GSA in the crosshairs on Trump lease

House Democrats and others say that President-elect Donald Trump will be in breach of his lease on the Old Post Office when he takes office, but the General Services Administration is not taking a position for now.

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

President-elect Donald Trump runs a luxury hotel in a government-owned building leased by the General Services Administration

The General Services Administration is in the crosshairs of one of the most prominent potential conflicts of interest facing the coming Trump Administration.

A prominent Democratic congressman is reporting that his staff was told by a senior GSA official that President-elect Donald Trump is poised to breach the terms of a real estate lease with the agency. However, GSA is denying that it has taken a position on the matter.

Before he became a candidate for president, Trump won the right to develop the historic Old Post Office Building in downtown Washington, D.C., through a competitive bidding process managed by GSA. The 2012 award to the Trump Organization called for the renovation of the historic landmark building to create a luxury hotel and conference center.

The terms of the lease, however, appear to preclude any elected federal or D.C. official from holding the lease, which includes a provision that, "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; provided, however, that this provision shall not be construed as extending to any Person who may be a shareholder or other beneficial owner of any publicly held corporation or other entity, if this Lease is for the general benefit of such corporation or other entity."

Rep. Elijah Cummings (D-Md.), the ranking member of the House Oversight and Government Reform Committee, seized on this language to argue that Trump will be in violation of the terms of the lease from the moment he takes the oath office.

"We do not see this as an ambiguous provision, but as a strict and categorical ban," Cummings wrote in a Nov. 30 letter to GSA Administrator Denise Turner Roth. "The contractual breach threatened by Mr. Trump's swearing-in is compounded by the general and egregious conflict of interest posed by his appointing the GSA Administrator who will oversee this lease with his hotel," Cummings wrote. Reps. Gerry Connolly (D-Va.), Peter DeFazio (D-Ore.) and Andre Carson (D-Ind.) joined Cummings in the letter.

Cummings also indicated that Oversight committee staff was briefed Dec. 8 by a GSA's deputy commissioner of buildings. A Dec. 14 letter from Cummings and his colleagues to Roth reports that, "GSA assesses that Mr. Trump will be in breach of the lease agreement the moment he takes office on January 20, 2017, unless he fully divests himself of all financial interests in the lease for the Washington D.C. hotel. The Deputy Commissioner made clear that Mr. Trump must divest himself not only of managerial control, but of all ownership interest as well."

Cummings also reported that the GSA official had tried to make contact with the Trump transition to address the matter, but had not heard back. According to Cummings' letter, the deputy commissioner indicated that if Trump does not divest himself of interest in the lease, GSA would follow up with a letter giving Trump 30 days to review the matter and respond. "If the breach is not resolved satisfactorily, GSA would then normally bring the matter before the U.S. Civilian Board of Appeals," according to Cummings' account.

The content of the briefing as reported by Cummings was responsive to a series of questions in the congressman's Nov. 30 letter.

GSA did not respond to FCW's email request to confirm the account in Cummings' letter. A few hours later the agency released the following statement: "GSA does not have a position that the lease provision requires the President-elect to divest of his financial interests. We can make no definitive statement at this time about what would constitute a breach of the agreement, and to do so now would be premature. In fact, no determination regarding the Old Post Office can be completed until the full circumstances surrounding the President-elect’s business arrangements have been finalized and he has assumed office. GSA is committed to responsibly administering all of the leases to which it is a party."

Trump had planned to made announcements about the disposition of his real estate and financial holdings on Dec. 15, but that has been pushed back to early 2017.

On a Dec. 14 conference call with reporters, Trump spokesman Jason Miller said, "This will be something that comes up at the press conference the President-elect will now be holding in January. This will be one of the business items that will be discussed."

FCW staff writer Chase Gunter contributed reporting to this story.