U.S. watchdog faults handling of government lease for Trump D.C. hotel

[January 17, 2019]  By Jan Wolfe

WASHINGTON (Reuters) - An internal U.S. government watchdog on Wednesday found "serious shortcomings" in federal officials' handling of a lease by President Donald Trump's company of a historic government building in Washington now home to a Trump International Hotel.

Amid intensifying scrutiny of possible conflicts of interest involving Trump's businesses, the inspector general of the U.S. General Services Administration (GSA) found fault with the agency's review of the lease of the Old Post Office Pavilion.

The Romanesque Revival landmark on Pennsylvania Avenue, not far from the White House, was leased by the Trump Organization in 2013 for 60 years and now houses a luxury Trump hotel often frequented by government officials.

Some Democrats have charged that Trump's businesses, now managed by his sons, have profited from his presidency, saying that foreign dignitaries sometimes stay at the hotel in part to curry favor with him.

"GSA's decision-making process related to Tenant's possible breach of the lease included serious shortcomings," the report said. "GSA had an obligation to uphold and enforce the Constitution. However, GSA opted not to seek any guidance from OLC (Office of Legal Counsel) and did not address the constitutional issues related to the management of the lease."

For the inspector general's report, see: https://bit.ly/2RAV9ct)

The White House declined to comment.

The original lease stated that no elected federal official could participate in the lease or any benefit arising out of it.

In March 2017, after Trump was elected president the previous November, the GSA issued a 166-page decision concluding that the president was in "full compliance" with the lease.

The inspector general's report said the GSA ignored "issues under the Constitution's Emoluments Clause that might cause a breach of the lease."

The Old Post Office lease is at the center of litigation over whether the president is violating the emoluments provisions, which bar U.S. officials from accepting payments from foreign and state governments without congressional approval.

Flags fly above the entrance to the new Trump International Hotel on its opening day in Washington September 12, 2016. REUTERS/Kevin Lamarque/File Photo

The attorneys general of Washington, D.C., and Maryland have won preliminary rulings allowing them to proceed with one lawsuit alleging the hotel violates the emoluments clauses. A federal appeals court will soon review those rulings.

U.S. Department of Justice lawyers have argued in court filings that the emoluments clauses were intended to prohibit outright bribes and that the president was not in violation of them.

The report from the inspector general, a watchdog inside GSA that monitors its activities, said: "We also found that the decision to exclude the emoluments issues from GSA’s consideration of the lease was improper because GSA, like all government agencies, has an obligation to uphold and enforce the Constitution; and because the lease, itself, requires that consideration."

Congressional Democrats, who took control of the House of Representatives earlier this month, have listed the Old Post Office lease and the Trump hotel there as likely targets for upcoming investigation.

“This devastating new report from the Inspector General is proof that President Trump should have divested his business interests rather than ignoring the advice of ethics experts,” Democratic U.S. Representative Elijah Cummings, who chairs the House Oversight Committee, said in a statement.

(Reporting by Doina Chiacu; Editing by Kevin Drawbaugh and Peter Cooney)

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