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Kendall Coffey on the Lars Larson Show – January 24th, 2017

Kendall Coffey, former U.S. Attorney for the Southern District of Florida and co-founder of Miami law firm Coffey Burlington, joined the Lars Larson Show on January 24th, 2017 to discuss a lawsuit filed against President Trump to make his tax returns public. Follow Kendall Coffey on Twitter for additional updates and media appearances.

Lars Larson: It’s a pleasure to welcome back to the program Kendall Coffey, former United States Attorney. Kendall, thanks for taking the time to talk. A lawsuit filed against our brand new president, Donald Trump, for ethics violations to force him to release his tax returns. What in the world is this all about?

Kendall Coffey: Well, I’m just surprised they waited until Monday. I thought maybe 12:30 on Friday the lawsuits like this would begin. But I guess they wanted to give him the weekend. The theory of the lawsuit is that it is a violation of the Emoluments Clause of the United States Constitution to accept emoluments, whatever that means, which we’ll talk about momentarily, from a foreign government. President Trump has businesses around the world, and sometimes foreign governments or foreign diplomats rent some of his buildings or perhaps stay as guests in some of his hotels, [and] any money that comes to President Trump’s business…constitutes some kind of a emolument from a foreign government.

I don’t really think it’s a sound case. But in a way, they’ve signaled what they really want to do, even though what they’re arguing is that it’s a violation of the Constitution, and President Trump’s businesses shouldn’t be having anything to do with any kind of foreign interests. What they’re saying at the same time is, in order to prove their case [they must] find out what money President Trump may have been receiving [that is] directly or indirectly attributable to a foreign source. They’ve got to look at his tax return. So it’s not actually a lawsuit to get the tax returns. But it’s part of the normal discovery or subpoena process. They say they’ve got to get that information. Now bottom line, I don’t think this lawsuit is going to be successful in terms of a court of law, but in the court of public opinion they’ve already got their message out once again. They’ve got a message that you know President Trump has connections to foreign businesses or governments, and more specifically, they’re beating the drums once again that he hasn’t disclosed his tax returns. So is this really a strong case in a court of law? I don’t think so. Did they get a couple of points or get a little bit of attention in the court of public opinion? Maybe; that’s really for you and your listeners to decide.

LL: And we’ve talked about the emoluments clause a lot both before and after the election and before and after the inauguration. But let me kind of dive into this a little bit. And in fact I might even ask you to stay over if we’ve got calls on this. But you know first of all the Emoluments Clause–correct me if I’m wrong–does not make a distinction about the value of the emolument, does it?

KC: It doesn’t, but it seems to contemplate some form of a gift.

LL: So if President Obama got a bottle of wine, a nice bottle of wine from the President of France, he can’t actually take that bottle of wine. Right?

KC: I mean theoretically, you’re right, there is no dollar minimum or standards set by the Constitution. So theoretically, it could be anything, and as we know, U.S. presidents and other office holders have accepted things [that] have relatively modest value as gifts from foreign governments. I mean sometimes they may….I guess the American people would see the Statue of Liberty some years ago [as an example of that].

LL: Yeah, and in fact, well, that was received by the American people. And not to be ridiculous, but for example, I would imagine–I haven’t bothered to check this yet–but would you bet that Dreams From My Father was not only published in the United States but probably translated in other languages and sold in other countries?

KC: Of course.

LL: Probably by foreign publishers. But those weren’t the government. So President Obama could have taken payments from a foreign publisher as long as nothing involving the government of that country touched it. Right?

KC: Well, that is [a] fair and critical distinction because it does refer to foreign governments. Let’s talk about some of the hurdles the case has to go through. First and most centrally, is it in an emolument if somebody is paying basically market rent? Same kind of rent that a Trump-owned office building would charge any other tenant. Is that a gift?

LL: I don’t think so.

KC: I don’t think so either. I mean, Trump’s got a brilliant legal team. No surprise. He’s got great lawyers working for him, but they’ve made that argument very credibly, that President Trump’s businesses are…charging basically standard rate. They’re not getting a gift. And in fact, there are many public servants who have business interests. And no one has suggested that, for example, if a business is paying market rent to somebody who happens to be a mayor a senator or governor, whatever it is, that if they’re getting what is the legitimate business market rate in terms of some kind of compensation, rental, whatever it may be, payment on stock dividends, no one’s going to say that you have to report that as a gift. And so I think, you know, that lawsuit doesn’t get to first base. Now there’s a lot of other issues that raise the question of whether the lawsuit even gets to stand in the batter’s box, because we’re all very familiar with some of the issues…before you can get into constitutional attacks or claims that the government has violated some part of the law.

LL: That’s what you lawyers call standing, right?

KC: Standing is a big deal, and it’s not unusual at all–especially in controversial cases–for the courts to really question what is the special interest that these would-be litigants have that entitles them to basically drag the President United States into court? And standing generally…means you need to have some kind of distinctive injury or interest that’s unique to you. It can’t just be that everyone who is a taxpayer should be bothered by this, everyone who is a voter. What is [the] specific interest and distinct injury that these particular plaintiffs have? And I think that’s going to be a big obstacle to overcome, and as I say, they don’t get standing, they don’t even get into the batter’s box.

LL: I’m talking to former U.S. attorney Kendall Coffey. So for example, this group that brought the suit Citizens for Responsibility and Ethics in Washington, otherwise known as CREW. The judge might look at them and say, Look, you haven’t suffered any special injury. You don’t have any standing, so therefore we’re not going to allow the lawsuit at all, before we even get to the question of whether the lawsuit is valid or not.

KC: Sure. I mean, [how] is your interest any different from any of the listeners that Lars has, or from Kendall, or from basically any citizen or taxpayer of the United States?

LL: Mr. Coffey, let me ask you this. Now, let me play the devil’s advocate, not because I agree with CREW, but because, let me make it more complicated. So Donald Trump has a hotel in some foreign country, and a hotel, to operate, has to have licenses. Things like liquor licenses, [and] if they want to do any construction work they probably have to get construction permits. Could those things be considered emoluments because they have value? The ability to build onto a hotel or operate a bar in some foreign country has value, and those things come from the government. Can they make the argument that those things are emoluments?

KC: I think it would have to be a clear case. And it’s not very far from the normal kind of–I mean, frankly, corruption issues, where they’re really looking at some transfer of funds or some transfer [of] value to somebody [who] is in a public position. And the question always becomes, are you getting some distinct and special treatment? Are you getting, in effect, a gift from a foreign government? Or is this a just an example of zoning? Is this a character of zoning that other developers or other hotel builders might also have been entitled to, based on the existing laws?

LL: I have the great pleasure of having Kendall Coffey with me, former United States attorney. We’re talking about the Emoluments Clause [that] some of you probably [haven’t] cover[ed] since high school, but we’ve covered it a lot lately because it says, in short, that the President of United States cannot take gifts. Not big gifts, not little gifts. And now a group called CREW, the Citizens for Responsibility and Ethics in Washington, is suing President Trump as of yesterday for alleged ethics violations, and they’re demanding to see his tax returns so they can know where is he getting that money and [if] this constitute[s] emoluments.

Let me ask you from the other side, Mr. Coffey. Let’s assume that all these people–and I get plenty of callers who say he’s involved in this violation of the clause in the Constitution. I say, well, how would you suggest that he resolve these, and he said, “Well, sell everything he’s got.” First of all, it would be tremendously damaging to him. But let’s get past that. Let’s assume Donald Trump says, OK, I may take a billion dollar hit. I’ll sell everything I’ve got. Could he effectively sell things, you know like foreign properties, without also crossing the emoluments line because some of the bigger properties he owns, he might have to have the government sign off from the countries where they’re located? He might be selling to foreign buyers. As we know in the United States, it’s a private industry that owns things for the most part, not the government, but in some foreign countries like Russia, if you sell something, you’re probably selling it to an arm of Vladimir Putin, Inc. So could it even satisfy the Emoluments Clause at this point?

KC: Well that’s a great question because in many places they are a government owned entities. And, you know, you get into a lot of hairsplitting. What if, for example, the Russian government owns 40 percent of a particular company–or 50 percent? Under the theory that even an arm’s length transaction is getting a fair, not an excessive price, [that] could constitute the receipt of an emolument. He’d have a huge logistical nightmare trying to coordinate the sale and liquidation all the many assets that are connected to President Trump. And, of course, one of his ethics specialists stated that he’s going to ensure that he doesn’t actually receive any profit that’s connected to any other foreign properties. But whatever it is that the threshold question is, if you sell something or rent something or have a hotel room, and somebody pays you only the same amount that anybody walking in off the street pays, is that a gift? I don’t think so.

If somebody is in there, and say they have a law firm, and somebody comes in and pays him for their services just like all the other clients do, did they receive a gift? Of course not. If somebody pays far in excess of what a service, or a property, or anything else is worth, then the questions can arise. And that assumes we get to standing.

LL: But Mr. Coffey, let me ask you. The Emoluments Clause does not require a quid pro quo, does it? Because it just says if Vladimir Putin sends him a bottle of the best vodka in Russia and doesn’t ask a single thing for it, simply receiving that gift is a violation of the Constitution, and that’s the purist view of it, that you can’t take anything, you can’t get anything. I guess in theory, if the President of the United States goes to dinner in France with the President of France, he’s got to go Dutch. I mean, if you really want to take it to the Nth degree. Fair?

KK: Yeah, I mean, I think the President will be able to afford the dinner. Theoretically, you’re right.

LL: So now here’s what I want, to make it a little more complicated. Do you know what the single most valuable thing Donald Trump owns is?

KK: Well in the terms of a hard asset, I don’t know.

LL: I would say the soft asset. I’d say his most valuable property is his name. So you slap Donald Trump on the front of a hotel, you’re probably going to book more rooms. I mean, that’s the theory, anyway: you put Donald Trump on the front of the golf club. I know the Democrats will avoid it, and liberals. But it will be a more valuable golf club just by putting his name on the front. That’s true of a lot of celebrity endorsements, and most of those trademark things are a function of government. So even if he sold all his physical properties, if his name is still used anywhere on planet Earth outside the United States, to the extent that the name can only be protected and used in a sale–nobody is going to buy the use of your name if it can’t be trademarked–and it can’t be protected because you can’t very well say, I’ll put Trump on the front of my golf club in front of a golf club in Scotland, and then every other golf club in Scotland call[s] itself Trump Golf, and there’s no protection for that, the use of that name, but the protection comes from the government. Is the granting of, say, the trademark on the use of Donald Trump Golf by the Scottish government–Is that an emolument?

KK: Theoretically, that’s no different than, for example, getting approval to build a hotel in the Philippines.

LL: The reason I ask that is not to be picayune or penny ante. But I’m saying that these guys could say, literally, you have to sell everything you own outside the borders the United States, and you are not allowed to use your name in any way, shape, or form anywhere outside of this country. Because if you get the trademark protection…nobody would buy. No person who is buying the use of the trademark name is going to buy it without that protection, and the protection has been granted by government. They could literally say you effectively can’t be the President of the United States unless you stop using your name. Stop letting anyone else use your name and sell every hard asset outside the borders of the country.

KK: I mean, that’s an extension. If you take the core allegations and you stand it logically all the way, then that’s the result you get.

LL: That’s absurd.

KK: I don’t think anybody putting their money on this lawsuit is getting very far. But it’s already got us talking about it. It’s already in the news. And that may have been the major goal–again, keeping the drumbeats on President Trump, including the issue of tax returns. Because they know that is at least where they say the polls show that there’s wide public support for him disclosing his tax returns. That’s what they’re trumpeting because they think it connects to a message to the court of public opinion.

LL: But you know what’s crazy about that, Mr. Coffey? I think the reason 70 percent of Americans say we ought to is because the media has had a drumbeat going since the beginning of the Trump campaign, saying he has to release his tax returns, and they’ve been beating on this forever. And I think most Americans view the tax returns the same way the IRS does: this is your private business with the government, and the only thing that says it ought to be released is a tradition that dates back over 40 years to the Nixon administration because Spiro Agnew was a tax cheat. That’s essentially it is it.

KK: Yeah. And by the way, I completely agree with you that the IRS is not the most sympathetic agent in America. There’s actually a fair amount of law that recognizes that personal privacy and tax returns and plenty of limitations on even government.

LL: I couldn’t agree with you more. Mr. Coffey, I’ve got a break. I would love to continue talking about this, but I can’t thank you enough for your time. I really appreciate it, sir.

LL: Thanks for having me back. Fascinating stuff. Glad to talk to you.

Kendall Coffey also serves as an Adjunct Professor at the University of Miami School of Law. Learn more here: http://www.law.miami.edu/faculty/kendall-coffey