By now, it has been amply established that Donald Trump has no intention of severing ties with his real estate empire–and the treasure trove of payments from foreign governments. As a result, the moment he took the oath of office, he was violating the very Constitution that he was supposed to uphold. There is no doubt this is an impeachable offense. But as it stands now, the GOP-controlled House and Senate have no intention of acting. However, it turns out there might be a way to hold Trump to account after all–by turning the legal screws on the Trump Organization.
With Congress unable or unwilling to act–at least for now–it will likely take a lawsuit to pierce the web of conflicts. However, Jed Shugerman, a law professor at Fordham University and an expert on torts and legal history, thinks that it will be hard for any plaintiff to claim that it has standing to sue–that is, it can demonstrate that it has been injured by Trump’s actions. For that reason, he thinks Citizens for Responsibility and Ethics in Washington’s lawsuit against Trump–or any lawsuit against Trump–could founder, since it is very difficult for a private party to claim standing to sue a public official.
The Trump Organization, however, is another matter. Shugerman told ThinkProgress that there is a way the Trump Organization can be held to account for illegally funneling foreign payments to Trump. He points out that corporations are required to do business within the law in order to retain their charters. If a state attorney general suspects a corporation is engaging in unlawful activity, he can bring a “quo warranto” proceeding against the corporation. Since a public official would be suing a private entity, the standing problem is solved.
Shugerman first mentioned this in a blog post on February 9, which was republished in Law360. He sees this as a natural outgrowth of the yeoman’s work being done by constitutional scholars and ethics experts such as Laurence Tribe, Richard Painter, and Norman Eisen–who, more than anyone else, have tried to turn the hot lights on Trump’s blatant disregard for the Emoluments Clause.
Thanks, @tribelaw! I'm just building on your work w/ @ZephyrTeachout @NormEisen @RWPUSA https://t.co/GjlnmQsVuD
— Jed Shugerman Vote 11/6 (@jedshug) February 12, 2017
Quo warranto suits against corporations have become extremely rare since the 1950s, as shareholders now have greater windows to hold corporations accountable. However, this is an unprecedented situation–a major corporation whose controlling shareholder is the president of the United States.
A number of states have provisions in their statutes that explicitly give their attorneys general the power to file quo warranto suits. Fortunately, one of them is the home state of both Trump and the Trump Organization, New York. That state’s corporation law allows the attorney general to sue a corporation if it has “carried on, conducted or transacted its business in a persistently fraudulent or illegal manner.” If successful, the attorney general can seek to either heavily fine the corporation, enjoin it from the illegal activity, or in extreme cases revoke the corporate charter.
In Trump’s case, if a quo warranto action is successful, the New York state attorney general can force the Trump Organization to sell off certain assets, ban it from doing business with foreign governments, or even ask a judge to order the Trump Organization dissolved. More importantly for the long run, any quo warranto proceeding would almost certainly force Trump to make significant disclosures about his foreign dealings. In all likelihood, he would also be forced to–at long last–release his tax returns.
It also helps that New York’s attorney general is a Democrat, Eric Schneiderman–which removes any potential Republican roadblock to holding him accountable at that level. Schneiderman has already shown that he isn’t afraid to take on Trump in court. He forced Trump to cough up millions to settle lawsuits against Trump University, and forced the shutdown of the Trump Foundation. He would have at least one route to sue Trump under the Emoluments Clause. The biggest commercial tenant at Trump Tower is the Industrial and Commercial Bank of China, the largest bank in the world. That bank is owned by the Chinese government.
A quo warranto suit could also impact the Trump International Hotel Washington, which is located in the Old Post Office Pavilion a few blocks from the White House. Under the terms of the Trump Organization’s lease with the General Services Administration, federal officials cannot control the hotel. Since Trump is the highest federal official of all, D. C. attorney general Karl Racine could bring a quo warranto action against Trump that could potentially force him to sell off the hotel.
So there is a way to hold Trump to account for treating the Constitution as something in his way–and it doesn’t require Republican help. The obvious question–will Schneiderman or any other Democratic attorney general in a state where Trump does business exploit it?
(featured image courtesy Sebastian Bergmann, available under a Creative Commons BY-SA license)
