Trump Must Divest His Washington Hotel, House Democrats Say

  • Four Democratic lawmakers comment on exchanges with agency
  • Trump will be in violation of lease unless he divests: Letter

Trump: Sons Will Take Over Business Interests

President-elect Donald Trump will be in violation of his lease for the Trump International Hotel in Washington when he takes office if he doesn’t divest all financial interests in it, according to Democratic lawmakers after exchanges with the agency in charge of government buildings.

The 60-year lease for the Old Post Office Pavilion, a U.S. government-owned building on Pennsylvania Avenue just blocks from the White House, forbids elected officials from being party to the deal or receiving any of its benefits. It has become one of the most visible potential conflicts of interest for Trump, whose international real estate and branding business presents unprecedented circumstances in which a president may remain involved in the private sector.

Trump with his wife Melania and son Eric during the opening of the Trump International Hotel in Washington, D.C.

Photographer: Andrew Harrer/Bloomberg

According to a letter written by four House Democrats, a top official of the General Services Administration, which leases government buildings, told their staffs that Trump will be in violation of the lease unless he divests.

But the GSA said in a statement Wednesday afternoon that it would be “premature” to make a “definitive statement at this time about what would constitute a breach of the agreement.” It said the agency has not taken “a position that the lease provision requires the President-elect to divest of his financial interests.”

Renee Kelly, a GSA spokeswoman, instead cited the language of the lease provision, which says, “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 letter from Representatives Elijah Cummings, Peter DeFazio, Gerald Connolly, and Andre Carson, who had requested details of the deal, said, “Mr. Trump will be in breach of the lease agreement the moment he takes office on January 20, 2017, unless he fully divests himself of all financial interests in the lease for the Washington D.C. hotel.”

Sons in Charge

Trump has said his two grown sons will run the Trump Organization and will forgo "new deals" during his administration, but he hasn’t specified his own role or the extent of his future ownership. He has postponed until January an announcement -- originally scheduled for Thursday -- when he would detail his plan.

Trump transition aides told reporters in a phone briefing on Wednesday that the GSA lease issue will be addressed at the January announcement.

Throughout his campaign and during his current transition, Trump has used properties branded with his name as the setting for meetings and media events. In September, he appeared in the ballroom at the Washington hotel, using an event with veterans to acknowledge for the first time that President Barack Obama was born in the U.S. after questioning that fact for years.

Trump often boasted of the new Washington hotel during his campaign, and he took time to preside over its official opening on Oct. 26, less than two weeks before election day.

Ownership Interests

On Dec. 8, the deputy commissioner of GSA, from which Trump Old Post Office LLC leases the historic Old Post Office Pavilion, told the lawmakers’ representatives "that Mr. Trump must divest himself not only of managerial control, but of all ownership interest as well,” according to the letter.

The GSA "has received no communications to date from Mr. Trump’s business organization about this issue," which became public last month when two experts in government procurement wrote about the provision in the lease and urged the government to find a way to terminate it, according to the lawmakers

Read about Trump’s conflict-of-interest worries -- QuickTake Q&A

Professional ethicists, as well as Democrats and some Republicans, have said Trump’s apparent plans to put his children in charge don’t resolve potential conflicts, including those with foreign governments and U.S. entities that have brought their business to the Washington hotel. Those concerned about the conflicts have called on Trump to sell his businesses or place them in a blind trust controlled by someone with whom he doesn’t communicate rather than let his children continue heading operations.

Ethical Standards

The Democrats’ letter comes a day after the head of Office of Government Ethics wrote to Democratic Senator Tom Carper that Trump’s current plans don’t meet ethical standards but that the president is exempt from the relevant conflicts-of-interests laws that apply to other executive branch officials.

Trump has about $3.6 billion of assets held in more than 500 companies, according to a July analysis by Bloomberg. His golf developments, tenant rosters, loans and licensing arrangements tie him to businesses and governments in 20 countries, including China and the Philippines.

Trump’s three oldest children -- Don Jr., Ivanka and Eric -- were deeply involved in his campaign and have advised his transition. GSA has primarily worked with Ivanka over the last several years, according to the letter.

Lawyers have said Trump may be able to shift the ownership structure of the limited liability corporation that leases the Washington hotel, allowing his children -- who currently each own a little more than 7 percent of it, according to Trump’s financial disclosure -- to split the ownership and take over Trump’s own stake of about 77 percent.

— With assistance by Justin Sink

    Before it's here, it's on the Bloomberg Terminal.