Legal experts say Trump official broke law by saying ‘Buy Tesla’ stock but don’t expect a crackdown

As of Friday, no public action had been taken against Howard Lutnick and it was unclear whether he would suffer a similar fate. (Getty Images/AFP)

• “It will never be this cheap,” US Commerce Secretary Howard Lutnick said Wednesday. “Buy Tesla.”

NEW YORK: When a White House adviser in the first Trump administration told TV viewers to “Go buy Ivanka stuff,” top government lawyers sprang into action, telling her she had violated ethics rules and warning her not to do it again.
Government ethics experts have varying opinions on whether the 2017 criticism of Kellyanne Conway went far enough, but many agree such violations now might not even draw an official rebuke.
A week after President Donald Trump turned the White House lawn into a Tesla infomercial for Elon Musk’s cars, a second sales pitch by a US official occurred, this time for Tesla stock.
“It will never be this cheap,” US Commerce Secretary Howard Lutnick said Wednesday. “Buy Tesla.”
Government ethics experts say Lutnick broke a 1989 law prohibiting federal employees from using “public office for private gain,” later detailed to include a ban on ”endorsements.” Although presidents are generally exempt from government ethics rules, most federal employees are not and are often punished for violations, including rebukes like the one Conway got.
As of Friday, no public action had been taken against Lutnick and it was unclear whether he would suffer a similar fate.
“They’re not even thinking of ethics,” said Trump critic and former Republican White House ethics czar Richard Painter of administration officials.
Painter has equally low expectations of that other possible brake to future violations — public opinion: ”I don’t know if people care.”
In his first term, Trump opened his hotel near the Oval Office to foreign ambassadors and lobbyists in what many legal scholars argued was a violation of a constitutional ban against presidents receiving payments or gifts that could distort public policy for private gain. His company launched a new hotel chain called “America Idea” in hopes of cashing in on his celebrity. Trump even once proposed holding a G-7 meeting of world leaders at his then-struggling Doral golf resort.
The ‘Buy Ivanka’ rebuke
But the reaction to Conway’s “Ivanka stuff” comment suggested certain lines couldn’t be crossed.
Within days of Conway’s TV comments, the head of the federal ethics agency, the Office of Government Ethics, wrote a letter to the White House saying Trump’s adviser may have broken the law and urging a probe. A White House lawyer then met with Conway to remind her of the law and reported to the ethics office that she had assured him she would abide by it in future.
But this time, there is no head of the Office of Government Ethics. He was fired by Trump. Ditto for the inspector generals of various agencies who would head any investigation.
“What is likely to happen now? I really don’t know,” said Kedric Payne, chief lawyer at the Campaign Legal Center, a non-profit watchdog that sent a letter to the government ethics office on Friday calling for an investigation. “We no longer have the head of the Office of Government Ethics to push the Commerce Department to make sure the secretary acknowledges the law.”
Payne said Lutnick’s comment on TV may seem like a small transgression but it could snowball into a bigger problem if not punished.
“It starts with one TV appearance, but can develop into multiple officials asking people to support companies and products,” Payne said. “If there are no consequences, you get into a danger zone of a corruption.”
Trump critics point to other signs that Trump is careless with the law and ethical norms, citing his pardons for Jan. 6 Capitol rioters, a decision to allow his Trump Organization to strike business deals abroad and his attack on the Foreign Corrupt Practices Act banning US company bribes abroad to win business.
Jelly beans and airlines
When it comes endorsing products, presidents used to be far more circumspect.
Their comments were mostly quick asides expressing opinions of taste, such as when Harry Truman called Pillsbury flour the “finest” or John F. Kennedy said United Airlines was “reliable.”
Ronald Reagan famously enthused about his jelly beans habit, remarking that they were the “perfect snack.”
Trump had five Teslas lined up in the White House driveway last week as he praised Musk’s company. Then he slipped into a red Model S he had targeted for personal purchase, exclaiming, “Wow. That’s beautiful.”
“Presidents are allowed to have personal opinions on products they like and dislike,” said ethics lawyer Kathleen Clark, referring to the Truman through Reagan examples. ”But what Trump did was transform the White House into a set for advertising the products of a private company.”
“It’s the difference between holding an extravaganza and holding an opinion.”
Calls for Musk investigation
In the aftermath of the Tesla White House event, Massachusetts Sen. Elizabeth Warren and three other senators wrote a letter to the Office of Government Ethics saying that, while presidents are exempt from ethics law banning endorsements, Elon Musk isn’t and calling for an investigation.
A spokeswoman from Warren’s office said the government ethics office had not yet responded about what it planned to do about the White House Tesla endorsement. The Office of Government Ethics itself said it would not comment on either the Warren letter or Lutnick’s TV appearance.
The Commerce Department did not respond to Associated Press requests for comment.
Asked whether Lutnick would be reprimanded or an investigation opened, White House spokesman Kush Desai defended Lutnick, lauding “his immensely successful private sector career” and his “critical role on President Trump’s trade and economic team.”
Former White House ethics chief Painter says Democrats have also played loose with the ethics law.
He is harshly critical of the Clinton charity, the Clinton Foundation, which was taking donations from foreign governments when Hillary Clinton was the country’s chief diplomat as secretary of state. Painter also blasts former President Joe Biden for not removing his name from a University of Pennsylvania research institute when he was in office even though it appeared to be helping draw donations overseas.
But Painter says the slide from caring about ethics laws and norms to defiance has hit a new low.
“There’s been a deterioration in ethics,” he said. “What Biden did wasn’t good, but this is worse.”