Nonetheless, last week, the president-elect told the New York Times: "The law's totally on my side, the president can't have a conflict of interest.” He’s wrong.
While the president and vice president are exempt from some of the ethics statutes, including some of the prohibitions related to conflicts of interest, many of the statutes that prevent conflicts of interest and corruption do constrain the president. For example, if the president wanted to award another hotel lease on a sole-source basis to a company he, or his adult children, controlled, he could not. The Competition in Contracting Act would prohibit it. Similarly, the president could not lawfully direct GSA to house official guests of the government or dignitaries at a hotel owned by him or his adult children.
Looking ahead, things may get worse before getting better. Last week, in announcing its $25 million settlement, the New York State attorney general explained that the state had “sued Donald Trump for swindling thousands of innocent Americans … through a scheme known as Trump University. Donald Trump fought us every step of the way, filing baseless charges and fruitless appeals and refusing to settle for even modest amounts of compensation for the victims of his phony university.”
Such an announcement normally would prompt members of Congress to prod GSA to consider suspension or debarment proceedings against a contractor accused of such dishonest behavior. The Trump University settlement suggests that the New York attorney general found “adequate evidence” of “making false statements,” which satisfies the regulatory standard for a federal agency’s suspension and debarment officer to take action. Of course, knowingly breaching a contract would alone be a cause for concern. But we also fear that, over the next four years, other plaintiffs will sue, accusing the Trump Organization of committing, for example, tax evasion, or “other offenses indicating a lack of business integrity or business honesty that seriously and directly affects the present responsibility of a Government contractor.” Yet every federal suspension and debarment officer would be caught between their duty to consider action to protect the public interest and their loyalty to their supervisors, the highest of whom will have been appointed by then-President Trump.
It’s Only Money
The government should immediately end the hotel lease relationship, before Trump becomes president. In a perfect world, Trump and the GSA would negotiate a mutually agreeable termination of the lease or a novation/transfer to an unrelated firm. Nothing thus far suggests that President-elect Trump appreciates the need to do so. As a result, GSA must take unilateral action.
In almost all federal government contracts, the government reserves the right to terminate the contract “for the convenience of the government” (with appropriate compensation due to the contractor), whenever “it is in the Government’s interest.” Unfortunately, the Trump hotel lease explicitly prohibits GSA from exercising that longstanding, well-established, Congressionally-mandated right.