After a week of major retailers dropping Ivanka Trump’s products, the #GrabYourWallet boycott made its biggest impact ever today when it prompted the president of the United States to respond with an angry tweet that may have crossed an ethical line, say government ethics experts.
This morning, just 20 minutes into a national security briefing in the Oval Office, President Trump went on Twitter to take a swing at Nordstrom, which announced last Thursday that it would no longer sell Ivanka Trump products: “My daughter Ivanka has been treated so unfairly by @Nordstrom. She is a great person — always pushing me to do the right thing! Terrible!” Within seconds, the share price of the retailer, which attributed its decision to the brand’s poor performance, dipped for a few minutes before quickly recovering. Later, the official @POTUS account retweeted Trump’s tweet, a possible ethics violation which illustrates the conflicts of interest inherent in the real-estate mogul’s new role as the president.
Nordstrom’s decision last week turned out to be a tipping point. The next day, Neiman Marcus said it would no longer stock items from the Ivanka Trump Fine Jewelry collection. (There are now rumors that the collection may be discontinued altogether.) Also employees at T.J. Maxx and Marshalls reportedly received an unusual memo last week instructing them to remove Ivanka Trump signs and hide products among other merchandise on racks. This week, Belk department store, Jet, and Shopstyle all dropped her products.
Since he was elected, Trump and his daughter, who serves as one of his closest advisors, have been under pressure to divest themselves from their businesses to address concerns that they could wield the levers of government to advance their own companies or to be influenced by special interests. But the Trumps haven’t gone that far. The president handed over control of the Trump Organization to his two oldest sons but retains ownership of the company through a trust and will benefit financially from his sons’ business deals.
Ivanka herself made a public show of separating herself from her company last November and in January, she announced on Facebook that she would take a formal leave of absence from both the Trump Organization and her own brand. But it’s clear that the Trump family has been closely watching the brand’s fate. Maggie Haberman, the New York Times White House correspondent, said that sources close to Ivanka claimed she was upset by Nordstrom’s decision.
The tweet and especially the retweet raised plenty of concerns among lawyers and ethics experts. “This is not trivial,” says Kathleen Clark, a law professor at Washington University who is an expert of government ethics, told Fast Company. “Trump is using government power for his personal purposes. That’s why we all wanted him to divest. He refused to and here he is using government power for his financial benefit or the financial benefit of his daughter.”
What are the legal implications of his decision? It’s complicated.
According to the Code of Federal Regulations, government officials cannot use their public office “for the endorsement of any product, service, or enterprise.” The law further states that officials cannot use their position to give the appearance that the government “sanctions or endorses” the activities of a private party. In this case, “sanctions” can mean to penalize, much like the U.S. has placed sanctions on Iran. The catch here is that the law applies to every single government employee besides the president and the vice president. It was designed that way because, while other employees of the White House can step aside due to a conflict of interest, forcing the president to do so would leave a massive power vacuum.
That said, the regulations provide us with a clear guide as to the right and the wrong way to use the government’s power. It makes it clear that there is a distinction between using one’s capacity as a government official and acting as a private citizen. Trump first tweeted under his private Twitter handle, @realDonaldTrump, to make this statement. “I interpret this tweet to mean that Donald J. Trump is acting in his personal capacity, not on behalf of the United States government,” Clark says. “He’s talking about his daughter and he doesn’t invoke anything about the government here.”
According to Clark, this initial tweet was not an ethical violation. The law ensures that government employees are afforded the right to act as private citizens. “It’s absolutely critical that government officials, in general, make communications in their personal capacity,” she explains. “And that the government not be able to shut down or gag government employees by prohibiting them from speaking on their own behalf.”
But all of that changed when the official @POTUS account retweeted Trump’s original tweet, because suddenly the official weight of the government was behind Trump’s criticism of Nordstrom’s decision to drop Ivanka’s products. “The @POTUS handle is seen as government property,” Clark says. “It’s an official government organ.”
On the surface, it seems like a small, perhaps even insignificant difference. After all, the impact is exactly the same: The world recognizes that the American president is angry at Nordstrom’s department store. But by using the government’s handle–much like using the government’s letterhead or standing behind a White House podium–Donald Trump is invoking the power of the government. “It may seem like a technicality,” Clark says. “But I would say this is about using government resources and government symbols–like saying something standing in front of the seal of the presidency–that would be indicating that his words have a different social meaning.”
And there could be a legal argument that Donald Trump has crossed a line. The question is whether Congress is willing to take him to task for this. “It’s an abuse of government power and Nordstrom is harmed by it,” Clark says. “He’s violating a common law standard that he owes to the American people the obligation to use government power for government purposes.”
Even if Congress doesn’t act, there’s another course of legal action that could take place. Norman Eisen, a former U.S. ambassador to the Czech Republic, and cofounder of the watchdog group Citizens for Responsibility and Ethics in Washington, says that Nordstrom could consider suing the government under California’s Unfair Competition Law , designed to protect businesses from “unfair practices.”
It’s unlikely that Nordstrom will follow through on this. Suing a sitting president or the government would be a landmark, resource-draining case and Nordstrom likely wants to create as much distance from this controversy as possible for fear of driving away Trump-supporting customers.
Spokespersons for Nordstrom and the White House did not return calls for comment.