Ethics experts 'underwhelmed' at Ivanka Trump shuttering her fashion business — and wonder what she'll do about her stake in the Trump Organisation

Win McNamee/Getty ImagesIvanka Trump.
  • President Donald Trump’s daughter Ivanka Trump, an assistant to the president, announced the closure of her fashion business on Tuesday.
  • Ethics experts were “underwhelmed” at the news.

Ethics experts were “underwhelmed” at the news that Ivanka Trump, President Donald Trump’s daughter and an assistant to the president, opted to close her namesake fashion brand on Tuesday.

They said the move, while a step in the right direction, comes amid other major conflicts of interest for Ivanka, her husband Jared Kushner, a White House senior adviser, and the president, which remain active.

“Eighteen months into the historically unprecedented and profoundly conflicted activities of Ivanka, her husband, and her father, this seems to me to be underwhelming,” Norman Eisen, chief ethics lawyer under former President Barack Obama, told Business Insider. “In part that’s because she’s not abandoning other business connections including her profoundly troubling trademarks in China and elsewhere, and because the conflicts are accumulating for the family, including her husband and her father, with every passing day.”

The Wall Street Journal reported that Ivanka grew frustrated with the self-imposed ethics restrictions on her fashion brand, such as the inability to strike new foreign deals, and felt that they stunted its growth. Citing poor performance, a number of stores, such as Nordstrom and Hudson’s Bay, dropped the brand since her father took office last year.

“After 17 months in Washington, I do not know when or if I will ever return to the business, but I do know that my focus for the foreseeable future will be the work I am doing here in Washington,” Ivanka said in a statement. “So making this decision now is the only fair outcome for my team and partners.”

According to Rakuten Intelligence, the brand’s online sales on Amazon, Macy’s, Bloomingdale’s, and Zappos fell about 45% since mid-2017 when compared to the previous year, The Wall Street Journal reported. In November, YouGov consumer perception survey found that her fashion line fell to the bottom 10 of more than 1,600 brands analysed.

The brand saw growth during the 2016 election season. At the end of last January, net sales of Ivanka-licensed apparel rose 61% to $US47.3 million from the previous year, a Securities and Exchange Commission filing from G-III showed.

While working in the White House, Ivanka continued to be updated on the financial health of the company and earned a share of its profits, even though she separated herself from its management and operations prior to joining the administration. Ivanka retained her ownership interest through a trust.

Her most recent financial disclosure showed the trust was valued at more than $US50 million and earned her more than $US5 million in income last year. Ivanka maintains a stake in the Trump Organisation, though she resigned from her position prior to joining the administration.

In May, controversy surrounded Ivanka after her fashion brand was awarded a number of Chinese trademarks just as her father pledged to revive Chinese telecom giant ZTE.

‘How much’ conflicts ‘will be reduced will depend on how it is done’

Eisen told Business Insider that Ivanka’s decision was likely motivated more by the business performing poorly than by any ethical concerns over conflicts.

Larry Noble, the senior director and general counsel of the Campaign Legal Center, told Business Insider that Ivanka shutting down her fashion brand “is a small step that will reduce some potential conflicts of interest.”

“How much they will be reduced will depend on how it is done,” he said. “More importantly, she still does not acknowledge the conflicts it presented, nor the continuing conflicts presented by her interests in her family’s other businesses.”

Noble said he suspects the move was “driven, in part, by the disconnect between the businesses practices and her attempts be seen as socially conscious.”

Noah Bookbinder, executive director of the watchdog group Citizens for Responsibility and Ethics in Washington, said in a statement that although Ivanka’s decision was “a notable step in the right direction” it’s “a small one that comes much too late.”

“The ethics issues that arise from her ownership of the Ivanka Trump Brand also arise from her ownership stake in the Trump Organisation, and still more issues arise from her father’s ownership of that business,” he said. “If the Trump family truly cared about ethics, they would fully divest themselves of these assets – something they should have done before they entered the White House.”

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