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Update: Feds say it’s ‘premature’ to judge lease for Trump’s D.C. hotel

The 11th Street entrance to Donald Trump’s D.C. hotel, which is in a building owned by the federal government. (AP Photo/Pablo Martinez Monsivais)
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This story has been updated.

Federal officials overseeing Donald Trump’s lease for his D.C. hotel said it’s too early to determine whether the president-elect will violate a clause in the deal before he enters office Jan. 20.

Officials from the General Services Administration, which oversees federal real estate, said the agency  “does not have a position that the lease provision requires the President-elect to divest of his financial interests.”

“We can make no definitive statement at this time about what would constitute a breach of the agreement, and to do so now would be premature,” the agency said. “In fact, no determination regarding the Old Post Office can be completed until the full circumstances surrounding the President-elect’s business arrangements have been finalized and he has assumed office. GSA is committed to responsibly administering all of the leases to which it is a party.”

The statement followed congressional Democrats’ assertion Wednesday that the president-elect would violate a clause in the agreement if he did not surrender his interest upon entering office.

Congressional Democrats led by Rep. Elijah E. Cummings (Md.) said early Wednesday that GSA officials had informed them that Trump would need to divest his interest in his D.C. hotel before being sworn in to avoid running afoul of a clause in the lease barring any “elected official of the Government of the United States” from deriving “any benefit” from the agreement.

After the GSA said it had made no such determination, Cummings issued another statement explaining he was aware no breach had yet occurred and that GSA viewed it as a “hypothetical” issue until then.

The back-and-forth reflected the continuing confusion and rancor over how Trump will manage his private businesses once he takes public office.

Aside from public stocks, Trump has resisted calls from ethics officials to sell stakes in his businesses, saying that he plans to let his children Don Jr. and Eric run them. He added this week on Twitter that “no new deals will be done during my term(s) in office.”

Republican nominee Donald Trump spoke at the grand opening of Trump International Hotel. (Video: The Washington Post)

There’s already a big problem with Trump’s ‘no new deals’ pledge

But in the case of his D.C. hotel, the terms of his deal have come under particular scrutiny. His firm leases the Old Post Office Pavilion, the federally owned building where the hotel is located, from the GSA on a 60-year deal.

Congressional Democrats have been pressing GSA on that issue, as well as the possibility that by renting rooms to foreign leaders there Trump may be in violation of the “emoluments clause” of the Constitution, which bars U.S. officials from benefiting from foreign gifts, upon entering office.

After Cummings and Reps.  Peter A. DeFazio (Ore.), Gerald E. Connolly (Va.) and André Carson (Ind.), all Democrats, wrote GSA Administrator Denise Turner Roth recently seeking answers, they say they were briefed by Roth’s deputy for public buildings last week.

In a  letter early Wednesday, the Congress members wrote that the official “informed our staff that GSA assesses that Mr. Trump will be in breach of the lease agreement the moment he takes office on January 20, 2017, unless he fully divests himself of all financial interests in the lease for the Washington D.C. hotel.”

They say the official “made clear that Mr. Trump must divest himself not only of managerial control, but of all ownership interest as well.”

Trump spokesman Jason Miller told reporters Wednesday morning that the D.C. hotel “will be something that comes up at the press conference the president-elect will now be holding in January.” A spokeswoman for the Trump Organization did not immediately respond to a request for comment.

According to the financial disclosure form Trump filed with the Federal Election Commission as a candidate, the president-elect owns 76.725 percent of the D.C. hotel project. Three of his children, Don Jr., Ivanka and Eric, each have 7.425 percent of the project.

There is a provision in the federal lease allowing Trump to sell or transfer his stake in the hotel to “any Trump Family Member.” Selling it to an outside entity would likely require approval by the GSA.

Some of the Obama administration’s options may be limited because that clause would not go into effect until Trump is sworn in, leaving the issue to his own administration; he will not technically be in breach of his lease until he himself takes office.

GSA officials have said they rely on the Office of Government Ethics for guidance on how to address such conflicts. Despite the fact that the president is exempt from most financial conflict-of-interest rules governing federal officials, on Monday Walter M. Shaub Jr., director of the ethics office, asserted that it was the “consistent policy” of previous presidents to abide by those rules and that Trump ought to as well.

“Given the unique circumstancesof this Presidency, OGE’s view is that a President should comply with this law by divesting conflicting assets, establishing a qualified blind trust, or both,” he wrote, in a letter to Sen. Thomas R. Carper (D-Del.).

Shaub acknowledged his office had no way of enforcing that opinion: “However, although every President in modern times has adopted OGE’s recommended approach, OGE has no power to require adherence to this tradition.”

The federal government’s best shot at forcing Trump’s hand may lie in the Old Post Office lease terms barring elected officials from deriving benefits from the deal. The boilerplate language, which ethics experts say dates to the Civil War, was not closely contemplated when negotiating the deal, according to federal officials familiar withe discussions.

Even that language may not constitute an open-and-shut case that would force Trump to sell. Georgetown University law professor Gregory Klass said recently that the clause may not technically trigger a violation of the lease when Trump enters office.

“It could be read to prohibit an elected official from keeping a beneficial interest after elected — that is, to cover the Trump case. And the term’s clear purpose is to prevent conflicts of interest of that type. But the language is not crystalline,” he said.

Other ethics experts have argued that even if Trump were to transfer ownership of his hotel stake to his children, through a lease change with the GSA, it wouldn’t prevent Don Jr. or Eric from passing on profits to their father during or after his administration.

At a forum Wednesday on ethical issues facing the new administration, Cummings narrowed in on Trump’s foreign clients at the hotel, saying he cared “about every instance in which a foreign entity will see an opportunity to bestow illegal favors on the president that could degrade our democracy.”

“It is our obligation as members of congress to identity and hopefully prevent these types of constitutional violations,” Cummings said.

Stephen Gillers, a professor at the New York University School of Law, said the emoluments provision “forbids a certain kind of conflict, conflicts that are between the president’s duty” and his business with foreign customers.

As president, Gillers said, “he would be in violation of that clause.”

Follow Jonathan O’Connell on Twitter: @oconnellpostbiz

Vice President-elect Mike Pence and President-elect Donald Trump’s chief of staff Reince Priebus address Trump’s potential conflicts of interest. (Video: Bastien Inzaurralde/The Washington Post)