Rule of Law

Trump has awarded next year’s G-7 summit of world leaders to his Miami-area resort, the White House said

President Trump has awarded the 2020 Group of Seven summit of world leaders to his private company, scheduling the summit for June at his Trump Doral golf resort in Miami, the White House announced Thursday.

That decision is without precedent in modern American history: The president used his public office to direct a massive contract to himself.

Trump’s Doral resort — set among office parks near the Miami airport — has been in sharp decline in recent years, according to the Trump Organization’s own records. Its net operating income fell 69 percent from 2015 to 2017; a Trump Organization representative testified last year that the reason was Trump’s damaged brand.

Now, the G-7 summit will draw hundreds of diplomats, journalists and security personnel to the resort during one of its slowest months of the year, when Miami is hot and the hotel is often less than 40 percent full. It will also provide a worldwide spotlight for the club.

“What about Doral?” Trump asked aides earlier this year, according to White House acting Chief of Staff Mick Mulvaney, who announced the move. Mulvaney said a nationwide search conducted by the president’s administration led to the conclusion that the president was right.

“Doral was far and away the best physical facility for this meeting,” he said. The administration examined 10 sites before choosing this one, according to Mulvaney, who then quoted an anonymous site selection official who he said told him, “It’s almost like they built this facility to host this type of event.” Mulvaney did not say what other sites were vetted — just that they were all worse.

Trump’s decision to select his own resort as host of the international gathering is a sign that he is becoming more brazen about flouting criticism from Congress and shattering ethical norms that have been observed by previous presidents with regard to separating the duties of their office from their financial well being.

It also appears to signal the collapse of promises made by both Donald Trump and Eric Trump, the president’s son and the day-to-day leader of Trump’s businesses, at the start of the Trump presidency — when they pledged to create separation between the president’s private business and his new public office.

“I will be leaving my great business in total,” Donald Trump said then.

“There are lines that we would never cross, and that’s mixing business with anything government,” Eric Trump said in 2017.

The Trump Organization on Thursday said it was “honored” to have been chosen by its owner, the president, for this event.

“We are excited to have been asked to host the 2020 G-7 Summit at Trump National Doral,” the company said in a statement.

But the company did not respond to questions about how much money it will make off this event.

Eric Trump did not respond to questions about how much the president’s company would charge the United States or foreign governments during the event. He also did not respond to questions about whether the Trump Organization would ask taxpayers to pay for upgrades to the site. One obvious concern for next year: There will be at least eight world leaders coming to this event, but at present Doral has just two “presidential suites.”

The State Department, which typically helps organize these events, declined to comment.

Mulvaney said the White House was not going to release information about the selection process.

“If you want to see our paper on how we did this, the answer is absolutely not,” he said.

On Capitol Hill, the Democrat-led House has already passed a measure that would ban federal funds from being paid to Trump properties — a provision that, if it became law, would seem to block a massive federal event at Trump Doral.

Rep. Peter A. DeFazio (D), one of 200 congressional Democrats who have sued Trump over his doing business with foreign governments and who are investigating Trump’s D.C. hotel, said that president ongoing interest was to “leverage the presidency to benefit himself, his family and his associates, rather than the country’s interests.”

Rep. Jamie Raskin (D-Md.), a member of the Judiciary Committee, also condemned the decision.

“The cardinal sin of the Trump presidency is the conversion of his public office into an instrument of private gain and campaign activity,” he said, calling the deal a “sellout of the U.S. government, the Constitution and the American people.”

Hosting the G-7 summit could become problematic legally for Trump because foreign governments would be paying money to his business, which Democrats have held is a violation of the foreign emoluments clause of the Constitution.

“President Trump’s decision confirms what we have long known: Unless the courts expeditiously require the President to comply with the words of America’s founders, the Foreign Emoluments Clause soon will lose all practical effect, allowing presidents to profit from foreign governments without first obtaining the consent of Congress,” said Constitutional Accountability Center President Elizabeth Wydra, one of the lead attorneys for the congressional Democrats on the case.

Other Democrats on Capitol Hill were bothered that the White House made the Doral announcement on the day that Rep. Elijah E. Cummings (D-Md.), chair of the House Oversight Committee and one of the most aggressive investigators of Trump’s conduct, died.

“God bless Elijah E. Cummings — this is what Chairman Cummings talked about all the time,” said Rep. Raja Krishnamoorthi (D-Ill). “And it’s just you know, on the same day as Chairman Cummings passes, for the administration to do what it did is just a reminder of how important oversight is and how we need a vital check on the executive branch.”

The G-7 summit rotates among sites chosen by the seven member countries, as well as by the European Union. The last time it took place in the United States, in 2012, President Barack Obama held it at the government-owned retreat at Camp David in Maryland. Before that, President George W. Bush held it at the exclusive, isolated resort of Sea Island, Ga., in 2004.

This year, Trump had hinted repeatedly that he intended to award the event to himself. At this year’s G-7 summit, in August in Biarritz, France, Trump said his aides had examined other sites and come back to tell him that Doral was the best. The site is set among office parks in an inland area near the Miami airport.

“They went to places all over the country, and they came back and they said, ‘This is where we’d like to be,’ ” Trump said then. “It’s not about me. It’s about getting the right location.” He particularly praised the club’s ample parking.

The Doral club is a major part of Trump’s portfolio. It provides him more revenue than any other hotel or golf club.

But, in recent years, this keystone property has fallen into decline, with profits falling 69 percent in three years. An expert hired by the Trump Organization blamed the drop on Trump’s politicized brand.

Trump’s properties have hosted U.S. government officials before, and his company says it does not seek to make a profit off that business. But even so, Trump’s properties can be expensive. At his Mar-a-Lago Club, for instance, the government paid Trump’s company $546 per night for each staffer staying in the club’s guest rooms and $1,000 for a single night of drinking by White House aides at one of Mar-a-Lago’s bars.

In this case, Eric Trump recently said that if Doral was the choice, Trump would not overcharge his own government.

“It actually would have saved the U.S. a tremendous amount of money in that they wouldn’t be paying for massive amounts of rooms with some hospitality company that’s going to milk the hell out of the U.S. government,” Eric Trump said at a forum put on by Yahoo Finance last week.

These events are massive: in 2004, when the U.S. hosted the summit on Sea Island, Ga., the organizers served 45,000 meals to 3,000 people, and paid the owners of the Sea Island resort $3 million to reserve the entire property for 10 days, according to Bob Goodwin, who organized the event for President George W. Bush. He said that foreign governments also paid for their own rooms.

Goodwin said that the organizers paid for communications upgrades to the island.

Government contracting experts were deeply skeptical that the president would not benefit financially from the deal.

“Any great resort in the country would love to be on national television nonstop hosting the G-7,” said Steven Schooner, professor of government procurement law at George Washington University.

Schooner, who has advised plaintiffs who have sued Trump over his business practices, said that owners of competing properties could potentially file a complaint opposing the decision given the lack of transparency in the decision. “We know what an open and competitive contracting process looks like and that’s what this wasn’t,” he said.

Even if the Trump Organization charged lower than market rates, the event would bring guests to fill unfilled rooms, as well as a glut of global publicity.

The summit will also come to Doral at a particularly good time — June, when Miami is steamy and its business usually drops off sharply. In 2017, the hotel reported that June was its second-slowest month, with just 38.3 percent of its rooms occupied. Only August, at 31.1 percent, was slower.

Trump has visited his own properties more than 100 times as president — sometimes bringing along foreign leaders. Those visits have resulted in tens of thousands of dollars in revenue for his businesses, as the U.S. government — and other governments — pay for their personnel to accompany him.

But this is something on a different scale: Seven foreign leaders, plus hundreds of other foreign personnel, would be housed at Trump’s resort. Trump is already facing lawsuits for allegedly violating the Constitution’s ban on receiving “emoluments” from foreign governments.

Trump bought the 57 year-old Doral golf resort in 2012, taking out $125 million in loans from Deutsche Bank to finance the purchase. He then poured money into renovating it — relying heavily on a crew of Hispanic stoneworkers that included some undocumented immigrants, according to members of the crew.

Since 2015, however, the 643-room club’s revenue and profits have nose-dived, according to figures that the Trump Organization provided to Miami-Dade County last year.

“They are severely underperforming” other resorts in the area, tax consultant Jessica Vachiratevanurak, who had been hired by Trump, told a county official last year in a bid to lower the property’s tax bill. Vachiratevanurak said the club’s net operating income — a key figure, representing the amount left over after expenses are paid — had fallen by 69 percent as of 2017.

The Trump Organization says the real problems scaring visitors away are the Zika virus and hurricanes. The Doral club’s revenue rebounded slightly in 2018, according to Trump’s presidential financial disclosures, though it is unclear whether profits went up or down.

In recent years, Doral has turned to Trump’s political allies to replace some of its lost revenue. This past weekend, for instance, it hosted a pro-Trump group called American Priority. Shown at that event was a violent video showing Trump shooting, stabbing and beheading members of the media and some Democratic opponents, according to the New York Times.

Earlier this year, the club also booked a golf tournament hosted by Shadow Cabaret, a Miami area strip club — then canceled it after The Washington Post reported about the tournament, and the charity beneficiary pulled out.