Trump Hotel Emoluments Case Is at Federal Appeals Court as President Asks for It to Be Thrown Out

By Ann E. Marimow and Jonathan O'Connell, The Washington Post

19 March 19

 

resident Trump’s luxury hotel in downtown Washington and the foreign dignitaries who book rooms and host events there are central to a novel appeals court case Tuesday involving anti-corruption provisions of the Constitution.

The attorneys general for Maryland and the District of Columbia contend that the president is illegally profiting from the Trump International Hotel’s foreign and state government visitors and that his financial gain comes at the expense of local competitors.

“The president is neither above the law nor exempt from litigation, and nothing in this suit impinges on his public duties,” D.C. Attorney General Karl A. Racine (D) and Maryland Attorney General Brian E. Frosh (D) say in court filings in advance of oral arguments at the U.S. Court of Appeals for the 4th Circuit.

At issue are the Constitution’s once-obscure emoluments clauses, designed to prevent undue influence on government officials but never before applied in court to a sitting president.

A federal judge in Maryland allowed the case to move forward and adopted a broad definition of the ban to include “profit, gain, or advantage” received “directly or indirectly” from foreign, federal or state governments.

Trump and his lawyers appealed, saying in court filings that the president should be shielded from such liability and legal distractions. They also are trying to stop an order from U.S. District Judge Peter J. Messitte authorizing dozens of subpoenas to federal government agencies and Trump’s private business entities.

The subpoenas seek details on some of the most closely held secrets of Trump’s business and finances: Which foreign governments have paid the Trump Organization money? How much? And for what?

All of the documents — including marketing materials targeted to foreign embassies, credit card receipts and restaurant reservation logs — relate to Trump’s D.C. hotel.

“The complaint rests on a host of novel and fundamentally flawed constitutional premises, and litigating the claims would entail intrusive discovery into the president’s personal financial affairs and the official actions of his Administration,” according to the Justice Department’s filing.

“Despite this remarkable complaint, the district court treated this case as a run-of-the-mill commercial dispute,” the filing continues. “Not only did it deny the president’s motion to dismiss, but it refused even to certify for immediate appeal.”

The Richmond-based court, which takes appeals from Maryland, temporarily put the subpoenas on hold while the case is pending.

The three-judge panel on Tuesday will specifically consider whether the District and Maryland have legal grounds — or standing — to sue the president in the first place. And the appeals court will consider the president’s request to dismiss the case outright or to take the unusual step of ordering the lower-court judge to allow a midstream appeal.

The judges are Paul V. Niemeyer, Dennis W. Shedd and A. Marvin Quattlebaum Jr. Niemeyer was nominated to the 4th Circuit by President George H.W. Bush, Shedd by President George W. Bush and Quattlebaum by President Trump.

“The president seeks to justify that extraordinary remedy on the ground that he is completely immune from judicial process,” Racine and Frosh said in their court filing.

Unlike past presidents, Trump has retained ownership of his private businesses, including the hotel on Pennsylvania Avenue, a few blocks from the White House, that has attracted government clients. The Kuwaiti Embassy has held its National Day celebration there three years in a row. Lobbyists representing the Saudi government reserved blocks of rooms in December 2016. The former governor of Maine stayed at the hotel and dined at its restaurant in 2017.

Despite the case — and a separate emoluments suit brought by 198 Democrats in Congress — the Trump Organization did more business with foreign governments in 2018 than it did the year before. The company said it received $191,000 in profits from large events and hotel bookings paid for by foreign governments last year, money it donated to the U.S. Treasury. The previous year the company reported about $150,000.

In January, the inspector general for the General Services Administration said the agency had “improperly ignored” potential conflicts with the emoluments provision in leasing the Old Post Office building to the hotel. The watchdog agency did not recommend that GSA modify the deal, but several House committees are now planning investigations into the project.

In his initial ruling in March 2018, Messitte found that Maryland and the District had sufficiently shown that Trump’s hotel “has had and almost certainly will continue to have an unlawful effect on competition.” He specifically noted the local governments’ financial interests in the Walter E. Washington Convention Center and the Bethesda North Marriott Hotel and Conference Center, which offer venues that may compete for some events.

The provisions being reviewed by the 4th Circuit have never before been tested at a federal appeals court. One bars federal officers from taking presents, or emoluments, from foreign governments. The other prohibits presidents from taking side payments from individual states.

The Justice Department had urged Messitte to dismiss the case, arguing that the clauses were meant to stop officials from taking bribes — but not to prevent them from doing business.

The Office of Legal Counsel within the Justice Department has routinely addressed the meaning and implications of the provisions for presidents past. President Ronald Reagan requested a guidance about whether he could accept the pension he earned as California’s governor. President Barack Obama accepted the Nobel Peace Prize only after the legal counsel’s office said he could do so without violating the emoluments clause.