The timing here is opportunistic, of course, aimed at signaling that the ethics challenges to Trump should begin at the first possible moment. But it’s not entirely opportunistic. Democrats pressed the GSA to take action on the lease last month, but GSA punted by claiming that it couldn’t do anything until Trump was president and had declared his plans for the disposition of his businesses. He announced those plans at a presser nine days ago — his sons will be taking over — and now he’s president. So here’s CREW, a D.C. ethics watchdog, nudging GSA to follow its own guidelines and get moving.
“The lease bans elected officials from benefitting to avoid conflicts of interest with their duties,” said CREW Executive Director Noah Bookbinder in a statement.
“We know Trump likes to renegotiate contracts for better deals. If that happened here, it will be the President negotiating against the government he leads. His best interests are not the same as those of the American tax payer,” he said…
Following Trump’s victory in the presidential election, foreign diplomats have been renting out space for events at Trump’s hotel. There is a worry that these high-dollar payments could be used to curry favor with the administration.
“He just swore on the Bible to ‘preserve, protect and defend the Constitution of the United States,’ but by continuing to accept payments from foreign governments, he has already failed,” Bookbinder said in the statement, just after Trump took the oath of office.
Two separate issues there, the hotel lease and the payments made to the hotel by foreign diplomats. Take three minutes and read this as quickie background on the lease, as it seems that’ll be the first major ethics clash for Trump’s administration. Trump’s D.C. hotel is based in the Old Post Office Building, which is owned by the federal government and administered by GSA; the lease, which was signed years before he became president, says that no elected official shall be “admitted” to it “or to any benefit that may arise therefrom.” That way, there’s no risk of GSA granting a sweetheart deal to someone just because he’s a senator or congressman — or president. Trump’s team will argue that because he was a private citizen when the lease was signed, it shouldn’t matter for purposes of the agreement that he’s president now. But that’s silly. If a dispute arose over the terms, or if (in an unlikely scenario) Trump’s hotel demanded to renegotiate the contract on terms more favorable to them, you’d have a situation where Trump’s government would be haggling with Trump’s business. It doesn’t get any more conflicted than that. Note too that, so long as Trump retains a financial interest in the lease, it wouldn’t seem to matter that his sons will end up in charge of managing the hotel. If he receives a financial “benefit,” he’s arguably in breach.
Here’s CREW’s complaint, which is short enough at two and a half pages that it can be read quickly. They want the lease terminated, which isn’t going to happen but the prospect of which is sufficiently draconian that it might convince Trump to divest:
An obvious way to cure the breach, assuming that GSA finds that there is a breach, would be for Trump to sell or simply give his interest in the hotel to his kids. Assigning it to a trust managed by an independent trustee wouldn’t solve the problem since President Trump, as a beneficiary of the trust, would continue to receive a “benefit” from the lease even though he isn’t personally managing the property. Assigning his interest to his kids would remove him from the equation entirely. Granted, there’d still be an egregious conflict of interest in Trump’s government potentially haggling with Trump’s kids over lease terms, but the clause in the lease is narrowly written to bar only “elected officials” themselves from being party to it. CREW could try to challenge the lease under federal conflict-of-interest laws once Trump’s kids had succeeded him as lessee, but the president is famously immune from most of those statutes. As absurd as it is to imagine GSA trying to negotiate at arm’s length with the president’s children, that would seem to be legal, and therefore is likely what we’ll end up with.
As I say, there’s a separate objection having to do with money the hotel makes off of foreign diplomats. That’s an Emoluments Clause issue, not a dispute over a clause in the lease, as the Constitution bars federal officers from receiving “emoluments” from foreign governments without approval of Congress. Trump did address that in his press conference nine days ago, saying that his hotels would donate any profits received from foreign states to the U.S. Treasury. That may not solve the problem, though: CREW is arguing, predictably, that it’s not enough to disgorge the profits from transactions with foreign governments. The entire payment, or “emolument,” has to be disgorged. Having to separate something like profit from revenue in the hotel industry could be difficult to do and exceptionally hard to oversee. We’re destined for a court fight over the meaning of the Emoluments Clause sooner rather than later.
Speaking of Trump’s plans for his businesses, your exit question: When is he planning to sign control over to his sons? Because, as of today, he hasn’t done it yet.