A Manhattan federal judge on Wednesday expressed doubts about whether he had jurisdiction to rule in a high-profile challenge to President Donald Trump’s foreign business ties as violations of the Constitution’s ban on presidential payments — so-called “emoluments” — from foreign states.
U.S. District Judge George Daniels said at a hearing that even if foreign government payments to Trump hotels and properties qualify as “emoluments,” the Constitution explicitly gives Congress the power to permit them, suggesting the dispute was “political” and not for the courts.
“They can make this an issue that has to be resolved by the third branch of government,” Daniels said. “They have not done that . . . If Congress had a concern they have the power to act. They have the power to hold hearings, to pass a resolution.”
The Constitutional provision says the president and other officials cannot “without the Consent of the Congress, accept of any present, Emolument, Office, or Title, of any kind whatever, from any King, Prince, or foreign State.”
Questions about his compliance with the provision have dogged Trump since the start of his presidency. The suit was brought by Citizens for Responsibility and Ethics in Washington, a watchdog group headed by two former White House ethics officers, and hotel industry plaintiffs New York and Washington who said Trump hotels’ foreign business is a competitive advantage.
During a 2-1/2 hour hearing that touched on subjects ranging from George Washington’s tobacco to Barack Obama’s biography, a Justice Department lawyer said the ban on emoluments was narrow, covering only foreign payments for personal services or flowing from official office, and not commercial profits.
Otherwise, said Brett Shumate, presidents from Washington to Obama would have had to worry about who was buying their merchandise, but none were ever challenged before Trump.
“Nobody ever understood the clause until this president to apply to private business pursuits,” he told Daniels.
But Deepak Gupta, representing the challengers, said the emoluments provision was a broad ban on taking anything of value from a foreign government to deter any risk of corruption, and covered items such as foreign embassy bookings at Trump hotels and Chinese trademark approval for Trump’s companies to “curry favor.”
“I give you an emolument, I’m expecting something in return,” he said. “If it’s embedded in a commercial transaction it’s very hard to detect, and that’s why we have that clause.”
Daniels appeared to lean toward the challengers’ interpretation, noting at one point that if payments for a treaty were funneled through a presidential “hot dog stand” they were still banned, noting that there was little precedent to rely on.
“Both of you are in uncharted territory,” he said.
But the judge grilled Gupta repeatedly on whether his clients suffered a concrete injury sufficient to give them standing to bring the case, and said he was disinclined to jump in without some indication that Congress was concerned.
“They don’t have to sit on their hands if they have a problem,” he said.
Daniels said he hoped to rule in 30 to 60 days.