Court: Emoluments Clause Applies To Trump And His Hotel Profits

President Donald Trump is subject to the Constitution’s emoluments clause, and any profit, gain or advantage that his hotel in Washington, D.C., obtains from a foreign or domestic government would implicate the clause, according to a ruling by a federal court on Wednesday.

This decision, by Judge Peter Messitte for the U.S. District Court for the District of Maryland, allows a lawsuit brought by the attorneys general of Maryland and Washington, D.C., to proceed against Trump, whose effort to dismiss the challenge was denied. The lawsuit claims that he is in violation of the Constitution’s emoluments clause, which bars federal officeholders from receiving financial or material benefits from foreign governments or domestic government bodies.

It’s a historic decision,” Maryland Attorney General Brian Frosh told HuffPost. “The judge says that the emoluments are broad anti-corruption clauses and can be enforced in the courts.”

Trump is the only billionaire real estate owner to become president and the first president in the modern era to refuse to divest himself of his business interests. He operates commercial and residential properties, golf courses, private clubs and hotels domestically and internationally. Numerous reports indicate that foreign governments paid to use Trump properties and planned to do so increasingly as a way of ingratiating themselves with his administration. The Trump International Hotel in D.C. has a lease with the General Services Administration, a federal agency, to operate out of the Old Post Office building. Trump and his lawyers dismissed any concern about this arrangement and claimed that the emoluments clause does not apply to the president.

The court previously ruled that the attorneys general have standing to bring suit against Trump and his company but only regarding the Trump International Hotel in D.C., not his other properties. The decision on Wednesday approved a legal definition of “emolument” to mean “any ‘profit,’ ‘gain,’ or ‘advantage,’” and stated that this definition could include foreign government payments to Trump properties. It is the first time a federal judge defined these constitutional provisions. 

The Trump team, in an attempt to get the suit dismissed, argued that “emolument” did not cover profits made by a hotel from foreign government guests. Nor did the legal definition of the word cover the lease between the Trump Organization and the General Services Administration to operate the hotel out of the federally owned Old Post Office building on Pennsylvania Avenue, they claimed. They argued that emoluments would be only direct payments to an official in exchange for services rendered. This was an attempt to limit the reach of the emoluments clause to bribery (something the Supreme Court has already done with the legal definition of “corruption”).

Messitte strongly disagreed with the Trump team’s arguments. The decision reviewed the historical record to determine that the framers of the Constitution saw corruption in broad terms and were uniquely worried about the possibility of foreign or domestic governments gaining undue influence over federal officeholders.

“An ‘emolument’ within the meaning of the Emoluments Clauses was intended to reach beyond simple payment for services rendered by a federal official in his official capacity, which in effect would merely restate a prohibition against bribery,” the decision stated. “The term was intended to embrace and ban anything more than de minimis profit, gain, or advantage offered to a public official in his private capacity as well, wholly apart from his official salary.”

This would, according to the court, absolutely apply to Trump’s receipt of profits from foreign or domestic governments through his hotel in D.C.

“Sole or substantial ownership of a business that receives hundreds of thousands or millions of dollars a year in revenue from one of its hotel properties where foreign and domestic governments are known to stay (often with the express purpose of cultivating the President’s good graces) most definitely raises the potential for undue influence, and would be well within the contemplation of the Clauses,” Messitte stated.

He also agreed with the attorneys general that executive branch precedent agrees with their interpretation of the clause in that it applies to profits made by a hotel owned by the president.

Additionally, Messitte dismissed an argument made by supporters of Trump’s position in briefs filed with the court that the emoluments clause was never meant to apply to the president. “The text, history, and purpose of the Foreign Emoluments Clause, as well as executive branch precedent interpreting it, overwhelmingly support the conclusion that the President” is covered by the emoluments clause, Messitte determined.

With these definitions for the emoluments clause decided, the judge denied the Trump team’s motion to dismiss the case.

“We continue to maintain that this case should be dismissed, a position that was shared by a New York court in a related case,” Andy Reuss, a spokesman for the Department of Justice, said in a statement. “The Justice Department is reviewing the order and determining next steps to continue vigorously defending the President.”

“President Trump has refused again and again to separate himself from his business empire to avoid pervasive conflicts of interest and constitutional violations,” said Noah Bookbinder, the executive director of Citizens for Responsibility and Ethics in Washington, a co-counsel to the attorneys general. “A court has now decided that the emoluments clauses, put in place by the framers of the Constitution to protect against corruption, are broad and can be enforced in court.”

Messitte stated that Frosh and Washington, D.C., Attorney General Karl Racine made plausible arguments that Trump is in violation of the emoluments clause for his receipt of foreign government money through his hotel and through his operation of a hotel with a federal government lease.

This means that the case will go forward. Frosh said he and Racine will now submit their discovery requests to the court for financial documents, depositions and other materials from Trump and his company.

We’ll ask for documents that will prove our case,” Frosh said. “We’re seeking documents that show the payments and benefits that Trump has received that violate the emoluments clause. We want to know what the hotel’s received and what the president’s received.”

It also means that these definitions could apply to cases challenging other aspects of Trump’s business, including trademarks from foreign governments or payments to other entities, if a plaintiff with standing emerges to bring suit.

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