An internal government watchdog said Wednesday that the federal General Services Administration improperly approved a lease for the Trump International Hotel in Washington by failing to consider whether the deal violated the Constitution’s guidelines prohibiting elected officials from profiting from doing business with the government.
The inspector general of the GSA said the agency failed to consider “issues under the Constitution’s Emoluments Clause that might cause a breach of the lease” for the luxury hotel, built in the historic Old Post Office Building on Pennsylvania Avenue three blocks from the White House.
The long-awaited report said the agency “decided not to address those issues” of a potential conflict of interest for the president. The inspector general said the GSA “has an obligation to uphold and enforce the Constitution” and recommended the agency reconsider the lease in light of the guidelines.
The report drew renewed condemnation from Democrats over the deal that the Trump Organization entered into in February 2012, more than three years before Mr. Trump announced his candidacy for president. Rep. Elijah E. Cummings of Maryland, chairman of the House Oversight and Government Reform Committee, said the president “should not have any contracts with the federal government.”
“It is an obvious conflict of interest, and it is why the lease for the Trump Hotel in Washington D.C. explicitly prohibits any federal government official from being a party,” Mr. Cummings said in a statement. “This devastating new report from the Inspector General is proof that President Trump should have divested his business interests rather than ignoring the advice of ethics experts.”
He said the Trump Hotel “is a glaring physical symbol of the Trump administration’s refusal to play by the same rules as everyone else.”
Critics argue that the Trump International Hotel is a conflict of interest for the president, in part, because foreign officials and others could try to curry favor with Mr. Trump by patronizing the hotel. The state of Maryland and the District of Columbia are suing in federal court, alleging that Mr. Trump is profiting off his elected office by operating the hotel via the Trump Organization, which is controlled by sons Donald Jr. and Eric.
The GSA chose Mr. Trump’s firm as developer in February 2012 to restore and redevelop the historic site into a 260-room hotel. In a required report to Congress, the GSA identified 31 lease provisions it considered “material,” but a provision prohibiting elected officials from being “admitted to” certain interests in the lease was not included in the agency’s list.
In August 2014, the GSA authorized the Trump Organization to begin construction. The Trump International Hotel opened Oct. 26, 2016; Mr. Trump was elected less than two weeks later.
The IG’s report said that after Mr. Trump’s inauguration, the Trump Organization notified GSA lease contracting officer Kevin Terry that the president had “relinquished his management” over the property but still retained his financial interest in it.
“According to this report, GSA’s own lawyers recognized that President Trump’s interest in the Trump Hotel raised concerns under the Emoluments Clause of the Constitution and under the lease itself, but ‘punted’ rather than addressing them,” Mr. Cummings said.
The report said GSA officials discussed a potential conflict in general before and after the election, but decided it wasn’t their responsibility to raise the issue with the Trump Organization or the president.
Mr. Terry told Trump Organization officials on March 23, 2017, that the hotel was in full compliance and the lease was valid.
“Terry stated that no one inside or outside GSA pressured him to render any specific decision,” the report said. “He stated that he had no meetings with the administrator, other GSA leadership, or the Presidential Transition Team about” the provision on potential conflicts.
“We also found that the decision to exclude the emoluments issues from GSA’s consideration of the lease was improper because GSA, like all government agencies, has an obligation to uphold and enforce the Constitution; and because the lease, itself, requires that consideration,” the inspector general said.
The watchdog said GSA knew that potential conflicts “might cause a breach of the lease, but decided not to address those issues in connection with the management of the lease.”
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