News & Politics

UPDATE: House Democrats Claim GSA Says Trump Has to Sell Hotel. GSA Says Not so Fast

Photograph by Jessica Sidman.

Democratic members of the House Oversight Committee claim the General Services Administration told them that President-elect Donald Trump must “fully divest” himself of any stake in the hotel bearing his name on Pennsylvania Ave., Northwest, before taking office January 20. But the GSA, which oversees the management of federal property, is saying not to jump to that conclusion so quickly.

In a statement, four members of the committee, led by Representative Elijah Cummings of Maryland, say GSA officials told them that if Trump is sworn in while still retaining any ownership of the Trump International Hotel, he will be in violation of the 60-year lease agreement between his family company and the agency, which still owns the Old Post Office building. The lease, which the Trump Organization signed in 2012, prohibits any elected official of the federal government from being a party to the agreement. That codicil was brought into new light last month after two George Washington University law professors wrote that a situation in which a President Trump is effectively his own landlord would present “unprecedented and intolerable conflicts of interest.”

The Oversight Democrats have also issued a letter to GSA Administrator Denise Turner Roth about the testimony they heard from officials about the Trump hotel.

“Most importantly, the Deputy Commissioner [of the Public Buildings Service] 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, DC hotel,” the letter reads. “The Deputy Commissioner made clear that Mr. Trump must divest himself not only of managerial control, but of all ownership interest as well.”

Yet in a statement responding to the Democrats’ letter, the GSA pushes back a bit, saying that it has not taken a position on whether Trump needs to get out of the hotel before his inauguration.

“GSA does not have a position that the lease provision requires the President-elect to divest of his financial interests,” the statement reads. “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. 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.”

So far, the President-elect has been cagey about how he plans to divest himself of the hotel or any of his other assets around the world. A press conference on the topic originally scheduled for Thursday was canceled earlier this week and tentatively rescheduled for January. Instead, Trump has offered only a pair of tweets in which he wrote that his two older sons, Donald Jr. and Eric, will manage his business interests during his term, while he retains ownership.

According to GSA documents obtained earlier this year by BuzzFeed News, Donald Trump owns about 77 percent of the hotel, with the remainder carved up between Donald Jr., Eric, and Ivanka Trump, who is said to be planning to move to Washington, where she may carry out the ceremonial duties of first lady while Melania Trump remains in New York.

Since Trump’s win in the November 8 election, his hotel has picked up as a nest of political activity. Foreign diplomats have been spotted staying there, with one even telling the Washington Post that it would be “rude” not to; last week, Vice President-elect Mike Pence addressed a Heritage Foundation event at the hotel; and today, the embassy of Azerbaijan plans to hold a Hanukkah party there along with the Conference of Presidents of Major American Jewish Organizations.

Ivanka Trump is singled out in the Democrats’ letter for continuing to be the GSA’s primary point of contact between the agency and the Trump Organization even as she takes an active role in her father’s transition to the presidency. (Donald Jr. and Eric are also listed as leaders in the transition process, with Donald Jr. believed to be responsible for the expected nomination of Montana Representative Ryan Zinkie for interior secretary.)

“In other words, Ms. Trump is all of the following—the President-elect’s daughter, a top presidential transition team official, a lessee under the contract GSA oversees, and the primary contact for the GSA on the lease,” the Democrats’ letter reads. “The conflicts of interest are obvious.”

If the letter is accurate and the GSA has told Donald Trump to completely offload the hotel and he does not, he would be in breach of the lease. The Trump Organization would then have 30 days to resolve the breach; if it does not, the case would be decided by a three-judge review board.

The Oversight Democrats are also asking for unredacted copies of documents pertaining to the lease between the GSA and the Trumps.

UPDATE, 5:09 PM: In another statement, Cummings, the top Democrat on the House Oversight Committee, says his side knows Trump isn’t violating the terms of his lease with the GSA right now, but is hoping the President-elect divests from the hotel before the inauguration so he doesn’t actually breach the agreement.

“We understand GSA’s position that this breach has not yet occurred, will not occur until Donald Trump is sworn in as president, and is officially viewed as a ‘hypothetical’ issue until that time,” Cummings says. “We also share GSA’s hope that the agency will not have to address this issue if President-elect Trump divests his ownership in the lease before then. But the simple fact is that GSA informed our staffs that they interpret this lease provision as prohibiting any elected official from having any ownership interest in the lease, and we stand 100 percent behind our letter.”

Staff Writer

Benjamin Freed joined Washingtonian in August 2013 and covers politics, business, and media. He was previously the editor of DCist and has also written for Washington City Paper, the New York Times, the New Republic, Slate, and BuzzFeed. He lives in Adams Morgan.