With this potential violation of the U.S. constitution, Trump appears to be risking everything by choosing not to divest.
As per two senators, U.S President Donald Trump is setting a unparalleled precedent by flirting with potential violations to the U.S. Constitution by not divesting himself from a hotel management company that financially benefits from investments made from public pension funds.
On April 26, Reuters had exclusively reported having reviewed public records, that in at least 7 U.S. states, public pension funds periodically send millions of dollars to an investment fund that owns the Trump SoHo Hotel and Condominium in New York City. The said investment fund also pays one of Trump’s companies to run it.
As per several constitutional lawyers, these investments have the potential to put Trump at risk of violating an obscure constitutional clause that prohibits the president from receiving additional payments beyond his salary from state governments.
According to Senator Ben Cardin, who sits on the Senate Foreign Relations Committee, Trump is “setting an extremely dangerous precedent”. Senator Richard Blumenthal of Connecticut has also expressed similar concerns.
The Trump organisation nor the White House responded requests for comments.
Earlier this year in January, at a news conference Trump had said he would turn over management of his companies to a trust controlled by his two elder sons. Sheri Dillon, his lawyer, had also announced that he would donate all profits from foreign governments payments made to his hotel, to the U.S. Treasury.
To date Trump continues to earn revenues from the hotel management company and from his other businesses in the Trump Organization.
When asked to respond to requests for comments, five Republican lawmakers did not respond to requests for comment.
In March, when Cardin introduced a resolution calling for Trump to convert his assets to “conflict-free holdings,” it focused on payments received from foreign governments.
At that time Cardin also stated the flow of public U.S. money to Trump from pension funds was “disturbing” and “reduced confidence that President Trump is acting in the public interest.”
The Trump SoHo is owned by a Los Angeles investment group, the CIM Group, through one of its real estate funds.
As per state investment records, state- and city-run pension funds that have invested in the CIM fund, typically pay the Trump SoHo a few million dollars in quarterly fees to manage assets in its portfolio, which incidentally includes the Trump SoHo.
In return for marketing and managing the hotel-condo, CIM pays Trump International Hotels Management LLC 5.75% of the SoHo’s operating revenues annually.