[Conflicts that for months have been theoretical are now about to become real — most immediately a possible challenge by the federal government. It owns the building that houses Mr. Trump’s hotel and has granted him a 60-year lease. From the moment he is sworn in as president at noon Friday, Mr. Trump may be in violation of that lease, given a provision that appears to prohibit federal elected officials from renting the Old Post Office building, the Pennsylvania Avenue landmark that houses the hotel, from the government.]
By Eric Lipton and Susanne
Craig
 |
|
President-elect Donald J.
Trump addressed a luncheon at the Trump International
Hotel in Washington on
Thursday. Credit Doug Mills/The New York Times
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WASHINGTON
— With sirens blaring, a
fleet of limousines and security personnel raced down Pennsylvania Avenue twice
in less than the last 24 hours to deliver Donald J. Trump to inauguration
events.
But he was not heading to the White House. He
was going to Trump International Hotel.
It was a telling destination for those visits
Wednesday night and Thursday afternoon. Perhaps more than any other location in
Mr. Trump’s far-flung real estate empire, this 263-room hotel epitomizes the
convergence of Donald Trump the global businessman and Donald Trump the
president-elect.
Conflicts
that for months have been theoretical are now about to become real — most
immediately a possible challenge by the federal government. It owns the
building that houses Mr. Trump’s hotel and has granted him a 60-year lease.
From the moment he is sworn in as president at noon Friday, Mr. Trump may be in
violation of that lease, given a provision that appears to prohibit federal
elected officials from renting the Old Post Office building, the Pennsylvania
Avenue landmark that houses the hotel, from the government.
Guests at the hotel include foreign diplomats
and politicians who could be looking to curry favor with Mr. Trump — but even
the act of paying their bills as they check out after the inauguration may open
Mr. Trump to a challenge that he has violated the United States Constitution,
which prohibits federal government officials from taking payments or gifts from
foreign governments.
Members of Mr. Trump’s new cabinet are also
staying there this week, as are dozens of big-ticket donors to his presidential
election campaign and inauguration. The hotel will also be the site of a prayer
breakfast on Friday before Mr. Trump is sworn in. All these bookings mean
payments to the Trump Organization for the hotel rooms, meals and other
accommodations.
Woody Johnson, the owner of the New York
Jets, and Duke Buchan III, a Florida money manager, were there this week.
David A. Clarke Jr., the Milwaukee County
sheriff, a Fox News regular and a Trump supporter, was camped in the bar
sipping Stoli Cranberi vodka. Among the other guests were Hary Tanoesoedibjo, a
billionaire businessman and politician from Indonesia who is Mr. Trump’s
business partner in two hotel projects there, and former Mayor Rudolph W.
Giuliani of New York.
The minimum nightly rate at the hotel will be
$735. One suite during inauguration week was offered for $500,000, with various
perks. On Thursday, the president-elect attended a lunch with Republican
leaders of Congress, cabinet members and hundreds of others in the hotel’s
enormous Presidential Ballroom, which features nine glass chandeliers and gold
and white walls. “This is a gorgeous room,” Mr. Trump told the gathering. “A
total genius must have built this place.”
Nearby, in the lobby bar, guests drank
Champagne and ordered expensive cocktails off a drink menu that includes a $100
libation called the Benjamin, made of vodka, raw oysters and caviar. Guests
wore red and white “Make America Great Again” hats.
“That building is symbolic of the minefield
that President-elect Trump has decided to walk through,” said Representative
Elijah E. Cummings, Democrat of Maryland, who is the ranking member on the
House Oversight and Government Reform Committee, which is charged with
investigating any potential wrongdoing by government officials. “We are going
now from the hypothetical to reality — and I myself am not sure where it is
going to lead.”
Sean Spicer, Mr. Trump’s press secretary,
defended Mr. Trump’s continued close ties to the hotel. “That he’s going to his
own hotel? I mean, I think that’s pretty smart,” Mr. Spicer said. “I think the
idea that he’s going to his own hotel shouldn’t be a shocker. It’s a beautiful
place. It’s a place that he’s very proud of.”
Mr. Spicer added: “It’s an absolutely
stunning hotel. I encourage you all to go there if you haven’t been by.”
The story of Mr. Trump and the Old Post
Office began in August 2013, when the General Services Administration awarded
Mr. Trump the contract that would allow him to develop the landmark tower.
His children Ivanka, Eric and Donald Jr. each
have a small stake in the company that holds the lease. Mr. Trump, who owns the
vast majority of the company, is the only family member with a financial
interest in the project, however, investing roughly $2.4 million of his own
money, records show.
The Post Office project is valued at roughly
$200 million, much of it financed by Deutsche Bank, a favorite lender of the
Trump Organization. The bank agreed to lend up to $170 million. The deal
requires a Trump company to pay the government $3 million a year in rent from
the hotel’s opening date.
“This is a location like no other,” Mr. Trump
said in an interview in 2013. “You have the Capitol, you have the White House
and right in the middle you have the Old Post Office.”
Mr. Trump was keen to begin construction and
in 2014 boasted that the hotel would open in time for the 2017 inaugural
parade.
At the time, however, few could have foreseen
it would be Mr. Trump’s inauguration Washington would be celebrating, and the
headache that would create.
The lease between the General Services
Administration and the Trump company includes a clause — “no member or delegate
to Congress, or elected official of the government of the United States or the
government of the District of Columbia, shall be admitted to any share or part
of this lease, or to any benefit that may arise therefrom” — that federal
contract experts say makes clear that Mr. Trump will be in violation of the
deal as soon as he is sworn in.
“The basic integrity and credibility of the
president of the United States of the federal procurement and contracting
regime is at risk,” said Steven L. Schooner, a professor specializing in
government procurement law at George Washington University. “We are about to
have a legitimate scandal on our hands.”
Representative Cummings, the Maryland
Democrat, said he expected the G.S.A. to declare the Trump Organization in
breach of the contract. Renee Kelly, a spokeswoman for the agency, would not
confirm that it intends to take such a move, saying only in a written statement
that the “G.S.A. won’t have an update until Friday after the inauguration.”
That a company Mr. Trump controls is a
prominent tenant of the federal government is just the beginning of it.
His administration will assume oversight of
Wall Street regulation, which includes policing Deutsche Bank’s activities.
The Trump administration will also direct
American foreign policy and will probably be in regular contact with the
diplomats sent by other countries to the United States. For Washington hotels,
those diplomats’ visits are big business, and Mr. Trump’s Washington hotel has
been actively courting them in recent months.
Mickael Damelincourt, the hotel’s managing
director, has held meetings and attended social events with ambassadors and
other foreign dignitaries, all potential sources of business for the new hotel,
given that visiting delegations frequently come to Washington.
Mr. Trump’s lawyers have said he would donate
any profit derived from foreign government hotel guests to the United States
Treasury. But Mr. Trump’s critics say that would not eliminate the risk he
would be violating the emoluments clause of the Constitution, which some legal
experts say prohibits federal employees from taking gifts or payments from
foreign governments.
Erwin Chemerinsky, the dean of University of
California, Irvine, School of Law, said, “There is no doubt he will be
benefiting financially from foreign government officials who are patronizing
the Trump Hotel in Washington and other facilities around the world.”
Employees at the hotel — the bellhops,
bartenders, restaurant servers and housekeeping aides — are deciding if they
will join the local hotel workers union, a process Mr. Trump recently agreed to
allow without protest. Signature cards are being distributed to new employees
at the hotel who will decide if they want to be organized.
Labor disputes have ended up before the
National Labor Relations Board, including one at the Trump International Hotel
in Las Vegas. Members of the board will be picked by Mr. Trump.
“We want to get workers at the hotel
organized, into a union and then negotiate a contract,” said John Boardman, the
president of the local, which represents about 7,000 hotel and casino workers
in the Washington area.
Employees at the hotel who might have
discrimination claims or claims related to overtime pay, worker safety or
health could end up having them investigated by federal agencies overseen by
people Mr. Trump appoints.
And if the Trump hotel seeks to fill job
vacancies with foreign guest workers — as Mr. Trump did at Mar-a-Lago, the
resort he owns in Florida — the Department of Labor and the Department of
Homeland Security would need to approve different aspects of the issuance of
visas.
“Him being an employer can only lead to
complications,” said Lawrence Mishel, the president of the Economic Policy
Institute, a liberal research organization that studies labor issues. “It is
inherent in owning a business.”
Already, Mr. Trump is suing two celebrity
chefs for breach of contract after they backed out of the hotel development.
The chefs had a change of heart about doing business with the hotel in 2015,
after Mr. Trump made incendiary comments about Mexican immigrants. Both
lawsuits are continuing and in one case Mr. Trump has given a video deposition.
Even the marketing of the hotel is sure to
draw scrutiny. Earlier this year Mr. Trump’s hotel offered a $500,000
“inauguration package” to its wealthy clients, which included the opportunity
to stay in a 6,300-square-foot suite, according to Travel Market Report, a news
report that caters to travel professionals. Doug Gollan, a contributing editor
and the author of the article, said hotel management told him that it had been
sold.
The hotel has certainly had a rush of
business this week from the inauguration festivities. The lobby has turned into
the social center for Mr. Trump’s supporters, who lounged at the dozens of
tables set up in the lobby, washing down bottles of wine and offerings from the
bar menu, including the $120 Trump tower seafood platter.
The crowd in the giant room — the courtyard
of the Old Post Office building — included Tony Romo, the Dallas Cowboys
quarterback, and Mevlut Cavusoglu, the Turkish foreign minister.
Gentry Beach, 41, a prominent fund-raiser and
friend of the Trump family, roamed the floor, greeting friends, drink in hand,
as they arrived for the big celebration on Friday. “How are you?” Mr. Beach, a
hedge fund manager from Dallas, said again and again, as he worked the room.
“How are you?”
The hotel has seen a rush of activity this
week. Outside, District of Columbia police, in addition to private security,
are being dispatched to help provide security as the hotel has become an early
target of protesters, including one man who set himself on fire this week.
Inside, the lobby has turned into a social center.
The hotel was sold out and the restaurant was
booked.
“We are very busy,” said Patricia Tang, the
director of sales and marketing for the property. “That’s about all I can say.”
Steven Eder contributed reporting.