Trump's D.C. Hotel Lost Over $70M During His Term, House Panel Finds
More details are coming to light about the way Donald Trump ran his business during his four years in the White House, and the latest revelation concerns his prominent hotel on Pennsylvania Avenue, blocks from his old address.
In a letter Friday morning, the House of Representatives Committee on Oversight and Reform revealed findings from an investigation that, while Trump disclosed making over $150M in income from the Trump International Hotel on Pennsylvania Avenue from 2016 to 2020, he declared losses of nearly $74M in separate filings through his accounting firm over the same time period.
The Trump Organization leases the hotel from the General Services Administration, the federal government's real estate arm. In the letter to current GSA Administrator Robin Carnahan, an appointee of President Joe Biden, Oversight Committee Chair Rep. Carolyn Maloney and Subcommittee on Governmental Relations Chair Rep. Gerry Connelly, two Democrats, claimed that Trump's business concealed over $1B in debt when it applied to redevelop the historic Old Post Office Pavilion into a luxury hotel, and that the GSA didn't perform any due diligence to verify Trump's bona fides.
The financial statements, which the committee found were inconsistent, were provided to the committee by Mazars, the Trump Organization's accounting firm.
The Trump Organization's pattern of reporting profits to one entity and losses to another is the crux of the Southern District of New York U.S. Attorney's Office's criminal investigation into the company, which led to 15 charges of fraud and grand larceny in a bombshell indictment in July. That investigation is ongoing.
The committee also claims Trump was given preferential treatment by a foreign bank when Deutsche Bank allowed the hotel's owner to continue making only interest payments on its $170M construction loan, despite the loan's scheduled maturity in 2018. Deutsche extended the date by which Trump must make principal payments until 2024, according to the letter.
"The six-year deferral in loan payments amounted to a significant benefit to the Trump Hotel and the President himself, who not only owned the hotel but personally guaranteed its loan," Maloney and Connelly wrote. "The deferral allowed President Trump’s business to avoid making large loan repayments to a foreign bank — potentially saving the hotel tens of millions of dollars per year — at a time when the underlying business was already losing money."
The report didn't say why the interest-only extension amounts to preferential treatment. The Trump Organization, through a spokesperson, disputed the findings of the committee Friday.
“We have been great custodians of this iconic building, continue to have a great relationship with the GSA and are in full compliance with our leasehold obligations,” company spokeswoman Kimberly Benza told The Washington Post in a statement. “Simply stated, this report is nothing more than continued political harassment in a desperate attempt to mislead the American public and defame Trump in pursuit of an agenda.”
The committee also called out Trump's reporting of foreign expenditures at the hotel, highlighting inconsistencies in the way it reported income from foreign governments. In all, the committee estimated foreign governments spent nearly $4M during Trump's term to stay in the hotel. While Trump claims to have donated more than $150K in profits related to those stays to the U.S. Treasury, the committee raised questions about the circuitous route the money took through Trump's web of affiliate companies before it found its way into government coffers.
"Rather than simply transfer the profits identified as from foreign governments to the Trump Hotel’s parent companies for payment to the U.S. Treasury, the Trump Hotel used the money to offset Trump Organization intra-company loans that DJT Holdings LLC had made to the Trump Hotel," the letter states. "That raises questions about whether the Trump Organization took advantage of the Trump Hotel’s payment of foreign government profits to claim some other credit or benefit."
Trump has been trying to sell the hotel since 2019, only to pull it off the market after the onset of the coronavirus pandemic in 2020 and relist it this summer. Axios reported last month that the hotel's lease, which is being marketed by Newmark, was close to finding a buyer.
The committee has requested more documents from the GSA as part of its investigation, including into the initial awarding of the lease and for more details of whether the foreign government payments violated the emoluments clause of the U.S. Constitution.