The Richest Administration In History Just Got Richer
President-elect Donald Trump is adding another billionaire to the top ranks of his administration.
Trump plans to nominate a wealthy financial executive, Vincent Viola, to be secretary of the Army. Viola would be at least the fourth Trump nominee with a net worth in the billions. And that's not counting Trump's own 10-figure fortune.
Viola is a West Point graduate who served in the 101st Airborne Division. The son of a Brooklyn truck driver, he made his fortune in the financial industry. Viola started working as a trader on the New York Mercantile Exchange in the 1980s and eventually became the NYMEX chairman.
He is credited with helping the exchange quickly resume operations after the terrorist attacks on Sept. 11, 2001. The following year, Viola founded and bankrolled the Combating Terrorism Center at West Point.
"It is an honor to be nominated to serve our country," Viola said in a statement. "If confirmed, I will work tirelessly to provide our President with the land force he will need to accomplish any mission in support of his National Defense Strategy."
Viola founded his own electronic trading company, Virtu Financial, in 2008. The company went public last year. Viola, who ranks 374th on the Forbes 400 list, also owns the Florida Panthers hockey team.
Trump has chosen at least three other billionaires for top jobs in his administration. The president-elect, who campaigned as a champion for working people, insists there's no disconnect in assembling the wealthiest administration in history.
"You know the media was saying the people who are negotiating your trade deals are very rich," Trump told supporters in Orlando Friday. "I'm saying, isn't that what we want?"
Some of Trump's nominees may have to sell off their investments to avoid potential conflicts of interest. In return, they could qualify for a valuable tax break.
For example, if Andrew Puzder is confirmed as labor secretary, he might not be allowed to hold stock in the fast-food company he runs because the Labor Department polices that company's compliance with wage-and-hour regulations.
If a nominee does have to sell investments to comply with federal ethics rules, he or she may be allowed to put off any capital-gains tax.
That's a break designed to help new nominees avoid conflicts of interest without paying a personal price.
"If there were a tax penalty, there might very well be fewer Americans willing to serve," said Steven Rosenthal, a former staffer for the Joint Committee on Taxation.
To take advantage of the tax break, nominees are required to invest any proceeds from a sale in assets that would be free from conflict, such as Treasury bonds or a broad-based mutual fund.
That's "to give Americans confidence that their civil servants would be acting in the country's interest and not their own financial interest," said Rosenthal, who now works for the Tax Policy Center.
The Office of Government Ethics has warned that even though it does not have much purview over conflicts of interest for the president, it does have some say when it comes to Cabinet officials.
"OGE reviews their financial disclosure reports not only for their compliance with applicable disclosure requirements but also for conflicts of interests," the agency's director, Walter Schaub, wrote to Congress last week.
Former ethics lawyers for both President Obama and former President George W. Bush have encouraged Trump and his children to liquidate their investment in the Trump Organization. While the president is not strictly subject to conflict-of-interest laws, he is governed by the "Emoluments Clause" of the Constitution, which bars officeholders from accepting gifts from foreign governments without approval from Congress.
Ethics lawyers Norman Eisen and Richard Painter warn that so long as the president-elect maintains his ownership stake in the Trump Organization — with its vast holdings in foreign countries — "Trump would arrive in office as a walking, talking violation of the Emoluments Clause."
So far Trump has shown no inclination to sell his stake in the company. He does plan to turn over operational control to his sons Don Jr. and Eric, although details of that arrangement won't be made public until next month.