Top House lawmakers would like to know more about the company, which is ready to take over the lease of the Trump Hotel in Washington, DC, which has been met with attention and criticism over the years.
The Trump Organization is in the process of transferring the rent for the hotel, located in the Old Post Office building, to the Miami-based investment group CGI Hospitality Opportunity Fund I, LP. The General Services Administration, which manages the lease, completed its review of the proposed sale in March, as outlined in a 21-page document. Officials found that the CGI was “qualified transferred” on the basis of an internal and third party review. The reported lease price is $ 375 million.
While the review examined the financial capacity of the proposed buyer and other factors such as its business reputation, experience in owning and managing hotels and the ability to manage historic properties, it did not fully examine the identity of all CGI Hospitality Opportunity Fund investors or potential conflicts. former President Trump’s interests in sales “, Carolina Maloney, DN.Y., Chair of the House Oversight and Reform Commission, and Gary Connelly, D-Va. writes to Raul Thomas, CEO of CGI Merchant Groupon May 6. The CGI Merchant Group manages the CGI Hospitality Opportunity Fund I, which plans to turn the Trump Hotel into the Waldorf Astoria, a luxury Hilton hotel brand.
Certain experts previously mentioned that the $ 375 million price “represents a significant premium over market prices for a hotel that, according to documents received by the commission, reported a loss of tens of millions of dollars since its opening in 2016,” lawmakers wrote. “In particular, this selling price is 10% higher – per room or turnkey – than the highest price ever recorded for a hotel in Washington, DC.”
In addition, “even taking into account the Trump Organization’s previous investment in the property, the sale price is reported to bring the Trump Organization a profit of at least $ 100 million, of which approximately three-quarters will go to former President Trump,” they wrote.
Maloney and Connolly requested a list of information from CGI by May 20, including the identities of individual investors in the CGI Hospitality Fund and a list of all members of the Trump family who were directly or indirectly involved in any of the rental negotiations.
“The GSA values its relationship with Congress and looks forward to continuing to work with the committee on this and other issues,” said Christina Wilkes, a spokeswoman for the GSA. Government executive, when asked for comment. CGI did not respond to comment at the time of writing.
In addition, the Trump Organization did not respond immediately to comment. Eric Trump, the son of the former president and executive vice president of the Trump Organization, “has repeatedly stated that the hotel has donated to the US Treasury Department all profits raised as a result of the stay of foreign government officials at the hotel, and has taken other steps in order to avoid ethical issues, such as not actively seeking business from foreign governments, “ New York Times reported last month. In an interview with times he said he could not discuss the details of the sale, but said he was proud of the work the Trump family had done with the hotel.
Maloney and Connolly said their worries “only increased” after news last week that the Trump Organization and Trump’s inaugural committee had agreed to pay $ 750,000 to settle a case filed by the Attorney General of DCalleging that the commission illegally overpaid the hotel for taking office in 2017. AG Karl Racine said the funds would be redirected to two non-profit organizations that promote civic engagement of young people in DC
Trump said in a statement issued by his office that he had “absolutely no admission of responsibility or guilt” and said it was “another example of law enforcement weapons against the Republican Party.”
Virginia Cantor, chief ethics adviser at Citizens for Responsibility and Ethics in Washington, D.C., said Government Executive Directore on Monday that the oversight committee was justified in this inquiry not only to learn about the “selling price” of the hotel, which is losing money, but also to identify possible national security problems due to the location of the hotel on Pennsylvania Avenue between the Capitol The United States and the White House. It also needs to be determined whether any Russian sanctions have been involved in the sale due to Russia’s invasion of Ukraine or other “bad players”, she said.
Canter suggested the House committee examine other hotel bidders and their bids to see if “the sale price offered by CGI represents fair market value or an inexplicable premium payment to President Trump and his family members when he left the office. ”
The Trump Hotel drew much criticism and scrutiny for allegations of conflict of interest with then-President Trump and breaches of the remuneration clause, as he never fully freed himself from the interests of his business as well as his financial problems.
Last month, Canter said Government Executive Directore that, in general, “there is no doubt that he should never have been allowed, as president, to maintain his interest in the hotel and it was a failure on the part of the GSA not to control this more effectively.”
In his May 5 newsletter, Walter Schaub, who was director of the Government Ethics Office from January 2013 to July 2017 and is now on the government oversight project, wrote: “It is too late to go back and change past, but Congress has done little to prevent a recurrence of this parody in the future. ”
The House has passed the Protection of Our Democracy Act, which will ban presidents from signing contracts with the federal government and further clarify the remuneration clause, but now the Senate must act, Schaub said.
This article has been updated with commentary from the GSA.