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24 Mar, 2017 03:54

Trump’s DC hotel in ‘full compliance’, federal agency sees no conflict of interest

Trump’s DC hotel in ‘full compliance’, federal agency sees no conflict of interest

The federal agency that oversees the lease on President Donald Trump’s luxury hotel in Washington, DC has ruled that he is not violating a clause barring government officials from being admitted to or benefiting from the building.

On Thursday, the contracting officer for the General Services Administration (GSA) sent a letter to Donald Trump Jr, informing him that the Trump Organization is in “full compliance” with the lease for the hotel. 

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,” the officer wrote.

Section 37.19 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.

Citizens for Responsibility and Ethics in Washington (CREW), the legal watchdog group that filed a lawsuit against Trump after he was sworn in as president, released a statement, calling the decision a “disappointment.”

Donald Trump still owns the hotel, still will benefit from payments and still has a vested interest in its success. These were issues the ban on ownership by a government official meant to preclude and why we filed a complaint with the GSA,” CREW executive director Noah Bookbinder said. 

In a letter to former GSA administrator Turner Roth, CREW says that section 37.19 is a standard conflict-of-interest clause, which has been “included in many GSA leases to create ‘a level playing field’ and protect the interests of the American people.” 

CREW argues that when Trump was sworn in as president, he became an “elected official,” which, according to the lease, would bar him from being “admitted to any share or part” of the lease, or “to any benefit that may arise” from it.

The GSA's contracting officer, Kevin Terry, has decided not to view Trump’s position in government as a violation of the lease. In his letter to Donald Trump Jr, Terry wrote that most of the reviews and reporting on section 37.19 have “reached simplistic 'black and white' conclusions regarding the meaning," however, he says that “other legal professionals and former government contracting officials have reviewed the language and come to different conclusions.

Terry argues the lease is valid because Trump moved his interests in the building to the Donald J. Trump Revocable Trust, managed by his two adult sons and Allen Weisselberg, a long-time executive at the company.

In other words, during his term in office, the president will not receive any distributions from the trust that would have been generated from the hotel,” Terry said in the letter.

However, President Trump is still the sole beneficiary of that trust.

Additionally, Terry points to an argument made by Sheri Dillon, a Washington attorney for Morgan Lewis, who said that the phrase “shall be admitted” refers to a future event. Therefore, the clause would only prohibit elected officials from “being admitted” to a share or benefit of the Lease.

The president-elect isn’t going to be ‘admitted’ to the lease, he’s already the tenant,” David Drabkin, a former GSA senior procurement executive, told Politico, commenting ahead of Trump’s inauguration. “That clause is inartfully written, but the way that it is written talks about admitting someone to the lease after the lease was entered into.

Robert Weissman, president of Public Citizen, said the GSA's interpretation “would get a first-year law student kicked out of law school."

"It provides a tortured and wholly uncompelling analysis to avoid the central facts of the case: The GSA contract says that government officials cannot own or benefit from a lease, and President Trump both owns and benefits from the lease," he said.

In a statement released Thursday, the Trump Organization praised the decision.

"We would like to thank the GSA for their diligent review of this matter," the statement said. "We are immensely proud of this property and look forward to providing our guests with an unrivaled luxury experience for years to come," according to CNN.