Explained: Trump’s Gulf money ties and their impact on his White House run

Vijay Valecha, The National News, April 28, 2024

Republican candidate Donald Trump’s potential return as US president will probably raise concerns about conflicts of interest that may pile pressure on him to distance himself from overseas business dealings, analysts have said.

During his term as president from 2017 to 2021, Mr Trump had said his business interests would be held in a trust run by his sons Don and Eric. He also said that there would be no new foreign deals during his presidency.

However, Mr Trump made at least $9.6 million from countries in the Middle East during his presidency, according to an analysis of his tax returns last year by non-profit watchdog organisation Citizens for Responsibility and Ethics in Washington (Crew).

That means Mr Trump pulled in at least six times his official presidential salary in side income from the Middle East alone during his time in office, the study showed.

The total could be much higher but public reporting only sheds light on the most high-profile instances of profiteering, Crew’s analysis found. “After Trump was elected president, he made the unprecedented decision not to divest from his business interests, and remained very much involved in the Trump Organisation, creating an endless number of conflict of interests by blurring the lines between the government and his businesses,” the report said.

He refused to follow the 50-year presidential tradition of building a wall between his business interests and his presidential duties.

“In theory, I can be president of the United States and run my business 100 per cent,” he told the New York Times in 2016.

According to the 1978 Ethics in Government Act, all high-ranking federal officials are required to disclose their financial holdings and recuse themselves from any government business in which they, their families or close associates have a financial interest. All federal officials except the president, the vice president, members of Congress and federal judges. “The profiteering paid off and Trump raked in tens of millions from international business interests during his time in office,” the Crew report said.

Under what is known as the Foreign Emoluments Clause in the US, presidents are barred from benefitting from foreign governments or affiliated entities without the consent of Congress, says Kate Belinski, a government ethics lawyer at Ballard Spahr in Washington.

“It is clear that Trump’s continued involvement in his business interests violated the Foreign Emoluments Clause, but the problem is enforcement,” she says. “The US Supreme Court had the opportunity to weigh in, but wouldn’t even take the case.”

Policy impact

Generally, Mr Trump’s overseas investments served as more of a political problem for him at home, where his opponents accused him of doing favours for countries such as Russia, Turkey and Saudi Arabia as a result of his connections there, says Ryan Bohl, senior Mena analyst at risk intelligence platform Rane Network.

While that certainly affected the way he would at times talk about these countries – often praising them and their leadership – on a policy level, they still have to face entrenched strategic interests, he explains.

“Russia, for example, was able to secure a Trump meeting but could not get the US to end arms support for Ukraine; Saudi Arabia got high-profile meetings with Trump but, nevertheless, received substantial criticism over its Qatari and Yemeni policies; and Turkey, despite Trump business interests there, had a brief currency crisis because Trump threatened to tariff them in August 2018 over the arrest of an American pastor,” Mr Bohl says.

Mr Trump will use his “bully pulpit” to praise his investment destinations, but he struggles from a policy standpoint to do more than that, he adds.

Gulf ties

James Swanston, Mena economist at Capital Economics, reckons that if Mr Trump is to be re-elected, his previous term could allude to a turn towards warming relations with the Gulf economies, regardless of his personal investments.

Ties between the US and the Gulf, particularly Saudi Arabia, were at their best during his presidency, he says.

Mr Trump made a pledge during his campaign to pull the US out of the nuclear agreement struck between world powers and Iran in 2016, and he successfully did that in 2018 and then reimposed sanctions, he says.

“At the same time, until recently, Iran and the Gulf had a strong regional rivalry that had seen conflict played out in proxy wars such as that in Yemen. Even before that, protests in the Arab Spring in Bahrain were blamed on Iranian influence. On top of this in 2019, the Iranian-backed Houthis attacked Saudi Arabia's Abqaiq oil facility,” Mr Swanston says.

In short, there was a shared opposition to Iran by the US and the Gulf that brought the relationship together.

“That said, the influence that president Trump could have in relations may be more diffused than previously, given the growing ties economically and politically between the Gulf states and China, which has been highlighted [in] Saudi Arabia and the UAE being invited into the Brics group, and Saudi Arabia also [being] invited to join the Shanghai Co-operation Organisation,” Mr Swanston adds.

However, Mr Trump contends that his involvement in global real estate predates his political career.

Vijay Valecha, chief investment officer of Dubai-based Century Financial, says this is demonstrated by the following examples.

Following financial setbacks in the 1990s, Mr Trump shifted his approach to property, favouring licensing deals over direct investment.

Under these agreements, developers fund projects while the Trump Organisation provides branding and oversight, serving as the property manager,Mr Valecha says.

Forbes estimated Trump's net worth at $6.4 billion, with undisclosed holdings in the Middle East.

This includes social media platform Truth Social's parent company, Trump Media & Technology Group, which is worth $4.6 billion, his real estate portfolio valued at $1.1 billion, clubs and resorts worth $810 million, cash and liquid assets estimated at $410 million, as well as other assets worth $100 million, Forbes reported.

“Licensing deals in Oman and the UAE brought in millions in fees, totalling $6.9 million. Though small when compared to Trump’s net worth, it meant a lot to his licensing business, which comprises a small slice of his fortune,” Mr Valecha says, citing data from Forbes.

Mr Trump has numerous business interests in the GCC, the Middle East, Asia, Europe, Africa, South America and North America.

The National explores his investments in the region ahead of the elections to examine how his financial interests could influence foreign policy if were he to return to the White House.

Source

The National News