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Chair DeFazio Statement from Hearing on GSA Outleases and the Trump Old Post Office Hotel

Jan 28, 2020
Press Release

The following are opening remarks, as prepared for delivery, from Chair of the House Committee on Transportation and Infrastructure Peter DeFazio (D-OR) during today’s hearing titled: “GSA Outleases and the Trump Old Post Office Hotel.” Video of Chair DeFazio’s remarks as delivered can be found here.

Chair DeFazio:

Thank you, Chair Titus, and thank you, Administrator Murphy for making your first appearance before this Committee.

We are here today because of GSA’s failure to act. The General Services Administration (GSA), under successive Administrations, failed to properly consider the Emoluments Clauses to the U.S. Constitution when evaluating the Old Post Office (OPO) lease to the Trump International Hotel.

But only under this Administration did this lease present what seems to be a clear violation of the U.S. Constitution.

The GSA’s own internal watchdog, the Office of Inspector General (OIG), concluded that GSA failed to consider the Emoluments Clauses when evaluating this lease.

The IG recommended that GSA revise its leasing language to ensure GSA is abiding by the laws of our Nation, including the supreme law of our nation, the U.S. Constitution. Once again, the GSA chose not to act by refusing to implement the IG’s recommendation.

In October, I issued a subpoena to GSA for copies of legal memos and financial data regarding the Old Post Office lease to the Trump International Hotel that GSA has refused to provide to the Committee for over one year now. Once again, GSA failed to act.

They have outright refused to provide the Committee with legal memos related to the Trump Hotel, and while we engaged in good faith efforts to review the financial data in-camera, GSA wanted us to grant them veto power over our ability to reference or release any of this data publicly if we believed it served a legitimate oversight need of the Committee and was in the public’s interest.

What’s interesting is that GSA appears to be mimicking arguments made by the Trump Organization. In fact, the GSA provided the Committee with a copy of a letter that an attorney for the Trump Organization sent GSA about complying with the Committee’s original records request. That letter questioned the Committee’s oversight jurisdiction and our legitimate need for financial records. This leads me to question whose interests GSA is serving—the Trump Organization or the American public?

So, I am happy that Administrator Murphy has agreed to be here to help us understand why GSA appears more concerned about protecting the personal interests of the President of the United States than the financial interests of U.S. taxpayers.

But this is not the only reason we have invited the GSA Administrator here today. We expect Administrator Murphy to answer questions about the potential sale of the Old Post Office lease.

Exactly a month after our last hearing on the Old Post Office lease in September of last year, and three years after the Trump International Hotel grand opening, media reports surfaced that the Trump Organization was interested in selling their lease with GSA. 

The sales brochure for the hotel says, “potential exists for a new owner to fully capitalize on government related business.” It sounds like they’re speaking from experience.

Meanwhile, the Trump Organization claims that their refusal to solicit foreign business has cost the hotel over $9 million. That’s a pretty specific number considering we can’t seem to get any other financial performance data related to the hotel.

The lack of transparency and cooperation by GSA with the Committee’s legitimate oversight authority over the past three years is ridiculous. 

In October, Chair Titus and I requested that GSA conduct an audit of the Old Post Office lease, which they had acknowledged had not been done. Three months later we are still waiting on a response to that request.

In addition, I have serious concerns about how GSA administers its outleasing program. While there are extensive regulations for how GSA should acquire leased space, there seem to be very few formal rules outlining how the government should lease property to private parties. Further, since a lessee’s compliance with a lease is determined by a Lease Contracting Officer, I’d like to know what processes are available to review that decision.

I hope we can make some progress today, Administrator Murphy,+ and get you to commit to working with this Committee to ensure GSA is properly managing its outleasing program so that we can ensure it is being managed effectively, efficiently and ethically moving forward.

Thank you. I look forward to your testimony. I yield back.