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Wednesday, 11 April 2018 06:12

The Trump Organization Muscled Panama Over a Hotel Dispute. Who Will Stop the Profiteering?

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constitution33Trump is in violation of the Emoluments Clause of the Constitution. (Photo: Kim Davies)

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Last month a federal judge ruled that Maryland and Washington, DC, had standing to sue President Trump for violating the Emoluments Clause of the US Constitution. As reported by CNN on March 28, however, the ruling included a significant qualification:

Judge Peter Messitte of the US District Court of Maryland says the Maryland and District of Columbia attorneys general who brought the case will have to focus it on the Trump Organization's operations in Washington. That means the case going forward will challenge payments made by foreign officials for services at the Trump International Hotel, but will not include visits to Mar-a-Lago in Florida or other Trump properties.

Maryland and DC have argued that the Trump International Hotel's operations put other nearby hotel and entertainment properties at a competitive disadvantage, and that the Trump hotel got special tax concessions.

As reported in previous BuzzFlash commentaries, the Emoluments Clause (Article 1, Section 9, Clause 8) of the Constitution states,

No Title of Nobility shall be granted by the United States: And no Person holding any Office of Profit or Trust under them, shall, without the Consent of the Congress, accept of any present, Emolument, Office, or Title, of any kind whatever, from any King, Prince, or foreign State.

The relevant words in the clause to Trump are "present" and "emolument." Dictionary.com defines emolument as "profit, salary, or fees from office or employment; compensation for services." In the case pursued by Maryland and Washington, DC, the emolument the plaintiffs are claiming is that foreign governments are seeking favor with the Trump administration by booking events and staying at Trump's DC hotel in the old national post office.

The Trump Organization offers a lavish description of the property on its hotel website:

Washington’s historic Old Post Office has been restored far beyond its initial grandeur and proudly stands as the iconic Trump International Hotel Washington, D.C., bringing a new level of luxury to Pennsylvania Avenue. Attracting locals and travelers alike, our hotel in downtown D.C. features BLT Prime by David Burke, Benjamin Bar & Lounge, a curated walkway museum, The Spa by Ivanka Trump, and the largest luxury hotel ballroom in the city. Our 5 star hotel in Washington, D.C. offers luxurious guest rooms and suites, of which no two are identical, making every stay truly unique.

However, the allegations that Trump -- and Jared Kushner and Ivanka Trump -- are violating the Emoluments Clause extend far beyond a DC hotel. In the case of Jared Kushner, for instance, it involves loans and financial deals -- while working in the White House -- that allegedly are valued in millions of dollars. At a minimum, Ivanka last year was touting her clothing line while working as a close adviser to her father.

Most recently, The Associated Press exposed how the Trump Organization attorneys delivered a letter to the president of Panama asking him to intercede in a dispute involving a Trump-managed hotel in that country:

U.S. President Donald Trump’s company appealed directly to Panama’s president to intervene in its fight over control of a luxury hotel, even invoking a treaty between the two countries, in what ethics experts say was a blatant mingling of Trump’s business and government interests.

That appeal in a letter last month from lawyers for the Trump Organization to Panamanian President Juan Carlos Varela was apparently unsuccessful -- an emergency arbitrator made days later declined to reinstate the Trump management team to the waterfront hotel in Panama City. But it provides hard proof of exactly the kind of conflict experts feared when Trump refused to divest from a sprawling empire that includes hotels, golf courses, licensing deals and other interests in more than 20 countries.

Many Trump hotels and condominium buildings are owned by investors who pay a fee for the Trump brand. They also sometimes pay the Trump Organization to manage the properties. That was the case with the Trump Ocean Club International Hotel in Panama City. Orestes Fintiklis, an investor from Cyprus, now owns a majority of the hotel and sought to cancel a management contract with the Trump Organization. Eventually, a Panamanian judge ruled that he was within his rights to terminate the agreement, which was to extend to 2031.

That is when the Trump Organization's attorneys intervened and had correspondence delivered to the Panamanian president threatening, according to The Washington Post, "repercussions" to Panama if the president didn't intervene and return the management of the hotel to Trump's firm. In essence, the attorneys were asking the leader of the government of Panama to dismiss a judicial decision. That would be as inappropriate in Panama as in the United States.

The Associated Press notes:

[The letter] goes on to say that the eviction violates an investment treaty signed by the two countries and suggests that the Panamanian government, not the hotel’s new management team, could be blamed for any wrongdoing.

“We appreciate your influence in order to avoid that these damages are attributed not to the other party, but to the Panamanian government,” said the letter, which was copied to Panamanian Cabinet officials, as well as the presidents of the Supreme Court and National Assembly.

The correspondence reeks of intimidation and insinuation that the US government, under Trump, is monitoring Panama's reaction to the request to return the hotel's management contract to the Trump Organization.

This sure looks like a blatant violation of the Emoluments Clause. It is now up to the courts or Congress to stop the profiteering that uses the office of the US presidency as leverage.