President-elect Donald Trump’s future political appointees may be able to help his business by pressuring General Services Administration (GSA) officials to lower the annual rent paid to the government by the Trump International Hotel in the nation’s capital.
The Trump Organization signed a 60-year, $180 million lease in 2013 with GSA to build the hotel in the historic Post Office Pavilion on Pennsylvania Avenue. Trump announced his candidacy for the Republican presidential nomination in June 2015.
The lease agreement requires the Trump conglomerate to disclose to GSA updated financial information annually, which is then to be used to negotiate rent payments, according to two George Washington University staffers writing Monday in Government Executive magazine.
“Just imagine GSA pressing the Trump Organization for more detailed revenue and expense information, or the president’s children negotiating annual rent adjustments with a career civil servant who reports to the GSA administrator appointed by their father, who serves at his pleasure,” wrote law professor Steve Schooner and senior adviser Daniel Gordon.
Trump has said his children, Donald Jr., Eric and Ivanka would take over Trump Organization. (RELATED: Here’s Why Trump’s Business Interests Could Trigger A Constitutional Crisis)
“Any reasonable person would worry about the undue pressures and the inherent risk of favoritism that the government might show to such a well-connected contractor,” Schooner and Gordon wrote.
Additionally, the authors show language in the lease that they argue prevent Trump from retaining power over the hotel: “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.”
Schooner and Gordon also worry that ignoring the issue would set a precedent for the rest of the government under Trump.
“If the president discounts the importance of avoiding conflicts, disrespects transparency and disparages the importance of compliance with contractual and regulatory requirements, we fear that the message will not be lost on the broader procurement community,” they wrote.
Schooner and Gordon suggested GSA officials negotiate “mutually agreeable termination of the lease” before the Trump’s inauguration.
Nearly 100 foreign diplomats attended an event at the Trump International Hotel, which could present a constitutional concern.
The issue of the Trump hotel’s lease highlights the immense potential for multiple conflicts-of-interest because the president-elect’s firms own properties across the country whose value could be affected for better or worse by nearby federal properties managed by GSA.
As the federal government’s housekeeping agency, GSA builds, leases and manages thousands of properties located in and near major cities. The last time widespread conflicts of interest became an issue at GSA with a presidential appointee was when President Reagan put Terence Golden in charge of the agency.
Golden was then a former vice-president of the Dallas-based Trammel Crow commercial development company and reportedly had more than 300 partners in real estate projects. He refused to make his partners list public as a means of avoiding conflicts of interest in his decisions as GSA’s Administrator.
Instead, Golden gave a copy of his partners list to a Senate committee and promised to allow one of his close aides to review the list when a potentially conflicted decision came to his desk. No conflicts were ever uncovered.
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