National News

Judge in Emoluments Case Questions Defense of Trump’s Hotel Profits

Posted June 11, 2018 7:46 p.m. EDT

GREENBELT, Md. — A federal judge on Monday sharply criticized the Justice Department’s argument that President Donald Trump’s financial interest in his company’s hotel in downtown Washington is constitutional, a fresh sign the judge may soon rule against the president in a historic case that could head to the Supreme Court.

The plaintiffs in the lawsuit, the District of Columbia and the state of Maryland, charge that Donald Trump’s profits from the hotel violate anti-corruption clauses of the Constitution that restrict government-bestowed financial benefits to presidents beyond their official salary. They say the hotel is siphoning business from local convention centers and hotels.

The judge, Peter J. Messitte of the U.S. District Court in Maryland, promised to decide by the end of July whether to allow the plaintiffs to proceed to the next stage, in which they could demand financial records from the hotel or other evidence from the president. The case takes aim at whether Trump violated the Constitution’s emoluments clauses, which prevent a president from accepting government-bestowed benefits either at home or abroad. Until now, the issue of what constitutes an illegal emolument has never been litigated.

Attorneys general for the District of Columbia and Maryland say that by allowing foreign officials to patronize the five-star Trump International Hotel blocks from the White House, Trump is violating the Constitution’s ban on payments from foreign governments to federal officeholders. They also claim the president is violating a related clause that restricts compensation, other than his salary, from the federal government or from state governments.

In a two-hour hearing, attorneys for the local jurisdictions and for the Justice Department debated what the framers meant by the emoluments clauses, citing definitions of the word emolument in centuries-old dictionaries and quoting Alexander Hamilton and other founders in attempts to discern their intent.

The Justice Department contended that the Constitution’s framers meant only to bar federal officials from providing a service to a foreign government and receiving compensation. For example, said Brett Shumate, a deputy assistant attorney general, the Constitution would prohibit Trump from signing a treaty in exchange for a financial benefit. But it allows him to profit financially from foreign diplomats who book his hotel because there is “no allegation that in exchange, he took some official action,” he said.

Messitte repeatedly challenged that interpretation, asking whether the framers meant merely to rule out outright bribery or to ward off situations that could give rise to corruption as well.

“Is your argument that as long as the president takes the money without corrupt intent, it’s OK?” he asked Shumate. “It has to be an actual quid pro quo?”

Steven M. Sullivan, the solicitor general for the state of Maryland, argued that it would be absurd if Trump were barred only from profiting for personally rendering a service to a foreign government. That “would prohibit him from accepting $5 for carrying a diplomat’s bags up to a suite at the Trump International Hotel but would permit him to receive thousands of dollars from the same foreign government” for its hotel bookings, he said.

Shumate insisted that previous officeholders had engaged in the same type of behavior without a whiff of public controversy. For example, he said, libraries owned by foreign governments had purchased President Barack Obama’s biography, earning him royalties.

Penny Pritzker held onto to her stock holdings in the Hyatt Hotels Corp. while she served as Obama’s commerce secretary and while foreign governments rented rooms and held conferences at Hyatt properties worldwide, he said.

But Messitte seemed unconvinced by that comparison to Pritzker. “It may well have been a violation,” he said. “I don’t know. No one challenged it.”

The Trump Organization signed a 60-year-lease in 2013 with the federal government for the building, renovated it and reopened it as a hotel just before Trump was elected president. Since then, the plaintiffs claim, the hotel has made special efforts to drum up business from foreign governments, including appointing a head of diplomatic sales. Trump himself regularly visits.

Messitte has already ruled once in favor of the plaintiffs. In March, he rejected the Justice Department’s argument that Maryland and the District of Columbia had failed to show that they had suffered injuries.

If he rules for the plaintiffs again next month, the case would typically move to the evidence-gathering phase, which could open up some of Trump’s financial records to public scrutiny

But legal experts said the Justice Department is highly likely to appeal an adverse decision from Messitte. The department could seek an emergency stay, arguing that the circumstances are so extraordinary that a higher court must intervene without waiting for the lower court proceedings to end, as is customary.

The 2nd U.S. Circuit Court of Appeals has another emoluments case on its docket. In February, Citizens for Responsibility and Ethics in Washington, a nonprofit organization known as CREW, appealed a decision by a federal judge in New York to dismiss a suit involving Trump’s restaurant interests. CREW is also a co-counsel in the Maryland case.

In promising an opinion in just seven weeks, Messitte appears to be acting with dispatch. As he noted during the hearing, federal judges are almost never called upon to decide a new constitutional question.