [under which] extortion was an offense committed by a public official who took ‘by color of his office’ money that was not due to him for the performance of his official duties. Extortion by the public official was the rough equivalent of what we would now describe as ‘taking a bribe.'” Id. Public corruption is also prosecuted as Honest Services Fraud.[9] As defined under the broad federal conspiracy laws, “[a]ny ‘scheme or artifice to defraud’ includes a scheme or artifice to deprive another of the intangible right of honest services.” 18 U.S.C 1346. The law operates under the principle that the public holds the right to honest services from public officials and official acts taken on the basis of personal financial enrichment or in exchange for or because of a bribe or kickback deny the public of such right. Both the Hobbs and Honest Services Fraud have been used to prosecute public corruption where 18 USC 201 is unavailable and/or where evidence does not fully support the requirements of 18 USC 201. For example, perhaps critically in the case of President Trump, Honest Services Fraud does not specifically require that the public official charged accepted the bribe while already in office; it is sufficient that the bribe taking official carried out an official act in exchange for the bribe while in office; thus, if the financial benefits Trump received from the Saudis (or Russia and/or China) before his inauguration formed the basis for his actions with respect to the Saudis (or Russia and/or China), it would constitute Honest Services Fraud. Up to now, President Trump has managed to avoid both serious legal examination and investigation of whether he has violated federal anti-corruption laws in his dealing with foreign powers; quite possibly the corruption equivalent of Trump’s braggadocios line in his campaign routine: shooting someone on Fifth Avenue in broad daylight and getting away with it. But with his [mis]-handling of the Khashoggi murder refocusing light on the ethical and legal dimensions of his financial ties to the Saudis and the prospect of a Democratic majority in Congress after the mid-term elections with investigatory powers to uncover all relevant facts and the will to do so, time may well be running short on this act. * * * Luke Brussel, J.D., University of Pennsylvania Law School (1999), teaches corruption law and investigations at Fordham University School of Law in New York and practices financial crimes law and compliance. He was formerly the Global Head of Anti-Corruption with General Electric and Corporate Counsel, Chief Compliance Officer with Cengage Learning. He has previously published on Law & Economics and financial crimes. [1] Pub. L. 114-328, subtitle F. The Magnitsky Act provides for punishing individuals responsible for gross human rights violations by freezing their assets and/or banning travel to the U.S. by such individuals. Were such sanctions imposed on MBS or other members of the House of Saud, it would cripple his ability to use and manage his vast financial wealth and send a clear and powerful message to the international community that actions like the Khashoggi murder will not be tolerated. [2] See McDonnell v. United States, 136 US 2355 (2016), holding that an “Official act” under the United States Bribery of Public Officials and Witnesses law, 18 U.S.C. Section 201, and as applied to Honest Services Fraud and the Hobbs Act, is “any decision or action” by a government official on any “focused and concrete …. formal exercise of governmental power” whether taken directly by the government official or indirectly, for example, by “using his official position to exert pressure on another official to perform” any action or make a decision. [3] The improper benefit, or bribe, “may consist of money, property, services, or any other act….” United States v. Kemp, 500 F.3d 257 (3d Cir. 2007). [4] Id. at 282 “[A] conviction under [18 U.S.C. 201] may be based on … benefits to the public official or to a third party whom the official favors….” [5] United States Attorneys’ Criminal Resource Manual 2041. [6] See also Kemp at 282, “Payments in violation of the statute may be made with the intent to retain the official’s services on an ‘as needed’ basis, so that whenever the opportunity presents itself the official will take specific action on the payor’s behalf.” [7] See, for example, McDonnel: The United States charged then Virginia Governor Robert McDonnell with six counts of Hobbs Act extortion and one count of conspiracy to commit Hobbs Act extortion, in addition to three counts of honest services fraud and one count of conspiracy to commit honest services fraud, for “accepting payments, loans, gifts, and other things of value [from the CEO of a Virginia company] in exchange for ‘performing official actions on an as-needed basis, as opportunities arose, to’” aid the CEO in obtaining government action favorable to his company’s products. [8] Evans v. United States, 504 U.S. 255 (1992) [9] See, Skilling v. United States, 130 S. Ct. 2896 (2010) (Honest Services Fraud applies to “bribery and kickback schemes.”).