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The Trump International Hotel, which sits just a few blocks east of the White House, has been controversial in recent years for a variety of reasons. For one thing, there were legal questions surrounding a sitting president effectively serving as his own landlord, in light of the fact that the Trump Organization’s lease was, as a practical matter, with the Trump administration.
For another, interested parties — foreign and domestic — had a habit of doing business with the hotel, apparently in the hopes of currying favor with Donald Trump during his tenure.
Complicating matters are questions about the hotel’s finances. Last fall, Democrats on the House Oversight Committee accused Trump of having provided “misleading information about the financial situation” during his presidency. As CNBC reported, that story became even more interesting this week.
A House committee urged a federal agency Thursday to consider terminating the lease on a Washington, D.C., hotel held by former President Donald Trump and his business. The House Committee on Oversight and Reform cited accounting firm Mazars’ recent announcement that it is dropping the Trump Organization as a client and stating that a decade of the company’s financial statements cannot be relied on as accurate.
In a letter Democrats on the committee sent to the General Services Administration, which was obtained by NBC News, the lawmakers wrote, “New information, including that former President Trump may have submitted inaccurate financial information to the federal government to obtain this lease and that he stands to reap millions in profit from selling the lease, reinforce the serious ethical and legal concerns previously raised by the Committee.”
And why is this important? I’m glad you asked.
Trump’s hotel, like so many of his ventures, has been losing money. That made it all the more notable when the former president struck a deal last fall to sell the lease for $375 million.
By all appearances, he could use the money: Trump has massive debts; his bankers no longer want anything to do with him; and his accounting firm not only broke up with him, it also said his financial materials from the last decade should no longer be considered reliable.
But at least he has that $375 million on the way, right?
This is where the letter from the House Oversight Committee comes into play. As congressional Democrats see it, Trump — who took over the lease two years before running for president — submitted suspect financial records with the government when it took over the hotel. Indeed, Mazars USA, Trump’s longtime accounting firm, just told the world not to rely on the documents that they helped prepare.
And what happens if Trump obtained the lease by way of false financial statements? Well, it means the government can terminate the lease — and if the lease is terminated, then the former president can’t sell the lease.
And if he can’t sell the lease, then he can’t get the $375 million.
Wait, it gets worse. The Oversight Committee also said it has the agreement between the Trump Organization and its bank for a $170 million loan used to finance the construction of the hotel. That loan agreement also relied, at least in part, on financial records that Trump’s former accounts no longer stand behind.
If Trump provided false information to his bank to get the loan Deutsche Bank would have the option of simply demanding that the former president repay the $170 million loan immediately.
For more along these lines, you should definitely check out our interview with the New York Times’ Susanne Craig from last night’s show. She discussed the possibility of Trump feeling the need to start selling assets to keep himself afloat, in light of his business losses, legal losses, and looming debt deadlines.