Federal employees may not use their positions for private gain, according to federal law in the United States. Yet, this is exactly what Ivanka Trump is doing, according to Democracy Forward. The nonpartisan watchdog organization, which scrutinizes Executive Branch activity across policy areas and challenges unlawful actions through litigation, sent a formal letter to the Office of Government Ethics claiming that Ms. Trump is the latest member of the administration to run afoul of the U.S. Code of Federal Regulations by using her position as a highly-ranking government employee to promote her fashion brand.
Democracy Forward’s most central claim in its letter to David J. Apol, Acting Director of the Office of Government Ethics, stems from 5 CFR 2635.702, the U.S. Code of Federal Regulations. Listed under the heading, "Subpart G—Misuse of Position," the statute states that a federal employee "shall not use his public office for his own private gain, for the endorsement of any product, service or enterprise, or for the private gain of friends, relatives, or persons with whom the employee is affiliated in a nongovernmental capacity, including nonprofit organizations of which the employee is an officer or member, and persons with whom the employee has or seeks employment or business relations."
The letter, dated January 22, follows from an investigation published by The Wall Street Journal in December, which reported that since commencing her official role as a White House adviser, Ivanka Trump has consistently worn garments and accessories from her own brand in 46 of the 68 posts on her Instagram account, or in 68 percent of photos of her on social media. This includes Ivanka Trump brand dresses, shoes, bags or jewelry.
Despite placing her brand in a trust for the duration of her father’s presidency and initially appearing to distance herself from the New York-based company (i.e., by creating separate social media accounts for herself and her brand), Ms. Trump, as noted by the WSJ, “still owns and from which she receives a multimillion-dollar annual income."
Trump responded to the WSJ’s report in a statement, saying (via email): “If what motivated me was to grow my businesses and make money, I would have stayed in New York and done just that.”
Yet, it is difficult to deny that presidential first ladies and daughters “can potentially make millions of dollars for apparel companies by their fashion choices,” according to the WSJ. “A study of Michelle Obama’s outfits in her first year in the White House, by New York University finance professor David Yermack, found that stocks of design firms and retailers typically spiked after she wore their apparel. The difference for Ms. Trump is that one of the brands she can promote in this way is her own company.”
This is compounded by the fact that in the six months between March and October 2017 – the period during which the 46 photos were posted – at least some of the garments and accessories at issue sold out on websites, such as Macy’s, shortly after being spotted on Ms. Trump and her Instagram account. Her promotion of the brand, according to Democracy Forward "translates directly into increased exposure and sales for Ms. Trump’s brand."
As stated in Democracy Forward’s letter, “As an experienced business executive in the world of lifestyle branding and marketing, Ms. Trump is almost certainly aware of the myriad ways in which her conduct feeds this ecosystem, and the ways in which she profits from it. By incorporating her official duties into her social media pages and personal self-promotion, Ms. Trump increases her public exposure. As such, Ms. Trump’s actions violate the letter and spirit of this prohibition by frequently featuring her name-branded company’s products in her social media posts showcasing her official duties.”
In bold, the letter asserts, “Ms. Trump’s conduct, at the very least, appears to violate federal ethics regulations in that Ms. Trump has created the appearance of a government endorsement of her own brand, which, in turn, benefits the brand and further enriches Ms. Trump.”
As a result, Democracy Forward has requested that the Office of Government Ethics “take action to stop the ongoing use of public office to accrue private profit to Ms. Trump's company and to Ms. Trump." These efforts, according to Democracy Forward, "should begin with an investigation into whether Ms. Trump has violated federal ethics rules prohibiting federal employees from using their public office for private gain, including whether Ms. Trump is coordinating directly with [Ivanka Trump] Collection or third party celebrity style publications that serve to connect consumers with featured products."
The letter comes after ethics lawyers and activists slammed White House Counselor Kellyanne Conway, who took part in a “free commercial” for Ivanka Trump’s lifestyle collection last year, telling Fox News Channel viewers to “go buy Ivanka’s stuff” in what appeared to be yet another violation of the federal rule that bars public officials from using their positions to promote private business interests.
Conway’s remarks drew a sharp and unexpected pushback from top Republican lawmaker, House Oversight Committee Chairman Jason Chaffetz (R-Utah), who said that Conway’s comments were “absolutely wrong, wrong, wrong” and “clearly over the line.”
Chaffetz, who had previously resisted urges from Democrats to investigate potential conflicts related to President Trump’s businesses, joined with the Oversight Committee’s ranking Democrat, Rep. Elijah E. Cummings (Md.), in sending a letter to the Office of Government Ethics calling Conway’s comments “unacceptable.” The letter asked the agency to recommend discipline given that Trump, who is Conway’s “agency head,” holds an “inherent conflict of interest” due to the involvement of his daughter’s business.
Following an investigation, Stefan Passantino, head of the White House's ethics office failed to take formal action against Conway, saying in a statement, "We concluded that Ms. Conway acted inadvertently and is highly unlikely to do so again." Passantino said that Conway "made the statement in question in a light, off-hand manner" and that she "did so without nefarious motive or intent to benefit personally."