WASHINGTON ― The House Oversight & Government Reform Committee is seeking more information from President Donald Trump and his business about how he plans to donate profits from foreign governments to the U.S. treasury.
Reps. Jason Chaffetz (R-Utah), the committee’s chairman, and Elijah Cummings (D-Md.), the ranking Democrat on the committee, sent a letter to the Trump Organization’s lawyer Sheri Dillon on Friday requesting details on how Trump will sort and return these foreign profits to the treasury.
Notably, the bipartisan letter comes days after Chaffetz announced plans not to seek re-election and to possibly resign his seat in the middle of his term. Chaffetz faced intense criticism for his early refusal to hold hearings on and request information from Trump about his business and conflicts of interest.
The letter demands all information related to how the company plans to sort and return foreign government profits to the government, what Trump properties or entities are going to return said profits and whether the company plans to claim these donations to the treasury as tax deductions.
On Jan. 17, Trump held a press conference to announce his plans to place his two adult sons, Donald Jr. and Eric Trump, in charge of his Trump Organization while maintaining his full ownership stake in all of his companies and properties. His decision to break with decades of presidential precedent and not divest or fully separate himself from his business opened him up to a vast array of conflicts of interest.
Additionally, ethics experts and constitutional lawyers questioned whether he would run afoul of the Constitution’s Emoluments Clause. This clause forbids government officials, including the president, from receiving any gift, payment or title of nobility from a foreign state.
Dillon, a tax lawyer at the firm Morgan, Lewis & Bockius, explained that while she and other lawyers had determined the Emoluments Clause did not apply to Trump, his Trump International Hotel in Washington, D.C., would divert profits from foreign governments to the U.S. treasury to avoid any appearance of impropriety.
“The Constitution does not require President-elect Trump to do anything here,” she said in January. “But, just like with conflicts of interest, he wants to do more than what the Constitution requires. So, President-elect Trump has decided, and we are announcing today, that he is going to voluntarily donate all profits from foreign governments made to his hotel to the United States treasury.”
Neither Dillon nor Trump’s business have explained which of Trump’s businesses will actually return foreign profits to the treasury. The only publicly known information is that the Trump Organization will return said profits from his D.C. hotel on an annual basis at the end of the year. Are other Trump hotels supposed to return their foreign profits, too?
This became a hot topic after his new D.C. hotel saw a huge uptick in business after his election. Hotel management pitched foreign dignitaries on staying at the hotel to curry favor with the president. One diplomat told the Washington Post, “Why wouldn’t I stay at his hotel … so I can tell the new president, ‘I love your new hotel!’”
The governments of Kuwait, Bahrain and Azerbaijan moved annual parties to the Trump hotel from other venues. Saudi Arabia paid for its U.S. lobbying firm to rent at least one room at Trump’s hotel after the inauguration. A Turkish business lobbying group close to the Turkish government is holding its annual conference with Turkish government officials present at the Trump hotel in May.
Chaffetz and Cummings want to know how the Trump Organization is calculating the profits from these events and hotel room reservations. The average profit margin for a luxury hotel was between 6 to 15 percent in 2013. Where does the Trump D.C. hotel fall in that range?
The hotel is not the only potential landing place for foreign government profits. According to USA Today, the Trump Organization has sold 58 real estate properties for about $90 million since the election. The majority of those sales have gone to limited liability companies that mask the identity of the owner.
The largest such sale, first reported by Mother Jones, was a $15.9 million Manhattan condo sale to the Chinese-American businesswoman Xiao Yan Chen. Chen just happens to run a consulting business to help U.S. firms gain influence in China.
While Dillon argues that the Emoluments Clause does not apply to the president, ethics experts and constitutional lawyers vehemently disagree. The Trump Organization is currently being sued by Citizens for Responsibility and Ethics in Washington, a liberal ethics watchdog; Restaurant Opportunity Partners, a nonprofit industry association; and Jill Phaneuf, an event planner, for allegedly violating the clause.