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Politics

No conflict in Trump hotel lease with government, federal agency says

Trump International Hotel in Washington
The Trump International Hotel is near Cork Wine Bar, whose owners say President Trump is unfairly using the power of his post to lure business.
(Alex Brandon / Associated Press)

President Trump can keep his hotel near the White House, in a building he leases from the government, a federal agency has decided, determining that the unprecedented arrangement does not present a conflict.

The General Services Administration, which is under Trump’s control, signed off on the deal after his son Donald Trump Jr. and lawyers tweaked the lease to prevent the president from receiving any of the proceeds from hotel operations, according to an agency letter released Thursday afternoon.

The move, along with the president’s decision to turn operation of the business over to his sons, was enough to satisfy the agency that the president’s company, Trump Old Post Office LLC, was not in violation of a provision of its lease that forbids any federal official from getting “any benefit” from the deal.

“Accordingly, the lease is valid and in full force and effect,” said the letter signed by the contracting officer, Kevin M. Terry.

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The decision quickly drew harsh criticism from ethics watchdogs and from two congressional Democrats, who said the General Services Administration had a different position before Trump took office.

“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,” said the statement from Reps. Elijah E. Cummings of Maryland and Peter A. DeFazio of Oregon.

“This is exactly what the lease provision was supposed to prevent.”

Before Trump took office, Cummings said, a General Services official confirmed to House Oversight Committee staff that Trump would have to sell his stake to avoid a conflict. The agency denies that, saying it could not make a determination until Trump took office.

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The luxury Trump International Hotel on Pennsylvania Avenue is one of the most visible examples of the complications presented by Trump serving as president while continuing to own a worldwide network of hotels, golf courses and other properties.

One recent lawsuit, filed by a Washington restaurant owner, argues that the hotel will unfairly grab business because lobbyists, foreign governments and others will be trying to buy favor from the White House.

According to the General Services Administration, the Trump organization wrote an amendment saying that all revenues from the hotel will stay with the hotel — and not flow to the president’s personal trust company.

“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,” Terry wrote.

Trump continues to own more than three-quarters of the hotel project, however — and his share of the revenues will go to a corporation he set up for his ownership stake. His three eldest children own stakes of about 7.5 percent each.

The leader of one watchdog group called the agency’s stand a “very tortured reading” of the contract.

Trump will continue to benefit from having money flow to a company that he owns, said Fred Wertheimer, president of Democracy21, which advocates for transparency and limits on political spending.

“This doesn’t make any sense to me, and it seems like GSA has leaned over backwards to accommodate the president here,” he said.

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“This is one more example of why President Trump should have divested his assets into a blind trust,” he added.

joseph.tanfani@latimes.com

Twitter: @jtanfani

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