GSA: Trump hotel's lease with government in 'full compliance'

By Allen Cone  |  Updated March 24, 2017 at 1:19 AM
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March 23 (UPI) -- The General Services Administration has ruled that the Trump International Hotel's lease with the government remains in "full force and effect" despite a clause that says no government official can be involved with the property in Washington, D.C.

The Trump Organization rents the building from the GSA. Because President Donald Trump oversees the GSA, that means in essence his is a landlord and tenant.

But in a letter sent to the Donald Trump Jr., on Thursday, the GSA said the president won't get any profits from the hotel while he is in office because of financial trusts and legal arrangements. All business holdings were transferred to sons Donald Jr. and Eric Trump, and a Trump Organization executive as trustees before he became president.

"In simple terms, what this accomplishes is that the funds generated by the hotel will not flow to the president," the letter signed by contracting officer Kevin M. Terry said. "In other words, during his term in office, the president will not receive any distributions from the trust that would have been generated from the hotel."

The hotel, a renovated historic post office three blocks from the White House, opened in September. Trump signed a 60-year lease on the property in 2013 that states no elected official "shall be admitted to any share or part of this lease, or to any benefit that may arise therefrom."

Terry explained how the lease benefits the government.

"The lease turned a [partly empty] building that had been costing taxpayers millions of dollars per year into a revenue-generating asset," Terry wrote.

The Trump Organization had already paid $5.1 million in rent before it opened in the fall, he noted.

It invested $200 million in the Old Post Office, according to the Trump Organization website.

"We would like to thank the GSA for their diligent review of this matter," a statement from the Trump Organization said. "We are immensely proud of this property and look forward to providing our guests with an unrivaled luxury experience for years to come."

Citizens for Responsibility and Ethics in Washington, a legal watchdog group, sued Trump after he was sworn in. They said he violated the Emoluments Clause of the Constitution by accepting payments from foreign governments without the permission from Congress.

"This ruling is a disappointment. Donald Trump still owns the hotel, still will benefit from payments and still has a vested interest in its success," CREW executive director Noah Bookbinder said in a statement. "The problems remain, as they were on inauguration day, unaddressed."

Guests, including foreign government officials, can try to influence Trump by spending their money there, experts in government ethics said. And earlier this month two owners of a wine bar sued Trump and the hotel, saying the president's affiliation with the government-owned property has an unfair financial advantage.

"This is wrong," Richard Painter, the chief ethics lawyer for President George W. Bush, told CNN after the ruling. "Forget about all these corporate entities and trustees and the games they want to play. Follow the money. The money is going to him."

And Robert Weissman, president of the progressive advocacy group Public Citizen, said in a statement: "GSA's analysis would get a first-year law student kicked out of law school."

Two Democratic members of the House, Elijah Cummings and Peter A. DeFazio, criticized the decision, writing in a statement the lease provision was "meaningless — any elected official can now defy the restriction by following this blueprint."

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