Contracting

Trump hotel lease is valid, says GSA

Old Post Office Building in Washington, D.C. (Photo: Wikimedia Commons) 

The Trump International Hotel in downtown Washington, D.C.

A federal contracting officer has ruled that financial arrangements made by President Donald Trump to distance himself from the profits arising from his lease on a government building are sufficient to keep the lease in effect.

Although the lease Trump signed with the Government Services Administration for the Washington, D.C., building before he was elected stipulated government officials cannot profit from the property, the agency said its terms haven't been violated.

"Based on my review of the Lease, discussions with Tenant, and documents submitted by Tenant, I have determined that Tenant is in full compliance," GSA Contracting Officer Kevin Terry wrote in a March 23 letter to Donald Trump Jr., who is in charge of the hotel property during his father's presidency. "Accordingly, the Lease is valid and in full force and effect."

In 2012, Trump won the contract to lease the building and turn it into a luxury hotel. After he was elected president, however, some lawmakers and observers said his ownership of the building violated the lease that included a standard provision forbidding an elected federal official from being the leaseholder.

Terry's letter indicates that GSA is satisfied that profits from the hotel are not going to President Trump while he is in office.

The decision brings to an end a simmering controversy over whether Trump would be allowed to retain ownership of the hotel lease during his presidency. Many observers have argued that the plain language of the lease dictates that Trump divest himself from the hotel deal.

Some lawmakers who have been questioning the deal with GSA for months, said the agency has shifted its position in its March 23 letter and negated that provision.

"This new interpretation renders this lease provision completely meaningless -- any elected official can now defy the restriction by following this blueprint," Rep. Elijah Cummings (D-Md.), ranking member of the House Committee on Oversight and Government Reform, and Rep. Peter DeFazio (D-Ore.), ranking member of the House Committee on Transportation and Infrastructure, said in joint statement on the GSA's letter. 

Cummings and DeFazio called the letter "a completely inadequate explanation for its decision" that cited news articles and explanations of complex ownership structures, not rules.

The Project on Government Oversight said the GSA's ruling should be challenged. Ari Goldberg, POGO's communications director in a March 23 statement called the decision "a contorted reading of the lease and clearly violates its obvious intent."

He said the lease decision "should not have been left up to a federal contracting officer."

About the Author

Mark Rockwell is a senior staff writer at FCW, whose beat focuses on acquisition, the Department of Homeland Security and the Department of Energy.

Before joining FCW, Rockwell was Washington correspondent for Government Security News, where he covered all aspects of homeland security from IT to detection dogs and border security. Over the last 25 years in Washington as a reporter, editor and correspondent, he has covered an increasingly wide array of high-tech issues for publications like Communications Week, Internet Week, Fiber Optics News, tele.com magazine and Wireless Week.

Rockwell received a Jesse H. Neal Award for his work covering telecommunications issues, and is a graduate of James Madison University.

Click here for previous articles by Rockwell. Contact him at mrockwell@fcw.com or follow him on Twitter at @MRockwell4.


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