Hogan's business conflicts just like Trump's? Not quite.
Jul 16, 2018 | 3:45 PM
The Maryland Democratic Party contends that Gov. Larry Hogan’s decision not to divest entirely from his real estate business and to place his companies under his brother’s management while in office is exactly the same as President Donald Trump’s choice to put his children in charge of his real estate empire. We’ll grant the superficial similarity — both men work in real estate, both put family members in charge, and both opted for something short of a blind trust — but the reality is that the two situations are worlds apart.
Mr. Hogan’s business mostly involves connecting buyers and sellers in real estate transactions; buying property on spec and selling it later; partnering with builders on commercial and residential real estate; and some direct ownership of developments. It can be lucrative, but it’s pretty plain Jane stuff. Mr. Trump’s business, by contrast, is about promoting his brand — putting his name on everything from apartment towers to mail order steak. He promotes it relentlessly through continual travel to his own golf clubs and other properties in the United States and abroad. In January, Citizens for Ethics and Responsibility in Washington released a report detailing hundreds of potential conflicts of interest, including an uptick in spending at Trump properties by U.S. and foreign government officials and special interest groups since his election. So far as we know, Mr. Hogan isn’t billing taxpayers for weekly travel to golf courses he owns, and foreign dignitaries aren’t clamoring to stay at a hotel he developed.
Gov. Larry Hogan's business dealings have drawn criticism from Democrats, who have sought to tie Hogan to President Donald Trump, and renewed a debate about the lengths to which businessmen-turned-politicians should wall themselves off from their private enterprises.
All that isn’t to say that Governor Hogan’s business interests couldn’t possibly pose conflicts of interest. They could. Because the terms of his trust allow Mr. Hogan to be briefed on his companies’ holdings and finances, he could theoretically use the power of his office to his personal benefit. It’s certainly also possible that a state or local government official charged with deciding on permitting or other regulatory issues related to Mr. Hogan’s properties could treat the matter differently (whether to the governor’s benefit or detriment) because of his position.
But even Mr. Hogan’s critics can’t cite an example when either of those things happened. The closest they’ve come is to point to the governor’s 2015 announcement of a highway overpass project near two properties in which the Hogan companies have an interest. But the project had been on transportation planners’ books since 1984 (a year before Mr. Hogan founded his business) and had received its first funding under former Gov. Martin O’Malley.
More broadly, one could point to Mr. Hogan’s decision to cancel the Red Line through Baltimore, where he does not have real estate investments, and redirect the funding to road projects in suburban and rural areas where he does. But that may speak more to his general perspective than his profit motives. It was no secret during the 2014 campaign that he was oriented toward roads rather than transit and that his business was in suburban development rather than adaptive reuse or historical preservation work in cities. His primary frame of reference simply isn’t urban. We can lament that fact without imagining a conspiracy.
Would it have been better if Mr. Hogan had divested entirely of his holdings before taking office? Certainly. But particularly in real estate, that’s easier said than done. He could also have opted for a blind trust — an arrangement in which he would have had no knowledge of the management of his assets while he is in office. But that structure has limitations as well; if the governor can’t know what’s going on with his company, the public can’t either. Democrats are right that the list of LLCs attached to Governor Hogan’s annual financial disclosure forms doesn’t tell the public much about his business, but that’s an issue with transparency around LLCs in general, not the governor.
In a world of imperfect solutions, we can take some comfort that Mr. Hogan worked out the plan for his business interests through consultation with the state Ethics Commission, which was at the time controlled by O’Malley appointees, and that he has voluntarily released both the trust agreement and his recent tax returns. That’s certainly better than President Trump has done, yet it still doesn’t and shouldn’t answer all questions about Mr. Hogan’s business arrangements forever. The public, the press and even Mr. Hogan’s political opponents have a right and a responsibility to keep asking about them — and applying the same scrutiny to other candidates as well.