WASHINGTON — House Oversight Committee Democrats said the General Services Administration told them that President-elect Trump must give up ownership and management of his new D.C. hotel or run afoul of the government lease.
Trump converted the Old Post Office Pavilion on Pennsylvania Avenue, a building on the register of National Historic Places, into a luxury hotel that opened in September. The GSA leased the building to Trump in 2013, a 60-year agreement inked with Trump’s holding company.
Oversight Dems, led by Ranking Member Elijah Cummings (D-Md.), requested and received a staff briefing from the GSA on the hotel lease last week.
In a letter to the GSA today, Cummings and the Dem Oversight subcommittee ranking members noted that “most importantly, the Deputy Commissioner informed our staff that GSA assesses that 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.”
“The Deputy Commissioner made clear that Mr. Trump must divest himself not only of managerial control, but of all ownership interest as well.”
Trump had been scheduled to hold a press conference Thursday to discuss how he plans on handling his business interests while in office, but that was postponed until January.
On Monday, Trump tweeted, “Even though I am not mandated by law to do so, I will be leaving my busineses before January 20th so that I can focus full time on the Presidency. Two of my children, Don and Eric, plus executives, will manage them. No new deals will be done during my term(s) in office.”
Trump’s lease agreement for the hotel property states: “No member or delegate to Congress, or elected official of the Government of the United States… shall be admitted to any share or part of this Lease, or to any benefit that may arise therefrom.”
The deputy commissioner of the GSA, states the letter, told staff that this provision is standard in many GSA leases to prevent conflicts of interest and maintain a “level playing field.” He also “confirmed that GSA’s position is that this provision applies to all elected officials, regardless of when they are elected.”
If Trump doesn’t divest of all financial interest in the hotel, the GSA would send out a letter to the president-elect giving him 30 days to respond to the agency. If the matter is not resolved in this way, the GSA would take the breach to the U.S. Civilian Board of Contract Appeals.
“The Deputy Commissioner informed our staffs that GSA has received no communications to date from Mr. Trump’s business organization about this issue,” the Oversight Dems wrote. “This raises serious questions about how Mr. Trump plans to proceed.”
The GSA has “informed the Trump transition team about concerns” raised by the lawmakers about “the imminent breach” but received no reply. The main point of contact for the GSA during the leasing process was Ivanka Trump.
Lawmakers said they were assured that GSA contracting officials are independent and “would not change their positions based on political influence,” such as Trump changing GSA officials to get a lease ruling in his favor. “However, he did not address the broader conflicts of interest that this issue poses, stating that GSA relies on the Office of Government Ethics and the Department of Justice for guidance on these questions,” the letter added.
Dems asked the GSA for additional information, including a list of any currently unleased space within the building, lease amendments, monthly expense and profit projections, any legal memos discussing a potential conflict of interest, a summary of the previous tenant’s bankruptcy, and the first monthly report submitted by the Trump Organization to GSA since the hotel opened.
UPDATE 1 p.m. EST: The GSA released a statement saying the agency “does not have a position that the lease provision requires the President-elect to divest of his financial interests.”
“We can make no definitive statement at this time about what would constitute a breach of the agreement, and to do so now would be premature,” the GSA added. “In fact, no determination regarding the Old Post Office can be completed until the full circumstances surrounding the President-elect’s business arrangements have been finalized and he has assumed office. GSA is committed to responsibly administering all of the leases to which it is a party.”