GSA says Trump isn't in violation of hotel lease.

Surprise! The GSA Doesn’t See the Problem With Trump’s D.C. Hotel Lease.

Surprise! The GSA Doesn’t See the Problem With Trump’s D.C. Hotel Lease.

The Slatest has moved! You can find new stories here.
The Slatest
Your News Companion
March 23 2017 5:33 PM

GSA Gives Trump the A-OK to Benefit but Not Benefit From His D.C. Hotel

618306162-republican-presidential-nominee-donald-trump-and-his
Donald Trump and his family cut the ribbon at the new Trump International Hotel on Oct. 26 in Washington.

Chip Somodevilla/Getty Images

The federal agency that oversees Donald Trump’s lease for his luxury hotel in Washington decided Thursday that his serving as president doesn’t violate the terms of the agreement that bars government officials from making money off the property.

Josh Voorhees Josh Voorhees

Josh Voorhees is a Slate senior writer. He lives in Iowa City. 

In a letter sent Thursday, a General Service Administration official informed the Trump Organization that everything is a-OK as far as the agency is concerned. “I have determined that Tenant is in full compliance with Section 37.19 and, accordingly, the Lease is valid and in full force and effect,” wrote the GSA contracting officer.

Advertisement

The aforementioned section of the lease reads:

No member or delegate to Congress, or elected official of the Government of the United States or the Government of the District of Columbia, shall be admitted to any share or part of this Lease or to any benefit that may arise therefrom.

Given Trump has refused to divest himself of his financial interest in the hotel—as well as the rest of his business empire—many experts read that clause as a deal-breaker. Trump clearly became an elected federal official when he was sworn in as president. Others, meanwhile, argued that the future-looking phrase “shall be admitted” might give Trump the wiggle room he was looking for, since he had already been admitted prior to becoming president. But ultimately the GSA—whose director, by the way, was recently appointed by Trump himself—focused its reasoning on the “any benefit” portion of the clause.

The GSA’s rationale is a bit complicated, in no small part because of the Russian nesting doll of LLCs, holding companies, and financial trusts used by the Trump family to do business. But the short version is that Trump appears to have put the agency’s mind at ease by restructuring things in a way so his share of any hotel profits won’t be paid out to him while he’s in office, and will instead remain with the Delaware-based LLC the Trump Organization created for the property. “In other words,” the letter from the GSA explains, “during his term in office, the President will not receive any distributions from the Trust that would have been generated from the hotel.”

That conclusion requires both a narrow reading of the clause in question and a strict reading of the organizational structure of the Trump Organization. Donald J. Trump, after all, clearly still benefits—financially and otherwise—from the success of his D.C. hotel regardless of whether he actually cashes checks from the company while in office. Still, the GSA decision removes the most obvious challenge to the president’s continued ownership of the D.C. hotel. Democrats very well may continue to make some noise about the lease in Congress, but there isn’t much they can do as long as they remain in the minority.

Trump and his hotel, however, aren’t in the clear yet. The hotel is still the subject of a pair of legal challenges, the first from an ethics watchdog that claims Trump is violating the U.S Constitution by accepting money from foreign government officials who stay at the hotel, and a second from a D.C. restaurant that is arguing that Trump’s ongoing ownership of the hotel—along with its in-house dining options—puts them at an unfair business disadvantage in D.C. Unless a court acts, though, Donald J. Trump will remain both landlord and tenant at the federally owned Old Post Office building a few blocks from the White House.