China's Sons and Daughters program

Ivanka Trump has scored a batch of new trademarks in China as her father continues trade talks with Beijing.

By Julia Horowitz

Seven trademarks were officially registered to Ivanka Trump this month with China's State Administration for Industry and Commerce, according to the government's trademark database. 

They are for items such as kitchenware, furniture, paper products and cosmetics.
The approvals come as Donald Trump remains engaged in trade negotiations with China on a wide range of issues.
Ethics experts say this raises conflict-of-interest concerns, since Ivanka Trump and her husband, Jared Kushner, both serve as senior advisers in the White House.
"They come at a time when her father and his administration, in which she and her husband work, are making enormously consequential decisions with and about China," said Norm Eisen, the former ethics chief for President Barack Obama and a CNN contributor.
"The conflict comes because we do not know if the Trump administration is making these official decisions [on China] to benefit the US, or to get more trademarks and other benefits for the Trump family," he added.
Eisen is an attorney in lawsuits against Trump that allege that the president's acceptance of payments and other benefits from foreign governments is in violation of the Constitution.
Abigail Klem, president of the Ivanka Trump brand, said in a statement that the fashion line regularly files for trademarks, especially in areas where trademark infringement is common.
"The brand has filed, updated, and rigorously protected its international trademarks over the past several years in the normal course of business, especially in regions where trademark infringement is rampant," she said. 

"We have recently seen a surge in trademark filings by unrelated third parties trying to capitalize on the name and it is our responsibility to diligently protect our trademark."
The company's recent actions were protective in nature, intended to guard against people unrelated to Ivanka Trump who want to capitalize on her name, and not necessarily because the brand intends to sell those products, a company spokesperson said.
Since her father's election, Ivanka Trump has stepped away from the management of her business, though she still retains an ownership stake. 

She isn't legally required to sell all her assets in order to work in the White House, though she is subject to rules for federal employees that prohibit her from participating in matters in which she has a financial interest.
The trademarks received preliminary approval in February 2018, and economic tensions between the US and China did not begin in earnest until March. 

Trademarks typically take about three months in China to move from preliminary approval to final approval.
The green-light comes at a time when the stakes between the two nations are incredibly high.
China and the United States recently committed to put on hold threats of tariffs that would have amounted to tens of billions of dollars. 

The countries said China would "significantly increase" purchases of US goods and services to reduce their trade imbalance, a top Trump administration demand.
But the situation remains in flux. China has not put a dollar amount on its commitment to boost purchases, and hasn't made any material concessions on intellectual property theft. 

Commerce Secretary Wilbur Ross is scheduled to go to China on June 2 through June 4 to continue discussions, according to the Chinese Foreign Ministry.
Trump is also still working out what to do about ZTE, the Chinese phone and telecom equipment maker that was crippled by a US export ban issued last month, in punishment for violations of its sanctions against North Korea and Iran.
Easing penalties on ZTE is a priority for Chinese dictator Xi Jinping, and the Commerce Department briefed members of Congress on Friday about a tentative deal. 

But blowback from senators from both parties has been severe, eliciting questions about whether Trump will move forward with his reprieve.
Ivanka Trump's Chinese trademarks aren't the only Trump family business project to raise eyebrows amid negotiations with Beijing.
Earlier this month, a state-owned Chinese construction company formalized plans to develop a theme park in Lido, Indonesia — part of a broader project for which the Trump Organization has existing licensing agreements.
The move led ethics experts to voice concerns about the potential for quid pro quo dealings between Trump and China. 

The president isn't in charge of the Trump Organization anymore, but he has not sold his ownership stake in the company.

J.P. Morgan Settlement Lays Bare the Practice of Hiring ‘Princelings’

"Sons and Daughters program" in China sought to hire well-connected offspring to win business
By ARUNA VISWANATHA

A pedestrian walks past the Shanghai office of J.P. Morgan Chase in China. 

A decade ago, a J.P. Morgan Chase & Co. managing director in Asia sent an email to the investment-banking team: “As you know, the firm does not condone the hiring of the children or other relatives of clients or potential clients...In fact, the firm’s policies expressly forbid this,” the director wrote.
Within two years, however, the team had begun orchestrating the hiring of dozens of relatives of powerful government officials in China with the express purpose of winning business, U.S. authorities said Thursday. 

The bank had created a separate channel to get unqualified applicants through the hiring process, and it later began tracking profits from any subsequent business awarded because of the hires, they said.
One candidate was described in an email as “the worst [business analyst] candidate they had ever see[n].” 

Another had a “napping habit” that would be an “eye-opening experience” for New York colleagues. In both instances, the candidates were hired, according to criminal and civil settlements the bank reached with the Justice Department, the Securities and Exchange Commission and the Federal Reserve.
All told, the bank hired around 100 applicants referred by government officials at Chinese state-owned firms, and earned at least $35 million as the result of a “corrupt scheme,” according to the settlement documents. 

The agreement ends a multiyear, high-profile investigation that had called into question whether the U.S. government was threatening to criminalize standard business practices in some countries.
J.P. Morgan agreed to pay $264 million and admitted it violated the Foreign Corrupt Practices Act—which bars U.S. firms from paying bribes to officials of foreign government in an effort to win business—through its hiring of so-called princelings. 

The Wall Street Journal had reported the outlines of the settlement in July. 

The 75 pages of settlement documents released on Thursday lay bare how the bank had set up a formal structure—dubbed the Sons and Daughters program—to leverage internships and win hundreds of millions of dollars in deals.
Between December 2010 and March 2011, one China-based employee maintained a spreadsheet that linked hires to specific clients, and tracked revenue attributable to those hires, the documents show.
“Some have argued that employment of a child, friend or relative could not possibly induce a foreign official to take action. Today’s action demonstrates the falsity of that assertion,” SEC enforcement director Andrew Ceresney told reporters.
“The so-called Sons and Daughters Program was nothing more than bribery by another name,” said Leslie Caldwell, the head of the Justice Department’s criminal division.
J.P. Morgan spokesman Brian Marchiony said in a statement the bank is “pleased that our cooperation was acknowledged in resolving these investigations” and that the conduct was “unacceptable.” 

Mr. Marchiony said the bank stopped the hiring program in 2013 and “took action against the individuals involved.” 

He added that the bank is still committed to the Asia-Pacific region. 

The agreement said more than two dozen employees had been let go or disciplined in connection with the investigation.
Several other banks are also under investigation for similar hiring practices, including Citigroup Inc., Credit Suisse Group AG, Deutsche Bank AG, Goldman Sachs Group Inc.,HSBC Holdings PLC, Morgan Stanley and UBS Group AG, according to regulatory filings. 

The banks declined to comment. 

Mr. Ceresney said he expected additional cases to follow the J.P. Morgan settlement.
The settlement documents cite emails in which J.P. Morgan officials discuss similar tactics they believed other banks were using.
In 2011, one employee asked for a hire to be switched into a permanent job, despite the person’s “undeniable underperformance” because the “deal is large enough [and] we are pregnant enough with this person, that we’d be crazy not to accommodate her father’s wants,” according to an email cited in the agreement.
Also in 2011, one employee asked whether one hire did substantive work. 

“We get real [investment banking] productivity from [the referral hire] or is she a photocopier[?]” “Photocopier,” was the response.
The agreements also show executives questioning why the bank wasn’t doing a better job of leveraging hires.
“We have more [lines of business] in China therefore in theory we can accommodate more ‘powerful’ sons and daughters that could benefit the entire platform,” one of the bank’s managing directors in Asia said in 2009.
In a 2008 exchange, one executive responded when asked about a prospective hire related to a potential client preparing for an IPO: “A couple of points...to discuss and agree prior to any offer being made to her: how do you get the best quid pro quo from the relationship upon confirmation of the offer?”