WORLD

Trump Is Set To Violate His Hotel Lease In 'Extraordinary' Conflict Of Interest And The Agency Holding It Has No Plan

'It does appear that GSA is out of the loop on this.'

14/01/2017 11:01 PM AEDT | Updated 15/01/2017 12:07 AM AEDT
Chip Somodevilla via Getty Images
WASHINGTON, DC - OCTOBER 26: Republican presidential nominee Donald Trump celebrates with his son Eric Trump (L), wife Melania Trump and daughter Tiffany Trump (R) after cutting the ribbon at the new Trump International Hotel October 26, 2016 in Washington, DC. The hotel, built inside the historic Old Post Office, has 263 luxry rooms, including the 6,300-square-foot 'Trump Townhouse' at $100,000 a night, with a five-night minimum. The Trump Organization was granted a 60-year lease to the historic building by the federal government before the billionaire New York real estate mogul announced his intent to run for president. (Photo by Chip Somodevilla/Getty Images)

WASHINGTON ― When explaining how he would (somewhat) extricate himself from his myriad conflicts of interest this week, President-elect Donald Trump and his tax lawyer completely ignored what would happen to the Trump International Hotel in Washington, D.C. It looks like he also failed to discuss that with the government agency that holds the hotel lease.

Trump’s deal with the General Services Administration to operate a hotel in the Old Post Office building specifically states that the lease cannot be held by an elected official. And the clock is ticking down to Trump’s inauguration.

Yet the GSA released a statement on Wednesday, after the president-elect’s press conference, indicating that it was not aware of his plans for the Trump Organization until he announced them to the public.

This is a legitimate international scandal and they’re not part of the conversation. Procurement law expert Steve Schooner, on the GSA

“GSA understands that an announcement has been made to change the business structure of the Trump Organization,” the agency said in a statement. “We are seeking additional information that explains and describes any new organizational structure as it applies to the Old Post Office lease. Upon receipt, consistent with our treatment of any contract to which we are a party, we will review this new organizational structure and determine its compliance with all the terms and conditions of the lease.”

The agency’s apparent lack of knowledge is “extraordinary,” according to Steven Schooner, a government procurement law professor at George Washington University.

“It does appear that GSA is out of the loop on this,” said Schooner, a former government contracting official at the Department of Justice and the Office of Management and Budget. “This is a legitimate international scandal and they’re not part of the conversation.”

The GSA did not respond to a request for comment.

The lease for the D.C. hotel was signed in 2013 and Trump announced his presidential campaign in June 2015. That means the agency has had nearly two years to come up with a plan on what to do if Trump won the presidency. So far, it has refused to state publicly whether it thinks Trump will be in violation of his lease the moment he takes the oath of office on Jan. 20.

On Wednesday, Trump announced his plans to hand over control of his business to his two adult sons, Donald Jr. and Eric, while still maintaining his ownership stake. Such an arrangement does little to nothing to resolve any conflicts related to the business. Walter Shaub, director of the Office of Government Ethics, called the plan “meaningless” and far short of the steps that every other modern president has taken to eliminate financial conflicts upon taking office.

MANDEL NGAN/AFP/Getty Images
Eric, Donald and Melania Trump cut the ribbon at the grand opening of the Trump International Hotel in Washington, D.C., on Oct. 26, 2016.

The hotel lease with the GSA clearly states, “No member or delegate to Congress, or elected official of the Government of the United States or the Government of the District of Columbia, shall be admitted to any share or part of this Lease, or to any benefit that may arise therefrom.”

Since Trump will keep his ownership in the Trump Organization, he will inevitably remain a beneficiary of the lease.

The GSA has another Trump-related problem looming. As president, Trump can and probably will name a new head of the agency. That person will be in charge of annual lease negotiations with the president’s sons.

“There’s an imbalance of power,” Schooner previously noted to HuffPost. “In a 60-year, complicated contract, we’re going to ask a civil servant at GSA to negotiate annually with the president’s children.”

The fact that the GSA was left out of the loop on Trump’s business plans fits with how the president-elect and his company lawyers have treated the Office of Government Ethics. Shaub has said he lost touch with the Trump team after the election and attempted to get their attention with a stream of tweets calling on the president-elect to fully divest his business holdings.

Rep. Elijah Cummings (D-Md.), the ranking Democrat on the House Oversight Committee, told HuffPost that he is “very concerned” in light of the latest GSA statement.

“I think they were reluctant to give a decision early on,” Cummings said. “In other words, before he violates it.”

Cummings added, “We’ll see what happens, I guess, see next Monday after he’s sworn in. I expect that there will be a decision on [Jan. 20].”

The GSA’s current silence on the hypothetical violation of the lease is consistent with its past public assertions.

Back in December, Cummings and Rep. Peter DeFazio (D-Ore.), ranking Democrat on the House Transportation and Infrastructure Committee, sent a letter to the agency asking whether it believed Trump would violate the lease agreement if he did not divest his holdings. The letter, released by Cummings, stated that Michael Gelber, deputy commissioner of the GSA’s Public Buildings Service, had said the new president would indeed be in violation.

The GSA, however, refused to comment, insisting that it could not make any determination until Trump assumed office.

“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 GSA statement said in December. “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.”

Congressional Republicans have held no hearings on the issue.

More On This Topic