Law Professor: Trump Can't Hold Lease On His Hotel Near White House

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After Donald Trump is sworn in as president on Jan. 20, he will follow a time-honored tradition and make his way from the U.S. Capitol down Pennsylvania Avenue.

Along the way, just a few blocks before he reaches the White House, he'll pass the Trump International Hotel. The 263-room luxury hotel is becoming the focus of a debate over conflict of interest between Trump and his business dealings.

Trump doesn't actually own the landmark building, which was once the headquarters of the U.S. Post Office. In 2013, he signed a 60-year lease for the building with the General Services Administration, which helps manage and support federal agencies. The Trump Organization spent upwards of $200 million on renovations and reopened it as a hotel about a month before the Nov. 8 presidential election.

But there's a hitch, according to Steven Schooner, a government procurement expert who is also a law professor at the George Washington University School of Law. Schooner has studied the 100-plus-page contract and says there's a clause that clearly states elected officials should have no role in the lease.

"The contract between GSA and the Trump Organization specifically says that no elected official of the United States government shall be party to, share in, or benefit from the contract," he says, citing clause 37.19 of the contract.

That clause reads:

"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."

Schooner says the GSA should terminate the lease before Trump becomes president.

Many potential conflicts

There are a host of reasons to cancel the deal besides the specific language in the contract, according to Schooner. He says foreign diplomats or special-interest groups could book rooms at the Trump International as a way to curry favor with Trump.

Once Trump becomes president, he will effectively be both the tenant and the landlord of the building. The administrator of the GSA, an independent body, is also a political appointee.

"So the Trump transition team would be naming the person responsible for the agency that's managing Trump's lease. Obviously that's a problem," he says.

The Trump transition team did not respond to requests for comment.

Trump has said he plans to divest himself of his business dealings once he takes office, handing them over to his grown children.

Even if Trump does hand over all his business dealings to his children, these negotiations could still present a problem.

Schooner says, for example, the complicated contract requires that each year Trump disclose financial information, after which the GSA is supposed to sit down and negotiate an adjustment in the rent, which is currently $3 million per year.

"Some civil servant at GSA is going to sit down with the president of the United States' children to negotiate adjustments to a multimillion-dollar lease on an annual basis. That's incomprehensible," he says.

The GSA would not directly answer questions about the termination clause. But a spokesman says the GSA plans to coordinate with the president-elect's team to "address any issues that may be related to the Old Post Office building."