Trump hotels exempted from ban on foreign payments under new stance
A narrow justice department interpretation of the emoluments clause gives countries leeway to curry favor with the president via commercial deals
The Department of Justice has adopted a narrow interpretation of a law meant to bar foreign interests from corrupting federal officials, giving Saudi Arabia, China and other countries leeway to curry favor with Donald Trump via deals with his hotels, condos, trademarks and golf courses, legal and national security experts say.
The so-called foreign emoluments clause was intended to curb presidents and other government officials from accepting gifts and benefits from foreign governments unless Congress consents.
But in a forthcoming article in the Indiana Law Journal, the Washington University Law professor Kathleen Clark reveals justice department filings have recently changed tack. The new interpretation, Clark says, is contained in justice filings responding to recent lawsuits lodged by attorneys generals and members of Congress.
Clark’s article notes that in more than 50 legal opinions over some 150 years justice department lawyers have interpreted the clause in a way that barred any foreign payments or gifts except for ones Congress approved. But filings by the department since June 2017 reveal a new interpretation that “… would permit the president – and all federal officials – to accept unlimited amounts of money from foreign governments, as long as the money comes through commercial transactions with an entity owned by the federal official,” the professor writes.
The justice department stance now closely parallels arguments made in a January 2017 position paper by Trump Organization lawyer Sheri Dillon and several of her law partners. On 11 January 2017, just days before he was sworn in, Dillon said Trump isn’t accepting any payments in his “official capacity” as president, as the income is only related to his private business. “Paying for a hotel room is not a gift or a present, and it has nothing to do with an office,” Dillon said.
That goes against what many experts believe.
“For over a hundred years, the justice department has strictly interpreted the constitution’s anti-corruption emoluments clause to prohibit federal officials from accepting anything of value from foreign governments, absent congressional consent,” Clark told the Guardian.
“In 2017, the department reversed course, adopting arguments nearly identical to those put forward by Trump’s private sector lawyers. Instead of defending the republic against foreign influence, the department is defending Trump’s ability to receive money from foreign governments,” Clark added.
A justice department spokesperson declined to comment, but pointed to its filings in the emoluments lawsuits which Clark has noted contain five arguments similar to those used by Trump’s business lawyers. Among the key justice arguments is that the foreign emoluments clause only was intended to prohibit the president accepting gifts and employment compensation from a foreign government, but allows him to benefit from what it calls “commercial transactions”.
Other legal scholars also voice strong qualms about the justice department’s current position on emoluments and criticize the administration’s lax attitude about conflicts involving Trump and his business empire.
“The heart of the matter is that these are clauses meant to guard against undue foreign influence and conflicts of interest,” John Mikhail, a professor at Georgetown Law Center, said.
Two attorneys general from the District of Columbia and Maryland have filed lawsuits arguing the Trump International Hotel in Washington, where numerous foreign and state delegations have stayed or hosted events, has violated the anti corruption clauses. Some 200 members of Congress have also filed a lawsuit alleging that Trump has conflicts of interest in at least 25 countries.
The inspector general at the General Services Administration, which oversees the government-owned Old Post Office building leased by the Trump International Hotel, has faulted the agency for “improperly ignoring (the) emoluments clauses” and for conflicts of interest involving the hotel while Trump is in office.
Former intelligence officials also expressed concerns. “There’s a perception among lobbyists for foreign governments that the White House is for sale,” said Robert Baer, a 21 year CIA veteran with a Middle East background. “It’s a counter intelligence nightmare.”
The Trump Organization did pledge that while Trump was president it would donate any profits from foreign entities to the treasury. To that end it has written checks for $342,000 to the government covering the years 2017 and 2018. But some ethics watchdogs have questioned the methodology for calculating these payments, arguing it doesn’t account for foreign revenues to Trump businesses which overall have had yearly losses.
Further critics note that while Trump opted to let his two sons run his real estate businesses, and pledged he would not be involved with it as long as he was president, he has not been shy about publicly touting his properties including his Scottish golf course.
A chief focus of critics and the emolument lawsuits has been the Trump International Hotel which has become a mini mecca for numerous foreign delegations – including ones from Saudi Arabia, Malaysia, Turkey and the Philippines – who have used it for overnight stays and various meetings.
The hotel is leased from the GSA for 60 years and located on Pennsylvania Avenue just a few blocks from the White House. The IG’s report this January said the lease should have been reviewed again with Trump’s election to determine if it was in violation of the emoluments clause.
Critics of Trump’s ongoing ties to the Trump International and his business empire also note that some countries with major political and business problems in Washington have frequented his properties. “It appears that President Trump may be benefiting from foreign use of his properties designed to influence his decisions,” said the former Republican congressman Mickey Edwards.
For instance, a 60-person Malaysian government delegation stayed at Trump International in the fall of 2017 at a time when the justice department was conducting a major corruption investigation of Malaysian officials including the then prime minister, Najib Razak, who had a White House meeting with Trump during their stay, as first reported by radio station WAMU and Reveal.
Meanwhile, lobbyists for Saudi Arabia, which has aggressively courted Trump’s son-in-law, Jared Kushner, spent at least $270,000 at his DC hotel after Trump won the election, booking 500 rooms over an estimated three-month period, according to a Washington Post report.
Last March, a Saudi delegation traveling with the country’s Crown Prince Mohammed bin Salman seemed to enjoy a lavish stay at Trump’s New York hotel, which helped to reverse a two-year revenue decline at the property, according to the Washington Post.
These foreign dealings with Trump hotels are exhibit A for many critics of the weak kneed enforcement of the emoluments clause in the Trump era.
“This administration gives off every appearance of turning the White House into a giant cash register,” said Mikhail. “ Rather than drawing bright lines between the Trump Organization and the Trump administration they seem intent on blurring those lines.”
The lawsuits have to wend their way through the courts – which could see tough battles given mixed court rulings thus far. But critics in Congress and outside are raising more questions about emoluments and Trump’s business conflicts as new issues keep arising.
“Congress now must conduct independent oversight so the American people can determine for themselves whether the President is acting in our nation’s best interests or his own,” said congressman Elijah Cummings, the chairman of the House committee on oversight and reform.
Mike Carpenter, who served on the National Security Council in the Obama years, added: “When foreign powers patronize the president’s businesses it creates an enormous national security risk.”
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