Alex Brandon/AP

GSA Finds No Fault With Trump's Washington Luxury Hotel Lease

Conflict of interest charges for Old Post Office are "simplistic," contracting officer concludes.

After months of virtual silence amidst public controversy, the General Services Administration on Wednesday handed President Trump a major ethics victory by finding no problems with his three-year-old lease arrangement for the luxury hotel he opened in Washington’s Old Post Office.

In a lengthy letter to the Trump Organization announced on Thursday, Kevin Terry, the Public Building Service’s senior realty contracting officer for the National Capital Region, declared the Trump Organization “in full compliance with the lease.”

Terry presented Trump’s family with the Estoppel certificate, the document that gives third parties critical information on the relationship between landlords and tenant.

 “Most of the review and reporting on Sec. 37.19 of the lease has focused on only a few select words, and reached simplistic 'black and white' conclusions regarding the meaning and interpretations of the clause,” Terry said in responding to a Feb. 17 letter from the Trump Organization agreeing to some changes. “However, it has been less widely reported that other legal professional and former government contracting officials have come to different conclusions.”

GSA's basis for declaring the lease in compliance is built around Trump having transferred the asset to trusts for his three adult children: one run by Donald Trump Jr. on Oct 5, 2015; one run by Eric Trump on June 5, 2015, and one run by Ivanka Trump on Aug. 13, 2010, all declaring that “Donald Trump is not a beneficiary of the trust.”

Critics of Trump’s arrangement for the hotel lease he won from GSA in 2013 argued that as president, he could not legally be owner and tenant of a federal property. Trump separately has declared that he will forward all profits earned from foreign government guests staying in the hotel to the U.S. treasury.

“Not only is the conclusion unexpected and unpersuasive, as a matter of law, but, as a matter of policy, it is harmful to the integrity - and thus credibility - of GSA, the presidency, and the federal procurement process,” Steven Schooner, a George Washington University procurement law professor and former Office of Management and Budget staffer, told Government Executive.

“It is deeply troubling that the contracting officer's letter makes no reference to the underlying conflicts of interest, which, of course, undercuts any suggestion that he (the contracting officer) engaged in independent analysis.  The CO's decision favors the president, who, in effect, is his supervisor, just as it favors the GSA (in terms of maintaining the status quo); but it also pleases his (the CO's) ultimate supervisor - the head of the agency - who serves at the president's pleasure.”

Schooner said he also sees transparency problems, “particularly to the extent that the letter and its conclusions are inconsistent with prior GSA communications reported by members of Congress.”