Ivanka Trump Joins White House Officially; Won't Sell Brand

(Bloomberg) -- Ivanka Trump said she will become an official unpaid federal employee after Democratic lawmakers said her previously unspecified role advising her father, President Donald Trump, raised questions about how she’d avoid conflicts of interest.

“I have heard the concerns some have with my advising the President in my personal capacity while voluntarily complying with all ethics rules, and I will instead serve as an unpaid employee in the White House Office, subject to all of the same rules as other federal employees,” Ivanka Trump said in a statement Wednesday. “Throughout this process I have been working closely and in good faith with the White House Counsel and my personal counsel to address the unprecedented nature of my role.”

Ivanka Trump doesn’t plan to divest from her brand of clothing and accessories as part of her compliance with ethics standards, said Jamie Gorelick, her attorney at law firm WilmerHale.

“Her compliance with ethics rules will be the same as they have been,” Gorelick said. “You can hold an asset if you recuse from particular matters.”

Larry Noble, general counsel of the Campaign Legal Center, which advocates for stricter controls on money in politics, said the decision not to divest was troubling. Recusal, he said, is limited to those with decision-making authority. That means Ivanka Trump would have more latitude to participate in matters in which her role is to advise, he said.

‘Porous Wall’

“There’s still the core issue of whether she’s going to be involved in things that can affect her family’s business,” Noble said. Her ethics arrangements provide a “very weak, porous wall” between her and her business, he said.

By taking no pay, Ivanka Trump may be able to avoid requirements to divest from assets that pose potential conflicts of interest and to file public financial disclosures, Noble said. Not all federal employees are subject to the same ethics provisions, he said, and the standards that apply are generally tied to an employee’s pay level.

“If Ms. Trump not only heard, but also understood, the ethics concerns expressed by many, she will abide by the principles and goals of the ethics rules designed for the high-level position she will hold in the U.S. government, regardless of her not being paid,” Noble said.

The U.S. Office of Government Ethics is in charge of evaluating federal employees’ plans for avoiding ethical conflicts -- though the agency’s authority is limited in the case of White House staff members, said Craig Holman, a government affairs lobbyist for Public Citizen, a left-leaning government-watchdog group in Washington.

Enforcement Issue

“If OGE determines that a financial stake truly poses a conflict of interest, you really do have to divest,” Holman said. But while he said he thought the ethics agency would recommend she sell the asset, he added, “they’re not in position to do much to enforce it.”

That power rests with the White House Counsel, Holman said.

Ivanka Trump announced in January that she was handing day-to-day management of her brand to top lieutenant Abigail Klem. A closely held company licenses her name to vendors that make goods, including a $100 million apparel line made by G-III Apparel Group, as well as shoes and accessories. She has transferred the company’s assets to a new trust overseen by relatives of her husband, Jared Kushner, but she has retained ownership and receives payouts.

Ivanka Trump’s Wednesday statement came just hours after Democratic Senators Elizabeth Warren and Tom Carper released a letter to the federal ethics office, asking whether the White House sought the agency’s guidance on the first daughter’s position. The letter followed news reports that Ivanka Trump was being given a West Wing office and security clearance without a specified official role in the administration. 

Senators’ Questions

The senators also asked what the consequences would be if Ivanka Trump violated rules that apply to regular full-time employees and what financial disclosures she would be required to make.

The White House praised Ivanka Trump’s decision.

“We are pleased that Ivanka Trump has chosen to take this step in her unprecedented role as First Daughter and in support of the President,” the White House said in a statement Wednesday. “Ivanka’s service as an unpaid employee furthers our commitment to ethics, transparency, and compliance and affords her increased opportunities to lead initiatives driving real policy benefits for the American public that would not have been available to her previously.”

‘Special Status’

Instances of family members -- particularly children -- of presidents serving in the administration are rare, and unprecedented under modern ethics standards. According to Barbara Perry, director of presidential studies at the University of Virginia, Ivanka Trump would be the first child of a president to hold an official White House post since Dwight Eisenhower’s son John.

The only comparable situation since the Ethics in Government Act of 1978, specialists say, is then-First Lady Hillary Clinton’s work leading President Bill Clinton’s efforts to revamp health care. Still, the role of a First Lady traditionally involves advising the president, and typically comes with an office and budget, said Stan Brand, an attorney and government-ethics expert at Akin Gump Strauss Hauer & Feld LLP. “I don’t know that first daughters have any special status,” he said.

Ivanka Trump, who served as a top executive in the Trump Organization in addition to running her own business, was a key adviser to her father’s presidential campaign. Following the election, her presence at meetings with her father and Japanese Prime Minister Shinzo Abe garnered criticism. She has also met with German Chancellor Angela Merkel during a visit to Washington this month. Her husband, Kushner, also serves officially as a top White House adviser.

Prime Issue

The role of women in the workforce, business and technology has been a prime issue for Ivanka Trump. That was among the subjects addressed when Trump met with Canadian Prime Minister Justin Trudeau in February, and Ivanka Trump had a seat at the table. This week, she joined Trump, Vice President Mike Pence and Linda McMahon, head of the Small Business Administration, in a meeting with 10 women business owners. She also appeared with Education Secretary Betsy DeVos at a Women’s Month event at the National Air and Space Museum to celebrate women in science, technology, engineering and math.

Kushner and Ivanka Trump have outlined plans to divest some assets. As a federal employee, Kushner has to file financial disclosures that also will detail his wife’s holdings.

In addition, her second business book, “Women Who Work: Rewriting the Rules for Success” is set to hit U.S. shelves on May 2. The 35-year-old has pledged to donate all of the proceeds to charity, but she has yet to say where the money will go, according to a person familiar with the situation.

‘Free Commercial’

Some of Ivanka Trump’s other business ventures have raised questions. This winter, following calls for boycotts by anti-Trump activists, her branded products started vanishing from such stores as Nordstrom, Neiman Marcus and ShopStyle. In February, Nordstrom confirmed it would stop selling the first daughter’s line, although it cited poor sales rather than politics.

The president responded in a tweet that his daughter was being treated “so unfairly.” Kellyanne Conway, another top White House official, then defended Ivanka Trump in a television appearance, delivering what she called “a free commercial.” Conway was counseled for her actions, which appeared to have violated the ban on executive branch employees endorsing products, White House spokesman Sean Spicer said.

To contact the reporters on this story: Ben Brody in Washington at btenerellabr@bloomberg.net, Lindsey Rupp in New York at lrupp2@bloomberg.net, Bill Allison in Washington at ballison14@bloomberg.net.

To contact the editors responsible for this story: Joshua Gallu at jgallu@bloomberg.net, John Voskuhl