President-elect Donald Trump is very proud of his new downtown Washington, D.C. hotel. He repeatedly bragged on the campaign trail about how it was the most sought-after location in Washington (after, of course, the White House), hijacked political events for free press when it opened, and often boasted of the great deal he made in procuring the lease for the property from the U.S. government.
Now that he’s the head of that government, though, the validity of that lease is in question. When Trump takes office he will effectively be both tenant and landlord of the multi-million dollar property. According to a briefing given to lawmakers by the General Services Administration (GSA), which oversees the lease, Trump must therefore give up all ownership of the hotel or be in clear violation of his government contract.
That view was publicly relayed in a letter issued by four Democratic lawmakers about a briefing from the Deputy Public Building Service Commissioner.
In response to the letter, however, a GSA spokeswoman contested the lawmakers’ claims, saying that the GSA can “make no definitive statement at this time about what would constitute a breach of the agreement, and to do so now would be premature.”
“In fact, no determination regarding the Old Post Office can be completed until the full circumstances surrounding the President-elect’s business arrangements have been finalized and he has assumed office. GSA is committed to responsibly administering all of the leases to which it is a party,” the spokeswoman said in a statement to The Washington Post.
The new GSA statement is at odds with what lawmakers say the Deputy Commissioner told them in their briefing.
According to the lawmaker’s account, “the Deputy Commissioner informed our staff that GSA assesses that Mr. Trump will be in breach of the lease agreement the moment he takes office on January 20, 2017, unless he fully divests himself of all financial interests in the lease for the Washington, D.C. hotel. The Deputy commissioner made clear that Mr. Trump must divest himself not only of managerial control, but of all ownership interest as well.”
The breach stems from a clause in the lease prohibiting elected officials from procuring leases from the government, in order to make sure that the process is fair and that officials are not using — and do not appear to be using — their official position for personal financial gain.
“This provision is a standard clause that is included in many GSA leases to create a ‘level playing field’ and protect the interests of the American people,” the Deputy Commissioner explained, according to the letter.
During the briefing, the Deputy Commissioner “confirmed repeatedly” that the GSA reads this clause as a strict prohibition of Trump’s involvement with the hotel and rejects other interpretations.
This is not the first time this has come up. In the press, Steven L. Schooner and Daniel L. Gordon — both former government officials specializing in federal contract law — have been pointing out the now-circular nature of Trump’s hotel lease for weeks. And, as this is a fairly straightforward matter of a contractual clause, the possibility that this could happen has been clear since Trump officially became the Republican nominee this summer.
According to the letter, however, the GSA has never been contacted by the Trump organization with a plan for how to proceed — not after the Republican primary, not after the November election, and not after the GSA reached out to the Trump transition team about the imminent breach.
“The Deputy Commissioner informed our staffs that GSA has received no communications to date from Mr. Trump’s business organization about this issue. This raises serious questions about how Mr. Trump plans to proceed,” says the lawmakers’ letter.
Publicly, Trump has indicated that he plans to deal with his conflicts by stepping away from managerial positions within his company and handing control to his children. He has not indicated that he intends to give up ownership.
A press conference scheduled for Thursday was slated to clarify his plans, but the Trump team has delayed that announcement until January — after the official electoral college vote that ensconces Trump as President-elect.
Giving control of his company to his children does not resolve the breach, the GSA official said. Only fully giving up ownership of the hotel would be sufficient.
The GSA official allegedly told the lawmakers that for the most part, the GSA’s main contact within the Trump organization to date has been Trump’s eldest daughter Ivanka. Trump also named Ivanka to his official government transition team.
“In other words, Ms. Trump is all of the following — the President-elect’s daughter, a top presidential transition team official, a lessee under the contract GSA oversees, and the primary contact for GSA on the lease. The conflicts of interest are obvious,” the lawmakers write.
The Trump team has given the GSA no indication that they have a plan to give up ownership of the hotel — indeed, publicly, Ivanka Trump is currently raffling off a coffee date with herself sometime in the next year to take place at either Trump Tower in Manhattan or the Trump International Hotel in D.C., suggesting the Trumps plan continued ownership of the property.
Unless Trump voluntarily divests himself of the hotel, the GSA will follow normal procedure, the Deputy Commissioner said. That involves sending the lessee an official letter with a 30-day deadline to review the matter and respond. If the breach isn’t resolved after that, the GSA will bring it before the U.S. Civilian Board of Contract Appeals. The board is an independent tribunal that is responsible for resolving disputes between government contractors and government agencies.
Aside from the contractual issues, Trump’s hotel has also been one of the most blatant showcases for the vast conflicts of interest Trump’s business empire poses for his Presidential tenure.
Shortly after his election, reports emerged of Foreign diplomats flocking to the hotel and attending sales pitches for its lavish — and lavishly priced — suites in an attempt to curry favor with the President-elect. The Embassy of Bahrain held their National Day celebration there (last year it was at the Ritz Carlton); on Wednesday, the hotel will serve as the venue for a Hanukkah party co-hosted by Jewish leaders and the Embassy of Azerbaijan.
Constitutional experts say that these types of payments from foreign entities are a direct violation of the constitution’s emoluments clause, which prohibits the president from accepting any gifts or payments of any sort from foreign governments.
This article and headline have been updated to reflect the response from the GSA.