The Presidential Compensation Clause & Trump’s “No New Deals” Motto

Today’s soup du jour is the Presidential Compensation Clause (“PCC”). The PCC provides:

The President shall, at stated Times, receive for his Services, a Compensation, which shall neither be increased nor diminished during the Period for which he shall have been elected, and he shall not receive within that Period any other Emolument from the United States, or any of them.

U.S. Const. art. II, § 1. cl. 7. This clause applies to the President. We know this clause—the PCC—applies to the President because it says: “the President.”

The PCC directs Congress to set the President’s “Compensation” by statute. Once Congress determines the President’s compensation by statute, Congress cannot increase that compensation or decrease it (during that President’s 4-year term). Furthermore, neither Congress nor the States may supplement the President’s compensation with “other Emoluments.”

What is an “Emolument”?

Some people argue that an emolument is a “benefit” or, indeed, any benefit. Certainly, there is some reason to think that “Emolument” extends to any “undeserved benefit,” such as a gift or present. But does the-Emolument-as-any-benefit position extend to what is already yours?

Let me give you a hypothetical. Trump deposits $50,000 in The First Bank of New Jersey (“FBNJ”), a closely-held and privately owned bank in Newark, New Jersey. He makes the deposit on January 20, 2016: a full year before he takes office. The day he takes office, January 20, 2017, FBNJ is seized by state authorities: the stockholders, directors, officers, and managers are charged with violating state racketeering and state money laundering laws (in regard to non-Trump accounts). The state, New Jersey, prevails, and, as a result, the stockholders’ interests in the bank are wholly transferred to New Jersey. A state government agency of New Jersey now owns, controls, and manages FBNJ. No depositor money has been lost. On January 20, 2018, a full year into his administration, President Trump is touring New Jersey. He stops by “his” bank. He goes to the teller at the window, and he seeks to cash his personal cheque** for $10,000 on his FBNJ account. The conversation goes likes this:

Teller: Mr. President, I cannot honor your cheque.

Trump: Why the **** not? Don’t I have $50 ****in grand in my account?

Teller: Yes, Mr. President, you do, but we have special instructions regarding this account. Let me ask you to direct your inquiries to the Managing Vice President, Mr. Gringotts.

            ….

Trump: I am very busy, and I have important private and public business to conduct. You had better have a good reason for delaying me here today?

Gringotts: Mr. President, I would like to help you, but this bank (which is, in effect, a state agency) has been directed by a higher state government authority to block your accessing your account until you are out of office.

Trump: I am going to sue you—yuuuge!

Gringotts: Mr. President, please, let me explain. This bank is now owned, controlled, and managed by New Jersey. The New Jersey Attorney General’s office solicited a legal opinion or memorandum from a very reputable law firm—Eisen, Painter & Tribe LLP—and that opinion took the view that this bank’s turning your money over to you (even on the same terms and conditions that we do for all our other customers) is a “benefit” or “emolument” forbidden by the U.S. Constitution’s Presidential Compensation Clause. That clause binds us as well as you. Here is a copy of the memorandum; I think we may have already sent you a copy.

Trump: But it is my money, not your money. Your giving me what is mine is no “benefit.” What is more, you are required by contract and by statute to honor my cheques.

Gringotts: Mr. President, the memorandum takes the view that state contract law and state and federal banking statutes are trumped by the Constitution. In confidence, Mr. President, I voted for you, and I think the equities are all on your side. But my own view cannot come into this. I am a state government officer, and I am instructed by higher authority not to honor your cheque. Should a court direct me to do otherwise, of course, I will comply.

Trump: That’s a crazy result. What’s more you know its crazy. Giving me what is mine is not a forbidden gift, present, or “emolument.” A President ought not to receive more favorable terms than the general public (except as is incidentally necessary to carry out pressing public business) but he ought not be treated worse than the general public either. I will say it again: I am going to sue—yuuuge!

In the hypothetical above, the President is not so much asking for a benefit, as he is asking for what is already his. In other words, where a contract, property, or statutory right has already vested, the PCC does not come into play. Old deals (negotiated with state or federal instrumentalities prior to becoming President) go forward, and Trump can demand that those old deals remain in force and honored. New deals, that is, those deals which are individually negotiated with state or federal instrumentalities and which are not equally accessible to all other U.S. citizens on the same terms and conditions, are (as a general matter) forbidden once Trump becomes President.

That position described above in not my view. Rather, it is the long held view of the staff at the Department of Justice’s Office of Legal Counsel (“OLC”). For example, in 1964, OLC staff determined that President Kennedy could keep both his presidential compensation and also continue to receive naval retirement pay. In other words, “the President [may] continu[e] to receive payments to which he was, prior to his taking office, entitled as a matter of law” notwithstanding that those additional payments come from the United States Treasury. President Reagan’s Ability to Receive Retirement Benefits from the State of California, 5 Op. O.L.C. 187, 189 & n.4 (1981) (Simms, Dep’y Asst. Att’y Gen.) (quoting prior Kennedy memorandum). Likewise, OLC took the position that President Reagan could continue to receive both his presidential compensation and also continue to receive the state pension which he had already accrued as governor of California. Id. at 190; see also Norman L. Eisen, Richard Painter & Laurence H. Tribe, The Emoluments Clause: Its Text, Meaning, and Application to Donald J. Trump, Governance Studies at Brookings  5 n.13, 11 n.42 (Dec. 16, 2016), http://tinyurl.com/zsxrayj (citing OLC’s Reagan memorandum approvingly). 

The point is that not every “benefit” is an “emolument,” even if the benefit flows directly from a state’s treasury or from the U.S. Treasury. Old deals and vested rights go forward; new deals are not impossible, but they are subject to heightened scrutiny, and for that reason, they should be avoided where reasonably possible.

Unlike others, I am not asking you to accept the OLC’s conclusions because OLC is an “authority.” Instead, I would have you review their memoranda and see if their reasoning is sound. Conclusory statements absent cogent argument, evidence, and precedent you are free to and should reject. Likewise, where OLC memoranda put forward conclusions absent any discussion of weighty contrary precedent, you should ignore such views as wholly unsound and unprofessional. There are those who will tell you otherwise. They will tell you that you must accept all OLC memoranda as authoritative because OLC is a highly professional organization at the pinnacle (or near pinnacle) of the American legal establishment, and its work product deserves as much deference as would an independent Article III court. When they tell you that—ask them—did they feel that way about the so-called torture memoranda?

Seth

** That’s right: I am not using American-English. 

Twitter: https://twitter.com/SethBTillman ( @SethBTillman ) 

My prior post: Seth Barrett Tillman, Discussions, Quotations, Citations to Tillman on “Office” and “Officer,” The New Reform Club (Dec. 20, 2016, 6:29 AM). [here]