Inn trouble: Trump may have to divest from his D.C. hotel

July 27, 2018

Federal Court Judge Peter Messite, ruling for the District of Maryland on July 23, found that one of the three emoluments cases against President Donald Trump—which hinges on the POTUS making money directly from his political actions and status as head of government—can proceed, Slate reported on July 25.

The decision in this particular case sets the stage for potentially shutting down the Trump International Hotel in Washington, D.C.—where many foreign diplomats currently are staying when they visit the Beltwayn and where many U.S. politicians are holding dinners and events to gain favor with the president— as a violation of the government lease and, thus, as an unconstitutional emolument. The legal interpretation in this decision would force Trump to divest from the hotel entirely.

There are two emoluments clauses in the Constitution: The Foreign Emoluments Clause provides 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.”

The Domestic Emoluments Clause provides, “The President shall, at stated Times, receive for his Services, a Compensation, which shall neither be increased nor diminished during the Period for which he shall have been elected, and he shall not receive within that Period any other Emolument from the United States, or any of them.”

In addition to problems with foreign and state governments spending money at the hotel, Slate reported, the court focused on an even more fundamental problem and laid out the facts hinting at an allegation of direct corruption:

  • Plaintiffs allege that the Hotel received an emolument from the Federal Government in the form of the GSA Lease, which governs the Hotel’s use of the Old Post Office Building in the District of Columbia, where the Hotel is situated. Section 37.19 of the Old Post Office Lease states: “No … elected official of the Government of the United States … shall be admitted to any share or part of this Lease, or to any benefit that may arise therefrom.”
  • Plaintiffs allege that, before the President’s inauguration, the then-Deputy Commissioner of the GSA indicated that the President would be in violation of the Lease unless he fully divested himself of all financial interests in it. Shortly after his inauguration, the President replaced the Acting Administrator of the GSA.
  • Plaintiffs allege that several weeks later, on March 16, 2017, less than two months into his term, the President released a proposed budget for 2018 that increased the GSA’s funding, while cutting back on other the funding of other agencies. On March 23, 2017, the GSA issued a letter determining that the President and the Hotel were not in violation of the Lease. Plaintiffs allege that the GSA’s abrupt about-face position was and is in direct contradiction of the plain terms of the Lease and that, by determining that the Hotel was and is in compliance with the Lease, the Federal Government bestowed upon the President an emolument in violation of the Domestic Emoluments Clause.
  • These allegations plausibly state a claim under the Domestic Emoluments Clause.

While procedurally this ruling is merely a denial on a motion to dismiss, Judge Messitte is making conclusions of law that would apply at trial and adding the clear conditions of the lease. After all, “any benefit” means any benefit, Slate noted.

Even if a trial might not factually establish a corrupt deal by Trump, this ruling strongly suggests that a trial would lead to shutting down the Trump International Hotel as an unconstitutional violation and would force Trump to divest entirely. If there is a motion for summary judgment, the court already might have sufficient evidence to shut down the hotel. And plaintiffs—the attorneys general of D.C. and Maryland—would still be able to investigate the impermissible emoluments that Trump already has accepted.

Of course, Trump will appeal to the Supreme Court first. But if there is a trial, the next phase of discovery might investigate how Trump was able to obtain this lease in contradiction of its clear terms. And because such direct corruption could be considered an abuse of power, this trial could become even more perilous legally and politically for Trump.

In a 2017 poll conducted by PRRI, nearly half (47%) of Americans said they believe that President Trump has acted in ways that violate the U.S. Constitution. Roughly as many (46%) say that he has not. . Roughly eight in ten (79%) Democrats, but only about one in ten (11%) Republicans, believed at the time that Trump has violated the Constitution. There is a robust gender divide in views about the constitutionality of Trump’s actions. A majority (55%) of women believe Trump has acted in ways that violate the U.S. Constitution while only 39% of men believe he has. A majority (53%) of men say Trump has not violated the Constitution.

Research contact: @jedshug

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