The Trump International Hotel in Washington. (Brian Snyder/Reuters)

A federal appeals court seemed skeptical Tuesday that President Trump is illegally profiting from foreign and state government visitors at his luxury hotel in downtown Washington or that his financial gain comes at the expense of local competitors.

The three-judge panel of the U.S. Court of Appeals for the 4th Circuit was reviewing a novel case brought by the attorneys general of Maryland and the District of Columbia involving anti-corruption provisions in the emoluments clauses of the U.S. Constitution.

The once-obscure clauses were designed to prevent undue influence on government officials but have never been applied in court to a sitting president.

One judge, Dennis W. Shedd, suggested the president may actually be driving up business at other local hotels because of people who would be drawn to Washington to protest Trump’s policies and would not choose to stay at the president’s namesake hotel.

Another, Paul V. Niemeyer, noted that the president had already stepped back from day-to-day management of Trump International Hotel. Forcing the president to give up his financial interest would not remove the Trump name from the business, the judge said, and foreign dignitaries would still book rooms and events at the venue.

The judges repeatedly pressed the lawyer representing D.C. Attorney General Karl A. Racine (D) and Maryland Attorney General Brian E. Frosh (D) about the specific remedy the two jurisdictions seek and about their intentions.

Niemeyer, addressing attorney Loren AliKhan, said: “You seem to be ducking the question. . . . What is the relief you are asking for?”

AliKhan said Trump, in his role as president, is violating the foreign and domestic emoluments clauses by choosing to maintain his business interests. The attorneys general are asking the court to declare that Trump is violating the ban, she said, and issue an order preventing him from accepting emoluments.

Shedd responded by raising the possibility of another motive for the challenge. He asked AliKhan whether such a declaration would “be the basis for a high crime and misdemeanor for impeachment?”

“I don’t believe so,” AliKhan answered.

The third judge on the panel, A. Marvin Quattlebaum Jr., appeared concerned about a broad definition of emoluments. Would it mean, he asked, that presidents would have to give up Treasury bills and federally insured bank accounts?


Maryland Attorney General Brian E. Frosh (D), left, and D.C. Attorney General Karl A. Racine (D) leave court Tuesday in Richmond. (Win McNamee/Getty Images)

“My view is it covers any profit, gain or advantage,” AliKhan said of an emolument, but she stopped short of saying a Treasury bill or other passive investment would qualify.

The Trump administration attorney told the court that Maryland and the District have no authority to sue the president in his official capacity over payments his business accepts from state and foreign governments.

“The president is unique” in our system of government, said Justice Department attorney Hashim M. Mooppan. “He’s not just any old inferior officer. . . . That’s why he gets absolute immunity.”

The panel specifically is considering whether the two jurisdictions have legal grounds, or standing, to sue the president in the first place. And the appeals court will consider the president’s request to dismiss the case outright or to take the unusual step of ordering the lower-court judge to permit a midstream appeal.

At the 4th Circuit, the names of the three judges randomly assigned to each panel are made public on the morning of an oral argument.

All three in the Trump hotel case were nominated to the bench by Republican presidents — Niemeyer by President George H.W. Bush, Shedd by President George W. Bush and Quattlebaum by Trump.

When the two Democratic attorneys general first greeted each other Tuesday in the ornate, wood-paneled courtroom, they joked about the luck of the draw.

“Did you pick the panel?” Frosh joked, slapping his palm to his forehead in mock disbelief.

After the hearing, Frosh told reporters, “We think our case is a strong one, and we expect to prevail.”

Racine said he “didn’t take anything from the judges’ tone.” Suggestions that the lawsuit was politically motivated, he said, are a distraction.

If the judges do not rule in their favor, he said, they would consider appealing for a rehearing by a full panel of the 4th Circuit and still would not be surprised to see the case reach the Supreme Court.

A federal judge in Maryland allowed the case over the Trump hotel to move forward and adopted a broad definition of the ban to include “profit, gain, or advantage” received “directly or indirectly” from foreign, federal or state governments.

Trump and his attorneys appealed, saying in court filings that the president should be shielded from such liability and legal distractions. They also are trying to stop an order from U.S. District Judge Peter J. Messitte of Maryland authorizing dozens of subpoenas to federal government agencies and Trump’s private business entities.

The subpoenas seek details on some of the most closely held secrets of Trump’s business and finances: Which foreign governments have paid the Trump Organization money? How much? And for what?

All of the documents — including marketing materials targeted to foreign embassies, credit card receipts and restaurant reservation logs — relate to Trump’s Washington hotel.

“The complaint rests on a host of novel and fundamentally flawed constitutional premises, and litigating the claims would entail intrusive discovery into the president’s personal financial affairs and the official actions of his Administration,” the Justice Department said in a court filing.

“Despite this remarkable complaint, the district court treated this case as a run-of-the-mill commercial dispute,” the filing continued. “Not only did it deny the president’s motion to dismiss, but it refused even to certify for immediate appeal.”

The Richmond-based 4th Circuit, which takes appeals from Maryland, temporarily put the subpoenas on hold while the case is pending.

Unlike past presidents, Trump has retained ownership of his private businesses, including the hotel on Pennsylvania Avenue NW, a few blocks from the White House, that has attracted government clients. The Kuwaiti Embassy has held its National Day celebration there three years in a row. Lobbyists representing the Saudi government reserved blocks of rooms in December 2016. Paul LePage, then governor of Maine, stayed at the hotel and dined at its restaurant in 2017.

Mooppan said there was no evidence Maryland or the District had been harmed by the Maine governor’s trip: “This case should be over.”

Despite the case — and a separate emoluments suit brought by 198 Democrats in Congress — the Trump Organization did more business with foreign governments in 2018 than it did the year before. The company said it received $191,000 in profits from large events and hotel bookings paid for by foreign governments last year, money it donated to the U.S. treasury. The previous year the company reported about $150,000.

In January, the inspector general for the General Services Administration said the agency had “improperly ignored” potential conflicts with the emoluments provision in leasing the Old Post Office building to the Trump Organization. The watchdog agency did not recommend that the GSA modify the deal, but several Democratic-controlled House committees are now planning investigations of the project.

In his initial ruling in March 2018, Messitte found that Maryland and the District had sufficiently shown that the Trump hotel “has had and almost certainly will continue to have an unlawful effect on competition.” He specifically noted the local governments’ financial interests in the Walter E. Washington Convention Center and the Bethesda North Marriott Hotel and Conference Center, which offer venues that may compete for some events.

The provisions being reviewed by the 4th Circuit have never been tested at a federal appeals court. One bars federal officers from taking presents, or emoluments, from foreign governments. The other prohibits presidents from taking side payments from individual states.

The Justice Department had urged Messitte to dismiss the case, arguing that the clauses were meant to stop officials from taking bribes — but not to prevent them from doing business.