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The General Services Administration responded to a letter from House Democrats on Wednesday that said the federal agency had informed Congress President-elect Donald Trump would be in violation of a government contract unless he relinquished his ownership stake in his brand-new Washington, DC, hotel before his inauguration.
The initial letter came weeks after a request from Democratic lawmakers to the agency that leased the property, the taxpayer-owned Old Post Office, to Trump to assess whether Trump would have to step away from it.
“GSA does not have a position that the lease provision requires the president-elect to divest of his financial interests,” a spokesperson for the agency wrote. “We can make no definitive statement at this time about what would constitute a breach of the agreement, and to do so now would be premature.
“In fact, no determination regarding the Old Post Office can be completed until the full circumstances surrounding the president-elect’s business arrangements have been finalized and he has assumed office. GSA is committed to responsibly administering all of the leases to which it is a party.”
Trump’s ownership stake in the DC hotel has come under scrutiny since he secured the presidency. The lease, which Trump had signed well before being elected president last month, stipulated that no elected official could hold the property. According to the letter from House Democrats, the GSA had said Trump would be given 30 days following his inauguration to resolve the issue before it would be brought in front of the US Civilian Board of Contract Appeals.
As president, Trump will be able to appoint a new head of the GSA.
“Most importantly, the deputy commissioner informed our staff that GSA assesses that Mr. Trump will be in breach of the lease agreement the moment he takes office on January 20, 2017, unless he fully divests himself of all financial interests in the lease for the Washington, DC, hotel,” the four Democratic lawmakers, which included Rep. Elijah Cummings of Maryland, wrote in the initial letter from Wednesday morning. “The deputy commissioner made clear that Mr. Trump must divest himself not only of managerial control, but of all ownership interest as well.”
The GSA said Trump’s team had not responded to inquiries about the matter, according to the letter. It also made clear that the contract would be breached if Trump had his adult children run the hotel.
The discrepancy between the two letters appeared to stem from the GSA declining to make an outright conclusion while Trump could still resolve the conflict regarding the lease. House Democrats had made their assessment following answers from the GSA to their questions of whether Trump would be in breach of the contract if he did not make any changes.
Cummings, the ranking Democratic member of the House Committee on Oversight and Government Reform, told Business Insider in a statement that the lawmakers “understand” GSA’s position, but they stand “100%” behind the initial letter.
“We understand GSA’s position that this breach has not yet occurred, will not occur until Donald Trump is sworn in as president, and is officially viewed as a ‘hypothetical’ issue until that time,” Cummings said. “We also share GSA’s hope that the agency will not have to address this issue if President-elect Trump divests his ownership in the lease before then.”
“But the simple fact is that GSA informed our staffs that they interpret this lease provision as prohibiting any elected official from having any ownership interest in the lease, and we stand 100% behind our letter,” he continued.
Republican National Committee communications director Sean Spicer, when asked about the letter from the Democratic lawmakers, told CNN on Wednesday that eliminating the potential conflicts of interest for Trump is “not as easy as waving a magic wand.” He said the assessment did not catch Trump off guard.
In an earlier call with reporters, Spicer said the matter would be addressed in a January press conference about what Trump was planning to do with his business empire – a press conference that was originally scheduled for Thursday but postponed by Trump earlier this week.
The future of Trump’s stake in his business empire has been a central focus during his transition. Trump said earlier this week that during his presidency, his two adult sons and a few executives will manage the company and make “no new deals,” but ethics experts have said that step is not far enough.
This story has been updated.