Fourth Circuit Scrutinizes Claims Trump Is Illegally Profiting From D.C. Hotel

March 19, 2019 by Dan McCue
The Trump International Hotel under construction on March 6, 2016 in Washington, D.C. The lawsuit claiming he President Donald Trump is improperly profiting from the hotel still stands. (Ron Sachs/CNP/Sipa USA/TNS)

A federal appeals court panel repeatedly pushed back Tuesday at claims by two attorneys general who say President Trump is illegally profiting from foreign and state government visitors at his luxury hotel in downtown Washington.

At the center of the hearing before a three-judge panel of the 4th U.S. Circuit Court of Appeals was the emoluments clause of the U.S. Constitution.

The clause bans federal officials from accepting benefits from foreign or state governments without congressional approval. The attorneys general of Maryland and the District of Columbia, both Democrats, claim government spending at the Trump International Hotel clearly violates it.

In March 2018, a federal judge in Maryland allowed the case to proceed, holding the plaintiffs had “sufficiently alleged that the president is violating the foreign and domestic emoluments clauses of the Constitution by reason of his involvement with and receipt of benefits from the Trump International Hotel.”

The 47-page opinion by U.S. District Judge Peter Messitte also cited the profits derived from operations of the Trump Organization with respect to the hotel.

Messitte adopted a broad definition of the emolument clause ban, saying it includes any profit, gain or advantage received “directly or indirectly” from foreign and state governments. It was the first time a federal judge had interpreted the emoluments clause.

Trump’s attorneys immediately appealed the ruling, arguing the president should be shielded from such legal distractions.

They are also asking the Fourth Circuit to throw out an order from Judge Messitte authorizing scores of subpoenas to federal government agencies and Trump’s private business entities.

Trump has said he’s donated nearly $350,000 to the U.S. Treasury during his first two years in office.

The Fourth Circuit panel that heard the case Tuesday is considering whether the District of Columbia and Maryland have standing to pursue the case, and the request from the president that the litigation be tossed out.

From the outset of Tuesday’s hearing, the judges seemed highly skeptical of the arguments made by Loren AliKhan, solicitor general for the District of Columbia, who represented D.C. Attorney General Karl Racine and Maryland Attorney General Brian Frosh.

For instance, U.S. Circuit Judge Paul Niemeyer, who was appointed to the appeals court by former President George H.W. Bush, noted that the president has already stepped back from day-to-day management of the hotel.

And even if Trump’s name was scrubbed from the building, foreign dignitaries would still book rooms and events there, Niemeyer said.

Frosh and Racine maintain hotels in Maryland and Washington have been harmed because foreign and state government officials are more likely to stay at Trump’s hotel in an attempt to curry favor with the Republican president.

But U.S. Circuit Judge Dennis Shedd, another George H.W. Bush appointee, suggested Trump’s name on the Washington hotel may actually be benefiting those other businesses because people who object to the president’s policies won’t want to stay under his roof.

Arguing on behalf of the Trump administration, Justice Department attorney Hashim Mooppan said while he appreciated the judges’ assertions, the emoluments clause only bars payments made in connection with services the president provides in his official capacity.

And he went on to insist Maryland and the District of Columbia have no authority to sue the president in his official capacity over payments the president’s business accepts from other governments.

“The president is unique,”  Mooppan said. “That’s why he gets absolute immunity.”

Both Maryland and the District of Columbia have responded to this in court filings, contending that Trump’s alleged misconduct is unrelated to the functions of his office, so absolute immunity does not apply.

U.S. Circuit Judge A. Marvin Quattlebaum Jr., the third judge on the panel and a Trump appointee, wanted to know exactly what the attorneys generals would want the president to give up to satisfy the emolument clause requirements.

“My view is it covers any profit, gain or advantage,” AliKhan said.

The panel also roughed AliKhan up on the question of what relief the attorneys generals are seeking.

“You filed the lawsuit and you don’t even know what real world relief would satisfy,” Niemeyer said at one point.

AliKhan offered that ordering Trump’s full divestment of his ownership stake may be an option.

Mooppan disagreed.

“This case should simply be over,” he said.

Trump won rights to lease the U.S. government’s Old Post Office site in 2012 and opened it as a luxury hotel in October 2016, just weeks before he won the presidential election.

The hotel, located just blocks from the White House, quickly became a hot spot for lobbyists and foreign officials.

According to published reports, a public relations firm working for Saudi Arabia spent nearly $270,000 on food and rooms. The Philippine and Kuwaiti embassies also have thrown parties there.

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