GSA Back in the Hot Seat Over Trump Hotel Oversight, Potential Sale

The head of the agency that oversees the lease of the Trump hotel in Washington said on Tuesday that she only knows about foreign expenditures at the hotel from the news. This reinvigorated Democrats’ concerns over lax oversight of the lease and potential emoluments clause violations.

General Services Administration Administrator Emily Murphy testified before a House Transportation and Infrastructure panel about GSA’s oversight of the Old Post Office Building lease to the Trump International Hotel, which the Trump Organization is looking to sell. Once again, Democrats raised concerns about potential conflicts of interest since the emoluments clause of the U.S. Constitution prohibits the president from receiving payments beyond his salary from federal, state or foreign governments, and criticized GSA for failing to keep a close eye on the lease.

When pressed by Rep. John Garamendi, D-Calif., to confirm that GSA has no idea how much spending by foreign governments contributes to the income and profits at the Trump hotel, Murphy said, “that’s correct.” On foreign expenditures she said, “The only thing I know is what I've read in the paper.” Garamendi noted that foreign spending is considered an emolument. 

According to the watchdog Citizens for Responsibility and Ethics in Washington’s tracker, 115 foreign government officials have stayed at the D.C. hotel since Trump took office, which is the most among all Trump properties.

Murphy said it would “be the lease contracting officer’s determination” to ask the Trump Organization for such information and that she has not sought it herself because of the three ongoing lawsuits on the matter. She added that the Justice Department argued the hotel’s lease does not violate the emoluments clause and said once there is a decision in the courts, GSA will act accordingly. 

The question of foreign expenditures is part of the ongoing struggle between GSA and committee Democrats for communications, financial records and legal memos related to the lease. The Democrats claimed GSA defied their subpoena for the documents, but the agency pushed back. GSA offered to let them view the financial records as long as they do not publicly disclose the information. Murphy stated during the hearing that those records do not, however, include foreign expenditures and who the hotel guests are. 

GSA would not turn over the agency's legal memos, arguing the Trump organization did not violate the emoluments clause. Murphy said the memos are “highly deliberative in nature and contain attorney-client communications that implicate core confidentiality interests of the executive branch.”

The hotel has been an ongoing point of contention because Trump failed to fully divest from his business interests. Following 57% occupancy in the hotel in 2019, which is well below that of competitors, the Trump organization announced in October that it’s looking to sell hotel lease for up to $500 million, The Washington Post reported. This came as the impeachment inquiry against the president was heating up and Trump’s 2020 reelection campaign was getting underway.

The deadline for initial proposals was last Thursday, but Murphy said the Trump organization has not shared the names of potential buyers yet. Also, Murphy would not rule out the possibility that the Trump organization can sell the lease to a foreign entity. 

“American taxpayers deserve transparency in knowing who is buying this lease; we should all seek to ensure that it’s not some foreign government,” said Rep. Peter DeFazio, D-Ore., committee chairman. “That arrangement would not only raise serious ethics questions, but it would also potentially bring into question the emoluments clauses to the U.S. Constitution.”