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Elizabeth Warren Demands Answers on Trump's DC Hotel Lease

Senate Democrats ask GSA why Trump is allowed to be his own landlord.
Image: Sen. Elizabeth Warren (D-MA) Speaks At The Center For American Progress On The American Middle Class
Sen. Elizabeth Warren (D-MA), delivers a speech about the American middle class, at a Center for American Progress forum, July 13, in Washington, D.C.Mark Wilson / Getty Images

Two top Senate Democrats are pressing the government to explain how Donald Trump's federal lease to operate a luxury hotel near the White House can go forward despite what they call the "unmanageable conflicts of interest" presented by the president becoming his own landlord — as well as a provision that bans government officials from the deal.

Sen. Elizabeth Warren of Massachusetts joined with Sen. Tom Carper of Delaware, ranking Democrat on the committee that oversees government operations, in sending a letter Thursday to the General Services Administration, which in 2013 awarded a lease to the Trump organization to redevelop and run a hotel in the Old Post Office Pavilion on Pennsylvania Avenue.

Click Here to Read the Letter

Trump committed $200 million to transform the historic building into a hotel, and in return received the exclusive rights to run the hotel and keep the profits for a period of at least 60 years.

While Trump has said he will hand off control of his real estate empire to his children, he has not said whether he will transfer ownership.

First, critics say, that would mean the Trump organization would be negotiating annual rent payments with federal bureaucrats who work for Donald Trump.

And second, the GSA lease includes a standard provision stating that "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…"

"Federal procurement officials include this clause in lease agreements to avoid the appearance of favoritism or preferential treatment toward federal officials," Warren and Carper write. "GSA officials managing the agreement are required to balance their duties to execute the terms of the contract entered into with the building's tenant while also protecting the interests of the building's landlord."

However, the senators continued, "once President-elect Trump assumes office, he will oversee GSA and have the authority to appoint a new GSA Administrator, which will effectively make President-elect Trump landlord and tenant at the same time. Terms of the agreement also require annual disclosures of sensitive financial information and for GSA to renegotiate rent adjustments and other payments to the Trump Organization. Such a scenario will present unmanageable conflicts of interest for career GSA officials and President-elect Trump and result in a breach of plain language of the lease agreement."

Warren and Carper add that the GSA's relationship with President-elect Trump "is also complicated by two provisions in the Constitution prohibiting the President from receiving additional 'emoluments' salaries, fees, or profits — from either the U.S. or foreign governments."

They point out that Article II, Section 1, Clause 7 of the Constitution, states: "The President shall…receive for his Services, a Compensation…and he shall not receive within that Period any other Emolument from the United States, or any of them."

And Article I, Section 9, Clause 8 of the Constitution — often referred to as the "Emoluments Clause"—states: "[N]o Person holding any Office…shall, without the Consent of the Congress, accept of any present, Emolument...of any kind whatever, from any...foreign State."

If the current lease agreement remains in place, the senators say, President-elect Trump "will receive compensation from the federal government separate from his annual salary, which is prohibited by the Constitution."

Carper and Warren are also concerned, they write, that foreign governments are paying for their official representatives to stay at what is known as the Trump International Hotel because the property is affiliated with the incoming President.

The Kingdom of Bahrain, for example, recently booked space at the Trump Hotel for a reception, they write.

"Once he takes office, payments from these foreign governments to entities owned by President-elect Trump would likely result in a violation of the Emoluments Clause prohibition of payments from foreign governments," the senators say.

The senators say they see no evidence that GSA took steps to plan for this difficult scenario while Trump campaigned to be president, and they are demanding answers that GSA so far has refused to provide about what legal conclusions have been reached by government ethics lawyers.

In November, the GSA told Buzzfeed that "Prior to Mr. Trump taking the oath of office, GSA plans to coordinate with the President-elect’s transition team to allow a plan to be put in place to identify and address any potential conflict of interest relating to the Old Post Office building."

Trump has promised that he will discuss how he plans to deal with his business interests at a Dec. 15 news conference. During the campaign, he accused Democrat Hillary Clinton of "corruption," for, among other things, the Clinton Foundation's acceptance of contributions from foreign governments.