If she’s already raised money, she could be breaking the law.
Ivanka Trump told Axios on Wednesday that she was working to start a “massive fund” with donations from both nations and companies to boost female entrepreneurship. According to the report, she was working with the President of the World Bank, with whom she recently co-authored an op-ed on female empowerment, to develop the fund.
Immediately, the prospect of Ivanka Trump founding and directing her own global foundation, and soliciting foreign donations, while also shaping foreign policy, set off a firestorm. Later on Wednesday, Axios added an update from the World Bank, saying that the World Bank would be in charge of the fund instead.
The World Bank themselves told The Washington Post that they were “in discussions” with Ivanka about the fund, and that nothing had yet been agreed to. They also said that no definitive plans had been made, and no money had yet been raised.
Yet, in direct contradiction, Axios reported that “Canadians, Germans and a few Middle Eastern countries have already made quiet commitments, as have several corporations.”
If Ivanka has indeed already secured commitments, then she may be in legal trouble, according to Tom Watson, the president and founder of CauseWired, a non-profit advising consulting firm and the author of a book on non-profits.
“If you are raising funds for a non-profit in the U.S., you have to file with the IRS. Not doing so is a violation of tax law. And you also have to file reports on a yearly basis,” said Watson. “We don’t know if any of that has been done.”
The legal problems
It’s hard to tell exactly what’s going on, in part because the public is learning details solely through scattered reporting, rather than open disclosures.
“It’s incredibly non-transparent. We don’t know if there has been any filing. We don’t know how it’s structured — is it a 501(c)3, an LLC, what is it?” Watson told ThinkProgress over the phone. Per the World Bank’s account, that is still up in the air — which means they could not possibly have filed the necessary documents to begin fundraising.
Without more information, though, he added it was impossible to tease out the legal ramifications of the unique situation.
That doesn’t mean that presidents and their families are prohibited from engaging in philanthropy, or that it’s entirely unprecedented: the U.S. has a long history of public-private partnerships stretching back to President Franklin Roosevelt’s involvement with the March of Dimes.
Such partnerships, however, have to go go through elaborate approval processes, because the risk for corruption and the perception of conflict is so high.
“The approval process is elaborate, because of the many risks, including illegal quid pro quos when the private partners contribute large sums of money. Then there is the risk of giving those partners special access and influence, which is wrong and in some cases illegal,” Norm Eisen, Chief Ethics Counsel for Barack Obama told ThinkProgress via email.
And, it’s rare for White House affiliated-organizations to have an international focus.
“They’ve mainly been domestic. And they are subject to transparency and regulations and filings,” Watson said. He added, however, that while it could theoretically be possible to structure it in a way that it would work, it would require immense front-end planning.
“It just doesn’t seem like there’s been that kind of thought going into this. And it’s bad form to start talking about it without having those ducks in a row, because that means that ethical questions are going to come up right away,” he said.
And ethically, the project is already raising red flags.
The ethical problems
Ivanka’s role in the fund is uncertain, but according to both reports she would play some sort of fundraising role — while also officially serving as an adviser in the White House. Her role and influence at her father’s side is highly visible, and she will, in her White House capacity, have a role and influence on foreign policy decisions.
“This is not a theoretical thing where, if someone is elected and they once served as Secretary of state and if they once took money from a country, will it under the harshest reading of the situation be a conflict,” said Watson, referencing the criticism of the Clinton Foundation and Hillary Clinton’s role during the election. “This is literally a day-to-day conflict.”
One of the countries, for example, that Axios reported Ivanka had secured commitments from was Canada. Yet at the same time, President Trump just escalated a trade squabble with Canada over lumber, announcing a heavy tariff.
So while in one White House office, the U.S. government is claiming to crack down, in another, a representative of the government — the President’s daughter and one of his top advisers, no less — is asking for handouts. What influence might Canada’s commitment to Ivanka’s fund have on her father’s disposition to the country’s trade behavior?
The actual answer may be impossible to determine. At the very least, however, there would be a perception of conflict of interest. Such a foundation, with Ivanka’s involvement, could be yet another avenue for foreign governments to attempt to influence the presidency.
The problem with the Trump businesses
The other problem is the persistent ethical baggage the Trump family has brought to the White House.
“Here we have some added Trump family factors: the broken White House ethics and compliance system and the fact that Ivanka, her husband, and her father all have maintained outside business ownership interests that may create conflicts when other businesses, perhaps their partners, are solicited for these funds,” said Eisen. “It’s like a slow-motion train wreck unfolding before our eyes.”
Watson, who advises non-profits on how to raise money, said that’s exactly what he would advise a client to do.
“Here’s a question: Is she going to Trump family business partners in these countries to solicit donations? If I were her funding counsel, and she wasn’t in government, that’s what I would recommend.”
And that would raise red flags on both sides of the conflicts issue — because as a government employee, Ivanka is supposed to be separate from her businesses.
The hypocrisy problem
From her own description, Ivanka’s project is based on a public-private partnership. One of the most successful examples of such an organization is the Clinton Foundation — the very organization her father slammed as “the most corrupt enterprise in political history.”
Much of Trump’s criticism of the Clinton organization revolved around unsubstantiated allegations of corruption, foreign donations and overlap between the Clinton’s political and philanthropic donors.
Although the foundation remained in operation while Hillary Clinton served as Secretary of State, it took numerous steps to remove the appearance of conflict, including publicly disclosing all its donors. Despite Trump’s allegations of corruption, the foundation spends 87 percent of its money directly on programs, and has won top accolades from charity review watchdogs.
“There’s the rank hypocrisy of coming into office in part by criticizing an organization that was legitimately helping people,” Watson told ThinkProgress about the Trump’s new plans.
President Trump, according to Axios, “is a huge supporter of his daughter’s idea.”
Yet, while the Trumps appear to be steering global philanthropy into projects they have a hand in, the Trump administration writ large has been focused on gutting foreign aid and programs that would help the very populations Ivanka claims to be concerned with.
Recently, Trump eliminated U.S. funding for the U.N. Population Fund, which provides maternal and child-health services in 150 countries around the world. His budget proposal would cut aid to developing countries by over one-third. He wants to slash $650 million from the World Bank, the very organization in talks with Ivanka.
And, while Ivanka is publicly promoting the importance of investing in female entrepreneurship, Trump has proposed eliminating the government’s Program for Investment in Micro-Entrepreneurs (PRIME). The PRIME program disproportionately benefits women’s businesses, because they tend to be smaller and work with smaller amounts of capital.
That means that the Trump White House is slashing aid for established organizations, while touting philanthropic efforts and funneling aid through Trump-affiliated, untested channels.
“Who’s gonna run it? Who’s the staff? How do you apply? All those kinds of things are wide open,” Watson told ThinkProgress. Usually, he said, similar public-private partnerships are done “in partnership with existing organizations, so ethical rules and the programmatic side is in place, so things can actually get done.”
If the project is carried out in partnership with the World Bank, then, it may have a higher chance of being effective, but the question remains: If empowering women, girls, and developing countries is actually a priority, then why would the White House so severely undercut the organizations that are already helping people on the ground?