Rule of Law

OP-ED: GSA, Trump International Hotel, and the Constitution

Lease agreements don’t tend to be that interesting, but there’s one lease agreement in D.C. that’s been getting a lot of attention of late: the one between a Trump business and the General Services Administration (GSA) for a historic property that Donald Trump has turned into a luxury hotel.  Ever since Trump was elected, ethics experts have warned that the Trump business would, as soon as Trump became President, be in violation of the lease, which bars “elected official[s] of the Government of the United States” from being “admitted to any share or part of this Lease, or to any benefit that may arise therefrom.”

To the surprise of all of those experts, the GSA yesterday declared that the lease remains valid.  Experts on ethics and government procurement law have already responded and are saying that the GSA’s decision is plainly wrong.  But there’s an even larger question: does the GSA’s decision to bless this situation run afoul of the Domestic Emoluments Clause?

As I and others have written elsewhere, the Domestic Emoluments Clause prohibits the President from receiving, on top of his salary, “any other Emolument from the United States, or any of them.”  In other words, the President is entitled to a salary for serving as President, but he may not receive any other “emolument”—any compensation, profit, or advantage—from the federal government, state governments, or their instrumentalities.  This Clause, which is found in Article II of the Constitution and applies specifically to the President, has received less attention than the Foreign Emoluments Clause, which applies to any person holding “any Office of Profit or Trust” under the United States and prohibits the receipt of presents or emoluments from foreign states without the consent of Congress.  But it’s no less important.

Like the Foreign Emoluments Clause, the Domestic Emoluments Clause was adopted to address the Framers’ deep concerns about corruption, and their worries that if the President could receive benefits or compensation from the states or the federal government, it might induce him to put his own financial interests over the interests of the nation.  To the Framers, this Clause was a critical safeguard against such corruption: Alexander Hamilton wrote that “[i]t is not easy . . . to commend too highly the judicious attention which has been paid” to addressing them in the Constitution.

Fast forward 200-plus years, and a business owned by the President of the United States holds a lease with a federal agency called the General Services Administration.  As noted above, that lease expressly provides 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.”  On its face, that language seems pretty clear: elected officials can’t benefit from the lease. And it’s not difficult to understand why such a provision would exist: as Citizens for Responsibility and Ethics in Washington has explained, it is to “‘avoid any conflict of interest that might arise between the [federal] employees’ interests and their Government duties, and to avoid the appearance of favoritism or preferential treatment by the Government toward its employees.’”

The need for such a prohibition seems particularly great when the elected official is the President, who appoints the head of the GSA.  As one article put it, “the fact that the agency’s chief now owes his position to Trump cements the conflict of interest—effectively making the president both landlord and tenant.”

Yet GSA—or, specifically, the contracting officer at GSA who led contract negotiations with Trump before the lease was signed—has now said that the lease remains valid because “during his term in office, the President will not receive any distributions . . . that would have been generated from the hotel.”  It is apparently irrelevant whether Trump will receive profits generated by the hotel immediately after he leaves office.  In short, a benefit delayed is a benefit denied.  One expert on government procurement law called the decision “unbelievable.”

And that brings us back to the Domestic Emoluments Clause, which prohibits the President from receiving any benefit or advantage from the federal government beyond his salary.  GSA’s decision that this lease provision doesn’t bar Trump’s business from continuing to hold the lease would certainly seems like a pretty big benefit, and it also raises the very self-dealing concerns that the Domestic Emoluments Clause was adopted, at least in part, to prevent.  The possibility that the GSA’s decision might be wrong merely underscores the point: the American people shouldn’t have to ask whether the federal government is making certain decisions and reaching certain results simply because they benefit the President.

In the days ahead, there will likely be many questions raised about this GSA decision, such as why it was made by the contracting officer with a long relationship with the Trump Organization (rather than by a higher level officer) and why benefits delayed don’t qualify as a “benefit” under the lease.  But there’s one very important question that no one should forget: does this decision, which directly benefits the President, violate the Domestic Emoluments Clause?