Conflict of Interest Blog

Compliance in the service of ethics

Years ago, I was hired to conduct a C&E training “needs analysis” for an investment bank, and ran into an interesting problem with the ethics side of the project: my client contact explained that if I did identify any actual ethics issue at the bank, a new compliance policy would immediately be issued to address it. While I understood the logic of this approach (particularly in the financial services arena, given the degree and impact of regulation there), it certainly didn’t leave much breathing room for an ethics perspective. Since then, I’ve been fascinated by the connections (or lack thereof) between compliance and ethics – and the opportunities often presented to have one help elevate the other.

In a recent article in the Harvard Business Review,  Christopher McLaverty and Annie McKee make a number of important suggestions on “What You Can Do to Improve Ethics at Your Company.” They note that research by McLaverty  shows that “in contrast to what corporate compliance officers would like us to believe, their organizations’ codes of conduct and ethics training wasn’t particularly helpful when it came to managing ethical dilemmas.”

I completely agree that in many business organizations C&E  codes and training often don’t help employees resolve the sort of ethical dilemmas they are likely to face. I concur, too, with the authors’ various suggestions for gauging the ethical well-being of a company and with the finding from McLaverty’s study that “the most useful resource that leaders have when faced with an ethical dilemma is their own personal network. This provides an informal sounding board and can highlight options and choices that the leader may not have considered.”

But I do think more should be said on behalf of the role that compliance can have in promoting ethics in organizations.  A different way to look at the issue is how being exposed to the full range of C&E program measures at a company over the course of years can be helpful preparation for the moment when an ethics-related quandary  is presented.

From my perspective, codes and training aren’t the main story here, and never have been. They are, after all, mere preaching. More likely to be impactful are such measures as risk assessment, monitoring, auditing, use of metrics and various other accountability-related practices and procedures  – at least, when these are done in a serious, results-oriented way.

But what do they have to do with ethics? While each is a  traditional compliance activity, they can also be seen as part of a broader commitment to doing what is right – particularly by the many members of the workforce who don’t distinguish between C and E.  And, I believe that the beneficial habits of mind – i.e., “inner controls” – that should, over time, come with being in a company with a strong approach to  compliance can help lift a company’s ethics performance, including preparing managers for dealing with an ethics issue that is not addressed in the training or code.

I should emphasize that I’m not suggesting that every true ethical quandary is easier to resolve by those who work in companies with rigorous C&E programs. “Right versus right” dilemmas, in particular, may be outside the scope of what I’m describing. However,  there are doubtless many other sorts of workplace ethical challenges – particularly having to do with summoning the will, not finding the way – for which having a well-engrained habit of doing what is right could make a real difference.

A final thought: if what I’m saying is true it should work both ways. That is, a well-engrained habit of acting ethically should make compliance stronger in companies and individuals.

When do you really need best practices?

In my most recent post  I argue for applying a best-interest-of-the-client standard for those who give investment advice.

But – paradoxically or not – when it comes to designing or evaluating compliance & ethics programs, you don’t always need to aim for the maximum.

In my latest column in the SCCE’s Compliance & Ethics Professional (page 2 of PDF) I look at the issue of: How much is enough?

I hope you find it interesting.

Relaxing ethical standards

Imagine the following. Your doctor has two schedules of fees: a “full price” one for patients who want the doctor to prescribe medicine based purely on what’s in their best interests and a lower-cost “value plan” for those who agree that the doctor can receive money from pharma companies for prescribing their medicines. The doctor stresses that under the value plan, while her decisions may not be in your best interests, they will be “suitable” for you. In essence, your doctor is offering to “unbundle” her professional ethical obligations from the other aspects of her service – as a way of saving you money.

Or consider a similar situation involving a company. The head of procurement offers to give up any bonus if his ethical standards can be “relaxed.” Or a member of the board of directors proposes the same with respect to her fees. In both cases, they promise that they would act “suitably” in performing their duties for the company – but not necessarily in its best interests. And, while we are imagining things, how about a political leader who offers to reduce his salary in return for a diminution of his duty of loyalty to the citizenry? Would you find any of these appealing?

Yesterday, as described in this Fox News story, President Trump “signed a memorandum instructing the Labor Department to delay an Obama-era rule that requires financial professionals who charge commissions to put their clients’ best interests first when giving advice on retirement investments.”  The “past administration’s ‘fiduciary rule,’ [was] aimed at blocking consultants from steering clients toward investments with higher commissions and fees that can eat away at retirement savings. The rule was to take effect in April. The financial services industry argues that the rule would limit retirees’ investment choices by forcing asset managers to steer them to low-risk options.” (Note: registered investment advisers are already covered by a best-interests standard – so the rule in question is about extending this requirement to a wide range of others who give financial advice.)

There is a technical side to this debate that I don’t have the expertise to assess. (For instance, if the proposed rule really and truly requires recommending low-risk options for all investors then it is clearly flawed.) But as someone who taught ethics in business school for many years and who studies conflicts generally this does present something of a teachable moment.

To begin, not all business relationships require a “best interests” standard. We each engage regularly in countless transactions where we are content to fend for ourselves (so long as we are not being defrauded). This is true of most things we buy. But for relationships of trust – with doctors, employees, directors … and perhaps political leaders – we do require something beyond a no-lying standard of conduct.

What are relationships of trust? To some extent they are defined by law – such as in Judge Benjamin Cardozo’s famously saying that more is required of trustees than adherence to “the morals of the marketplace.” But beyond this, I think the analysis should be functional, using two dimensions.

The first of these is the likelihood of conflict-driven behavior occurring – which, in turn, is based at least partly on the ability of participants to the transactions in question to recognize such behavior. In each of the examples above the  likelihood of bad conduct seems high, either because the participants might lack necessary technical skill (in the doctor example) to identify it or because the range of conduct at issue is too broad to be efficiently monitored (as in the other examples). Investment-advisor-type relationships would seem to fit into this category, meaning the average investor doesn’t have the time or expertise to monitor her advisor. Indeed, part of the point of purchasing  professional financial advice is to get the benefit of time and expertise that the average person lacks.

The second dimension is, of course,  impact. To my mind, this also argues for a strong – i.e., best interests – set of ethical standards in this setting. That is, for any individual, sub-optimal investment performance could have grave consequences. And, for the nation as a whole – which will increasingly become beset by debts of various kind – the total impact of such a shortfall could exceed the (potentially very high)  sum of such parts. For more on the impact that financial advisor COIs – as well as those in the healthcare, business organization and political realms – can cause see this post.

A Nobel Prize in Compliance & Ethics?

President Trump continues to dominate the C&E news – or at least this blog’s coverage of such news. The story of the week: a team of ethics advisors was named for the White House and a chief compliance counsel was appointed at the Trump Organization.  When taken together, these measures can be viewed as creating a C&E program addressed to the President’s conflicts of interest.

This C&E program raises a number of interesting questions. Perhaps the most significant – as noted by Roy Snell, head of the Society of Corporate Compliance and Ethics – is whether “the new positions [have] enough authority and independence to be effective. [Snell added] compliance officers typically have power to launch investigations on their own and set up programs to educate employees on ethics, assess risks and allow for anonymous reporting of ethics trouble. Lacking that power, Snell said, the new compliance counsel could ‘struggle to prevent, find and fix ethical and regulatory problems.’”

A second area of interest – touched on briefly in Snell’s comments – is risk assessment. The issue here partly concerns process: will the White House Ethics Advisors and Trump Organization Chief Compliance Counsel have a rigorous, structured approach to identifying particular risk areas and using that information to inform key aspects of their program? Deploying  risk assessments of this sort is widely seen as a foundational element of effective C&E programs.

But there is also a substantive dimension to this area, too: what risks will the Ethics Advisors and Chief Compliance Counsel address? In particular, how will they take on the all-important issue of Trump’s avoiding not only actual but also apparent COIs?

The challenge here is that – due to the President’s refusal to release his tax returns – there is some concern that when it comes to business dealings he may not be putting America first. Will this adverse ethical inference drawn from a lack of transparency be part of the risk assessment equation, as logically it should be?

Third, there is the question of culture generally and tone at the top in particular. As all C&E professionals know, culture generally overrides (or “trumps”) policies and procedures when it comes to shaping behavior in organizations.

This is especially true when it comes to giving whistleblowers the courage to report suspected wrongdoing. Providing such comfort  is hard enough even in the best of circumstances, but will be truly daunting with respect to a man who rose to fame telling people “You’re fired.”

How will the new team deal with the culture challenge of promoting C&E in this setting? Honestly, I have a hard time imagining how this can be accomplished. But if they do succeed they should be considered for a Nobel Prize in compliance & ethics.

But, this bit of whimsy notwithstanding,  I should stress that while I’m skeptical about this effort I do hope it will succeed. This would not only be good for the country in a general way – but could be a showcase for the value of effective C&E programs.

 

 

The Trump Conflict-of-Interest Mess

Donald Trump’s announcement last week that his steps to address his conflicts of interest will not include divestiture of his holdings presumably surprised no one. But it is still very big news, which, in my view, has important implications for the country – and not just in the COI realm.

Trump’s apparent reason for this decision is that given the nature of the holdings any divestiture would be very disadvantageous to him financially. I have no reason to doubt that point. Trying to liquidate his interest in the Trump Organization would be, without question, much harder to do than selling publicly traded stock – and would subject him to a very sizable “haircut.”

But, as others have pointed out, as Commander in Chief, he will be asking US military personnel to risk making sacrifices far greater than those he is willing to require of himself.  Indeed, in other contexts – particularly dealing with climate change and the escalating national debt – any meaningful solutions will require some degree of sacrifice by millions of Americans.

The lack of ethical leadership shown by the President Elect on COIs could indeed weaken efforts to deal with a wide range of grave challenges requiring sacrifice that the country faces. To me this is potentially the greatest harm from his decision. (For more on the link between morality-based sacrifice and the success of human societies see Jonathan Haidt’s The Righteous Mind.)

Still, while I disagree with where Trump comes out on divestiture there is at least a logic to it. But the explanation given for the closely related issue of his refusal to release his tax returns – that being under audit prevents him from taking this step – is simply false.

A lesson I learned as a young criminal defense lawyer which has served me well as an older C&E lawyer is that if a good reason can’t be given for something then the real reason is usually a bad one. Of course, this isn’t always the case (as behavioral ethics has demonstrated).  But it is true enough to ask – particularly when viewed in light of his decision to not divest – if Trump is hiding something damaging by not releasing his tax returns.

Regardless of what his reason actually is, a presumption of guilt will  – based on his false explanation –  likely shape the perceptions of his deals, holdings and business partners that are already known and those that emerge from what will doubtless be an endless voyage of discovery by investigative journalists. The loss of trust at risk here will be harmful not only for Trump but also the country as a whole, in the same way that Watergate was harmful.

A gloomy forecast, indeed – particularly given that this condition may well last for four years. But what does it mean for the C&E practitioners who are most of the readers of this blog?

I’d like to think nothing – and to assume that this can all be relegated to the realm of politics, which is far off and distinct from that of the business world, which is largely my focus. But we cannot ignore the warning of Justice Louis Brandeis: “Our government is the potent, the omnipresent teacher. For good or for ill, it teaches the whole people by its example.” While Brandeis was speaking about violations of law (which Trump’s decision on COIs does not involve) the point seems just as applicable to ethics.

Ethics advance…or decoy?

While COI aficionados (not to mention concerned citizens) await the President Elect’s plan to mitigate his conflicts of interest, there is interesting ethics  news regarding his nominee for Secretary of State, Rex Tillerson, CEO of ExxonMobil.  As described in today’s NY Times, in addition to selling ExxonMobil stock he owns outright to avoid a COI, “a more complicated task involved resolving the fate of two million shares of ExxonMobil stock, worth about $180 million, that Mr. Tillerson was set to receive over the next decade. If he held on to this promised future payout from ExxonMobil, he would still have a financial interest in matters that might affect the company and the oil industry. So ExxonMobil agreed to take the unusual step of paying out the value of these sales and putting the money into an independent trust, with the money invested in neutral assets like Treasury bonds and mutual funds. Under the terms of the agreement, if Mr. Tillerson, 64, goes back into the oil industry during the next decade, he will forfeit any money left in the account.”

With respect to this forfeiture provision, Richard W. Painter, a White House ethics lawyer during the administration of President George W. Bush, told the Times that it “was unusual and positive, as it removes the incentive for him to take steps while in government that might benefit an industry he planned to return to work for upon his departure. ‘It gives up something I had never been able to get from other government officials — a promise not to go back to an industry from which you came,’ Mr. Painter said.”

There is, however, a more negative way of looking at the agreement – one that focuses not on the forfeiture provision but rather on the payment for the loss of the restricted stock itself. As noted in  this article by Climate Central: What makes the Tillerson deal unusual is that ExxonMobil has agreed to provide him with benefits it had no legal obligation to provide. ‘This was not a clause in his employment contract that was triggered,’ Stanford law expert Michael Wara said. ‘It’s a special arrangement of massive economic significance to Tillerson that was given to him purely because of his move into government…’ Wara described the arrangement between Tillerson and the ExxonMobil’s board of directors as a legally questionable ‘sweetheart deal.'”

Viewed  through this lens the forfeiture provision is not praiseworthy but should be seen as  an ethics decoy. In this view, it is a clever way of distracting attention – at possibly little real cost to Tillerson  (given that he may have no interest in ever going back to the oil industry) – from a questionable payment of a magnitude that would  engender gratitude in all but the most hard hearted of recipients.

Note, however, I am not 100 % sure that the sweetheart deal analysis is correct. I say that because while I read quite a few press accounts of the Tillerson agreement this article was the only one to make the point.  And, since I’m not an employment lawyer I don’t feel like I know enough to make a judgment on this point based on the agreement documents alone.

But what does seem certain from the Climate Central article is that, in addition to the traditional COI problems, there are other reasons for concern about Tillerson’s impartiality on issues facing oil companies: “‘I want to see some questions at the confirmation hearing about how much those oil companies are going to be coming around and chatting him up,'” ethics attorney Painter said. “‘Are there going to be cognitive biases and personal loyalties?'”

In sum, a mixed bag.  The forfeiture provision does seem like a genuinely important advance in the state of the art regarding forward looking, revolving door conflicts. But the payment for restricted stock could be a powerful backward-looking COI – particularly when coupled with the COI-like bias and loyalty concerns identified by Painter. Rather than passing judgment on which view seems more right to me, I’ll fall back cryptically on  the life philosophy espoused long ago by a Doonesbury character who described himself as cynical but eternally optimistic.

 

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Asking a good question

The late Nobel Laureate in physics Isidor I. Rabi once said: ”My mother made me a scientist without ever intending it. Every other Jewish mother in Brooklyn would ask her child after school: ‘So? Did you learn anything today?’ But not my mother. She always asked me a different question. ‘Izzy,’ she would say, ‘did you ask a good question today?’ That difference – asking good questions – made me become a scientist!”

Asking good questions can also help companies promote compliance and ethics.

In The Road to Character, David Brooks notes that he once met an employer  who asked every job applicant: “’Describe a time when you told the truth and it hurt you.’”  This is, to my mind, a good C&E-related question, as it can help identify those who practice, as well as preach, ethical behavior. It also reminds those asking the questions about the importance of C&E to the organization. A frequently used variation on this question is: “Describe an ethical challenge you’ve faced and how you dealt with it?”

Of course, employment interviews are not the only setting in which it is important to ask good C&E-related questions. Another is employee engagement surveys, in which one commonly sees questions about relative comfort in reporting violations and perceptions of the ethicality of the organization’s management.

These are good topics for questions, and I think every company that fields an employee engagement survey should use them. But my favorite question of this sort  comes from a survey conducted by the Economist (discussed here), which measured respondents’ perception of the need for ethical flexibility to advance one’s career within an organization.  What I particularly like about this question is the focus on flexibility – which may be easier for respondents to admit to than asking outright about their engaging in  ethical transgressions.

Yet another setting for asking C&E questions is the compliance audit. While most of what is done in C&E audits revolves around document reviews, interviewing employees can be part of the picture as well. Among the topics that should be considered for such questioning: Does the interviewee think that the company’s training is effective? In addition to producing useful information about training itself, posing this question may make it easier for employees to identify concerns about risks and actual violations. I.e., like the question above about ethical “flexibility,” questions about C&E training may offer a “soft” way of approaching a “hard” topic.

Moreover, questions about training can be asked  not only in audits but as part of (and typically at the end of) the training itself.  One possibility here is to ask whether after the training the employee now feels that she understands how the company’s compliance program applies to her job – again, a variation on the “soft” question approach.

Finding the right question can also be important in developing a C&E-component to a company’s exit interview template. Options include general culture questions, such as how do you rate our company as a values and ethics driven employer – with an opportunity to say why; specific questions about key aspects of the program, such as whether the departing employee understood all the options for reporting concerns; and, of course, asking whether the employee was aware of any unreported concerns.

I should stress that this post is not intended to cover the whole world of asking C&E-related questions.  Among the areas not addressed: the importance of Q&A in codes of conduct and approaches to asking questions in risk assessments.

Finally, to an extraordinary degree, boards of directors can have the power to impact a C&E program simply by asking the right questions. Here (on page 2 of the PDF) is an article which offers not actual questions but topics that boards can turn into questions in overseeing their respective companies’ C&E programs.

Domestic bribery and code of conduct waivers

It was – at least according to this Blog – the most interesting COI story of 2015 (as of February of that year): the head of the New York/New Jersey Port Authority (the PA)  – David Samson – had persuaded United Airlines to reinstate a money-losing route that was convenient for his personal use in return for his giving them favorable treatment on certain PA matters. But what has happened since? And what can C&E professionals learn from it?

In July of 2016, Samson “pleaded guilty to one charge of bribery for accepting a benefit of more than $5,000 from” the airline. “At the same time, United–which was not criminally charged–agreed to pay a fine of $2.25 million and pledged to institute ‘substantial reforms’ to its compliance program.”  And earlier this month the airline settled related charges with the Securities and Exchange Commission.

Above all, that settlement – which involved violations of the FCPA’s books-and-records and internal accounting controls provisions – is a reminder that an effective anti-corruption compliance program must be addressed to domestic  bribery, as well as the foreign kind. In that regard, it is worth remembering that the US is not at or near the top of the Transparency International Corruption Perception Index: it is tied for 16th. And for certain parts of the country – including New Jersey, where Samson worked (and I live) – the picture is worse.

Yet, in my experience some companies don’t address domestic bribery risks with the same rigor that they do foreign ones – even those involving “cleaner” countries than the US.  So, this settlement may be a useful opportunity for companies to consider whether their anti-corruption policies and procedures – including risk assessment – are sufficient to address domestic bribery.

Less significant but perhaps more interesting to C&E practitioners is the SEC’s discussion of the issue of code of conduct waiver – and specifically the failure to get a waiver of the code’s gift provision in connection with the reinstatement of the unprofitable route. The SEC noted that a companion document to the code had provided that: “exceptions would be granted only in accordance with the following procedure: Generally, requests for exceptions must be submitted in writing to the Director – Ethics and Compliance Program.  Approvals for an exception will also be in writing and must be obtained in advance of the action requiring the exception.”  Yet “no one at United sought a waiver of United’s Code of Business Conduct prior to initiating the … Route for Samson’s personal benefit. Nor did anyone at United seek or obtain an exception to Continental’s Ethics and Compliance Guidelines [which was still in effect following the merger of the two carriers]  prior to initiating the … Route. As a result, no written record reflecting the authorization for the … Route was prepared or maintained, as required by United’s Policies.”

Code of conduct waiver-related requirements are based on, among other things,  rules of the New York Stock Exchange and SEC . They derive,, to some extent, from the Enron case.  Yet in recent years I’ve heard very little about them. That may be because the NYSE and SEC standards apply to a narrow band of senior officials at public companies. Yet waiver requirements can go beyond this, as United’s ostensibly did.

So, is there any takeaway for C&E professionals from this aspect of the United case? One idea would be to include questions about waivers in audit interviews – which might pick up information that a question about violations might miss. A second is to include a discussion of waivers in training boards and senior executives – who may have at one point known the Enron-related origins of the waiver provision requirement but have likely forgotten this piece of C&E history.

Finally, for those revising their codes of conduct, one might consider requiring that waivers be granted only upon a clear showing that doing so would be in the best interests of the Company – and that all meaningful circumstances surrounding a waiver be documented in a complete and accurate way. Indeed, given that the SEC has taken the occasion of the United case to speak about code waivers, this is an area where companies should take a moment to make sure they are doing everything right.

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Why conflicts of interest matter – it is both the incentives and disincentives

Yesterday Paul Krugman had a great piece in the NY Times on Why Corruption Matters. With the COI Blog about to have its five-year anniversary, and with COIs in the news as never before (thanks to the President Elect), it seems worth asking the same question of conflicts of interest. After all, corruption can be seen as one type of COI (albeit a particularly sinister type).

Krugman’s central point is that the harm of a corrupt act cannot be measured solely by calculating the benefit to the wrongdoer. Rather, he notes: “It’s not the money, it’s the incentives. True, we could be talking about a lot of money — think billions, not millions, to Mr. Trump alone (which is why his promise not to take his salary is a sick joke). But America is a very rich country, whose government spends more than $4 trillion a year, so even large-scale looting amounts to rounding error. What’s important is not the money that sticks to the fingers of the inner circle, but what they do to get that money, and the bad policy that results.”

I agree with Krugman, but – at least as far as COIs are concerned – would offer a friendly amendment that the harm is not only in the incentives but also in the disincentives. What I mean by that is explained in one of the earliest posts in this blog (which looked at COIs broadly – not just those arising from government service):

How much does it matter that organizations, individuals and governments pay close attention to identifying and mitigating conflicts of interest? One way to answer this question is to consider – as I ask students in my business school ethics class to do – what the world would look like without such focus and sensitivity. Below are some of the observations that I have heard from them over the years.

In “Conflict of Interest World,”

– Individuals might be reluctant to take the medicines that their doctors recommend for fear that those recommendations are motivated more by the doctors’ financial relationships with pharma companies than by the patients’ well-being.

– Individuals and organizations might not use financial advisors for fear that the advice they receive is driven by hidden, adverse interests – and would instead devote otherwise productive time to trying to become their own financial experts, resulting in a significant misallocation of capital as well as time.

– Organizations could hesitate to take a wide range of everyday actions for which they need to trust their employees and agents to do what’s right by the organizations – or would proceed only with highly intrusive and costly surveillance-like measures in place.

In short, Conflict of Interest World is a place of needlessly diminished lives, resources and opportunities.

Additionally, from the perspective of “normative compliance” – an important concept in the C&E field which will be addressed in future postings – in Conflict of Interest World legal and ethical standards beyond those that are COI-related would be weakened, too.

 Bottom line: a short visit to this unhappy imaginary world – a place of “all against all” – is reminder of the vital role that sufficient attention to COIs play in our very real world.

Five years later the importance of trust to our society and the threat that COIs present to it are – to my mind – greater than ever before. While each type of COI – including those facing the President Elect – must be identified and dealt with appropriately,  I view the need for upping our COI game generally as being larger than the sum of the relevant parts. The goal is a society where individuals can trust others – both leaders and fellow citizens – to act in ways that are motivated by the common good and not individual or parochial interests.

One can identify many areas for which having such trust can be essential for success. Most prominently, dealing effectively with climate change will require millions of people around the world to trust one another in the design and execution of solutions to this grave peril. That may be the greatest reason of all to care about conflicts of interest.

Trump Princelings?

The most recent post on this blog concerned the possibility of President Elect Trump putting his assets in a trust which would be managed by his children to avoid conflicts of interest that could arise from his management and ownership of such assets while in office. Since then an unrelated legal development has occurred which further underscores the challenge facing Trump: the announcement that JP Morgan was settling the “Princeling” case, which involved the bank’s hiring the sons and daughters of important Chinese officials in return for business. The case (which will likely be followed by others of its sort) is a timely reminder that helping one’s children can inspire corruption – and not just in China.

A famous instance of this sort from the 1980s concerned the hiring (by a former Miss America) of a NY judge’s daughter to influence the judge’s decision on a pending case. And then there are the immortal words of the first Mayor Daley who, in speaking to colleagues on the  Cook County Democratic Committee, defended his having directed a million dollars of insurance business to an agency on behalf of his son John by saying: “If I can’t help my sons, then [my critics] can kiss my ass. I make no apologies to anyone.”

Indeed, helping one’s children might  be a more powerful source for wrongdoing than is pure self-centered greed, for the very reason that it seems to spring from a sense of duty. (An old saying goes that if you’re not stealing from your company you’re stealing from your family.)

Note that I’m not suggesting that Trump would use his influence to get jobs for his kids or direct government business to them. But if they are running his far-flung, secretive and complex business empire  he will have plenty of opportunities to use his influence to benefit them.

None of this means that Trump’s children are destined to serve as “princelings.” I should also stress that I have no reason to think they would do anything unethical. Seriously.

Rather, the focus of this post (and indeed this blog generally) is more about structures and circumstances than it is individual personalities. In effect, the princeling analysis is part of risk assessment, even if it is speculative; it is not an accusation.  More specifically, the JP Morgan case reminds us that in designing (or agreeing to)  an approach to address the COIs relating to his assets, Trump needs to  have procedures that will help  avoid not only direct COIs but those involving his sons and daughters as well – and give the public comfort that those procedures are up to the task at hand.