The Art of the Self-Deal
It’s nice work if you can get it—only it’s not work, and you can’t get it.
The epicenter of corruption in the Trump administration was not at the White House, but at the Old Post Office, a dramatic Romanesque landmark a few blocks down Pennsylvania Avenue from the presidential residence.
The building, which operated for several years as the Trump International Hotel, became a hot place to see and be seen for a certain set, especially Trump hangers-on (Rudy Giuliani was a regular) and foreign diplomats eager to curry favor—a clear ethical problem. But a new investigation from the House Oversight Committee shows that the problems with the arrangement didn’t end there.
The Trump Organization also charged the Secret Service as much as $1,185 per night for agents protecting Trump family members—nearly six times the usual allotted rate for government employees. In all, the House report found that the Secret Service spent at least $1.4 million in taxpayer money at the Trump International and other Trump properties, and probably more.
By the standards of federal spending, $1.4 million is not a great deal of money. (The government has spent $5.4 trillion this fiscal year.) What is offensive here is not the sum, but the naked profiteering. The Secret Service couldn’t shop around: Agents had to stay at the hotel to protect the family members. The Trump Organization treated that as an easy way to bilk the government, sending public money directly to the president’s own pockets while claiming that it offered agents huge discounts. It was a brazen parody of what it means to be a public servant.
The Trump International Hotel exemplifies this—a massive exercise in self-dealing from an acknowledged master of the art. Donald Trump obtained a lease to run the building from the federal government, continued to operate it even after he became the head of the federal government—effectively taking over his own landlord—and then used the arrangement to direct federal money to himself. It’s nice work if you can get it—only it’s not work, and you can’t get it.
The building is owned by the federal government, but in 2013, the Trump Organization obtained a 60-year lease to redevelop and run it as a luxury hotel. From the start, the project was questionable. Another bidder protested that it had offered more than Trump; others pointed out that Trump’s business record was spotty, while his historic-preservation record was downright stained. In any case, Trump got the lease and got to work.
The hotel might have remained just another Trump property—garishly appointed, lavishly praised, and commercially underperforming—if Trump had not won the 2016 presidential election, creating a serious conflict of interest. The president-elect might have allayed concerns the way predecessors had, by either divesting his business interests or placing them in a blind trust. He refused to do either, instead announcing a flimsy transfer of power to his children and then openly intervening in the business anyway. (Remember, the Trump Organization is not a publicly held company; it’s really just Trump and his children, aided by a few very loyal long-time lieutenants.)
The General Services Administration, the government agency that handles properties such as the Old Post Office, could also have taken steps to determine whether Trump’s ascension to the presidency constituted a breach of the lease. But it did not, a report by the GSA’s internal watchdog found, describing “serious shortcomings” in its decision-making process that endangered its “obligation to uphold and enforce the Constitution.”
This conflict led to accusations that Trump’s lease violated the emoluments clause of the Constitution, because anyone with an interest in influencing the president might choose to ostentatiously stay and spend at his property (though those lawsuits sputtered on procedural grounds). Trump was also able to use the presidency as free advertisement for his business, frequently traveling on the government’s dime to dine, play golf, and be photographed at his commercial concerns.
But as the new Oversight report shows, he was also able to channel money more directly to himself too. Because Trump owns lots of hotels, and because Secret Service personnel are obliged to protect the president’s family and stay close, many opportunities emerged for the Trump Organization to charge what Committee Chair Carolyn Maloney, a Democrat from New York, called “exorbitant” rates.
The Trump Organization understood the public-relations liability posed by charging taxpayers more for one night in a hotel than the median American makes in a week. In 2019, Eric Trump, the president’s son, claimed the Secret Service was actually getting a great deal. “If my father travels, they stay at our properties for free,” he said. “So everywhere that he goes, if he stays at one of his places, the government actually spends, meaning it saves a fortune. Because if they were to go to a hotel across the street, they’d be charging them $500 a night, whereas, you know, we charge them, like, $50.” As the House Oversight report confirms—and as has been documented elsewhere—this was not even close to true. (The report does not indicate what the market rate was for the same rooms at the time.)
Presidents and their families enjoy all sorts of benefits—such as travel on Air Force One—that are not available to the average American. (In a sense, these are fringe benefits for a job that pays far less than market rate for the responsibilities.) They are also entitled to Secret Service protection, which has its own price tag but is a necessity. From time to time, partisans gripe about presidents of the other party vacationing in this or that exotic locale, but that’s the usual disingenuous push-and-pull of politics. What is different about Trump’s charges to the Secret Service is that he wasn’t simply enjoying a nice vacation on the public dime. He was directing cash straight to his own pocket.
The Trump International Hotel is no more. In May, the Trump Organization sold the lease, earning an estimated $100 million after paying off loans. The hotel had turned out to be a big money loser, but it was saved by what the House Oversight Committee previously said was preferential treatment by Deutsche Bank, which must have been chary of demanding payment from a client who also happened to the president of the United States—yet another example of the corruption centered on the hotel.
The Trump administration is over too, at least for now. Trump is positioning himself for another run in 2024, and even without a hotel in D.C., he has shown that he would use a second presidency to direct still more taxpayer money to himself. In 2020, after reports of Trump charging protective agents $650 per night at Mar-a-Lago (a bargain compared to the Trump International, we now know), I asked why a billionaire would charge the Secret Service so much money, offering a few suggestions. The simplest answer, though, is that he could.