Controversy Continues Over President Trump's Stake In His Properties

Donald Trump Jr., has taken over as president of the company that runs the Trump Hotel in Washington, D.C., but there's still controversy over the president's stake in his properties. NPR's Robert Siegel talks to Steven Schooner, a law professor at George Washington University who focuses on federal government contract law, about the update.

ROBERT SIEGEL, HOST:

Now, another conflict of interest for President Trump - his ownership of the new Trump International Hotel in Washington, D.C. A lease negotiated in 2013 by the federal General Services Administration and the Trump Organization says this, no elected official shall be admitted to any share or part of this lease or to any benefit that may arise there from. Last month, the president created the Donald J. Trump revocable trust, and he moved hundreds of his companies into that trust, including the one that manages the hotel. But over the weekend, a document surfaced revealing that President Trump's revocable trust remains under one social security number, and that Social Security number is his. So he is the sole beneficiary of the trust.

Steven Schooner, who teaches government contracting law at George Washington University, has gone through the lease and the trust documents and joins us now in the studio. Welcome to the program.

STEVEN SCHOONER: Great to be here.

SIEGEL: Did the creation of the trust do anything to resolve a conflict of interest over the hotel?

SCHOONER: The short answer is no. You can give the Trump organization some credit for removing his management responsibilities, so it reduces his distraction rate. But it hasn't in any meaningful way alleviated the conflicts. He's still the owner. He's still the primary beneficiary.

SIEGEL: And that would be an explicit violation of the lease that he signed with the General Services Administration.

SCHOONER: Yes. But let's also be clear. We can focus on the language in the lease, which does indicate that they didn't want someone like the president to be party to the lease. But there are much more significant fundamental conflicts involved even regardless of the language. So there's a language problem, and then there's a core conflict problem.

SIEGEL: What would you say is the core conflict problem?

SCHOONER: So just imagine that this huge complicated lease requires on an annual basis that the Trump Organization make a massive financial disclosure to GSA. GSA is entitled to audit that. And then they're supposed to renegotiate rent on an annual basis. The GSA employee who has to do that works for the administrator of the GSA who is appointed by the president and serves at the president's pleasure. That government employee has to choose - do I make the president happy? Do I make my boss happy? Or do I serve the public? It's just not fair to that person.

SIEGEL: If President Trump had gone so far as to transfer ownership in some way to his children, let's say, would that really resolve the conflict of interest?

SCHOONER: Everyone has understood for some time that if he wanted to hold on to this, that a blind trust would be the right way to do it. The blind trust would be independent. It would be at arm's length. And that's exactly what he hasn't done in this case.

SIEGEL: The word revocable is key here. This is not a blind trust.

SCHOONER: Right. So, for example, if I offer you a million dollars, but I say you can't cash the check for four years, I'm still giving you a million dollars.

SIEGEL: NPR has reached out to GSA, and they've given no comment. The lease clearly states that any federal elected official cannot share the lease or benefit from it. But GSA continues to do business with the president. Why wouldn't GSA enforce the very language that they negotiated in the lease? Or is it just boilerplate language that they see in everything that they ever do?

SCHOONER: Oh, it's not boilerplate. It's pretty specific what they intended to do here. When they entered into the contract, it was pretty clear that they didn't want the president, the vice president, a member of Congress, the D.C. mayor or a D.C. council member part of the contract. I think you have to understand, though, there's a tremendous amount of fear and trepidation at GSA. They understand that if they do the right thing and tell the Trump Organization that they can no longer perform the lease, there's going to be a firestorm. One thing that we've seen throughout the campaign and the early period of the presidency is very few people want to take on that type of abuse.

SIEGEL: What would be an appropriate course of action right now for Trump and for the GSA?

SCHOONER: Well, Trump had a long time in advance to work this out. Look, Marriott is headquartered in the area. There's plenty of big hotels. They easily could have transferred this property. They didn't do that. Trump is not going to do anything. GSA, therefore, should focus on the fact that they haven't cooperated for more than a year. Trump literally hasn't responded to their requests to solve problems. And they should simply terminate the agreement. If they terminate the agreement, the only remedy that Trump has is to sue for money. First of all, I think GSA will win in that litigation. But more importantly, the conflict will be avoided. So I think the GSA needs to terminate the agreement.

SIEGEL: Professor Schooner thank you very much for talking with us.

SCHOONER: Thanks for having me.

SIEGEL: Steven Schooner teaches government contracting at George Washington University.

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