The General Services Administration turned a blind eye to and thus “improperly ignored” the constitutional issues connected with President Trump owning a hotel in a building that is leased from the federal government, according to the agency’s watchdog.
As a result, said the GSA’s inspector general in a new report released Wednesday, “the constitutional issues surrounding the President’s business interests in the lease remain unresolved.”
The GSA in 2013 leased the D.C. landmark Old Post Office building for 60 years to Trump’s holding company, DJT Holdings LLC. The building was eventually developed into the Trump International Hotel.
The lease “raised issues under the Constitution’s Emoluments Clauses that might be a breach of the lease; however, GSA decided not to address those issues,” the IG said.
The Emoluments Clause in the Constitution bans presidents from taking improper payments from foreign governments and individual states.
The attorneys general of Maryland and the District of Columbia have sued the president for violating the clause due to foreign governments and states hosting events and staying at the hotel. A handful of subpoenas in the case were issued in December.
GSA attorneys had “a few internal discussions” about the emoluments issues after the 2016 presidential election and were aware there was a Foreign Emoluments Clause and a President Emoluments clause, the IG said.
“Nonetheless, the attorneys decided to ignore the emoluments issues,” the report said. “They told us that the agency generally does not deal with constitutional issues, and consequently, the Constitution’s emoluments issues were not in GSA’s purview.”
One unnamed GSA attorney told the IG that they decided not to “spin their wheels” on something “that was not before them, and if necessary, they could address the issue another day.”
Despite having an “obligation to uphold and enforce the Constitution,” the IG said, “GSA opted not to seek any guidance from the Office of Legal Counsel and did not address the constitutional issues related to the management of the lease.”
“If ’emoluments’ include an official’s gain from private business activities, the President’s interest in the lease [of his hotel] raises at least potential constitutional issues,” the IG said.
In a March 2017 letter, the GSA officer in charge of the lease told the Trump organization that the lease with the government was in “full compliance” with federal law and that the lease remains in “full force and effect.”
“In simple terms, what this accomplishes is that the funds generated by the hotel will not flow to the president,” contracting officer Kevin M. Terry said in the 2017 letter. “In other words, during his term in office, the president will not receive any distributions from the trust that would have been generated from the hotel.”
Terry told the IG that he did not consider the Emoluments Clause in the analysis that led to the March 2017 letter because it “has broader implications for the President and … it was most likely another government body that would be responsible for making a decision.”
The IG did not recommend the GSA cancel the lease with the Trump administration, but did say that agency agreed to conduct a new “formal legal review” of the deal.
The GSA said in a letter released simultaneously with the IG report that there had been no political pressure on the GSA to keep the lease with the Trump organization.
The Trump Organization did not immediately return a request for comment.
