Donald Trump (C) with his son Eric Trump (L) daughter Ivanka and son Donald Trump Jr. (R) © Reuters

Donald Trump’s plans to separate himself from his businesses fail to address potential conflicts of interest, the head of the US Office of Government Ethics said in a blunt intervention just hours after the president-elect outlined arrangements for his corporate empire. 

Walter M Shaub Jr told an audience at the Brookings think-tank that every president in modern times had taken the “strong medicine of divestiture” and that Mr Trump should follow the same course of action. 

“I appreciate that divestiture can be costly” he said, but “He is going to be asking his own appointees to make sacrifices. He is going to be asking our men and women in uniform to risk their lives in conflicts around the word. So, no, I don't think divestiture is too high a price to pay for being president of the United States of America." 

Earlier Mr Trump and one of his lawyers set out plans for his operations to be put into a trust and for management to be transferred to his sons Donald Jr and Eric. He declined to put his business interests into a blind trust, as some experts had recommended.

Speaking alongside the president-elect and piles of what he said were legal documents relating to his plans, Sheri Dillon said Mr Trump would take steps to assure the American public he would not exploit the office to benefit his business. 

The arrangements fell well short of measures that some ethics experts have recommended. Norman Eisen, a former legal ethics adviser for President Barack Obama, said the moves were inadequate “in every respect”. 

He argued Mr Trump had not made a clean break with his business ownership interests, as his predecessors for four decades had done, and had not established a blind trust or the equivalent. Trust responsibility had been conferred to his own family and a current employee, not an independent trustee. 

In his speech Mr Shaub, who was appointed by Barack Obama, pointedly cited the late Antonin Scalia, a Supreme Court justice venerated by Republicans. "Justice Scalia warned us that there would be consequences if a president ever failed to abide to the same principles that apply to lower level officials". 

He added that officials needed their president to show that ethics matters, “not only through words but through deeds.”

The corporate arrangements were laid out in Mr Trump’s first press conference since winning the election. Last month Mr Trump cancelled a planned briefing on how he would handle conflicts of interest and his business interests with little explanation. 

The president-elect has already said he has instructed his lawyers to dissolve his charitable foundation as he prepares for his inauguration on January 20. But his plans for handling business arrangements including the Trump Organization’s real estate and golf course holdings and licensing deals have until now remained unclear. 

Mr Trump has continued to refuse to release his tax returns, in contrast to previous presidential candidates. And while he decided not to sell his enterprise, his cabinet appointees are being required to go to considerable lengths to remove any possibility of conflicts of interest. 

Mr Trump’s team defended his new arrangement at the press conference, with Ms Dillon arguing that divesting or taking the company public would not be feasible and that the approach being taken would avoid Mr Trump and his family incurring unnecessary losses. “President-elect Trump should not be required to destroy the brand he built,” she said.

Mr Trump said he would not discuss with his sons how they run the business, insisting he was doing more than the law required the president to undertake. 

The Trump Organization entities would be conveyed to a trust before January 20, with leadership and management relinquished to his sons as well as long-serving executive Allen Weisselberg, she said. 

The new trust agreement would require that the company undertake no new foreign deals for the duration of the presidency. An ethics adviser would be appointed to approve new deals and pronounce on any potential conflicts of interest. 

Dennis Kelleher, chief executive of the Wall Street and Washington watchdog Better Markets, said the president-elect had “monumental and unprecedented conflicts”. A “litmus test” of the legitimacy of the steps being taken was whether there was full disclosure of all the documents relating to the new arrangement, he said.

He added: “It’s not clear that the only way to manage the conflicts of interest is by a blind trust or by divestment. There may be a way to fashion a solution that is in fact comprehensive. He’s announced a novel series of steps to manage the conflicts — but the devil is going to be in the details and they need to be carefully scrutinised.” 

While cabinet members are subject to detailed conflict of interest rules, the president is not bound by the same obligations. But some analysts have said Mr Trump could face trouble over a clause in the constitution designed to prevent bribery of government officials by foreign parties. 

This says that no government official can “accept of any present, emolument, office or title, or any kind whatever, from any king, prince or foreign state” without congressional consent. Some critics say that a foreign diplomat booking a room at Mr Trump’s new hotel in Washington might put him in contravention of the law. 

Ms Dillon denied hotel bills fell under this heading, but said Mr Trump would donate all profits from foreign governments payments made to his hotel to the US Treasury while president.

Mnuchin to divest holdings if he becomes Treasury Secretary

Fannie Mae shares soared in November after Steven Mnuchin, Mr Trump’s nominee as Treasury Secretary, said on CNBC that he wanted to see the government-sponsored enterprise returned to private hands, writes Ben McLannahan

Those remarks may have netted the former Goldman Sachs banker a tidy paper profit. On Wednesday, Mr Mnuchin disclosed that he has a stake worth between $500,001 and $1m in Paulson & Co’s Advantage Fund, which owns shares in Fannie.

The Paulson stake is one of dozens that Mr Mnuchin said he is prepared to sell, should he be confirmed as Treasury Secretary. Also on the list for disposal are investments in Goldman, Citigroup and Blackstone, as Mr Mnuchin seeks to minimise conflicts of interest in his new role.

In a letter to the Office of Government Ethics, Mr Mnuchin said he would offload interests in 43 companies and funds within 90 days, should his nomination be approved. He added that he would resign from 42 management positions, including roles at Dune Capital Management, the hedge fund he launched after leaving Goldman, and a foundation he set up with his second wife, Heather.

The disclosure form reports a range of values for Mr Mnuchin’s assets: $118.2m to roughly $391.6m, according to calculations by Bloomberg. Among them is a “small airplane,” used solely by Mr Mnuchin for both business and personal reasons.

Among liabilities, he discloses debt of at least $15,000 on a Citibank credit card and a 30-year personal loan from Citi, taken out in 2014.

Mr Mnuchin, 54, also said that he would retain an unpaid position as president of Steven T Mnuchin Inc, an entity which he uses to manage “some” of his investments. He pledged to recuse himself from any matter that “to my knowledge has a direct and predictable effect on the financial interests” of that entity, during his time as Treasury Secretary.

Since being nominated by Donald Trump, Mr Mnuchin has faced a storm of criticism over his six-year spell at the helm of OneWest, the Pasadena-based bank which foreclosed on tens of thousands of homeowners in the wake of the financial crisis.

Elizabeth Warren, senator from Massachusetts, has said Mr Mnuchin’s selection as Treasury Secretary “should send shivers down the spine of every American who got hit hard by the financial crisis.”

No date has been set for his confirmation hearing.

Additional reporting by Kara Scannell and Alistair Gray in New York

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