U.S. Markets close in 2 hrs 20 mins

Trump blasts retailer Nordstrom, raising new concern on business ties

An Ivanka Trump-branded blouse is seen for sale at off-price retailer Winners in Toronto, Ontario, Canada February 3, 2017. REUTERS/Chris Helgren

By Will Dunham and Richard Cowan

WASHINGTON (Reuters) - President Donald Trump blasted department store chain Nordstrom Inc (JWN.N) on Wednesday for dropping his daughter Ivanka's clothing line, prompting critics to accuse him of misusing public office to benefit his family's sprawling business empire.

After Trump's highly unusual move to use a White House platform to intervene in a commercial matter involving his daughter, Nordstrom reiterated that its action last week was based on declining sales of the Ivanka Trump products. But White House spokesman Sean Spicer characterized the move as a "direct attack" on the president's policies.

"My daughter Ivanka has been treated so unfairly by @Nordstrom. She is a great person -- always pushing me to do the right thing! Terrible!" Trump wrote on Wednesday on both his personal and official presidential Twitter accounts.

"This is misuse of public office for private gains," Richard Painter, who served as Republican President George W. Bush's chief ethics lawyer, said in an email to Reuters. "And it is abuse of power because the official message is clear - Nordstrom is persona non grata with the administration."

The wealthy New York real estate developer who became president on Jan. 20 has declined to sell off his businesses despite demands from critics that he do so to avoid thorny conflicts of interest.

Trump on Jan. 11 said he would maintain ownership of his global business empire but hand off control to his two oldest sons during his presidency. Trump's web of international companies remains a bit opaque since he has refused to release his tax returns, which experts have said would provide a clearer view of his business interests.

Ethics experts have said Trump's arrangement does little to address potential conflicts because he would still know what assets he owned, such as Trump-branded golf courses and hotels, and his family would continue to profit from them.

Ivanka Trump ran a clothing and jewelry business bearing her name, in addition to other work for the Trump Organization, before saying she would resign when her father was sworn in as president. Her father's various contentious actions and comments have prompted boycott efforts by critics and have driven some consumers away from Trump family businesses.

During a White House press briefing, Spicer painted Nordstrom's action as an attack on the president's daughter.

"For someone to take out their concern with his policies on a family member of his is just not acceptable. And the president has every right as a father to stand up to them," Spicer said.

A spokeswoman for the Ivanka Trump brand declined to comment.

On Tuesday, First lady Melania Trump filed a $150 million defamation lawsuit accusing the Daily Mail British tabloid of damaging her brand by falsely reporting she had worked as an escort. The lawsuit said the article ruined a "unique, once-in-a-lifetime opportunity" for the first lady but her lawyer said she "has no intention of using her position for profit."


Democrats pounced on Trump for the tweet.

"I think it's inappropriate, but he's a totally inappropriate president, so it's totally in keeping with who he is," said Nancy Pelosi, the top U.S. House of Representatives Democrat.

Senator Bob Casey, a Democrat, in a tweet indicated the matter should be referred to the federal Office of Government Ethics.

Nordstrom said it informed Ivanka Trump about its decision in early January.

"Over the past year, and particularly in the last half of 2016, sales of the brand have steadily declined to the point where it didn’t make good business sense for us to continue with the line for now," the retailer told Reuters.

Nordstrom shares initially fell after the president's criticism but closed up 4 percent on the New York Stock Exchange.

Some retailers continue to carry Ivanka Trump products but others have backed away. The move by the retailers comes amid an ongoing campaign called #GrabYourWallet, which encourages shoppers to boycott products with ties to President Trump, his family and his donors. Usage of the hashtag on Twitter rose dramatically on Wednesday.

"President Trump said he is going to have nothing to do with his family businesses," said Robert Weissman, president of liberal watchdog group Public Citizen. "His reaction to developments with his daughter's business line suggests that claim is untrue."

Trump's tweet left fellow Republicans in an uncomfortable position.

Republican Senator David Perdue of Georgia told Reuters of Trump's tweet, "That sounds like a personal matter to me." Perdue added, "He is a citizen and he is a citizen who is now president of the United States."

Republican Senator Ron Johnson of Wisconsin, asked whether the president should be criticizing a publicly traded company over its business dealings with Trump's daughter, said, "I don't know the answer to that question. Let me think about what the answer is."

Since winning the presidential election on Nov. 8, Trump has castigated specific companies on Twitter but this was his first tweet involving a business tied to his family since the victory.

Bush ethics lawyer Painter, who has been critical of Trump in the past, said Nordstrom could have cause for legal action if the Trump administration takes any adverse action against it.

A group including former White House ethics attorneys filed a lawsuit after Trump took office accusing him of allowing his businesses to accept payments from foreign governments, in violation of the U.S. Constitution.

(Additional reporting by Richard Cowan, Doina Chiacu and Susan Heavey in Washington and Nandita Bose in Chicago; Editing by Bernard Orr)