News & Politics

The Future of Trump’s DC Hotel Is as Confusing as Ever

Photograph by Jessica Sidman.

A lawyer for President-elect Donald Trump said Wednesday that among the steps he will take to separate himself from the day-to-day management of his corporate holdings upon taking office will be the transfer of profits from foreign governments’ businesses at his hotels to the US government.

Trump’s attorney, Sherri Dillon, told reporters at Trump Tower in New York that the Trump Organization—which will now be led by Trump’s sons, Eric and Donald Jr.—will “voluntarily donate all profits from foreign government payments made to his hotels to the United States Treasury.” This presumably includes the Trump International Hotel inside the Old Post Office on Pennsylvania Ave., Northwest, which has become a magnet for diplomatic travel and functions since last year’s election.

Dillon’s announcement, one of many she made about the future of the Trump Organization, was meant to explain how Trump will get around the Emoluments Clause of the US Constitution, which bars the president from receiving gifts or payments from foreign governments or heads of state. (Trump presently owns about 77 percent of the DC hotel, with the remainder split between his three oldest children.) In reality, though, the move to donate foreign-born profits to the federal government leaves the ownership of Trump’s DC hotel as convoluted as ever.

The Trump Organization is in the fourth year of a 60-year lease with the General Services Administration for the Old Post Office. The terms of the lease stipulate that no signatory to the lease can be an elected federal official, a clause that House Democrats have seized upon in urging the President-elect to “fully divest” himself from the hotel. The GSA responded last month, saying that it cannot take a position on whether Trump needs to leave the hotel “until the full circumstances surrounding the President-elect’s business arrangements have been finalized and he has assumed office.”

But it also sounded from Powell that Trump has no plans to divest himself from his DC hotel or any of his other 500-odd properties around the world. Instead of putting his assets in a blind trust, Trump’s holdings will be managed by a trust that will not advise him of specific transactions but will give him updates on profits and losses. Ivanka Trump, who is expected to move into an as-yet-specified White House role, is also stepping away from the Trump Organization and previously announced that she will sell some of her financial assets.

The new structure of the Trump Organization is as complicated as ever, but its DC hotel is seems especially dizzying. With this statement about potential profits from foreign-government travelers being donated to the Treasury, is this hotel, which is on property owned by the people by the United States, now a partial subsidiary of the government of the United States, which will now be headed by the man whose name is on the building? More likely, it’s just another thing President Trump will lean on to make himself seem like a magnanimous guy (he appears to enjoy describing himself as a philanthropist). “This way it is the American people who will profit,” Powell also said Wednesday.

For its part, the GSA responded to Trump’s press conference by reiterating its last statement on the Old Post Office, but added that it needs to review the Trump Organization’s management under Eric and Donald Jr. before making a decision on whether the company can continue to operate the DC hotel.

“GSA understands that an announcement has been made to change the business structure of the Trump Organization,” the agency said. “We are seeking additional information that explains and describes any new organizational structure as it applies to the Old Post Office lease. Upon receipt, consistent with our treatment of any contract to which we are a party, we will review this new organizational structure and determine its compliance with all the terms and conditions of the lease.”

Of course, the head of the GSA serves at the pleasure of the president, and come January 20, Trump will be free to appoint his own person. If there’s any silver lining in all this, it’s that Trump’s pledge to donate some of his hotel chain’s profits to the government shines a bit of light on the Treasury Department’s program of accepting gift contributions to reduce the national debt. Since the program’s 1996 inception, US taxpayers have donated an average of $2.4 million per year in hopes of relieving a debt that currently tops $19 trillion. But if 2017’s receipts shoot up, maybe we’ll have an inkling about the health of the Trump Organization’s hotel business. It’s not like anyone’s releasing their tax returns.

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.