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

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

News

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

2025-03-22 05:12 Last Updated At:05:32

NEW YORK (AP) — 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.

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FILE - Tesla and SpaceX CEO Elon Musk listens as Republican presidential nominee former President Donald Trump speaks at a campaign event at the Butler Farm Show, Oct. 5, 2024, in Butler, Pa. (AP Photo/Alex Brandon, File)

FILE - Tesla and SpaceX CEO Elon Musk listens as Republican presidential nominee former President Donald Trump speaks at a campaign event at the Butler Farm Show, Oct. 5, 2024, in Butler, Pa. (AP Photo/Alex Brandon, File)

A Tesla vechile is seen near a charging station, Wednesday, March 19, 2025, in Woodstock, Ga. (AP Photo/Mike Stewart)

A Tesla vechile is seen near a charging station, Wednesday, March 19, 2025, in Woodstock, Ga. (AP Photo/Mike Stewart)

Commerce Secretary Howard Lutnick speaks with reporters at the White House, Thursday, March 13, 2025, in Washington. (AP Photo/Alex Brandon)

Commerce Secretary Howard Lutnick speaks with reporters at the White House, Thursday, March 13, 2025, in Washington. (AP Photo/Alex Brandon)

FILE - President Donald Trump listens as Elon Musk speaks in the Oval Office at the White House, Feb. 11, 2025, in Washington. (AP Photo/Alex Brandon, File)

FILE - President Donald Trump listens as Elon Musk speaks in the Oval Office at the White House, Feb. 11, 2025, in Washington. (AP Photo/Alex Brandon, File)

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 U.S. official occurred, this time for Tesla stock.

“It will never be this cheap,” U.S. 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.

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 U.S. company bribes abroad to win business.

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."

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."

FILE - Tesla and SpaceX CEO Elon Musk listens as Republican presidential nominee former President Donald Trump speaks at a campaign event at the Butler Farm Show, Oct. 5, 2024, in Butler, Pa. (AP Photo/Alex Brandon, File)

FILE - Tesla and SpaceX CEO Elon Musk listens as Republican presidential nominee former President Donald Trump speaks at a campaign event at the Butler Farm Show, Oct. 5, 2024, in Butler, Pa. (AP Photo/Alex Brandon, File)

A Tesla vechile is seen near a charging station, Wednesday, March 19, 2025, in Woodstock, Ga. (AP Photo/Mike Stewart)

A Tesla vechile is seen near a charging station, Wednesday, March 19, 2025, in Woodstock, Ga. (AP Photo/Mike Stewart)

Commerce Secretary Howard Lutnick speaks with reporters at the White House, Thursday, March 13, 2025, in Washington. (AP Photo/Alex Brandon)

Commerce Secretary Howard Lutnick speaks with reporters at the White House, Thursday, March 13, 2025, in Washington. (AP Photo/Alex Brandon)

FILE - President Donald Trump listens as Elon Musk speaks in the Oval Office at the White House, Feb. 11, 2025, in Washington. (AP Photo/Alex Brandon, File)

FILE - President Donald Trump listens as Elon Musk speaks in the Oval Office at the White House, Feb. 11, 2025, in Washington. (AP Photo/Alex Brandon, File)

Federal Reserve Chair Jerome Powellsaid Sunday the Department of Justice has served the central bank with subpoenas and threatened it with a criminal indictment over his testimony this summer about the Fed’s building renovations.

The move represents an unprecedented escalation in President Donald Trump’s battle with the Fed, an independent agency he's repeatedly attacked for not cutting its key interest rate as sharply as he prefers. The renewed fight will likely rattle financial markets Monday and could over time escalate borrowing costs for mortgages and other loans.

The subpoenas relate to Powell’s testimony before the Senate Banking Committee in June, the Fed chair said, regarding the Fed’s $2.5 billion renovation of two office buildings, a project Trump has criticized as excessive.

Here's the latest:

Stocks are falling on Wall Street after Federal Reserve Chair Jerome Powell said the Department of Justice had served the central bank with subpoenas and threatened it with a criminal indictment over his testimony about the Fed’s building renovations.

The S&P 500 fell 0.3% in early trading Monday. The Dow Jones Industrial Average lost 384 points, or 0.8%, and the Nasdaq composite fell 0.2%.

Powell characterized the threat of criminal charges as pretexts to undermine the Fed’s independence in setting interest rates, its main tool for fighting inflation. The threat is the latest escalation in President Trump’s feud with the Fed.

▶ Read more about the financial markets

She says she had “a very good conversation” with Trump on Monday morning about topics including “security with respect to our sovereignties.”

Last week, Sheinbaum had said she was seeking a conversation with Trump or U.S. Secretary of State Marco Rubio after the U.S. president made comments in an interview that he was ready to confront drug cartels on the ground and repeated the accusation that cartels were running Mexico.

Trump’s offers of using U.S. forces against Mexican cartels took on a new weight after the Trump administration deposed Venezuelan President Nicolás Maduro. Sheinbaum was expected to share more about their conversation later Monday.

A leader of the Canadian government is visiting China this week for the first time in nearly a decade, a bid to rebuild his country’s fractured relations with the world’s second-largest economy — and reduce Canada’s dependence on the United States, its neighbor and until recently one of its most supportive and unswerving allies.

The push by Prime Minster Mark Carney, who arrives Wednesday, is part of a major rethink as ties sour with the United States — the world’s No. 1 economy and long the largest trading partner for Canada by far.

Carney aims to double Canada’s non-U.S. exports in the next decade in the face of President Trump’s tariffs and the American leader’s musing that Canada could become “the 51st state.”

▶ Read more about relations between Canada and China

The comment by a Chinese Foreign Ministry spokesperson came in response to a question at a regular daily briefing. President Trump has said he would like to make a deal to acquire Greenland, a semiautonomous region of NATO ally Denmark, to prevent Russia or China from taking it over.

Tensions have grown between Washington, Denmark and Greenland this month as Trump and his administration push the issue and the White House considers a range of options, including military force, to acquire the vast Arctic island.

Danish Prime Minister Mette Frederiksen has warned that an American takeover of Greenland would mark the end of NATO.

▶ Read more about the U.S. and Greenland

Trump said Sunday that he is “inclined” to keep ExxonMobil out of Venezuela after its top executive was skeptical about oil investment efforts in the country after the toppling of former President Nicolás Maduro.

“I didn’t like Exxon’s response,” Trump said to reporters on Air Force One as he departed West Palm Beach, Florida. “They’re playing too cute.”

During a meeting Friday with oil executives, Trump tried to assuage the concerns of the companies and said they would be dealing directly with the U.S., rather than the Venezuelan government.

Some, however, weren’t convinced.

“If we look at the commercial constructs and frameworks in place today in Venezuela, today it’s uninvestable,” said Darren Woods, CEO of ExxonMobil, the largest U.S. oil company.

An ExxonMobil spokesperson did not immediately respond Sunday to a request for comment.

▶ Read more about Trump’s comments on ExxonMobil

Trump’s motorcade took a different route than usual to the airport as he was departing Florida on Sunday due to a “suspicious object,” according to the White House.

The object, which the White House did not describe, was discovered during security sweeps in advance of Trump’s arrival at Palm Beach International Airport.

“A further investigation was warranted and the presidential motorcade route was adjusted accordingly,” White House press secretary Karoline Leavitt said in a statement Sunday.

The president, when asked about the package by reporters, said, “I know nothing about it.”

Anthony Guglielmi, the spokesman for U.S. Secret Service, said the secondary route was taken just as a precaution and that “that is standard protocol.”

▶ Read more about the “suspicious object”

Trump said Iran wants to negotiate with Washington after his threat to strike the Islamic Republic over its bloody crackdown on protesters, a move coming as activists said Monday the death toll in the nationwide demonstrations rose to at least 544.

Iran had no direct reaction to Trump’s comments, which came after the foreign minister of Oman — long an interlocutor between Washington and Tehran — traveled to Iran this weekend. It also remains unclear just what Iran could promise, particularly as Trump has set strict demands over its nuclear program and its ballistic missile arsenal, which Tehran insists is crucial for its national defense.

Iranian Foreign Minister Abbas Araghchi, speaking to foreign diplomats in Tehran, insisted “the situation has come under total control” in fiery remarks that blamed Israel and the U.S. for the violence, without offering evidence.

▶ Read more about the possible negotiations and follow live updates

Fed Chair Powell said Sunday the DOJ has served the central bank with subpoenas and threatened it with a criminal indictment over his testimony this summer about the Fed’s building renovations.

The move represents an unprecedented escalation in Trump’s battle with the Fed, an independent agency he has repeatedly attacked for not cutting its key interest rate as sharply as he prefers. The renewed fight will likely rattle financial markets Monday and could over time escalate borrowing costs for mortgages and other loans.

The subpoenas relate to Powell’s testimony before the Senate Banking Committee in June, the Fed chair said, regarding the Fed’s $2.5 billion renovation of two office buildings, a project that Trump has criticized as excessive.

Powell on Sunday cast off what has up to this point been a restrained approach to Trump’s criticisms and personal insults, which he has mostly ignored. Instead, Powell issued a video statement in which he bluntly characterized the threat of criminal charges as simple “pretexts” to undermine the Fed’s independence when it comes to setting interest rates.

▶ Read more about the subpoenas

President Donald Trump speaks to reporters while in flight on Air Force One to Joint Base Andrews, Md., Sunday, Jan. 11, 2026. (AP Photo/Julia Demaree Nikhinson)

President Donald Trump speaks to reporters while in flight on Air Force One to Joint Base Andrews, Md., Sunday, Jan. 11, 2026. (AP Photo/Julia Demaree Nikhinson)

President Donald Trump waves after arriving on Air Force One from Florida, Sunday, Jan. 11, 2026, at Joint Base Andrews, Md. (AP Photo/Julia Demaree Nikhinson)

President Donald Trump waves after arriving on Air Force One from Florida, Sunday, Jan. 11, 2026, at Joint Base Andrews, Md. (AP Photo/Julia Demaree Nikhinson)

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