Top House legislators want to learn more about the company vying for the lease of the Trump International Hotel in Washington, D.C., which has been the subject of much attention and criticism over the years.
The Trump Organization is in the process of transferring the lease for the hotel in the Old Post Office building to CGI Hospitality Opportunity Fund I, LP, a Miami-based investment organization. According to a 21-page document, the General Services Administration, which maintains the lease, completed its study of the proposed sale in March. Based on an internal and third-party investigation, officials found that CGI was a “qualified transferee.” The lease is said to be worth $375 million.
“While the review examined the proposed buyer’s financial capacity and other factors such as its business reputation, experience in owning and operating hotels, and capability to manage historic properties, it did not fully explore the identities of all the investors in the CGI Hospitality Opportunity Fund or former President Trump’s potential conflicts of interest related to the sale,” Rep. Carolyn Maloney, D-N.Y., and Gerry Connolly, D-Va., chairman of the House Oversight and Reform Committee’s government operations panel, wrote to Raoul Thomas, CEO of CGI Merchant Group, on May 6. CGI Merchant Group is the manager of CGI Hospitality Opportunity Fund I, which aims to convert the Trump Hotel into a Waldorf Astoria, a Hilton luxury hotel brand.
According to the lawmakers, certain experts previously stated that the $375 million price tag “represents a significant premium over market rates for a hotel that, according to documents obtained by the committee, has reported losing tens of millions of dollars since it opened in 2016,” and that the price tag ” the lawmakers wrote. “Notably, this sale price is 10% higher—on a per-room, or ‘per-key,’ basis—than the highest price ever recorded for a Washington, D.C., hotel.”
Additionally, “even accounting for the Trump Organization’s prior investments into the property, the sale price will reportedly yield the Trump Organization a profit of at least $100 million, of which approximately three quarters would flow to former President Trump,” they wrote.
By May 20, Maloney and Connolly had sought a list of information from CGI, including the names of individual investors in CGI Hospitality Fund and a list of all members of the Trump family who were involved in the lease sale negotiations, either directly or indirectly.
“GSA values its relationship with Congress and looks forward to continuing to work with the committee on this and other matters,” Christina Wilkes, GSA spokesperson stated.
Last month it was reported that Eric Trump, the former president’s son and executive vice president of the Trump Organization, “repeatedly pointed out that the hotel donated to the United States Treasury any profits collected as a result of stays by foreign government officials at the hotel, and took other steps to avoid ethics questions, such as not actively soliciting business from foreign governments.” He told the New York Times that he couldn’t discuss the sale’s details, but that he was happy with the Trump family’s efforts on the property.
Following the announcement last week that the Trump Organization and Trump’s inaugural committee had agreed to pay $750,000 to settle a lawsuit filed by the D.C. attorney general alleging that the committee improperly overpaid the hotel for the 2017 presidential inauguration, Maloney and Connolly said their concerns “have only grown.” According to AG Karl Racine, the funds would be redistributed to two nonprofit organizations in D.C. that promote youth civic engagement.
Trump’s office sent a statement saying there was “absolutely no admission of wrongdoing or guilt,” and that this was “yet another example of weaponizing law enforcement against the Republican party.”
Virginia Canter, the chief ethics counsel at Citizens for Responsibility and Ethics in Washington, told Government Executive on Monday that the oversight committee is justified in conducting this investigation not only to learn about the hotel’s “premium sale price,” which has been losing money but also to look for any potential national security issues due to the hotel’s location on Pennsylvania Avenue, which is sandwiched between the US Capitol and the White House. Additionally, due to Russia’s invasion of Ukraine, it must be investigated if any sanctioned Russian persons or other “bad actors” were involved in the deal, she said.
Canter urged that the House committee look into the other hotel bidders and their offers to see if “the sale price given by CGI represented a reasonable market value or an unexplainable premium payoff to President Trump and his family members as he exited the office,” according to Canter.
The Trump Hotel has come under fire for charges of conflicts of interest with then-President Trump, as well as violations of the Emoluments Clause, because he never fully divested from his corporate interests and financial troubles.
Canter told Government Executive last month that “there’s no question he should have never been permitted, as president, to retain an interest in the hotel and it was a failure on the part of the GSA not to police that more effectively.”
“It’s too late to go back and change the past, but Congress has done little to prevent a repeat of this travesty in the future,” Walter Shaub, who served as director of the Office of Government Ethics from January 2013 to July 2017 and is now at the Project on Government Oversight, wrote in his newsletter on May 5.
The Protecting Our Democracy Act was passed by the House, which would bar presidents from contracting with the federal government and clarify the Emoluments Clause., but bow, Shaub states, the Senate must act.