For most of Monday and Tuesday, the political world was abuzz about Donald Trump campaign chairman Paul Manafort’s questionable dealings in Ukraine. But Mother Jones recently stumbled on a potential conflict of interest involving Trump himself that is at least as egregious. Specifically, Trump’s interest in redeveloping a Washington, D. C. landmark into the capital’s newest luxury hotel.
Back in 2012, Trump helmed a consortium that won a bid to renovate the historic Old Post Office Pavilion for $200 million. The General Services Administration, which runs federal facilities, leased the Old Post Office to Trump for 60 years in return for at least $3 million in rent and a share of the profits. In return, Trump will pay for the renovations out of his own pocket, and will post up to $40 million as a guaranty. The hotel is slated to open next month as the Trump International Hotel Washington.
It was such a sweetheart deal that a number of Trump’s competitors thought it was too good to be true. One of the runners-up, a consortium led by Hilton, claimed that there was no way Trump could deliver the revenues he promised when he was spending $60 million more than Hilton planned to spend on refurbrishing the building. Others claimed that the only way Trump could possibly make money would be to charge rates that are obscene even by Washington luxury hotel standards.
For instance, Steven Pearlstein of The Washington Post estimated that Trump would have to charge at least $750 a night to make the project worth the effort. His hunch was right. On October 18, the cheapest room at the Trump International will cost $775. By comparison, rates would start at $735 at the Four Seasons and $685 at the Ritz-Carlton. On some nights, the Trump International will charge up to three times the rates of other five-star hotels in the capital.
If Trump can’t fill those rooms, he’ll likely have to go to the GSA with hat in hand to renegotiate the deal. That’s a very real possibility, given that his brand has absolutely tanked since he launched his bid to buy the presidency. Properties bearing his name have seen their foot traffic fall through the floor in the last year.
Jessica Tillipman, a law professor and government ethics expert at George Washington University, is flabbergasted that no one is talking about this potentially astronomical conflict of interest. She believes that “you’d be kidding yourself” if you think the White House would stay on the sidelines for any negotiations over the Old Post Office deal. She’s even more troubled that Trump has taken “no affirmative steps” to resolve it.
This is no idle concern. While presidents aren’t technically bound by the ethics rules covering other federal officials, you shouldn’t need a rule to know that the president should not even appear to unduly favor his own business interests. Most federal officials put their business interests in a blind trust or turn over outright control of their holdings to avoid even the appearance of impropriety. You would think that Trump would have taken such steps when he locked up the Republican nomination at the latest. But so far, he hasn’t
Moreover, Trump has already shown a disturbing tendency to intermingle his real estate interests with his campaign. For instance, Melania Trump’s now-infamous speech was written by a Trump Organization staff writer on Trump Organization time. There is no evidence the campaign paid for it–which would make the speech an illegal corporate donation to the campaign.
One of the few comments Trump has made on this issue is to suggest he would put his vast real estate holdings under the control of a trust controlled by his children. This raises the possibility that the GSA could be forced to negotiate any issues arising from the hotel’s construction with the president’s children–or even President Trump himself.
Given that there are less than 90 days before Election Day, the fact that Trump isn’t even trying to resolve this egregious conflict of interest is curious at best. Political careers have been ended over far less than this. In this case, count this as yet more evidence that Trump, with his bad business record, can’t be trusted with our money.
