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ANDREA BERNSTEIN: Hello, and welcome to this Trump, Inc. podcast extra, from WNYC and ProPublica. I'm Andrea Bernstein. Today we have a special guest: Karl Racine, who’s the Attorney General of the District of Columbia, who recently won a big victory in his lawsuit to prevent President Trump from profiting from his family's business while he's in the White House.
Just recently a federal judge, in a rather unambiguous decision, ruled D.C. could go ahead with discovery, collecting documents and information on Trump's business. So we're going to talk about D.C.’s lawsuit — and all the lawsuits out there — and how the courts are responding, and what's next. But first, welcome, Attorney General Racine!
ATTORNEY GENERAL KARL RACINE: Thank you very much for having me, Andrea.
BERNSTEIN: So, you know, I always stumble on this, but people call you General?
ATTORNEY GENERAL RACINE: [LAUGHS] My friends and family do not, I assure you, [BERNSTEIN LAUGHS] but yes, by official title, I'm “General Racine.”
BERNSTEIN: Okay! Well, thank you for joining us. So, back in June of last year, you decided to file an emoluments case with the A.G. of Maryland. And I think most people who listen to Trump, Inc. know what the Emoluments Clause is, but just in case, can you explain?
ATTORNEY GENERAL RACINE: I will. And let me first say that I have relied on information that I've learned from your podcast to inform the team on — on aspects of our case. So thank you for your in-depth investigative reporting.
The Emoluments Clause is the country's first anti-corruption law. What that means is that our Framers, including Alexander Hamilton, were incredibly concerned that our new democracy could be corrupted by a president or any federal officer receiving monies from a foreign country or from other states in the United States. And so they included this Emoluments Clause to ensure that a President of the United States — as well as other federal officers — would be loyal to the interest of the United States, not to their purses or to their pocketbooks.
BERNSTEIN: Why? Why were they so concerned about this?
ATTORNEY GENERAL RACINE: They were concerned about it because the history in Europe showed that European royalty, oftentimes, essentially, bought each other out. They would say, “Hey, look, if I were to give you this particular island, will you be with me on this important issue?” And deals were made in that regard. And so our founders were focused on having checks and balances and protections against things like corruption.
BERNSTEIN: So, if I'm not mistaken, between the 1700s and now, there is no case law on this. Is that right?
ATTORNEY GENERAL RACINE: That's exactly right. Our case is before Federal District Judge in Greenbelt, Maryland — Judge Masetti — and Judge Masetti’s opinion, uh, was the first opinion rendered by a federal district judge. And I think the point is really important. Why has there never been a federal judicial opinion on the Emoluments Clause? The answer simply is that every prior president followed the rules. And the rules essentially require that a president should firmly separate themselves from any financial entanglement or business that they had prior to the presidency.
In short, we’re here because President Trump has decided to do what no other President of the United States has done, and that is to continue to profit from his business while serving as President of the United States.
BERNSTEIN: Now, the President and his lawyers have made a number of comments about this. They say the president can[‘t have a conflict, that staying in a hotel is not an emolument, and that there'd only be a problem if there was an actual quid pro quo. So, with that in mind, let's listen to what President-elect Trump said in January 2017. This was shortly before the inauguration at that press conference at Trump Tower with all those stacks of folders in front of him.
DONALD TRUMP: Because, as you know, I have a no-conflict situation because I'm president.
BERNSTEIN: So what about that?
ATTORNEY GENERAL RACINE: Well, I remember that well. My reaction was, “Oh, that can't be the case.” Every single, uh, federal officer must be mindful of rules of conflicts of interest. And I've got to tell you, it was right around that time period, uh, that we in the Office of Attorney General of the District of Columbia — and I can speak, I think, for my colleague, Brian Frosh in Maryland — started receiving letters from, oh my goodness, residents, as well as legal scholars, pointing out that the President could be in flagrant violation of the Emoluments Clause. And it was then that we really started digging in, doing our homework, and, um, reaching the conclusion that, “My goodness, we've got a strong legal case here.”
BERNSTEIN: Now there are three cases, right, working their way through the courts right now, specifically on emoluments?
ATTORNEY GENERAL RACINE: That's correct. There’s a case in New York. In that case, the federal district judge ruled in favor of the President of the United States. He determined that the party that brought the suit did not have legal standing.
There's a second case in the District of Columbia that's been brought by, uh, Democratic Senators, and then, uh, there’s, uh — our case. Our case has advanced the furthest, and we're on the eve of receiving what's called “discovery,” getting documents relevant to our case.
BERNSTEIN: What do you think you're going to learn?
ATTORNEY GENERAL RACINE: I think we're going to learn a lot. I think we're going to learn that, in fact, the President of the United States is receiving monies from foreign sovereigns in violation of the foreign Emoluments Clause. We're going to also learn, as your podcast has reported, that the President has been receiving emoluments from certain states, including Maine. And, as you all have reported well, he is also receiving emoluments from federal agencies.
In short, the Trump Hotel in the District of Columbia, just five blocks from the Office of Attorney General in D.C., is getting money from foreign sovereigns, states, and federal agencies. And what's really interesting is, when you talk to you or — or do research into why some of these foreign countries are doing business at the Trump hotel, they tell you very plainly and very clearly. They say that they're staying there, they’re making these payments, because they want to honor the President, and that they know that in order to honor and show respect to the President, they've got to do business with them.
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BERNSTEIN: Now, Judge Daniels in New York — who is not exactly what you would call a friend of President Trump — dismissed the case here. Now that's on appeal. But did that give you pause? I mean, what did you make of his arguments about the plaintiffs in that case not having standing to go forward?
ATTORNEY GENERAL RACINE: That suit was brought by a different party. It was bought by a collection of hotels against, um, you know, the President, citing the Emoluments Clause. I think that their level of standing, you know, candidly, is not as firm as the level of standing that applies to state attorneys general. And, in the case of the District of Columbia and Maryland, uh, the hospitality industry is a significant source of revenue for both of our jurisdictions. And we were getting reports and, you know, finding evidence that, you know, in short, the Trump Hotel was getting business from local hotels, partly because — just as the foreign sovereign countries made clear — they wanted to go to the Trump Hotel to “show honor.”
BERNSTEIN: One of the — I mean, to clarify, you're seeking in your lawsuit to what? To have the President divest? What's the remedy you're seeking?
ATTORNEY GENERAL RACINE: The first remedy we're seeking is a declaratory judgment from a federal court that firmly and concisely finds that the President has been violating the Constitution's Emoluments Clause. Second, we want the court to effectuate that which the present has not, which is, put in place a clear dividing line, uh, whereby the President will not receive any monies during the time that he's president from any of the hotels that he has here in the District of Columbia.
BERNSTEIN: I want to play you a couple of clips of various Trump and-or other representatives of the President, and some arguments they've made. So the first one that I'm going to play is from Sheri Dillon, who is his personal attorney, and she was at that press conference that we were talking about. This is what she said:
SHERI DILLON: No one would have thought, when the Constitution was written, that paying your hotel bill as an emolument. Instead, it would have been thought of as a value-for-value exchange? Not a gift, not a title, and not an emolument.
BERNSTEIN: So she directly confronts the issue of the Emoluments Clause. And she says, “Look, if they're paying a hotel bill, this is not really a gift.”
ATTORNEY GENERAL RACINE: Yeah. So really what she's saying is that the President of the United States should be able to engage in commerce. Uh, and because he's providing service, “Hey, it's not a violation of the Constitution.” Uh, “Wrong,” is what, uh, the judge in Maryland said. The judge in Maryland — quite correctly in our view — found that any gain, any money going into the pocket of the President of the United States, notwithstanding the provision of services is an unlawful gain under the Emoluments Clause.
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BERNSTEIN: Here’s another argument that you could hear in your case. So a judge brought this up during the appeal of the New York case that got dismissed, and he said, “How could you really solve this problem?”
JUDGE GEORGE DANIELS: Wouldn’t people who want to curry favor with the President still use the hotels and still use the restaurants, so that they could tell him they were doing it? And they — or — or because they like the brand, or because they like the service, or because they wanted to confer financial enrichment on the family?
BERNSTEIN: That is a question, right? That his family is still going to run the hotels no matter what, and, based on the behavior of foreign leaders, is it any reason to think that they wouldn't still patronize the Trump hotels in order to curry favor with the President, even if he wasn't personally profiting?
ATTORNEY GENERAL RACINE: Clever argument, uh, has some common sense logic to it, but that's not the question presented. The Constitution says that any federal officer, including the President of the United States, shall not receive any gain from foreign countries. And again, I go back to the history of the United States.
We're here talking about this, only because Donald Trump would not do what every other president who had a business — including Jimmy Carter. You remember the peanut farm days?
BERNSTEIN: Oh, I do. [BOTH LAUGH]
ATTORNEY GENERAL RACINE: He had to give up that peanut farm and once he gave it up and entered into a for-real blind trust, guess what happened? Months after he did that, uh, the Republican Congress, uh, launched an investigation as to whether President Carter was receiving emoluments.
BERNSTEIN: What happened with that investigation?
ATTORNEY GENERAL RACINE: It went nowhere in regards to the President of the United States. It did uncover some misdeeds by his, uh, colorful brother, Billy.
BERNSTEIN: I wanted to play another argument for you from that same emoluments lawsuit in New York. This is the Justice Department lawyer arguing on the President's behalf during the appeal.
JUSTICE DEPARTMENT LAWYER: All I would want to suggest that it's not so clear that it is an unalloyed benefit. The President — I don't think it's a surprise to say — is a very polarizing person. And, just as there might be some people who might be in— in— interested in going to the President's establishment because he has a financial interest, so, too, there might be people who are disincentivized.
BERNSTEIN: So basically he's saying some people want to help Trump's family business, some want to hurt it. In the end, it balances out.
ATTORNEY GENERAL RACINE: Yeah. And — and this is where the Constitution matters more than anything else. Why are we debating whether the President is making money or losing money because he is a controversial figure? The Constitution says, “Hey, Mr. President, please be the president. Don’t be in business during the four or eight years that you serve the people.” It's as simple as that. The President must separate himself from his businesses under the Constitution.
BERNSTEIN: So we get this question a lot on Trump, Inc., so I'm going to pass it along to you, which is: Why should people care about this? And what difference will it make if the President is profiting or not?
ATTORNEY GENERAL RACINE: Look, uh, those are, I think, fair questions. Um, let me give you an example — and the example does not relate to the Trump hotel in Washington, but I think the example will nonetheless be relevant.
The Trump Hotel in New York City was having a very bad year. Apparently the first three quarters of the year were not profitable. Then, all of a sudden, the government of Saudi Arabia, uh, sent a fleet of Saudi Arabians to occupy the hotel. And they also obviously paid the freight. Well, as it turns out, that last-minute visit by the Saudi government officials meant that — not only did the fourth quarter go really well for the Trump hotel in New York — but the entire year turned positive.
Now, as Americans, why must we even worry or consider whether the gifts that the Saudi Arabians gave to Trump impact how Trump is going to approach the Saudi Arabians regarding what appears to be a Saudi assassination of Jamal Khashoggi? The whole point about the Constitution is to remove the appearance of corruption, the appearance of impropriety, and all the President has to do is enter into a clean and firm blind trust. Why isn't he doing this?
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BERNSTEIN: So what's next in your lawsuit?
ATTORNEY GENERAL RACINE: Well, what's next is discovery. Um, you know, we've made an allegation —
BERNSTEIN: And — and that happens regardless? They can’t appeal that?
ATTORNEY GENERAL RACINE: It's a good question. Uh, the most recent decision on that the court made was that discovery should proceed, and that the President cannot appeal the judge's rulings until the case is over.
It's rare that courts allow appeals while the case is going on, but I’m confident that the Department of Justice will seek every creative way to get this to another appellate court. We’ll continue to persist in our fight to try this case before we go to appeals and we're going to move with discovery. What we want to know is, we want to know the extent to which foreign and domestic governments — hear states — have been paying the President of the United States at the Trump hotel. We want to know all about the special concierge service that was once established at the Trump hotel that specifically sought out business from foreign sovereigns. And we want to know the trail of the money that eventually lands itself, sure enough, into the President's bank account.
BERNSTEIN: So one of the things that we've been frustrated with is that there was some promised disclosure — some very small amount of promised disclosure — and neither the Trump Organization or the White House has really lived up to that. Is that something that your lawsuit remedies?
ATTORNEY GENERAL RACINE: The lawsuit will remedy that. What you're talking about is the great opacity with which the President operates his businesses. You know, of course, we've not seen a tax return. We've always seen those from prior presidents. Um, we've also seen half-efforts in regards to trying to separate himself from the business. Pursuant to a federal lawsuit, where we have clear rules of discovery, uh, with a federal court overseeing that, we're going to get the kind of information that we need.
BERNSTEIN: When discovery happens and you start getting documents, are those documents then public to us? Or is there another layer that has to happen before we get to see them?
ATTORNEY GENERAL RACINE: Uh, generally speaking, a civil case is a public case, and materials that are produced in the context of those cases are also public and certainly subject to, um, FOIA, et cetera.
BERNSTEIN: Do we have any — any kind of date on the discovery? Is there a clock running on that?
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ATTORNEY GENERAL RACINE: The clock is running for us to produce a schedule to the court and, sure enough, we're to propose a discovery schedule on or before Thanksgiving Day.
BERNSTEIN: Well, thank you very much. General Karl Racine is the Attorney General of the District of Columbia and is pursuing an emoluments case there. Recently received a favorable decision. Thanks so much for talking to us today on Trump, Inc.
ATTORNEY GENERAL RACINE: Thank you very much, Andrea.
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Trump, Inc. is produced by Meg Cramer. The editors are Charlie Herman and Eric Umansky. We had help this week from Jesse Eisinger. The Technical Director is Bill Moss. The music is by Hannis Brown. Robin Fields is the Managing Editor of ProPublica. Jim Schachter is the Vice President for News at WNYC, and Steve Engelberg is the Editor-in-Chief of ProPublica.