Trump Ethics Watchdog Moves to Allow Anonymous Gifts to Legal Defense Funds

By Darren Samuelsohn, Politico

14 September 17

In a reversal of internal policy, the Office of Government Ethics says funds benefiting aides caught up in Russia probes may accept anonymous gifts from lobbyists.

he U.S. Office of Government Ethics has quietly reversed its own internal policy prohibiting anonymous donations from lobbyists to White House staffers who have legal defense funds.

The little-noticed change could help President Donald Trump’s aides raise the money they need to pay attorneys as the Russia probe expands — but raises the potential for hidden conflicts of interest or other ethics trouble.

“You can picture a whole army of people with business before the government willing to step in here and make [the debt] go away,” said Marilyn Glynn, a former George W. Bush-era acting OGE director who worked in the office for 17 years.

Lawyer fees have long been the source of controversy for presidents under fire. Richard Nixon’s White House took covert steps to pay the Watergate burglars, and a trust set up during Bill Clinton’s first term to deal with Whitewater and other controversies had to return hundreds of thousands of dollars in donations from a controversial Arkansas friend who was later indicted for campaign finance abuses.

At issue for the Trump staffers is a 1993 OGE guidance document that gave a green light to organizers of legal defense funds for government employees to solicit anonymous donations from otherwise prohibited sources — like lobbyists or others with business before the government. That Clinton-era opinion reasoned that if such donors were anonymous, such donations could be legal because the employee “does not know who the paymasters are.”

But former OGE officials say the ethics office quickly determined that guidance had flaws, and instead advised attorneys to stay away from all lobbyist donations, anonymous or not, as they arranged funds benefiting the Clintons and a cadre of senior White House aides.

“It wasn’t in the interest of the public to have people guessing who really is donating here,” Glynn said. “We preferred more sunshine in the process.”

Yet the 1993 guidance document was never officially changed, in part because aides working in the George W. Bush and Obama administrations didn’t face significant legal scrutiny while still serving in government. (I. Lewis “Scooter” Libby, the Bush aide who was convicted of perjury and other crimes connected to the leak of CIA agent Valerie Plame’s identity, had already left the White House by the time his trial started.)

The anonymous donation issue sat on the OGE back burner until just before the 2016 election, when then-Director Walter Shaub initiated a review.

In an interview, Shaub said that given the political environment he anticipated questions about the rules surrounding legal defense funds would be front and center — no matter who won the White House.

“I was worried they’d read the [1993] opinion and think it’s valid,” he said of the guidance that allowed for anonymous donations from lobbyists.

But OGE’s work on legal defense funds got lost amid more pressing transition questions involving Trump’s plans for handling his private businesses upon entering the White House, as well as financial disclosures for incoming Trump administration nominees, Shaub said.

He said that in May, he instructed his staff to add a brief, one-sentence note to the top of the underlying 1993 document to signal that internal practice had diverged from the formal guidance.

“NOTE: SOME STATEMENTS IN THIS OPINION ARE NOT CONSISTENT WITH CURRENT OGE INTERPRETATION AND PRACTICE,” read the message in all caps and red font.

As Shaub prepared to leave OGE in July, his longtime general counsel, David Apol, told him that he’d been having private discussions with Trump White House attorneys about ways to revise the 1993 guidance to prohibit anonymous gifts, Shaub said.

Apol was subsequently named head of OGE. The guidance document has since been updated to replace Shaub’s note with a longer disclaimer signaling the August 1993 document allowing anonymous donations to legal funds remains in force — and “HAS NOT CHANGED.” The guidance also notes that “BECAUSE EACH ANALYSIS IS VERY FACT SPECIFIC” government ethics officials should do a deeper dive before advising individual employees on the rules.

“It’s very depressing,” Shaub said. “It’s unseemly for the ethics office to be doing something sneaky like that.”

The Office of Government Ethics declined to respond to Shaub’s characterization of the events surrounding changes to the guidance document.

The Trump White House, which did not respond to a request for comment on this story until after it was initially published, said in a statement that it is not helping to set up any legal defense funds and it is also not pushing for any change that allows anonymous donations. If anything, a White House aide said the administration is interested in identifying ways to have donors disclosed and to ensure no prohibited sources, including lobbyists, are contributing funds for the benefit of White House employees.

The White House aide also disputed Shaub's characterization — which the former OGE chief had initially posted on Saturday on Twitter — that the OGE and the White House had been negotiating on the issue behind his back while he was still the office director. Trump officials were only looking to OGE for advice on how to comply with federal ethics rules, the aide said.

"This is another example of Walter Shaub — who has no direct knowledge of anything the White House is doing or assisting with — trying to make himself feel relevant," said White House spokeswoman Lindsay Walters.

While it remains unclear just how many White House aides will need legal defense funds, several Trump staffers still working in the Republican administration are turning to their own private counsel for help navigating the Mueller probe and separate investigations from Congress. The list includes Trump himself, Vice President Mike Pence, senior adviser Jared Kushner, White House Counsel Don McGahn, and newly promoted White House Communications Director Hope Hicks.

The legal bills can add up quick for White House aides working on government salaries, especially if they are pulled in for multiple rounds of questioning or get in trouble of their own for perjury, making misleading statements or obstructing justice.

They have options beyond legal defense funds, including filing for public subsidies, using homeowners’ insurance or relying on lawyer friends for pro bono help. But those approaches may not be enough, especially if they are leaning on a top-tier white-collar private attorney who charges upward of $1,500-per-hour.

While no outside groups have come forward yet to raise money on behalf of current Trump administration aides, people close to the investigation said it’s only a matter of time before that changes. And the White House attorneys who have been in talks with OGE have been having discussions under the assumption that they’ll need to advise the staff on those rules of the road.

Former Trump campaign and White House aides pulled into the Russia probe don’t need to follow the same ethics rules as their counterparts still serving in government when trying to raise money for their legal defenses. Indeed, Roger Stone set up his own defense fund this summer, and former White House national security adviser Michael Flynn has made moves to set up a defense fund as he faces scrutiny over his own lobbying work and unreported contacts with Russian officials.

Several sources interviewed for this story urged anyone planning to set up a legal defense fund on behalf of the current Trump White House aides to stick with past practice and not accept anonymous donations for the government employees.

“Politically, it just would not be viable,” said Richard Lucas, who served as the lead counsel to the Clintons’ second legal defense fund, which raised nearly $9 million for the president and first lady to help cover their attorney expenses. “Not knowing the source is a recipe for disaster.”

The fund Lucas oversaw issued semi-annual reports naming donors and their contributions, he added.

The OGE guidance is not binding. In fact, Justice Department lawyers and Mueller’s team have full authority to examine who’s footing the bill for potential witnesses in the Trump administration if they have reason to believe other federal laws are being violated from the donations.

“You can’t lean on it,” said Stan Brand, a white-collar attorney who represented Clinton adviser George Stephanopoulos during the probe of the president’s Whitewater land deals. “It’s not going to save you. You better have a really solid legal interpretation that you can bank on independent of anything they say.”