GSA approves sale of Trump Hotel lease, after years of scrutiny from watchdogs

The Trump Hotel is one major step closer to changing hands, now that the General Services Administration has cleared a buyer for the lease to the historic feder...

The Trump Hotel is one major step closer to changing hands, now that the General Services Administration has cleared a buyer for the lease to the historic federal building.

GSA on Friday approved CGI Hospitality Group as a “qualified transferee,” the agency said in a press release, after an extensive internal and third-party review.

CGI and Hilton Worldwide Holdings plan to convert the building, known as the Old Post Office, into a Waldorf Astoria luxury hotel. After the transfer of the contract, CGI will assume responsibility for the terms and conditions of the lease.

“GSA based this decision on the strength of the partnership between CGI and Hilton and the parties’ commitment to ensuring the success of the future hotel,” the agency said in a press release.

GSA’s lease for the Trump Hotel became the focus of intense legal scrutiny and congressional investigations for much of the Trump administration.

At the core of the matter, Congress and courts debated whether former President Donald Trump’s financial ties to a federal lease violated the Emoluments Clause of the Constitution.

GSA’s inspector general found in 2019 the agency’s legal team “ignored” legal questions about the Emoluments Clause, but declined to weigh in on whether or not the 2012 lease violated the Constitution.

The Supreme Court threw out several lawsuits focused on the Trump Hotel last year, on the grounds that the cases were moot now that Trump is no longer in office.

Under the terms of the lease, GSA had 45 days to approve the sale and transfer of the lease once the Trump Organization has named a “qualified transferee.”

To meet that standard, GSA had to examine the buyer’s financial responsibility, their ability to pay the rent and their track record of maintaining historic properties.

The Trump Hotel, in many ways, was an anomaly in GSA’s private lease portfolio. The agency leases about 600 federal properties to the private sector, but former GSA Administrator Emily Murphy told lawmakers in 2020 that many of those are for parking lots or antennas.

Only a handful of those leases, she added, has GSA struck an agreement for a private company to occupy 20% or more of a federal building.

Congress passed the Old Post Office Building Redevelopment Act in 2008 to allow GSA to lease out the building to the private sector while ensuring federal ownership.

After winning the lease in 2012 following a competitive bid process, the Trump Organization spent more than $200 million restoring the Old Post Office. Prior to that, the building had fallen into disrepair and accounted for a $6 million annual loss for the agency.

Top Democrats on the House Oversight and Reform Committee recently called on GSA to terminate its lease for the Trump Hotel in downtown Washington after Mazars, a long-time auditor of the Trump Organization, said it could no longer vouch for the accuracy of 10 years of financial statements it prepared for the company.

The financial statements the Trump Organization submitted to GSA precede the documents in question, but Committee Chairwoman Carolyn Maloney (D-N.Y.) and Government Operations Chairman Gerry Connolly (D-Va.) said the Trump Organization may have misrepresented itself in negotiations with the agency.

Maloney said in a statement Friday that the “sale of the Trump Hotel does not resolve the committee’s grave concerns about former President Trump’s conflicts of interest, the false or misleading financial documents he apparently used to obtain this lease, and the lack of transparency surrounding the sale to a group of largely unidentified investors. ”

“No one is above the law, and former President Trump should not be rewarded for providing false or misleading information to the federal government or for seeking to profit off the presidency—yet he now stands to reap tens of millions of dollars in profits,” Maloney said,.

Connolly said in a statement Friday that the sale — and GSA’s original lease to the Trump Organization — raises concerns.

“The original sin by GSA to allow President Trump to hold this lease and benefit has tainted this whole process. Today’s decision doubles down and abets the Trump family’s continued profiteering off the presidency. This is a stain on federal procurement that will not wash away,” Connolly said.

Talk of selling the lease, however, never settled lawmakers’ push for confidential financial and legal documents tied to the Trump Hotel.

House Transportation Committee Chairman Peter DeFazio (D-Ore.), in a 2019 subpoena, ordered GSA to turn over “unredacted documents and communications” between the agency, the Trump Organization and members of the 2016 presidential transition team.

Murphy told members that GSA provided the “vast majority” of what the committee asked for, including more than 10,000 pages of documents.

Following the subpoena, GSA has also offered members of Congress an “in-camera” review of confidential financial records, on the condition that lawmakers not publicly disclose the information contained in those records without GSA’s consent.

Murphy said GSA had asked the Trump Organization for approval to disclose those financial documents, but the company, she said, declined to do so.

The Old Post Office is about 400,000 square feet, and is one of the tallest buildings in D.C., and is on the National Register of Historic Places.

The Washington Post first reported this story Friday.

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