WASHINGTON ― By walking onto the inaugural platform outside the Capitol and putting his hand on a Bible on Jan. 20, Donald Trump may be stepping closer to committing a felony than he ever imagined when he launched his unlikely bid to become the nation’s 45th president.
That’s because Congress passed a law in 2012 called the Stock Act, which explicitly bars the president, members of Congress and senior executive branch officials from using their insider knowledge to make money.
Obeying the law is not especially difficult for most people. But most people do not have access to the immense amount of secret information that presidents deal with every day. And no presidents before have been billionaires with business holdings spread around the world.
The law is clear in saying that the president cannot do anything that resembles helping friends, family members or himself to make a profit off of information he gains from doing his job.
“It’s the same as it applies to the American people,” said Sen. Kirsten Gillibrand (D-N.Y.), the lead author of the Stock Act. “You cannot trade on nonpublic information. That is a criminal violation of the law.”
“The president, the vice president, Cabinet secretaries, all of them have to play by the same rules as every other American,” Gillibrand added. “And that’s what the Stock Act ensures.”
Indeed, the director of the federal Office of Government Ethics, Walter Shaub, recently declared as much in a letter explaining his official guidance to Congress.
“The Stock Act bars the President, the Vice President, and all executive branch employees from: using nonpublic information for private profit; engaging in insider trading; or intentionally influencing an employment decision or practice of a private entity solely on the basis of partisan political affiliation,” the letter says.
For Trump, it all presents a special problem, especially since he has unprecedented conflicts of interest, has so far decided not to completely divest himself of his businesses and is going to leave control of his business in the hands of his children.
It means that anything he says to his children or business confidants, or any tips he gives to friends that get turned into profits can get him in trouble. (The video above explains it in more detail.)
“If you tell people who work for you, or tell people you like or tell your best friend, that’s all insider trading,” Gillibrand said.
A president has constant exposure to and involvement in market-moving intelligence. And a president with multiple business interests and numerous friends and relatives involved in business could easily improperly mingle those worlds.
“It’s very difficult. So it’s not surprising that most [senior government officials] put all of their business interests in blind trusts. It’s not surprising that that’s what most presidents have done because it’s really difficult,” Gillibrand said.
While it may be clear that Trump will be in a precarious position if he keeps his businesses in the family, it is not clear what would happen should he violate the letter of the law. Many legal scholars think that since the president runs the executive branch, which includes the Justice Department, he could not be prosecuted by that department.
But that proposition has never really been tested.
The only obvious way to check a president who has committed acts that appear to violate federal law is to impeach. How likely such a step would be in a Republican-led Congress is not clear.
An impeached president could be prosecuted unless his successor pardons him.