House Probes of Trump Hotel Continue Amid Report of Sale

Democrats on the House oversight committee are continuing their investigation into the Trump Organization’s controversial lease with the federal government for its Washington D.C. hotel, following the news on Sunday that an outside group is acquiring the lease.

The Wall Street Journal reported on Sunday that CGI Merchant Group, a Miami-based investment firm, is poised to acquire the lease for the Trump International Hotel, located in downtown D.C. in a General Services Administration-leased building. “CGI intends to remove the Trump name, and it has reached a deal with Hilton Worldwide Holdings Inc. to have the property branded and managed by Hilton’s Waldorf Astoria group,” said the report. The Trump Organization has been trying to sell the lease—which sparked much concern about potential conflicts of interest and violations of the Emoluments Clause of the U.S. Constitution while President Trump was in office—on and off for the past two years. GSA’s management and oversight of the lease during the Trump administration was also under much scrutiny.

“The oversight committee is continuing to investigate the serious conflicts of interest and potential constitutional violations raised by Donald Trump’s lease of this hotel from the federal government while he was president,” a spokesperson for the House Oversight and Reform Committee told Government Executive in a statement on Monday, when asked how, if at all, the reported upcoming sale would impact the committee’s investigations. 

“Former President Trump’s attempt to profit off the presidency triggered an ethics crisis that won’t be fully resolved by selling off this hotel,” the spokesperson continued. “We need full transparency and legislative action to prevent future presidents from using public office for private gain.”

The Trump Organization, CGI and GSA did not respond for comment by the time of this article’s publication. 

“[Trump] should have divested himself of [the hotel] along with the rest of his businesses before taking office,” said Noah Bookbinder, president of Citizens for Responsibility and Ethics in Washington, in a statement following the news report. “Instead, he rode out four years of using it for influence peddling and constitutional violations. The Trump Hotel D.C. stood as a bright neon sign telling foreign countries and moneyed interests how to bribe the president and a stark reminder to Americans that his decisions as president were just as likely to be about his bottom line as about our interests.” 

Bookbinder added that, “Selling it now that he’s out of office and the grift dried up is, to say the least, too little, too late.”

The House Transportation and Infrastructure Committee has also been investigating the lease and GSA’s handling of it. A spokesperson for the committee told Government Executive, “I don’t expect the sale of the lease to impact the committee’s work or findings.” 

GSA Administrator Robin Carnahan spoke about how the agency is approaching the lease under her tenure during a hearing for the transportation committee's Economic Development, Public Buildings and Emergency Management panel on November 2.

“I know that this is an important topic. I know that there is a lot of history about this that long predates my arrival four months ago at GSA and I very much respect Congress' oversight role in all of this,” she said. “I have instructed the team to ensure that the tenant is fully compliant with all of its lease obligations and that we at GSA are being as transparent as we possibly can be with the committee and its oversight requests and always focused on doing everything we can to protect the public’s interests in every way. So, I cannot turn back the clock on things that have happened in the past, but I can commit that going forward I am very interested in making sure we have the right procedures in place for these kinds of outleases and that Congress’ role in that is one that is appropriate.”

Democrats on the House Oversight and Reform committee released documents last month that raised what they called “new and troubling questions” about the lease. 

“The committee found that President Trump provided misleading information about the financial situation of the Trump Hotel in his annual financial disclosures; received undisclosed preferential treatment from a foreign bank on a $170 million loan to the hotel that the president personally guaranteed; accepted millions of dollars in emoluments from foreign governments without providing an accounting of the money’s source or purpose; concealed hundreds of millions of dollars in debts from GSA when bidding on the Old Post Office Building lease; and made it impossible for GSA to properly enforce the lease’s conflict-of-interest restrictions by engaging in opaque transactions with other affiliated entities,” wrote Reps. Carolyn Maloney, D-N.Y., committee chairwoman, and Gerry Connolly, D-Va., chairman of the committee’s panel on Government Operations, in a letter to the GSA administrator. Also, the hotel lost more than $70 million when Trump was in office.

Shortly after the documents were released, Bookbinder; Danielle Brian, executive director of the Project on Government Oversight; and Steven Schooner, professor of procurement law at The George Washington University Law School, called on the federal government to cease doing business with the Trump Organization, arguing the “legal basis for suspending the Trump Organization is clear cut—so clear that it is remarkable a suspension has not already been issued” following the 15-count indictment against the Trump Organization and its chief financial officer in July. The indictment was for tax related crimes dating back 15 years (both the company and CFO pleaded not guilty).

The news about the lease sale comes after D.C. Attorney General Karl Racine said on November 9 his lawsuit, filed in January 2020, against the Trump hotel and Trump inaugural committee, is going to trial. 

“There's extensive evidence the committee illegally enriched the Trump family—the opposite of what a nonprofit is supposed to do,” Racine said in a tweet. “My office is working to recover $1 million.” 

A spokesperson for the attorney general's office said, "Our case will continue moving forward regardless of whether the Trump Hotel is sold."