Donald Trump’s plan to transfer control of his business empire to his adult children has been dealt a fresh blow by the Office of Government Ethics (OGE).

Tom Carper, top Democrat on the Senate homeland security and governmental affairs committee, wrote to OGE director Walter Shaub last month asking what guidance it is providing to the president-elect about addressing potential conflicts of interest.

Since his dramatic election win, government ethics lawyers have pressured Trump to sell his assets and put the money in a blind trust overseen by an independent manager unrelated to him. While federal ethics rules place strict limits on nearly all government employees and elected officials, the rules do not apply to the president, as Trump himself has pointed out.

But the OGE advised on Tuesday that failing to set up a blind trust would be a breach of the spirit if not the letter of the law.

According to a letter posted on Carper’s website, the OGE wrote: “[I]t has been the consistent policy of the executive branch that a President should conduct himself ‘as if’ he were bound by this financial conflict of interest law [18 U.S.C. § 208].

“Given the unique circumstances of the Presidency, OGE’s view is that a President should comply with this law by divesting conflicting assets, establishing a qualified blind trust, or both. However, although every President in modern times has adopted OGE’s recommended approach, OGE has no power to require adherence to this tradition.”

For decades, occupants of the White House have sold their stocks and other personal holdings and put the cash into a blind trust overseen by an investment manager. Jimmy Carter, for example, sold his peanut farm in Georgia.

Trump postponed a press conference that was due to address the matter on Thursday but tweeted that he will quit his businesses before his inauguration on 20 January. “Two of my children, Don and Eric, plus executives, will manage them,” he wrote. “No new deals will be done during my term(s) in office.”

Presidency. Two of my children, Don and Eric, plus executives, will manage them. No new deals will be done during my term(s) in office. — Donald J. Trump (@realDonaldTrump) December 13, 2016

But the OGE’s response found this insufficient: “Transferring operational control of a company to one’s children would not constitute the establishment of a qualified blind trust, nor would it eliminate conflicts of interest under 18 U.S.C. § 208 if applicable.”

Trump owns golf clubs, office towers and properties in several countries and has struck licensing deals for use of his name on hotels and other buildings around the world. Deutsche Bank, one of Trump’s lenders, is in settlement talks with the justice department over its role in the mortgage blowup that sparked the 2008 financial crisis.

Carper, a senator from Delaware, said that the numerous conflicts facing the president-elect’s administration would not be solved with the handover of his business to his sons.

“President-elect Trump has a sworn duty to ensure the American people that, in every decision he make as President of the United States, he has no other interests than those of our country, and I urge him to heed OGE’s advice in order to do so.”

Carper is among 23 senators who on Tuesday sent a letter urging Trump to divest his business holdings to resolve potential conflicts between the national interest and his personal financial interests.

A potential challenge to him could come via the “emoluments clause”, Article I, Section 9 of the constitution, which prohibits public officials from taking payments “of any kind whatever from any king, prince or foreign state”.



Donald Trump has said that his children will manage his business holdings. Photograph: Oli Scarff/AFP/Getty Images

During the campaign, he repeatedly attacked former secretary of state Hillary Clinton’s links to foreign governments and corporations that had donated money to the Clinton Foundation, insisting that it amounted to a grave conflict of interest.

But the blurred line between Trump’s businesses and political activities is now in question. A recent Wall Street Journal report noted: “It’s not clear how much Mr Trump’s businesses would benefit from his proposal to cut business tax rates.”

A day after he spoke to Argentina’s president Mauricio Macri, Trump’s Argentinian associate confidently predicted that construction would start next year on the planned Trump Tower Buenos Aires, despite zoning restrictions that have held it back for years.

Trump also met his Indian business partners and posed for pictures with them less than two weeks after winning the election. The Philippines government announced it was appointing his business partner in Manila as its next ambassador to Washington. And he used a meeting with a delegation of Brexit supporters, including Nigel Farage, to urge them to oppose wind farms that he felt would spoil the view from one of his Scottish golf courses.

Meanwhile, his new hotel on Pennsylvania Avenue in Washington has become a hot venue for foreign diplomats and embassies, corporate events, and the Republican party itself. The Washington Post reported in November that foreign diplomats were already planning on frequenting the hotel in an attempt to court favor with the new administration.

“The brand is certainly a hotter brand than it was before,” Trump told the New York Times recently.

Grover Norquist, founder and president of Americans for Tax Reform, a conservative organisation, ultimately played down the issues over conflicts of interest.

“It doesn’t keep me up at night. I don’t think that’s a real challenge. He runs hotels, he doesn’t sell weapons to the defense department,” Norquist said. “The chances for misbehaving would be more serious if you either bought something from the government or sold something to the government. That’s the two ways to get rich. It’s the wrong industry for that to be a real problem.”

But Noah Bookbinder, executive director of Citizens for Responsibility and Ethics in Washington, said: “Initially, it’s a little worrying that Trump has pushed his plan to deal with conflicts of interest to some unnamed time in the future.

“Hopefully this is a signal that he’s taking the issue very seriously and putting together a plan to deal with the myriad of conflicts his business brings by selling the business and putting the proceeds in a true blind trust, rather than using this as a stall tactic like he did to avoid releasing his tax returns after promising them.”