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Trump hit with $2 million suit by contractor on D.C. hotel

An electrical contractor is suing President Donald Trump’s Washington hotel for $2 million over what the contractor contends are unpaid bills for “nonstop” work performed to open the luxury lodging at the Old Post Office Building last year.

The suit filed in D.C. Superior Court by Laurel, Maryland-based AES Electrical, also known as Freestate Electrical, contends that the company was instructed to rush work on electrical and fire alarm systems at the hotel in advance of a visit then-candidate Trump made there for a “soft opening” in September and again for the “grand opening” of the hotel in October.

“Acceleration of Freestate’s work required Freestate’s crews to work nonstop, seven days per week, 10 to 14 hours per day for nearly 50 consecutive days, prior to the ‘soft opening,’ at significant additional cost and expense for which Freestate expected payment,” the complaint filed by attorneys Roger Jones and Nicole Campbell says. “Subsequent to the Hotel’s ‘soft opening,’ Freestate was required to continue its acceleration efforts and the performance of extra work in order to permit the ‘grand opening’ of the Trump Hotel by October 26, 2016.”

The suit makes several references to the importance to Trump’s presidential ambitions of getting the hotel open. The complaint says the October opening was set for just before the election “to provide an opportunity for positive press coverage for Mr. Trump’s presidential campaign.”

Freestate says the Trump Organization has offered to pay only one-third of the project change and acceleration costs the contractor incurred. The suit contends that Trump’s businesses have a practice of unfairly pressuring contractors to accept reduced payments on projects.

“On information and belief, Trump’s actions in refusing to pay for work performed, after a project has opened, is a repeated practice of the Trump organizations on various projects, evidencing a typical business practice mean to force subcontractors to accept ‘pennies on the dollar’ with respect to amounts owed for the cost of the work performed,” the complaint says.

Freestate filed a lien on the Trump property last month as part of the same dispute but took the matter to court last Thursday, one day before Trump’s inauguration. The contracting firm suggests it went to court because of concerns Trump might divest his financial interest in the project. The hotel operates under a lease from the federal government that says federal officeholders should not benefit from the arrangement. Trump’s lawyers contend that provision only restricts participants in the lease at its outset and not situations that arise after the lease is signed.

Trump has resisted calls to divest from any of his businesses, but the White House says he has turned over management of the companies to his two adult sons.

The suit also names as a defendant the general contractor on the Trump hotel project, Lend Lease of New York, but says that firm claims to be holding back funds from Freestate at the Trump Organization’s direction.

Lawyers for Freestate and the Trump Organization did not immediately respond to requests for comment.

The holding company for the Trump hotel, Trump Old Post Office LLC, posted a bond of nearly $3 million last week to cover a lien filed against the hotel by a plumbing and heating contractor, Joseph J. Magnolia Inc. The bond led a judge to release the lien on the property while the Trump and Magnolia firms either negotiate or litigate how much Magnolia is owed.

UPDATE (Thursday, 11:59 a.m.): This post has been updated with details on the status of the Magnolia lien.