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Why the Trump family selling its D.C. hotel could actually add to ethical concerns ǀ View

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Seeking profit and maybe legitimacy, President Donald Trump’s business announced at the end of October that it’s considering selling the lease to its imposing Washington hotel. This should not be taken as a sign of ethical self-awareness. Offloading the Trump International Hotel Washington could make the Trump family millions. It would also just splash existing ethics concerns with even more swamp water.

A recap: The 263-room Trump Hotel D.C. is in the Old Post Office Pavilion, which the Trumps lease from the U.S. government. The General Services Administration oversees the contract. Opening just weeks before the 2016 election, the venue quickly became the type of ethical morass Trump rails against on the stump, providing a clear path to the president’s pocket for those who can afford it. For the past two-plus years, I’ve tracked those who patronize the hotel and what they may want from the government, launching the 1100 Pennsylvania newsletter (named after the hotel’s address) last December. Nigerian dignitaries, lobbyists, GOP lawmakers, T-Mobile executives and 76 percent of the officials to serve in Trump’s Cabinet are just some of the people — with interests before the chief executive — who’ve queued up in the hotel lobby and restaurants, wallets in hand.

The Trump Organization argues that payments it receives from foreign governments do not violate the Constitution’s ban on U.S. officeholders receiving payments from those entities. It also claims that the organization goes above and beyond addressing those concerns by donating any profits made from foreign governments to the U.S. Treasury.
Zach Everson
Journalist

While Trump put his businesses in a trust prior to his inauguration, it’s not blind and he can receive income from it whenever he chooses. The Trump Organization argues that payments it receives from foreign governments do not violate the Constitution’s ban on U.S. officeholders receiving payments from those entities. It also claims that the organization goes above and beyond addressing those concerns by donating any profits made from foreign governments to the U.S. Treasury. But that approach relies on an honor system, both for foreign officials to identify themselves as such and Trump accountants to accurately calculate profit. (Ask students at Trump University how trusting the companyblindly worked out for them.)

Here’s why the Trumps jettisoning the lease could actually add to, rather than dismiss, ethical concerns about the property.

The Trumps’ are hoping to collect more than $500 million for the lease, The Wall Street Journal reported. That article said such a price would be one of the highest ever paid for a hotel on per-guest-room basis — and the Trumps may get offers close to it. According to The New York Times, Bruce Rosenberg, an executive at HotelPlanner.com, said the hotel could command bids around that asking price. The hotel’s lease says Trump may receive a 20 percent return on his investment from a sale, per The Washington Post.

So rather than handing over money to the president’s business one cocktail, steak dinner or presidential ballroom booking at a time, now one very special wooer has the option of shoveling millions to Trump in one convenient scoop.

GSA could nix a sale of the lease if it doesn’t like the buyer, but that agency — of course — is headed by Trump political appointees.

Yes, the president’s company is trying to sell the lease to a U.S. government building for $500 million — unless it gets blocked by an agency the president oversees or the Trump Organization’s chosen ethics adviser. It’s like if Super Bowls were played with perennial favorites the New England Patriots providing the refs.

“People are objecting to us making so much money on the hotel, and therefore we may be willing to sell,” Eric Trump said in a statement to The Wall Street Journal, sharing part of the purported rationale for putting the hotel on the block.

In that sentence, Trump’s son also shared a pithy explanation of why parting with the hotel won’t settle ethical concerns — namely that the president’s already reaped “so much money” from the business. Selling the lease now won’t purge profits previously pocketed. (Neither the White House nor the Trump Org responded to my inquiries asking if the president would be returning money he’s already made via the hotel.)

So how much cash is Eric Trump talking about? A private company, the Trump Organization isn’t forthcoming with financial information and doesn’t have to be. And the GSA has so far refused to turn over unredacted financial statements to the House Transportation committee, which has oversight of the agency. (Such obstructionist behavior lead the panel’s chair to subpoena the information.)

Three major lawsuits alleging that the president’s business interests flout the Constitution’s emolument clauses are still working their way through the courts. If the judges agree with the plaintiffs, it means the Trump family has been violating the Constitution since Jan. 20, 2017.
Zach Everson
Journalist

According to his legally mandated annual financial disclosures though, Trump’s revenue from his D.C. hotel during the first two years of his presidency topped $81 million. Similarly, White House adviser and the namesake of the hotel’s spa Ivanka Trump took in $7.8 million in revenue from her stake in the hotel over that same period. The Trumps did not disclose any hotel-related expenses though, so their profit is not publicly known. Nevertheless, the revenue figures alone show there’s no shortage of money coming in. (And concerns about special interests paying the president’s business won’t be assuaged by his accountants coming up with loses that offset the payola.)

Meanwhile, three major lawsuits alleging that the president’s business interests flout the Constitution’s emolument clauses are still working their way through the courts. If the judges agree with the plaintiffs, it means the Trump family has been violating the Constitution since Jan. 20, 2017.

And Trump’s D.C. hotel is just one spot in a portfolio of business interests for the president that span the globe, including in Dubai, Indonesia and Turkey. Lest you forget the breadth of his empire, Trump himself has visited 14 of his properties while in office. (The top official for a Taiwanese political party is well aware of Trump’s bountiful options for tribute — Yang Minsheng’s summer vacation in the United States this year included visits to five different Trump ventures. And, yes, he also owns a sporty American flag-themed Trump polo.)

So while jettisoning the D.C. hotel would remove the most convenient intake valve for U.S. politicians and lobbyists, the president has a golf course just 26 miles away from 1100 Pennsylvania Avenue at Trump National Golf Club, Washington, D.C.

Regardless of whether or not the hotel is sold off, other businessmen-politicians already have followed Trump’s lead. One of the most frustrating results of Trump’s brazen business dealings, in fact, is the precedent they have set. Post-election, ignoring norms mandating that presidents sever their business interest has proven maddeningly contagious. This February, Sen. Rick Scott, R–Fla., announced he would stop putting his assets in a trust (that wasn’t even blind in the first place). And in West Virginia, state agencies and lobbyists are directing business to The Greenbriar, a luxury resort owned by the governor, Jim Justice.

The president reaping millions more won’t piece together the political conventions Trump shattered by refusing to extricate himself from his businesses. If anything, it just further smashes the shards.

  • Zach Everson is a Washington D.C.-based journalist reporting on conflicts of interest with President Trump's businesses, most recently for the 1100 Pennsylvania newsletter, Vanity Fair, and Politico.

This piece was first published by NBC Think.

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