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Chairman Cummings Issues Statement on Scathing Inspector General Report on Trump Hotel

Jan 16, 2019
Press Release

 

Washington, D.C. (Jan. 16, 2019)—Today, Rep. Elijah E. Cummings, the Chairman of the Committee on Oversight and Reform, issued the following statement in response to a scathing new report from the General Services Administration (GSA) Inspector General (IG) on the Old Post Office lease with President Trump’s company:

           “President Trump should not have any contracts with the federal government.  It is an obvious conflict of interest, and it is why the lease for the Trump Hotel in Washington D.C. explicitly prohibits any federal government official from being a party.  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.  According to this report, GSA’s own lawyers recognized that President Trump’s interest in the Trump Hotel raised concerns under the Emoluments Clause of the Constitution and under the lease itself, but ‘punted’ rather than addressing them.  I have been trying for years to get documents from GSA related to this issue, but they have refused to provide them, preferring instead to litigate the matter.  The Trump Hotel is a glaring physical symbol of the Trump Administration’s refusal to play by the same rules as everyone else.”

 

Highlights:

Emoluments Clause Violations

  • In the end, they all agreed early on that there was a possible violation of the Constitution’s Emoluments Clauses. Nonetheless, the attorneys decided to ignore the emoluments issues. They told us that the agency generally does not deal with constitutional issues (other than issues involving land condemnation or GSA officials), and consequently, the Constitution’s emoluments issues were not in GSA’s purview.  (pg. 5)
  • OGC decided to ignore the constitutional issues without preparing a formal decision memorandum to document the rationale for the position they were taking. One attorney told us that the decision-making process was just talking among the lawyers. Attorneys also told us that they made this decision without conducting any research of the two Emoluments Clauses or checking for any OLC opinions about the Emoluments Clauses. (pg. 5-6)
  • As one senior attorney told us, OGC decided to “punt.” (pg. 16)
  • We found that GSA, through its OGC and PBS, recognized that the President’s business interest in the OPO lease raised issues under the Constitution’s Emoluments Clauses that might cause a breach of the lease, but decided not to address those issues in connection with the management of the lease. We also found that OGC improperly ignored these Emoluments Clauses, even though the lease itself requires compliance with the laws of the United States, including the Constitution. In addition, we found that GSA’s unwillingness to address the constitutional issues affected its analysis of Section 37.19 and the decision to grant Tenant an Estoppel Certificate. (pg. 23)
  • We conclude that decision was improper for several reasons: (1) as a federal agency, GSA is subject to the Constitution, which also is incorporated into the OPO lease; (2) GSA already had determined that the Foreign Emoluments Clause bars a federal employee from doing business with a foreign government in his private capacity, a conclusion reinforced by instruction OGC received from OGE; (3) OGC ignored OLC’s binding legal opinions on the Emoluments Clauses, even though OGC OPO attorneys knew that OLC issued opinions involving both President Reagan and President Obama; and (4) OGC failed to seek OLC’s guidance, even though the GSA OPO attorneys knew that OLC issued opinions on the Foreign and Presidential Emoluments Clauses. (pg. 16)

 

Breach of Section 37.19

  • Terry told us that he immediately formed an opinion, based on his “plain reading” of Section 37.19, that there was no breach of Section 37.19; however, he waited to formalize his opinion because he was willing to consider other points of view. (pg. 8)
  • Terry told us that during the January 31, 2017, meeting, he strongly encouraged the President’s divesture from Tenant. Terry told us that he pushed hard for divestiture in discussions with Tenant’s representatives to provide value to the government, not because he thought that the lease was breached. Terry said he wanted to get the OPO out of controversy so he encouraged divestiture to try and prevent any issues related to emoluments, even though emoluments issues were not GSA’s responsibility to consider.  (pg. 9)
  • GSA’s decision-making process related to Tenant’s possible breach of the lease included serious shortcomings. GSA had an obligation to uphold and enforce the Constitution. However, GSA opted not to seek any guidance from OLC and did not address the constitutional issues related to the management of the lease. As a result, GSA foreclosed an opportunity for an early resolution to these issues, including a possible solution satisfactory to all parties; and the constitutional issues surrounding the President’s business interests in the lease remain unresolved. (pg. 23-24)
116th Congress