Risk Update

Conflicts Allegations — Trump Towers + Law Firm Tenants = Attention; McDonalds + NLRB Conflicts Concerns

Posted Dan Bressler

The conflicts alleged in this piece are well beyond the scope of the law firm-ethical variety we typically cover, though there are firms noted: “‘One of the Most Significant Potential Conflicts of Interest in American History’: How Everyone From Foreign Governments to Federal Contractors Is Quietly Lining Trump’s Pockets” —

  • “Why would anyone, much less an entity that serves as an arm of the Qatari government, bother outfitting an empty office space in an expensive San Francisco skyscraper? Consider who owns the building. The lobby features signs for Vornado Realty Trust, the publicly traded firm, with innumerable shareholders, that has a 70% stake in the tower. The other 30% belongs to a single man: Donald J. Trump, the president of the United States… Trump’s 30% share of the rent in the two office towers amounts to an estimated $99 million annually, or roughly 52% of the commercial rent flowing into the Trump Organization.”
  • “Trump, in other words, personally holds 30% of the space the Qataris are leasing. Strip away the layers and it boils down to just the sort of arrangement the founding fathers feared. A foreign government, it seems, has been paying the president of the United States for more than a year. With so many other scandals brewing, this one has managed to go entirely undetected—until now.”
  • “By law, the president has to disclose every company that pays him, but he does not have to reveal who, in turn, pays those companies. That means that Trump, who holds his commercial real estate portfolio through a web of entities, does not have to disclose who his tenants are. It’s a massive loophole in federal disclosure laws, one that allows the president to accept money from entities all over the world without ever having to tell federal ethics officials who is paying him.”
  • “Then there were law firms who served as tenants while lobbying on behalf of various foreign clients, including some with disastrous reputations.”
  • “Jones Day helped Huawei, the Chinese technology company that Trump labeled a national security risk, with issues before the White House while also paying the president an estimated $1.5 million a year.”
  • “Venable LLP, a firm renting space inside 1290 Avenue of the Americas for an estimated $12.2 million a year, lobbied the Treasury Department and Congress on behalf of Russian state-controlled bank Sberbank, weighing in on bills designed to expose corruption around the Kremlin and combat Russian interference in elections.”
  • “A spokesperson for Venable suggested that connecting its rent payments to its lobbying efforts requires ‘an incredible leap of logic.'”
  • “Fair enough. But it’s still remarkable that a Trump tenant was apparently pushing Vladimir Putin’s agenda in Washington. And because of lax disclosure laws that leave the details of these transactions secret, it took more than three years into Donald Trump’s presidency for anyone to notice.”

“McDonald’s joint employer victory could be marred by potential conflict of interest” —

  • “The House Committee on Education and Labor subpoenaed the National Labor Relations Board on Tuesday for alleged ethical violations involving a December ruling that found McDonald’s not liable for violations committed by franchisees, resulting in a roughly $170,000 settlement from the chain’s franchisees to employees. Fight for $15 and other labor groups accused the chain of firing workers for engaging in union activity in 2012.”
  • “NLRB board member William Emanuel was asked not to participate in the case since he worked for a law firm that helped McDonald’s franchisees looking for legal assistance in response to employee protests. But Emanuel was involved in the process, which House Education Committee spokesperson Josh Weisz told The Washington Post violated an executive order that bars board members to be involved in decisions ‘directly and substantially related’ to former employers or clients.”
  • “The House Committee on Education and Labor is also investigating Emanuel’s participation in the NLRB’s decision to clarify the joint employer rule in February. The updated terms of the rule insulate franchisors from being held liable for labor infractions committed by their operators.