Why Trump is exempt from federal conflict-of-interest laws and what it means for his presidency

Why Trump is exempt from federal conflict-of-interest laws and what it means for his presidency

All federal officials in the US are legally bound to avoid financial conflict of interest—except the president and vice president. This so-called "presidential exemption" excuses President Donald Trump and Vice President JD Vance from the criminal conflict-of-interest statute that restrains their Cabinet secretaries, advisers and appointees. While other officials face divestment requirements or recusal duties at penal risk, Trump has openly mixed business and politics with impunity, CNN reported.

Trump's commercial activities

Seven months into his second term, Trump has consistently promoted or benefited from his own businesses while in office. His administration accepted a $400 million luxury aircraft from Qatar, he championed Trump-brand products like a phone, received investors in cryptocurrencies, and promoted his golf courses in Scotland. Ethics specialists argue these moves may not be against the law but they erode faith in the public and flout longstanding conventions adopted by earlier presidents.

Cabinet members have varied regulations

Trump staff are not exempt. Treasury Secretary Scott Bessent, for instance, has been forced to dispose of nearly all of his $1 billion worth of assets, including stakes in energy, telecom, and crypto firms. But even after complying with the sale of 96% of assets that must be divested, Bessent was warned by federal ethics regulators that he had fallen behind the deadline for full compliance. Other high-ranking officials at the Office of Management and Budget and within the Pentagon have recused themselves on cases related to former employers or defence contractors to avoid conflicts.

A system built after Watergate

The ethics regime in use today harks back to the 1970s, when Congress sought to rebuild public confidence after Watergate. Policymakers have had carveouts for the vice president and president based on the argument that their jobs were so wide-ranging that recusals would not be possible. Presidents of both parties for many years have voluntarily acted as if the law did not apply to them, either divesting or placing assets in blind trusts. Trump has done the opposite, employing the exemption instead of avoiding it.

Ethics watchdogs are alarmed

Former government ethics lawyers and independent groups caution that the exemption has become a loophole in waiting. Former ethics adviser to George W. Bush, Richard Painter, called it corrosive to public trust, and watchdog groups like Citizens for Responsibility and Ethics in Washington contend that the exemption permits presidents to blur personal business with public duty. The concern is exacerbated by Trump's continued claims of transparency, even as he declined to divest or recuse himself from his lucrative business interests.

Why the exemption matters

The exemption allows Trump to make decisions that can benefit him financially, while his Cabinet members and appointees scramble hastily to comply with draconian regulations. For critics, it creates a double standard: lower officials can be punished for conflicts, but the president can operate legally by a different set of standards. Supporters argue the exception preserves executive flexibility. But as Trump continues to blur the lines between his business brand and the presidency, the exception highlights a tension between the spirit of ethical governance and the letter of the law.