Chairs Maloney and Connolly Request Information From Investment Firm Poised to Purchase Trump Hotel Lease for $375 Million

May 6, 2022
Press Release
Lack of Transparency Over Identity of Investors and Above-Market Price Raise Concerns

Washington, D.C. (May 6, 2022)—Today, Rep. Carolyn B. Maloney, Chairwoman of the Committee on Oversight and Reform, and Rep. Gerald E. Connolly, Chairman of the Subcommittee on Government Operations, sent a letter to Raoul Thomas, CEO of Miami-based CGI Merchant Group, requesting information about the planned purchase of former President Trump’s hotel lease for the Old Post Office Building for $375 million, following information that CGI Merchant Group did not provide the identities of all the investors in the deal to the General Services Administration (GSA), the agency charged with managing the federal lease.

 

“The Committee has long focused on the serious conflicts of interest posed by former President Trump’s federal government lease during his presidency and the continued lack of transparency from the Trump Organization even after he left office,” wrote the Chairs.  “Far from resolving the Committee’s grave concerns regarding this lease, the high sale price and lack of transparency surrounding the ultimate purchasers have heightened concerns that former President Trump will receive a final, significant windfall from a lease that he should have never retained while in office.”

 

In their letter, the Chairs raised concerns on the planned sale of the Trump Hotel to CGI Merchant Group.  Although the Trump Organization reported losing tens of millions of dollars since it opened in 2016, the sale price represents a significant premium over market rates, according to some experts, and would reportedly stand as the most expensive hotel transaction ever in Washington, D.C., on a per-room basis.  CGI Merchant Group has not disclosed to GSA the identities of all investors funding this acquisition, reportedly citing privacy concerns and confidentiality requirements.

 

If it closes, this deal will reportedly yield the Trump Organization a profit of at least $100 million, of which approximately three quarters would flow to former President Trump. 

 

While GSA concluded its review of the proposed sale of the Old Post Office Building Lease, its review focused on the proposed buyer’s financial capacity and other factors such as its business reputation, experience in owning and operating hotels, and capability to manage historic properties

 

The Chairs’ concerns have increased in light of this week’s news that the Trump Hotel and former President Trump’s inaugural committee agreed to pay $750,000 to settle a D.C. Attorney General lawsuit alleging the inaugural committee illegally overpaid the Trump Hotel by at least $1 million.

 

On October 8, 2021, the Committee sent a letter to GSA detailing new concerns about former President Trump’s lease for the Trump Hotel in Washington, D.C. after documents released by the Committee showed his failure to disclose significant losses and debts, and his pervasive conflicts of interest as President.  The Committee also uncovered that the Trump Hotel served as an epicenter of foreign government payments to the President’s companies, receiving at least $3.7 million from foreign governments in the first three years of the Trump Administration.

 

On February 17, 2022, Chairwoman Maloney and Chairman Connolly sent a letter to GSA urging the agency to consider terminating the Old Post Office Building lease held by President Trump and the Trump Organization after Mazars USA LLP—the longtime auditor for the Trump Hotel—announced that it is severing ties with the Trump Organization and admitted that ten years’ worth of financial statements prepared for former President Trump are unreliable.  These revelations provided further corroboration of the Committee’s finding that the financial information former President Trump provided to GSA in order to secure the Old Post Office Building lease appeared incomplete and misleading and contained possible material misrepresentations.

 

The Chairs asked CGI to produce all requested documents and information by May 20, 2022.

 

Click here to read today’s letter.

117th Congress