Congressional Democrats, Obama administration at odds over Trump's D.C. hotel

Federal officials overseeing Donald Trump's lease for his D.C. hotel pushed back against congressional Democrats' assertion Wednesday that the president-elect would violate a clause in the agreement if he did not surrender his interest upon entering office.

Congressional Democrats led by Rep. Elijah E. Cummings, Md., said early Wednesday that General Services Administration officials had informed them that Trump would need to divest his interest in his D.C. hotel before being sworn in to avoid running afoul of a clause in the lease barring any "elected official of the Government of the United States" from deriving "any benefit" from the agreement.

But a GSA spokeswoman responded with a statement saying the agency, which oversees federal real estate, "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 agency said. "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."

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Aside from public stocks, Trump has resisted calls from ethics officials to sell stakes in his businesses, saying that he plans to let his children Don Jr. and Eric run them. He added this week on Twitter that "no new deals will be done during my term(s) in office."

But in the case of his D.C. hotel, the terms of his deal have come under particular scrutiny. His firm leases the Old Post Office Pavilion, the federally owned building where the hotel is located, from the GSA on a 60-year deal.

Congressional Democrats have been pressing GSA on that issue, as well as the possibility that by renting rooms to foreign leaders there Trump may be in violation of the "emoluments clause" of the Constitution, which bars U.S. officials from benefiting from foreign gifts, upon entering office.

After Cummings and Democratic Reps. Peter A. DeFazio, Ore., Gerald E. Connolly, Va., and André Carson, Ind., wrote GSA Administrator Denise Turner Roth recently seeking answers, they say they were briefed by Roth's deputy for public buildings last week.

In a new letter Wednesday, the Congress members wrote that the official "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."

They say the official "made clear that Mr. Trump must divest himself not only of managerial control, but of all ownership interest as well."

Spokespersons for the Trump Organization, as well as for Trump's transition team, did not immediately respond to requests for comment.

According to the financial disclosure form Trump filed with the Federal Election Commission as a candidate, the president-elect owns 76.725 percent of the D.C. hotel project. Three of his children, Don Jr., Ivanka and Eric, each have 7.425 percent of the project.

There is a provision in the federal lease allowing Trump to sell or transfer his stake in the hotel to "any Trump Family Member." Selling it to an outside entity would likely require approval by the GSA.

Some of the Obama administration's options may be limited because that clause would not go into effect until Trump is sworn in, leaving the issue to his own administration; he will not technically be in breach of his lease until he himself takes office.

GSA officials have said they rely on the Office of Government Ethics for guidance on how to address such conflicts. Despite the fact that the president is exempt from most financial conflict-of-interest rules governing federal officials, on Monday Walter M. Shaub Jr., director of the ethics office, asserted that it was the "consistent policy" of previous presidents to abide by those rules and that Trump ought to as well.

"Given the unique circumstances of the Presidency, OGE's view is that a President should comply with this law by divesting conflicting assets, establishing a qualified blind trust, or both," he wrote, in a letter to Sen. Thomas R. Carper, D-Del.

Shaub acknowledged his office had no way of enforcing that opinion: "However, although every President in modern times has adopted OGE's recommended approach, OGE has no power to require adherence to this tradition."

The federal government's best shot at forcing Trump's hand may lie in the Old Post Office lease terms barring elected officials from deriving benefits from the deal. The boilerplate language, which ethics experts say dates to the Civil War, was not closely contemplated when negotiating the deal, according to federal officials familiar withe discussions.

Even that language may not constitute an open-and-shut case that would force Trump to sell. Georgetown University law professor Gregory Klass said recently that the clause may not technically trigger a violation of the lease when Trump enters office.

"It could be read to prohibit an elected official from keeping a beneficial interest after elected – that is, to cover the Trump case. And the term's clear purpose is to prevent conflicts of interest of that type. But the language is not crystalline," he said.

Other ethics experts have argued that even if Trump were to transfer ownership of his hotel stake to his children, through a lease change with the GSA, it wouldn't prevent Don Jr. or Eric from passing on profits to their father during or after his administration.