At President Trump’s hotel in New York, revenue went up this spring — thanks to a visit from big-spending Saudis
• Aug 03, 2018
The general manager of the Trump International Hotel in Manhattan had a rare bit of good news to report to investors this spring: After two years of decline, revenue from room rentals went up 13 percent in the first three months of 2018.
What caused the uptick at President Trump’s flagship hotel in New York? One major factor: “a last-minute visit to New York by the Crown Prince of Saudi Arabia,” wrote general manager Prince A. Sanders in a May 15 letter, which was obtained by The Washington Post.
Neither Crown Prince Mohammed bin Salman nor members of the royal family stayed at Trump’s hotel, Sanders said: He said the Trump hotel didn’t have suites big enough to accommodate them. But “due to our close industry relationships,” he wrote, “we were able to accommodate many of the accompanying travelers.”
The previously unreported letter — describing a five-day stay in March that was enough to boost the hotel’s revenue for the entire quarter — shows how little is known about the business that the president’s company does with foreign officials.
Such transactions have fueled criticism that Trump is reaping revenue from foreign governments, even as he controls U.S. foreign policy toward those countries. Trump’s company has disclosed few details about the business it does with foreign customers, saying it already reveals more than is required.
Neither the Trump Organization nor the Saudi Embassy answered questions about whether the Saudi government paid for anyone’s stay at the hotel. Sanders did not respond to requests for comment.
For now, just a handful of foreign government clients at Trump properties have been publicly identified through media reports and statements from foreign officials.
But a broader list could eventually come out.
Last week, a federal judge in Maryland gave the go-ahead to a lawsuit alleging that by accepting government business at his properties, Trump is violating the Constitution’s “emoluments clauses” — dusty 18th-century measures meant to prevent presidents from putting their private bank accounts ahead of the public interest.
If it stands, the ruling could force the company to provide new details about its relationships with foreign governments, states and even federal agencies.
“This was how the Framers protected against corruption,” said Maryland Attorney General Brian Frosh (D), who filed the landmark suit along with D.C. Attorney General Karl A. Racine (D). They said the Constitution’s authors wanted answers to emoluments questions to be public. “They wanted to make sure the president would put the country above himself.”
On Friday, after this story was published online, New York Attorney General Barbara Underwood announced that she was already conducting a separate investigation asking if Trump had violated the emoluments clause at his businesses in New York.
The Justice Department, which is representing Trump in his official capacity, has argued that the Founding Fathers meant only to stop presidents from accepting gifts from foreign governments — not to keep presidents from conducting private business.
Frosh has said he believes the case could end up eventually before the Supreme Court. So far, neither the Justice Department nor Trump’s private attorney has said if they will appeal the decision.
The White House did not respond to requests for comment.
Trump said he has given up day-to-day control over his businesses. But he still owns them and can withdraw money from them.
From the start of Trump’s administration, his company has said it sees nothing wrong with continuing to do business with foreign states.
“The renting of a hotel room from one of the Trump businesses is not correlated to President Trump’s performance of the duties of the Office of President,” Bobby R. Burchfield, a Republican attorney whom the Trump Organization hired as an outside ethics adviser, wrote in a recent article in the Texas Review of Law & Politics.
Under pressure, the Trump Organization agreed last year to donate profits from foreign government clients to the U.S. Treasury. This year, it announced the amount of the donation for 2017: $151,470.
But it declined to say which foreign governments those profits came from, or how much they had spent in total.
Officials with Trump’s D.C. hotel — the property that is the subject of the emoluments suit — have told The Post that they are not actively courting foreign business, but they acknowledged they also are not turning it away.
The Embassy of Kuwait, for instance, has held its national day celebration twice at Trump’s hotel in downtown Washington.
This year, the Embassy of the Philippines also became a Trump customer, holding its Philippine independence day party in the Trump hotel’s ballroom. Trump has had warm relations with Philippine President Rodrigo Duterte, even as human rights groups have condemned Duterte for a crackdown on drug users that has left thousands dead.
“Having it at a hotel that happens to have [Trump’s] name . . . it’s a statement,” Jose Manuel Romualdez, the Philippine ambassador to the United States, told Philippine TV station ABS-CBNduring the event. “It’s a statement that we have a good relationship with this president.” He said the embassy chose Trump’s hotel as a venue, but private donors actually paid.
And the Saudi government spent $270,000 at Trump’s D.C. hotel last year, according to filings by a lobbying firm acting on the Saudis’ behalf. Press reports indicated that the money paid for hotel rooms, food and parking for U.S. veterans groups brought to the District to lobby against a bill the Saudi government opposed.
Beyond that list, there have been other events at Trump properties that had some connection to foreign governments — but the source of payment is unclear.
Earlier this year, Trump’s Mar-a-Lago Club in Florida hosted part of a “Polish American Leadership Summit,” which was organized in part by Polish government ministries, according to the summit’s website. When The Post inquired about whether the Polish government had paid to rent the room, an embassy spokeswoman referred questions to the organizers of the event, who declined to comment.
In the case of the Saudi visit to New York earlier this year, a spokeswoman for the Saudi Embassy said that none of Mohammed’s official traveling delegation stayed at the Trump International Hotel in New York. But she said the Saudi Embassy did not know if the Saudi government had paid for anyone else’s stay at the hotel during the crown prince’s visit.
The crown prince visited New York from March 26 to 30, as part of a longer, multicity American tour. Press reports indicate that many of his official delegation stayed at the Plaza Hotel — a NewYork landmark that Trump once owned, but sold in 1995.
Although Trump’s hotel in Washington has prospered during his presidency, some other properties — farther from the seat of power — have struggled. In New York, for instance, Trump’s hotel in SoHo lost business, and last year its owners cut ties with the Trump Organization.
Trump International Hotel in Manhattan — the one remaining Trump-branded hotel in New York — saw room revenue drop from 2015 to 2017, according to figures obtained by The Post. So the Saudi visit was a welcome boost.
The D.C. and Maryland attorneys general hope to use their emoluments lawsuit as a kind of legal pry bar, cracking open the Trump Organization’s secrecy about its customers.
In last week’s ruling, federal Judge Peter J. Messitte sided with them in a long-running debate about what the Founding Fathers really meant when they banned presidents from taking “emoluments” from foreign states.
Messitte agreed that, in the modern context, this covered not just outright gifts from foreign states but also regular business transactions — “even those involving services given at fair market value.”
Now — unless the ruling is overturned on appeal — that could allow the plaintiffs to ask the Trump Organization for a list of those transactions. Their search would be limited to the Trump hotel in Washington, but the plaintiffs are clearly hoping that their victory will inspire other suits aimed at Trump’s properties in places such as New York.
The case may also bring new scrutiny on the Trump Organization’s business relationship with the U.S. government, which owns the building that houses Trump’s D.C. hotel. Before he became president, Trump won a long-term lease to operate a hotel there.
Democrats in Congress say this relationship is now a separate kind of prohibited emolument — an unfair benefit given to Trump by his own government.
A clause in the lease says that “No . . . elected official of the Government of the United States . . . shall be admitted to any share or part” of the hotel’s ownership.
But, after Trump was in office, the General Services Administration ruled that he could still keep the lease.
That decision is now being probed by two independent inquiries, from the Government Accountability Office and the GSA’s inspector general. Messitte could allow the plaintiffs to seek information about the lease.
Georgetown University law professor John Mikhail, who has been studying the emoluments clauses, said these inquiries together could shatter the veil of privacy that Trump’s company has maintained — even while its owner is in the White House.
“He has very constantly refused to conform to well-established norms about conflict of interest and corruption and the appearance of corruption,” Mikhail said. “At some point in time, he may be told by a court: ‘You lose. You have to comply.’”
You can read the full article by David A. Fahrenthold and Jonathan O'Connell here.