The corruption continues

February 18, 2017

A major construction company owned by the Chinese government was hired to work on the latest Trump golf club development in Dubai despite a pledge from Donald Trump that his family business would not engage in any transactions with foreign government entities while he serves as president.

Trump’s partner, DAMAC Properties, awarded a $32-million contract to the Middle East subsidiary of China State Construction Engineering Corporation to build a six-lane road as part of the residential piece of the Trump World Golf Club Dubai project called Akoya Oxygen, according to news releases released by both companies. It is scheduled to open next year.

The companies’ statements do not detail the exact timing of the contract except to note it was sometime in the first two months of 2017, just as Trump was inaugurated and questions were raised about a slew of potential conflicts of interest between his presidency and his vast real estate empire.

The Chinese company, known as CSCEC, is majority government-owned — according to Bloomberg and Moody’s, among others — an arrangement that generally encourages growth and drives out competition. It was listed as the 7th largest company in China and 37th worldwide with nearly $130 billion in revenues in 2014, according to Fortune’s Global 500 list.

The company, which has had a presence in the United States since the mid-1980s, was one of several accused by the World Bank of corruption for its role in the bidding process for a roads project in the Philippines and banned in 2009 from World Bank-financed contracts for several years.

Meredith McGehee, chief of policy, programs and strategy at Issue One, which works to reduce the role of money in politics, said doing business with a foreign entity poses several potential problems for a president, including accusations that a foreign government is enriching him, gaining access to or building goodwill with him and becoming a factor in foreign policy.

The Trump Organization agreed to not engage in any new foreign deals or new transactions with a foreign entity — country, agency or official — other than “normal and customary arrangements” made before his election.

But Trump ignored calls to fully separate from his business interests when he became president. Instead, he placed his holdings in a trust designed to hold assets for his “exclusive benefit,” which he can receive at any time. He retains the authority to revoke the trust.

McGehee said Trump clearly knew foreign arrangements could be problematic because he outlined a list of restrictions, although vague ones, for his company to follow while he served as president. But more importantly, she said, the writers of the U.S. Constitution knew they could be too.

The Emoluments Clause in the U.S. Constitution says officials may not accept gifts, titles of nobility or emoluments from foreign governments with respect to their office, and that no benefit should be derived by holding office.

“This is not just a concern of good government organizations,” she said. “It was a fundamental concern of the founding fathers.”