Key Takeaways

• The Former Presidents Act of 1958 stipulates that former US presidents are entitled to an annual pension that is worth the basic pay (as in effect from time to time) of the head of an executive department or cabinet secretary. Currently, the basic pay for the head of an executive department (Level I) is $226,300.
• The Former Presidents Act of 1958 also stipulates that former presidents, their spouses, and minors under the age of 16 are eligible for lifetime protection by the US Secret Service. However, the exact costs are not known, as the NTUF reports that the data is classified.
• If a former president was not receiving protection from the Secret Service, declines the benefits or the protection provided by the Secret Service expired at its designated time, "appropriations up to $1 million for the former president and up to $500,000 for the spouse can be made, each fiscal year, for security and travel related expenses," according to the Former Presidents Act of 1958.

Introduction

Overview of How Much Former US Presidents Make and Security Costs

Pension

• The Former Presidents Act of 1958 stipulates that former US presidents are entitled to an annual pension that is worth the basic pay (as in effect from time to time) of the head of an executive department or cabinet secretary.
• Initially, the pension for former presidents was set at $25,000 per annum before it was amended to reflect the pay of a cabinet secretary, which stood at $221,400 in 2021 according to the National Taxpayers Union Foundation (NTUF), or $219,000 - according to an article published by Vox in 2021. Currently, the basic pay for the head of an executive department (Level I) is $226,300.
• The table below shows how much the government spent on various benefits and services for former presidents between 2015 and 2020, including the pension (under "Pension & Health").

 

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• The table below is the Request Budget document for former presidents in 2021, which shows the breakdown of all entitled allowances, including pension and health.

 

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• It's important to note that "the pension allowance shall not be paid for any period during which such former President holds an appointive or elective office or position in or under the Federal Government or the government of the District of Columbia to which is attached a rate of pay other than a nominal rate."
• If a former president dies, the wife or widow is entitled to $20,000 per annum, which is payable monthly. The benefits hold unless the widow dies, remarries before she's 60 years, or has an appointive/elective office where she's entitled to a rate of pay other than a nominal rate.
• Since the pension of a former US president is dependent on the basic pay of the head of an executive department or cabinet secretary, the US congress sets the amount annually.

Security Costs

• The Former Presidents Act of 1958 also stipulates that former presidents, their spouses, and minors under the age of 16 are eligible for lifetime protection by the US Secret Service. However, the exact costs are not known, as the NTUF reports that the data is classified.
• However, if a former president was not receiving protection from the Secret Service, declines the benefits or the protection provided by the Secret Service expired at its designated time, "appropriations up to $1 million for the former president and up to $500,000 for the spouse can be made, each fiscal year, for security and travel related expenses," according to the Former Presidents Act of 1958.
• Towards the end of Trump's reign as the president of the US, he approved "Secret Service security protection to be extended for additional next six months to his adult children," a request which reporters revealed cost $1.7 million - because of the number of people to be protected and how frequent they travel.
• In 2021, after leaving office, reports show that the former president, Donald Trump, cost the US Secret Service over $1.3 million on hotel and transportation bills, as federal agents secured and traveled between South Florida and New Jersey - spending $788,286 on hotel rooms, $286,802 on rental cars, and $262,091 on air and rail travel.
• While that $1.3 million is only a fraction of the overall cost, the overall cost of protection is not publicly available.

Average Book Deal

• It is common for former presidents to publish books and/or presidential memoirs when they leave office. They earn millions of dollars by signing expensive and record-breaking book deals with publishers.
• "In 2017, Barack and Michelle Obama signed a joint book deal with Penguin Random House to the tune of over $60 million," which featured books and/or memoirs like "Dreams from My Father: A Story of Race and Inheritance" by Barack and "Becoming" by Michelle.
• Bill Clinton's post-presidency book deal was worth about $14 million (or about $21 million in today's currency). The Obamas' book deal and Bill Clinton's book deal still rank in the top 10 book deals ever.
• George W. Bush also signed his book deal to the tune of $10 million after he left office.
• Based on these book deals, the average book deal size that former presidents can get is about $28 million (i.e., ($60 million + $14 million + $10 million) / 3 = $28 million).

Additional Private Sources of Income

Public Appearances

• Former presidents are usually invited to deliver speeches and keynote addresses or make public appearances at events and ceremonies, which does involve hefty fees.
• Reports show that Former President Barack Obama charged up to $400,000 for a speaking engagement in 2017. This came after it was reported that he was paid $1.2 million for three separate speeches to Wall Street groups.
• "Former President Bill Clinton has made the most of any modern president on the speaking circuit. He gives dozens of speeches a year and each brings in between $250,000 and $500,000 per engagement, according to published reports, and earned $750,000 for a single speech in Hong Kong in 2011," according to ThoughtCo.
• Washington Post estimated that former President Bill Clinton earned at least $104 million in speaking fees from 2001 through 2012.
• Reports show that former President George W. Bush charged up to $200,00 for a speaking engagement.

Brand Deals

• Like celebrities, former presidents have earned significant income from brand deals.
• In 2018, the Obamas signed a deal with Netflix to produce content, such as the "American Factory" and "Crip Camp," which received positive reviews. "Crip Camp" also won an Oscar.
• While the size of the deal was not disclosed, CNN reported it was a high "a high 8-figure deal." Based on the size of similar multi-year deals with well-known names, Newsweek speculated that it could be in the range of $150-$300 million.
• They were also included in a deal signed by Spotify with Higher Ground Productions in 2019. "The deal included a 9-episode podcast that was hosted by Michelle Obama and featured guests including Barack," according to Business Insider.
• TechCrunch revealed that the deal was worth approximately $25 million, though the estimation was based on rumors.
• Bill Clinton also signed a deal with iHeartMedia - the second of his deals with the media company—to produce a podcast that premiered in 2021. The deal size was not disclosed.

Research Strategy

Key Takeaways

• There are no specific laws that govern the president's rights and responsibilities related to running a private business.
•  Lyndon Johnson was the first president to put his private business in a blind trust during his tenure.
•  Barack Obama did not set up a trust for his business interests as they were considered to be vanilla and unlikely to present a conflict of interest.

Introduction

Applicable Laws

No Specific Laws

• According to Judge Andrew Napolitano, a professor of law at Brooklyn Law School, a president can continue to run or be involved in a private business, whilst in the White House. He notes that there are no laws or statutes that prevent this type of activity. Any potential conflicts of interest are a political matter rather than a legal one. The potential consequences could lead to impeachment. However, as noted below, it depends on the view of the House of Representatives and it would be decided by the Senate, not a court of law.
•  President and vice president are not subject to the restrictions in the criminal conflicts of interest laws 18 U.S.C. §§ 202-209 and are exempt from the ethics regulations relating to conflicts of interest noted in Executive Order 11222.
• The 1978 Ethics in Government Act states that all federal officials, except the president, must "disclose their financial holdings and recuse themselves from any government business in which they, their families or close associates have a financial interest".

Emoluments Clause

• Lyle Denniston, Constitution Daily's Supreme Court correspondent, says that The Emoluments Clause, part of Article I of the Constitution, could be a legal basis for looking into concerns around the president's private business abroad. The clause states, “No Title of Nobility shall be granted by the United States: And no Person holding any Office of Profit or Trust under them, shall, without the Consent of the Congress, accept of any present, Emolument, Office, or Title, of any kind whatever, from any King, Prince, or foreign State."
• The above clause was written into the Constitution following a unanimous vote that took place at the Philadelphia Convention in 1787 as a provision to “exclude corruption and foreign influence.”
• Congress has the power to pass laws that would allow or deny financial dealings between a foreign government and a federal official, including the President, according to Justice Department advisory opinions made over many decades. However, there are no records of court rulings that have interpreted the Emoluments Clause in the Library of Congress's Annotated Constitution, which makes it difficult to determine how much weight the clause has in practice.

Bodies Responsible for Controlling Presidents with Private Business Interests

Congress

• Lyle Denniston, when asked about Donald Trump's intention to retain some control of his private business when he took office, said that Congress is the body that must be relied upon to monitor this type of situation.

The General Accountability Office

•  The General Accountability Office (GAO), an independent part of Congress, would be responsible for investigating suspicions that a president's private business benefited from government funds, such as a public works project leading to improvements that could then benefit the president's company.
• However, Congress is still the body that has the necessary authority to take action. GAO is responsible for preparing factual reports containing non-partisan information for Congress and heads of executive agencies, so they could make informed decisions to improve the efficiency of the government and operate with transparency.

Impeachment

• If a president commits a crime or acts improperly, the most decisive action that can be taken is an impeachment proceeding by the House of Representatives. However, it is not specific to activities related to their private business. According to Time, the reasons a President can be impeached are "treason, bribery, or other high crimes and misdemeanors."
• The House of Representatives would need to pass an article of impeachment, outlining the accusations made against the President. If the House votes to proceed with the impeachment, the Senate then holds a trial. If the president is found to have committed the offenses they are accused of under the act, they can be removed from office.

Former Presidents That Cut Ties With Private Business

Lyndon Johnson

•  Lyndon Johnson is said to be a pioneer of the use of blind trusts. Upon winning the election, he put his business holdings, which were predominantly in radio and TV stations in the Austin area, into the control of independent trustees. He kept control of his family ranch.
• According to the National Conference of State Legislatures, "in a blind trust, an individual places assets that could otherwise create conflicts of interest into an asset vehicle ("trust"). Control over the trust and its assets are given to an independent trustee, who may buy and sell assets without the knowledge or consent of the beneficiary ("blind")."

Jimmy Carter

• When Jimmy Carter was elected in 1976, he put his peanut farm business into a blind trust. Carter Farms owned 2,000 to 3,000 acres of land, and Carter had 91% ownership. In addition, Carter had a majority interest in Carter Warehouse, located in his hometown. He set up the trust so that any decisions he took relating to agriculture could not be seen as biased in favor of his business interests. It was done despite the fact that the businesses were mainly run by his brother.

Ronald Reagan

• In 1981, Ronald Reagan announced he had set up a blind trust. He said that all his investments, other than his ranch in Santa Barbara and property in Pacific Palisades, both in California, were converted to cash and placed in a trust that would be managed by an independent trustee. He said he would not have knowledge of the progress of the investments or have any control over them to prevent any suggestion of s conflict of interest.

 

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Bill Clinton

• Bill Clinton set up a blind trust when he became president in 1993. It came to public attention when questions were asked about money Mrs. Clinton held in a mutual fund that had invested in a health-related stock. Relevant documents were referred to the Office of Government Ethics for review. The trust was dissolved in 2007 when Hilary Clinton decided to run for office.

George H. W. Bush

• George H. W. Bush used a blind trust as well. He had interests in an offshore oil drilling company and owned millions of dollars worth of properties. His alleged net worth was $26.3 million at the beginning of his presidency.

George W. Bush

• George W Bush also used a blind trust for his assets when he was in the White House. In fact, his assets of $39.5 million, including the professional baseball team the Texas Rangers, were put in a trust before he became Governor of Texas.

Former Presidents That Kept Control of Private Business

Donald Trump

• Trump refused to put his business interests into a blind trust when he was elected president. He announced that his three adult children would take control of his private business.

 

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• During Trump's tenure as president, his potential conflicts of interest were discussed frequently. Three organizations sued Trump for breaching the emolument clause. Various things were raised as being potential emoluments, including foreign government leases in Trump Tower, foreign officials booking rooms or events at his hotels, and even foreign government broadcasters paying for the rights to Apprentice re-runs. The cases had not reached a conclusion at the time of the publication.
• Trump treated the campaign to be president as an opportunity to enhance the Trump brand. His own hotels and golf courses were used for events, and Trump Tower was the campaign headquarters, which meant money was made for his business ventures during the campaign.

George Washington and Thomas Jefferson

• George Washington was considered to be one of the country's biggest landowners and also had a flour mill. His nephew was running the businesses when Washington was in office.

• Thomas Jefferson owned a plantation and a nail factory during his time as president. He also exported tobacco to Great Britain.
• The Department of Justice raised this point during a hearing for one of the cases against Trump, noting that no one had raised any issues with foreign governments being customers of or being involved in either of the earlier presidents' businesses.

Barack Obama

• According to Investopedia, Barack Obama did not use a blind trust because his investments were considered vanilla, being in index funds and treasury notes. These were not expected to present a conflict of interest.

Research Strategy