HL 14 – Emoluments, Legal Prostitutes and Tax Law 101

January 13, 2017

Home | Blog | HL 14 – Emoluments, Legal Prostitutes and Tax Law 101

The contrast between the outgoing and incoming presidents during their swan and maiden performances on January 10 and 11 was the most severe your blogger and most Americans have ever experienced.  Not saying who appeared smarter, more dignified, gracious, germaphobic, etc. – just that the distance in every area seemed to span light years.

In his, PE Trump had assistance, including from Sheri Dillon of the prestigious law firm Morgan, Lewis & Bockius.  We know it’s “prestigious” because Trump’s communications director, Sean Spicer, told us so and last year Morgan, Lewis was named “Russia Law Firm of the Year” by Chambers & Partners, a legal rating service.

In the course of explaining why the conflict of interest and ethics arrangements that she and others at her firm designed for Trump not only met but far exceeded what the law demanded, Dillon chirped many of the themes of Trump’s campaign and post-election spin.  At a news conference where Trump and Dillon made clear that there would be no sale of assets, no blind trust and no disclosure of tax returns, that she prepared, including seven years of returns no longer being audited, she assured us that Trump’s “sole business and interest is in making America great again.”  And again without release of the returns, Dillon also told us that “The American people were well – well aware of President elect Trump’s business empire and financial interests when they voted.  Many people voted for him precisely because of his business success.”  Hear that Hillary, it wasn’t because they were deplorable racists, sexists, homophobes, xenophobes, Islamaphobes or just plain Hillaryphobes.  They just admired the way Trump gamed the bankruptcy and tax laws to his advantage.  But with her sloganeering, Dillon also pronounced well outside her narrow expertise, on the Constitution’s “emoluments clause” and then within her tax law sweet spot – and somehow got both points wrong.

By Ms. Dillon’s reasoning when the Emir of Kuwait or the Maharincess of Hranistan pay $33,000 per night for the Trump Townhouse suite at Trump International Hotel on Pennsylvania Avenue, that is just a “fair value exchange” not an attempt by foreign interests to curry favor with the administration and no commercial exploitation of his name by Trump.  President Bush 43’s and President Obama’s top ethics lawyers have already disagreed with Dillon.  So she reassured us that the Trump hotel profit on the suite would be contributed to the U.S. Treasury.  Here she forgot the first lesson of Tax 101.  The income on the foreign potentate’s nightly stay must be “recognized” and cannot be “assigned” in the manner described.  The profit is taxable and the voluntary contribution deductible, end of story.

With this taxpayer (although he apparently doesn’t pay federal taxes) whose returns will never be revealed, how this Morgan, Lewis game is manipulated will remain secret until it likely explodes in all our faces.


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