Federal officials have held private talks in recent days with attorneys for President Trump’s real estate company to address a potential violation of Trump’s lease with the government for his new luxury hotel near the White House, but the two sides have so far failed to reach a resolution, according to documents and people familiar with the discussions.
At issue is a clause in the lease barring an “elected official” from receiving “any benefit” from the agreement, which Trump signed with the General Services Administration in 2013 long before he became a presidential candidate.
The uncertainty of the status of the lease drew the attention this week of a top Republican lawmaker, Rep. Jason Chaffetz (Utah), chairman of the House Oversight Committee, who sent a letter Thursday to the GSA’s acting director inquiring about the agency’s plans.
Chaffetz told reporters this week that he was interested to learn how officials intended to grapple with the potentially awkward situation in which the Trump-led government intended to negotiate with a business controlled by the president’s family.
“His being both the landlord and the tenant is something that we’re curious what the GSA’s opinion of that is,” Chaffetz said.
The question is one of numerous complications that have arisen since Trump refused to follow the advice of federal ethics officials and divest from his real estate and branding empire — a decision that experts say has created a global web of potential conflicts of interest.
While Trump has signed management of the hotel over to his oldest son, Don Jr., as part of his agreement to relinquish management of his businesses to his sons, the president has kept his 76.725 percent ownership stake in the project. The remaining portion is owned by his company and his children.
The 263-room hotel opened in the federally owned Old Post Office Pavilion last fall after Trump and his daughter Ivanka won a competitive bidding process and spent more than $200 million restoring the property. They added a 13,200-square-foot ballroom adorned with glass chandeliers at the eastern entrance and opened BLT Prime steakhouse and the Spa by Ivanka Trump.
The hotel has drawn criticism from some ethics experts who have sued Trump, arguing that receptions and other events held there by foreign governments violate a constitutional ban on presidents receiving payments from foreign governments. Trump has pledged to donate profits from foreign clients to the U.S. treasury.
The issue concerning the lease has proven difficult for the GSA, the federal agency that oversees contracting, which has undergone management changes as part of the transition between the Obama and Trump administrations. Trump, who replaced the interim director with an official from the GSA’s Denver office within hours of taking office on Jan. 20, has yet to name a permanent pick to head the agency.
Congressional Democrats have implored the GSA since the immediate aftermath of the election to consider how difficult it would be to protect taxpayers once Trump became president and could assign his appointees to the agency.
Among Democrats’ concerns are that, if the lease needs to be renegotiated, the process will be overseen in effect by a president with a personal financial stake in the outcome. Currently, the 60-year lease requires that the Trumps pay the GSA $3 million per year in base rent plus a share of profits above a certain threshold.
Democratic lawmakers led by Rep. Elijah E. Cummings (D-Md.) wrote the GSA in November warning of a “clear and very real conflict that will be triggered the moment Mr. Trump is sworn in as President of the United States unless concrete steps are taken now to avoid it.”
Three months after the election, however, no decisions have been announced.
The agency has been in repeated contact with Trump Organization attorneys since the election but has declined to issue any enforcement action thus far, according to documents and officials.
GSA attorneys met with attorneys representing the Trump Organization four days after the election, in a meeting that one official said took place at the agency’s headquarters.
Afterward the GSA issued a statement saying it was “reviewing and evaluating” the contract to assess the Trump Organization’s compliance.”
In December, the Trump Organization sent the GSA two letters about reorganizing Trump’s D.C. hotel company, Trump Old Post Office LLC. The GSA did not respond to requests to release the letters.
On Jan. 10. the government’s contracting officer for the hotel, Kevin Terry, wrote to Trump Organization attorney Lawrence S. Rosen to say he anticipated hearing more specifics on changes planned by the company.
“We look forward to receiving the final documents that explain the transfers and new organizational structure of Tenant,” Terry wrote.
The issue remained up in the air as Trump took the oath of office on Jan. 20, formally putting him in control of the agency responsible for the lease held by his company.
The Trump company’s reorganization of the hotel became public on Feb. 3, with a filing to D.C. government showing that Trump had transferred control of Trump Old Post Office LLC to Don Jr., who is now president, and Allen H. Weisselberg, now vice president, secretary and treasurer.
Three days later, in response to further questions from Democrats, the GSA sent a two-page letter from Saul Japson, acting associate administrator, saying that the agency “will continue to abide by its obligations under the Old Post Office contract and remain vigilant regarding the Government’s rights and remedies under the contract.”
Spokesmen for GSA and the Trump Organization declined to comment for this article. The agency released a statement saying it was “committed to expeditiously resolving issues associated with the Old Post Office Lease.”
The GSA’s inspector general, Carol F. Ochoa, has also reserved judgment. A spokeswoman for Ochoa, Sarah Breen, said the office was “still considering what would be the best course of action.”
Dan Tangherlini, the former GSA administrator who oversaw initial lease negotiations with Trump for the Obama administration and left the government two years ago, said he was not surprised the agency has not acted.
“Anything they did would have been viewed through a political lens,” he said.
As Trump appointees begin filling jobs at the agency, Tangherlini said he expects career GSA staff to do what they are told by the new leadership.
“They are awaiting instructions,” Tangherlini said. “And if the answer is, ‘Write me the memo that says this is okay,’ they will go ahead and do that, and it will be subject to whatever legal and political scrutiny that comes with it. Or it’s ‘Write me the letter that says it’s not okay.’ So I think they are waiting for someone to give them instructions and make a decision and be accountable for it.”
That leaves Democrats to press Trump appointees and career bureaucrats whose jobs — leasing office space for government agencies — typically remain several rungs below the political radar.
As part of their efforts to put pressure on Trump’s company and the GSA, the Democrats released data they had obtained from the agency late last month showing that Trump had lost more than $1.1 million in the period the hotel was open from September to October — a potential embarrassment to the president, who has called the property “one of the great hotels of the world.”