GSA warns Trump: You need to divest from your Washington hotel before the inauguration; Update: GSA disputes

posted at 1:31 pm on December 14, 2016 by Allahpundit

If you’re not familiar with the issue with the Trump International Hotel in D.C., which is housed in an old post-office building owned by the federal government, read this for background. There are two conflicts of interest related to the hotel. One has to do with the hotel potentially trading on Trump’s new status as president to drum up extra business, particularly among foreign diplomats who might be looking to grease the wheels of diplomacy by spending money there. That’s potentially an Emoluments Clause issue, but that’s something for Congress to worry about, not the GSA. What the GSA is concerned with is a clause in the lease that forbids federal elected officials from renting there, on the theory that an elected official might be able to pull strings in the government to get more favorable terms than an average citizen would.

Trump wasn’t a federal elected official when he signed the lease, but he is now. That was a key question House Democrats put to the GSA: Will Trump be in violation of the lease once he’s sworn in on January 20th or is he okay because he wasn’t an elected official when the building was rented and therefore had no government strings that he could pull? He’s in violation as of January 20th, says the GSA. And to prevent that, he needs to do more than just hand control of the property over to someone else. He needs to get rid of his stake in the hotel.

The official rejected alternative interpretations of the lease that have been floated in the press — including that the language only applied to people who were elected before the lease was signed, the letter said. It said that if Trump did not sell his share, he would be given 30 days to address the issue, then would be brought before the U.S. Civilian Board of Contract Appeals

Congressional staff asked during the briefing what would happen if Trump appointed a new top lawyer or administrator for the agency who sought to overrule its current interpretation of the lease. The deputy commissioner said that GSA contracting officials “are independent, base their decisions on the laws and regulations governing the contracts they oversee, and would not change their positions based on political influence,” the letter said.

The head of the GSA is appointed by the president, which means that as of noon on January 20th, Trump will effectively be both landlord and tenant of the property. And even though Trump wasn’t an elected official when he signed the lease, he’ll be an elected official if/when there are any disputes under the lease between the GSA and the Trump Organization over the next four years. The solution is divestment — but is it a perfect solution? What if, as expected, his kids take over management of the hotel? That could be a problem too, according to what the GSA told House Democrats:

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The talk over the past week has been that Ivanka will also extricate herself from Trump’s businesses so that she can serve in the White House in some capacity, either as an informal advisor or de facto First Lady. That would mean, presumably, that Trump’s sons would take over as managers of the hotel. But they’re also part of the transition team; Donald Jr, in fact, reportedly helped with the search for a new Interior secretary even though, as the new nominal co-head of the Trump business empire, he’s supposed to be separating himself from any political/governmental duties. Unless I missed something, though, the GSA would have no grounds to challenge the lease so long as the president-elect has divested, no matter which Trump child ends up acting as main lessee. So long as there’s no “elected official” drawing a benefit from the arrangement, there’s no violation of the lease. There’s still a conflict-of-interest problem, as the excerpt from the Democrats’ letter notes, but that’s not the GSA’s concern — and maybe no other agency’s concern either, as the president is immune from federal conflict-of-interest laws. Essentially, with the important exception of “emoluments” received from a foreign state, the watchdog charged with policing Trump’s conflict of interests is the electorate itself. If they don’t mind the family using the presidency to self-deal, there’s not a lot Trump critics can do except vote against him in 2020. In the end, the only check on Trump is the public’s basic sense of civics. Gulp.

Trump’s transition team says he’ll discuss his plans for the hotel at next month’s press conference about his business holdings, but Charles Cooke wonders if that’s going to end up the same way Trump’s tax returns did — first he was going to release them, then there was supposedly a snag because he was being audited, then he clammed up and hoped people would forget about it. We’ll see. In lieu of an exit question, here’s a new poll from Morning Consult showing that an overwhelming majority of the public (86 percent of Democrats and 74 percent of Republicans) believes that Trump’s business interests will affect his decision-making as president. When you ask them if that’s good or bad, though, er…

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It could be that the question was worded vaguely enough that Republicans and Democrats interpreted it in different ways. Republicans may be treating it as a more generic question about whether Trump’s knowledge of business will make him better for the economy, e.g., he knows from personal experience that corporate tax rates are too high. But I don’t know. I wouldn’t rule out the possibility that GOPers really did understand this as a question about conflicts of interest and just shrugged it off because they’re willing to let Trump get away with self-enrichment as president. He slayed the Clinton dragon. Giving him a “bonus” by letting special interests shower cash on his properties in hopes of winning the federal government’s favor is really the least we can do to say thanks.

Update: Welp. Just when you think one federal agency is going to take a hard line on conflicts of interest, here’s the GSA running away from what it allegedly told Democrats.

In a statement later on Wednesday, a GSA spokesperson refuted the letter, saying that the agency had not reached a conclusion about whether Trump would be violating the lease at the Old Post Office building, which houses his new Trump International Hotel.

“GSA does not have a position that the lease provision requires the President-elect to divest of his financial interests,” the spokesperson said. “We 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.”

The statement added that it would not reach a final determination about the lease agreement until Trump is inaugurated and has reached a decision about how to organize his business interests.

How would President Trump and tenant Trump negotiate disputes under the lease if he still has a financial stake in the hotel?


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