Acquisition

Hill Democrats quiz GSA chief about Trump hotel sale

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The lease on President Donald Trump's downtown Washington, D.C., hotel is for sale. The deadline for initial bids was Jan. 23, but so far the Trump Organization hasn't supplied information on potential buyers to the General Services Administration, which oversees the lease.

GSA Administrator Emily Murphy told lawmakers at a Jan. 28 hearing of the House Transportation Committee's Subcommittee on Economic Development, Public Buildings, and Emergency Management that GSA has 45 days to determine whether the candidate is up to par once the Trump Organization finds a "qualified transferee."

"There's a seven-part test for qualified transferees," Murphy said. "It goes towards the character of the party, their financial responsibility, and their past history of maintaining historic property."

If GSA doesn't make a determination within 45 days, the Trump Organization can transfer the lease and consider it approved.

Subcommittee Chairwoman Rep. Diana Titus (D-Nev.) said it wasn't clear whether 45-day period begins when the tenant notifies the landlord of its intent to sell, or when they find a suitable transferee.

"What I hear you saying is that there aren't any rules regarding the guidelines," Titus said.

 "Anybody's eligible to apply and you'll worry about it down the road, because nothing is in place."

"You're going to be overseeing the potential transfer of hundreds of millions of dollars into the pockets of the president and his family," Titus continued. "We want to know what, if any, changes could be made to the terms of the lease with the new tenant. Additionally, we must determine the need for new legislation to guide the outleasing process. I want us to make sure that the GSA and this committee have a clear understanding of the process moving forward, and that we're not going to be repeating the mistakes of the past." 

Emoluments concerns

Trump's ownership of the lease on the Old Post Office Property, obtained via competitive bidding before he was a presidential candidate, has been the source of multiple concerns for Hill Democrats, ranging from whether the lease was valid once Trump took office to whether the president is violating the emoluments clause of the Constitution through his continued profit off the hotel, which includes revenues from foreign government delegations.

The committee has been looking into a potential emolument case since November 2016, when members submitted a request to GSA officials asking how the agency planned to oversee the then-president elect's lease with the Old Post Office building.

In January 2019, an Inspector General report found that GSA had failed to consider the emolument issue when reviewing the lease to see whether the President could maintain his interest in the hotel.

Murphy testified at the hearing that GSA doesn't know how much the hotel receives in foreign expenditures. "I only know what's been reported in the newspapers," Murphy said. 

Republicans on the committee argued that GSA already has offered transparency to congressional overseers.

"GSA has invited this committee to review financial records for this purpose, but the majority would not take up the GSA on this offer because many would not agree to one single term: to not publicly disclose any of the private financial information contained in [the lease]," Rep. Greg Pence (R-Ind.) said. "This only confirms what we already know: This is not a legitimate exercise of the committee's oversight authority but rather an abuse of that authority to harm the president politically."

While the agency provided lawmakers with reams of documents, committee members said that they haven't been able to see specifics of the lease, due to GSA's citation of attorney-client privilege and other confidential financial information. In a Sept. 25 hearing, Murphy said that she couldn't weigh in as to whether GSA was looking into the emolument issue because it was the subject of ongoing litigation.

"[Subcommittee Chairwoman] Titus and I requested that GSA conduct an audit of the Old Post Office lease, which they had acknowledged had not been done. Three months later we are still waiting on a response to that request," Committee Chairman Peter DeFazio (D-Ore.) said, referring to a subpoena the two legislators filed in October.

"I have serious concerns about how GSA administers its outleasing program," DeFazio said. "While there are extensive regulations for how GSA should acquire leased space, there seem to be very few formal rules outlining how the government should lease property to private parties."

About the Author

Lia Russell is a former staff writer and associate editor at FCW.

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