The Trump Organization scored a major victory on Thursday when the Agency in charge of overseeing Federal Government property ruled that its Trump International Hotel in a historic Government building on Pennsylvania Avenue did not violate the terms of its Lease when Donald J. Trump became President.
“The tenant is in full compliance,” Kevin M. Terry, a Contracting officer at the Agency, the General Services Administration (GSA), wrote in a 166-page ruling.
The decision came after Democrats in Congress and several Government Contracting Experts and Ethics Groups had questioned if language in the 2013 Lease between the GSA and Trump and three of his children prohibited an Elected Federal official from participating in the deal.
“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,” the Lease says, referring to the Old Post Office building, which the Trump Organization converted into the Hotel late last year.
After the election, Trump resigned from his Executive positions at the Trump Organization and turned over Management of its Enterprises to his two oldest sons, as well as to other Executives who work at Trump Tower in New York. He also put his Assets in a Trust controlled by his sons, and made himself the ultimate beneficiary of the Trust.
To further address the concerns related to the Lease, the Trump Organization agreed this week that during Trump’s White House tenure it would not distribute proceeds from the Washington Hotel to his trust. The agreement also says no proceeds will go “to any other entity in which President Trump has a direct, indirect or beneficial interest,” meaning he would not Profit from its Operations in any way.
The Trump Organization, in a statement on Thursday, praised the ruling, which Trump’s son Eric Trump, an Executive Vice President of the Trump Organization, predicted in an interview last month. “We would like to thank the G.S.A. for their diligent review of this matter,” the statement said. “We are immensely proud of this property and look forward to providing our guests with an unrivaled luxury experience for years to come.”
Mr. Terry of the GSA. wrote in an eight-page decision memo, backed up by 158 pages of other documents and exhibits, that the Trump Organization had invested $200 million in the Old Post Office, which was decrepit before the deal. He also noted that at the time the Hotel opened late last year, the Government had already been paid $5.1 million in rent.
Mr. Terry said that the Old Post Office’s “historic integrity has been restored, and the wasting asset is now being put to productive use.”
The Ruling was criticized by Ethics Watchdog groups and certain House Democrats, who pointed out that with Trump in Control of the Federal Government, he in effect controls the General Services Administration.
The agency “changed the position it held before President Trump took office,” Representatives Elijah E. Cummings of Maryland, the Ranking Democrat on the House Committee on Oversight and Government Reform, and Peter DeFazio, Democrat of Oregon, said in a statement. “This decision allows profits to be reinvested back into the hotel so Donald Trump can reap the financial benefits when he leaves the White House. This is exactly what the lease provision was supposed to prevent.”
The GSA ruling does not put the issue away. Trump is being sued by a Restaurant in Washington, the Cork Wine Bar, which says that it has lost business as a result of an Illegal advantage the Hotel holds from its association with Trump. The Hotel contains several Restaurants.
Steven L. Schooner, a former Federal Government Contracting Officer and a Lawyer who is helping represent the Restaurant owners, said that even with the Ruling, the conflict of Interest still existed, as Trump was both the Landlord, in essence, and the Tenant. “The contracting officers’ decision favors the president, who, in effect, is his supervisor,” said Mr. Schooner, who is also a Professor specializing in Federal Procurement Law at George Washington University. “We want the public to have confidence in the integrity of the government, and this smacks of cronyism.”
The Hotel has also become a target of criticism because, after Trump’s Election, it marketed itself to Foreign Government Officials, urging them to hold their events there.
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