The US Department of State allowed seven foreign governments to rent luxury condominiums in New York’s Trump World Tower in 2017 without approval from the US Congress, according to documents and people familiar with the leases, in what some experts say could be a breach of the constitution’s emoluments clause.
The 90-story Manhattan building, part of the real-estate empire of US President Donald Trump, had housed diplomats and foreign officials before the property developer became president, but now that he is in the White House, such transactions must be approved by federal lawmakers, some legal experts say.
The emoluments clause bans US officials from accepting gifts or payments from foreign governments without congressional consent.
The rental transactions, dating from the early months of Trump’s presidency and first disclosed by Reuters, could add to scrutiny of his business dealings with foreign governments, which are now the subject of multiple lawsuits.
Congressional staffers confirmed to Reuters that the Trump World Tower lease requests were never submitted to the US Congress.
US House of Representatives Oversight and Reform Committee Chairman Elijah Cummings said that his committee has been “stonewalled” in its efforts to obtain detailed information about foreign government payments to Trump’s businesses.
“This new information raises serious questions about the president and his businesses’ potential receipt of payments from foreign governments,” Cummings said in a statement to Reuters. “The American public deserves full transparency.”
A state department spokesperson referred Reuters to the US Department of Justice because the subject involved “matters related to ongoing litigation.”
The justice department declined to comment.
The White House referred a request for comment to the state department and the Trump Organization, which declined to comment before publication.
Following publication of this article, Trump Organization attorney Alan Garten sent an e-mail to Reuters describing the story as “inaccurate” and “misleading.”
He said Trump World Tower is owned by its third-party condominium owners and therefore Trump would not receive proceeds from the lease of such units.
Six legal experts said that regardless of who owns those units, the fact that Trump was collecting fees for managing the building while foreign governments were paying to live there represents a potential breach of the emoluments clause.
The 1982 Foreign Missions Act requires foreign governments to get state department clearance for any purchase, lease, sale or other use of a property in the US.
Through the Freedom of Information Act, Reuters obtained diplomatic notes sent to the agency under this requirement from early 2015 until late 2017.
The records show that in the eight months following Trump’s Jan. 20, 2017, inauguration, foreign governments sent 13 notes to the state department seeking permission to rent or renew leases in Trump World Tower.
That is more solicitations from foreign governments for new or renewed leases in that building than in the previous two years combined.
The governments of Iraq, Kuwait, Malaysia, Saudi Arabia, Slovakia and Thailand, as well as the EU got the green light to rent a combined eight units in Trump World Tower and followed through with leases, according to other documents viewed by Reuters and people familiar with the leases.
Four of those governments — Kuwait, Malaysia, Saudi Arabia and Thailand — and the EU had also sought to rent units there in 2015 and 2016, state department records showed.
Reuters could not confirm whether the state department signed off on two other lease requests from Algeria and South Korea, as well as three additional requests from Kuwait.
“Letting this go without Congress knowing about it condones the creation of a second, opaque track of foreign policy,” said Harold Hongju Koh, a professor at Yale Law School and former legal adviser at the state department. “What it might lead to is a group of countries enriching the people in power on the mistaken belief that it’s going to improve their access.”
The 18-year-old luxury skyscraper is located next to the UN headquarters near the East River and is not to be confused with Trump Tower, the Fifth Avenue landmark where Trump maintains a residence.
Although Garten contended the emoluments question is moot because Trump World Tower units are owned by third parties, Trump does earn income through Trump Corp, a Trump-owned company that manages Trump World Tower and draws its income from fees paid by unit owners, according to the building’s financial records.
In 2017, Trump earned more than US$15 million in management and related fees through the properties managed by Trump Corp, according to the president’s financial disclosure.
The document did not reveal how much of that sum came from Trump World Tower.
In at least eight instances in 2017, third-party owners in Trump World Tower leased their units to foreign governments. When privately owned units are leased, their owners typically use that rental income to cover management fees and other common charges, two unit owners in Trump World Tower and four real-estate experts said.
Reuters was unable to determine exactly how the owners who leased the units to the foreign governments paid their fees, but even if the condominium owners did not use their rental income to pay their common charges, it still could be considered an emolument because the foreign governments helped those owners defray their costs, with the benefit flowing to Trump, said Kathleen Clark, a professor at Washington University School of Law who has studied justice department interpretations on the subject.
In other words, Clark said, payments passing through a chain of intermediaries to a US official could still constitute emoluments because they could ultimately enrich and influence the behavior of the official.
In legal opinions issued under previous administrations, Clark said, “the justice department has expressed concern that foreign governments would use companies as conduits for foreign emoluments.”
While US presidents have rarely needed to seek approval of payments from foreign governments in the past, Trump’s continued ownership of his vast network of businesses has left him exposed to more potential emoluments issues than any previous president, experts said.
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