IG: GSA ignored emoluments issue when reviewing Trump lease

The General Services Administration has oversight of President Donald Trump's lease of the Old Post Office Building in Washington, D.C., where the Trump International Hotel is located. A new report from the agency’s Office of Inspector General, however, suggests that oversight should have been more assertive.

GSA originally reviewed the terms of Trump's lease, which he won in 2012 through an ordinary competitive bidding process, in part because the language appeared at face value to preclude an elected official from holding the lease. But Trump's critics have long argued that a sitting president who draws income from a hotel could be potentially influenced by those seeking favor with the administration. The criticism is rooted in the Emoluments Clauses of the Constitution, which, among other things, prohibit U.S. office holders from accepting gifts or titles or offices from foreign states.

Trump said before he took office that he would shift day-to-day control of the hotel to his sons, as part of a plan to step away from his businesses and focus on the presidency.

A partially redacted report from GSA's Office of Inspector General, released on Jan. 16, found that agency lawyers reviewing the lease gave the Emoluments Clauses the short shrift when GSA decided that Trump could maintain his stake in the hotel at the government-owned site while serving as president.

The decision to exclude the emoluments question, the report states, was "improper because GSA, like all government agencies, has an obligation to uphold and enforce the Constitution."

GSA’s Office of General Counsel "decided to ignore the constitutional issues without preparing a formal decision memorandum to document the rationale for the position they were taking," the OIG concluded, "without conducting any research of the two Emoluments Clauses or checking for any [Office of Legal Counsel] opinions about the Emoluments Clauses."

The report also found there were recent opinions from the Justice Department’s Office of Legal Counsel regarding emoluments, including one covering the cash award from President Barack Obama's Nobel Peace Prize. The report also argues that the term emolument, both historically and in the present day, "includes the gain from private business activities," and isn't limited to titles, offices or gifts.

However, the report did not address the substance of GSA's decision on permitting President Trump to keep his stake in the corporation holding the lease, nor does it render an opinion on whether Trump's ownership of the hotel constitutes a violation of the Emoluments Clauses. It does say that Trump's interest "raises at least potential constitutional issues."

In reply comments, GSA General Counsel Jack St. John focused on the lack of any finding that the Trump administration leaned on GSA to render a favorable outcome on the lease review, and also noted that the decisions to forego a review of any constitutional issues was decided in late 2016, under the Obama administration.

"We note that after interviewing over two dozen employees and reviewing over 10,000 documents, your office found not a single instance in which a political appointee or career federal employee at GSA attempted to improperly interfere with or exert pressure on the contracting officer's decision-making process," St. John wrote.

The IG report also delved into the history of the section of the hotel lease that appears to prohibit elected officials. The provision dates back to an 1808 law that banned lawmakers from contracting with the federal government. Similar wording has appeared in other leases held by commercial firms on government buildings. The wording from the Trump lease was largely lifted from a 1983 contract for the development of the Willard Hotel, across the street from the White House.

GSA was satisfied by a plan from the Trump organization to transfer Trump's interest in the corporation that runs the hotel and controls the lease into a revocable trust, and to donate profits from foreign government payments to the U.S. Treasury.

Rep. Elijah Cummings (D-Md.), chairman of the newly renamed Committee on Oversight and Reform, has pledged to hold hearings and conduct other oversight activity related to the Trump Hotel lease and the larger emoluments issue.

Rep. Gerry Connolly (D-Va.), who is likely to chair the Oversight panel’s powerful Government Operations subcommittee, said the IG report "confirmed what we all knew: The Trump Administration is in violation of the Emoluments clauses of the United States Constitution. GSA's decision to not consider whether the President's business interest in the Old Post Office lease might be unconstitutional has enabled the President to line his pockets."

Connolly added: "The new Democratic majority must investigate this and the multiple conflicts of interest that plague his cabinet."