March 24, 2017 / 3:40 AM / 4 months ago

Trump's Washington hotel poses no conflict of interest, agency finds

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FILE PHOTO - Flags fly above the entrance to the new Trump International Hotel on its opening day in Washington, DC, U.S. on September 12, 2016.Kevin Lamarque/File Photo

WASHINGTON (Reuters) - The Trump International Hotel in Washington is not in violation of federal conflict-of-interest rules that bar elected officials from taking part in a lease of federal property, the U.S. General Services Administration said on Thursday.

Critics argued that the luxury hotel housed in the historic Old Post Office a few blocks from the White House was a conflict of interest for Republican President Donald Trump because he is both landlord and tenant of the building. Lawyers for the hotel said the claim had no merit.

Democratic lawmakers asked the GSA, which oversees federal property, to clarify the status of the lease arrangement.

“We would like to thank the GSA for their diligent review of this matter," Amanda Miller, a spokeswoman for the hotel, said in an email.

In January, Trump said he would maintain ownership of his global business empire, but hand control to his two oldest sons while president. His eldest son, Donald Trump Jr., subsequently took the reins of the Washington hotel.

In a letter from GSA contracting officer Kevin Terry to Donald Trump Jr., the agency said the issue had been resolved by the younger Trump taking over as head of the company that runs the hotel and by changes to its internal operating agreement.

The GSA said the company, the Trump Old Post Office LLC, was in full compliance with the section of the lease prohibiting elected federal officials from having any part of it.

The hotel on Pennsylvania Avenue has become a rallying point for anti-Trump protesters.

Two Democratic U.S. congressmen, Elijah Cummings of Maryland and Peter DeFazio of Oregon, voiced displeasure with the GSA decision.

"Any elected official can now defy the restriction by following this blueprint," they said in an email statement, calling the agency's letter "completely inadequate."

"This decision allows profits to be reinvested back into the hotel so Donald Trump can reap the financial benefits when he leaves the White House," they added. "This is exactly what the lease provision was supposed to prevent.”

A Washington restaurant sued the president and Trump Old Post Office LLC this month, claiming patrons had shifted business there to curry favor with his administration. A Trump Organization attorney said the lawsuit lacked merit.

Reporting by Ian Simpson and Eric Beech in Washington, and Ben Klayman in Detroit; Editing by Leslie Adler and Jonathan Oatis

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