Trump's DC hotel is the new legal hot spot in town

Trump's DC hotel faces lease issue
Trump's DC hotel faces lease issue

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Trump's DC hotel faces lease issue 03:54

Story highlights

  • The lease for the Trump hotel in Washington prohibits federal elected officials from renting the Old Post Office building
  • The president is not bound by the criminal conflicts of interest statue, but cannot accept presents from foreign officials

Washington (CNN)The moment Donald Trump became the 45th President, some legal experts say he triggered a violation of the foreign emoluments clause in the Constitution, flouted the plain terms of the lease for his Washington hotel, and opened himself up to a dizzying array of ethical questions on financial conflicts of interests.

For months, a vocal group of constitutional lawyers, ethics law scholars and Democrats on Capitol Hill have urged Trump to avoid the legal perplexities posed by his vast business enterprises and divest his assets into a truly blind trust (or the equivalent).
His response?
"The law is totally on my side, meaning, the President can't have a conflict of interest," Trump told The New York Times.
"I have have a no conflict situation because I'm President ... it's a nice thing to have," he repeated to reporters at a news conference earlier this month.
Trump instead pledged to resign from management of the Trump Organization, but according to an investigation by ProPublica apparently has not done so yet; promised to put his investments into some type of trust controlled by his two adult sons, but will not sell off his business holdings; and still refuses to release his taxes, but said he will hire an in-house ethics adviser.

The Trump hotel, emoluments and conflicts

Of all the potential legal problems posed by Trump's financial holdings, none is more immediate and complicated than the hotel he opened in the Old Post Office in DC.
The Trump Organization leased the property from the federal General Services Administration in 2013, but a clause in the lease states that no "elected official of the government ... shall be admitted to any share or part of this Lease, or to any benefit that may arise therefrom."
As of Saturday night, the GSA has not declared the Trump Organization in breach of the contract, and declined to comment on the status of any negotiations to resolve the apparent breach.
The Trump Organization and the White House also did not respond to requests for comment.
But at least one liberal group was quick to file a complaint.
"Elected government officials are barred from receiving any benefit under the lease, and now that Mr. Trump has been sworn in today as President of the United States, Trump Old Post Office LLC, a company he largely owns, is in violation of the lease's conflicts-of-interest provision," wrote the Citizens for Responsibility and Ethics in Washington in a letter to the GSA.
"This is bad as it gets," said Norm Eisen, who served as a chief White House ethics lawyer in the Obama administration.
The hotel's Twitter account, on the other hand, exclaimed Friday: "We are waiting for you Mr. President! Thank you!"
Assume for a moment that the GSA does not move to terminate the lease (at least not right away), and Trump retains his interest in the hotel -- experts say he still has a more profound constitutional problem on his hands under the foreign emoluments clause starting on Day 1 in Oval Office.
The main complaint here is that when a foreign official stays at the Trump hotel, they will be giving him an emolument -- i.e., money -- violating Article I, Section 9, Clause 8 of the Constitution, which states that "no Person holding any Office of Profit or Trust under (the United States), shall, without the Consent of the Congress, accept of any present, Emolument, Office, or Title, of any kind whatever, from any King, Prince, or foreign State."
Trump's lawyers said in a white paper released earlier this month that "the Constitution does not forbid fair-market-value transactions with foreign officials."
But an outspoken group of ethics lawyers say allowing foreign diplomats to curry favor with Trump by using his hotels would defeat the entire purpose of the emoluments clause.
Eisen has teamed up with former White House ethics lawyer Richard Painter under President George W. Bush, along with Harvard Law School professor Laurence H. Tribe, to argue that the emoluments clause "covers even ordinary, fair market value transactions that result in any economic profit or benefit" to the President.
In other words: "Trump can't receive any direct payment of any kind from a foreign government, including a fee for services," agrees Harvard Law School professor Noah Feldman.
So yes, those expensive drinks at the hotel bar count. As does the Industrial & Commercial Bank of China Ltd.'s lease payments for space in Trump Tower.

Who has the power to resolve these issues?

Given all of these weighty legal issues facing Trump's presidency, the natural question for many is: Who has standing to enforce a Constitutional violation?
The short answer is Congress.
"Congress would be well within its rights to impeach him for engaging in 'high crimes and misdemeanors'," according to Eisen, Painter and Tribe if there was reason to believe Trump violated the emoluments clause.
Congress could also create a brand new cause of action allowing private parties -- think business competitors -- to file suit.
But given that both the House and Senate remain under Republican control, the likelihood of action on either front is unlikely at best.
At the end of the day, many experts say it might simply be left up to the voters if the President and Congress do not adequately address these issues.
"How the public reacts may depend on whether it appears the conflicts are affecting decisions," Noble said. "This is why we expect the president to follow certain norms and not try to push the legal envelope on ethics rules."