Conflicted: Trump International Hotel, DC

A running series of articles on Donald Trump’s conflicts of interest

Luke Sharrett/Bloomberg

Luke Sharrett/Bloomberg

Welcome to the first of what will be a running series of articles on Donald J. Trump’s conflicts of interest and larger sticking points between the worlds of business, lobbying, influence, and politics.

It seemed appropriate to begin with revisiting the first topic we covered back in November; President Trump’s Old Post Office Hotel, now renamed the Trump International Hotel, in Washington, DC. This hotel stands as perhaps the most blatant violation and weakest link in the legal protections surrounding President Trump’s corporate empire. The Government Services Administration is the entity responsible for overseeing the lease. One of Trump’s early actions as president was to replace the temporary head of the GSA several days after taking office.

Legal/Ethical Issues at Stake:

Foreign Emoluments Clause (Article I, Section 9)

No Title of Nobility shall be granted by the United States: And no Person holding any Office of Profit or Trust under them, shall, without the Consent of the Congress, accept of any present, Emolument, Office, or Title, of any kind whatever, from any King, Prince, or foreign State.

Domestic Emoluments Clause (Article II, Section 1)

The President shall, at stated Times, receive for his Services, a Compensation, which shall neither be increased nor diminished during the Period for which he shall have been elected, and he shall not receive within that Period any other Emolument from the United States, or any of them.

Trump International Hotel Lease

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.

What exactly is an emolument? What little historical usage of emoluments exists is almost completely focused on the fear of the founders that U.S. diplomats or elected officials would accept bribes from foreign governments, such as diamond festooned snuffboxes, and act against the best interests of the United States. The emoluments arguments revolve around two separate clauses in the constitution concerning domestic and foreign emoluments. A violation of the emoluments clauses, if enforced by Congress, can result in impeachment. And it appears that Donald Trump has been in violation throughout his presidency.

Two main concerns surround the hotel in DC, that President Trump is in violation of his lease and that the hotel is a way for lobbyists, both foreign and domestic, to funnel money to and curry favor with the current administration. Specific language in the lease of the Trump International Hotel prohibits elected officials from holding or profiting from the lease. The second concern over pay-to-play politics deals with the two emoluments clauses from the Constitution and is especially concerned with how the Trump hotel has become a gathering place for lobbyists and Trump associates from the administration and campaign. Whether sharing a scotch, residing there, or attending one of the numerous political events held at the hotel, President Trump’s hotel has become “the new political capital of Washington.”

All this patronage is necessary for the hotel, which struggled in the months leading up to the election. President Trump’s hotel fell a dismal $2.3 million dollars short of it’s projected revenue in September and October of last year. No public figures exist for the revenue of the hotel since Trump took office. Trump LLC, the company that owns the hotel, is also suing Washington DC for charging them too much for taxes and a celebrity chef for withdrawing for opening a restaurant in the hotel after President Trump’s comments on the campaign trail.

Receiving gifts or money from foreign nationals or governments carries with it a whole host of problems beyond just the fair-market-value transactions of President Trump’s domestic corporate activities. President Trump is allowed to make money while in office, but he cannot receive emoluments from any part of the Federal or State governments. Every building permit, contract, or government convention involving any of President Trump’s hotels will at least potentially violate this clause and could produce a lawsuit given that a injured party can be found. Taking President Trump at his word on these donations, which the public will have a very difficult time verifying, does not address the issue. President Trump only promised to donate profits, not all revenue received from foreign governments. If President Trump publicly follows through with his plan of donating foreign profits from all his companies, it would go a long way to addressing concern over the swamp that is his current ethical conflicts.

Pending Legal Action

Several lawsuits are currently being litigated regarding the Trump hotel in DC. The first was filed by Citizens for Responsibility and Ethics in Washington and alleges violations of the foreign emoluments clause. CREW claims that the President’s conflicts of interest have cost them money that could be spent elsewhere. This lawsuit has not gone very far as it stretches claims for standing. Claiming damages because the President has forced them to spend more money being an ethics watchdog is a novel approach, but one likely doomed to failure.

Two other lawsuits were filed concerning the hotel. The first was filed by a competitor of the Trump hotel, a wine bar about a mile north. Regarding standing for the suit, the plaintiffs allege that:

“This is a company town and the business is the government. We have people, individuals, companies in the U.S. and around the world who do business with the government. And the business leader of the government is the president of the United States.”

No competition can be fair or open with the President’s finger on one side of the scale, or so the complaint goes. Republicans, including the President’s son, have laughed off the lawsuit calling it frivolous and a “publicity stunt.” Weighing in on the side of the plaintiff are small but not inconsequential items such as the President choosing to spend his first night out on the town eating in the hotel as well as comments like the ones from Press Secretary Sean Spicer saying, “It’s an absolutely stunning hotel. I encourage you to go there if you haven’t been by.”

The lawsuit from the wine bar is not the only one in the works concerning the President’s DC hotel. Remember that press conference where not yet President Trump came out on stage with all those envelopes on Jan. 11?

Read a Transcript of Trump's Press Conference on Ethics

At this conference President Trump promised to:

“donate all profits from foreign government payments made to his hotel to the United States Treasury.”

It seems so long ago now, but apparently this promise has not been forgotten. Filed on March 7th, a lawsuit is currently moving forward that seeks to insist on a system by which such donations could be tracked in a transparent manner.

Thus, the goal of Plaintiff’s lawsuit is to provide a mechanism and appropriate procedures to ensure, on behalf of the People, that “all profits from foreign governments’ patronage of [President Trump’s] hotels and similar businesses during his presidential term” that President Trump has promised and agreed will be paid to the U.S. Treasury are, in fact, paid to the U.S. Treasury

Progress on lawsuits of this size take time. There will be no midnight stays, or high profile injunctions in these cases as there were in the immigration executive order, rather they will move at the slow and deliberative pace of justice. Those seeking legal recourse against the President are proceeding from a variety of avenues, attempting to find those arguments and claims that the court is sympathetic to. The legal framework surrounding the relationship between politics and business continues to increase in important, especially as President Trump has inspired a whole host of CEOs, Democrat and Republican alike, to reach for that same prestigious place where their competitor now sits.

Conflicted // Donald Trump / Ethics / Government / Politics