President Trump lost the first round in his effort to throw out a lawsuit claiming he improperly profits from his tony downtown Washington hotel in violation of the Constitution’s “emoluments” clause.
The decision by U.S. District Judge Peter Messitte, refusing to dismiss the lawsuit Wednesday clears an initial legal hurdle and will allow the attorneys general of Maryland and the District of Columbia to go forward with the lawsuit.
But the judge did limit the claims to operations of the Trump Organization inside DC, from which he may receive personal benefits, and not his properties worldwide. Messitte did say he would allow the plaintiffs to amend their lawsuit to expand claims outside DC, if they can make such claims.
The emoluments clause prohibits a president from receiving gifts from a foreign government without the consent of Congress, or from being enriched through domestic gifts as well.
Trump is the sole owner of the Trump Organization and receives payments from a number of hotels, restaurants and event spaces in the U.S. and abroad. In particular, the AGs’ lawsuit has focused on the Trump International Hotel in Washington, DC, which is a five-star hotel on Pennsylvania Ave. near the white house.
Prior to Trump’s inauguration he turned management of Trump Organization to his sons Eric and Donald Trump Jr. Trump also said prior to taking office that any profits earned from foreign governments would be donated to the US Treasury. As of the date of today’s order the President “has made no such ‘donations’ to the treasury,” Messitte wrote.
In addition, Messitte wrote, the President’s sons have said they would provide business updates to the President regarding the organization on a quarterly basis and remains able to obtain money from the organization at anytime.
Foreign government officials have patronized the hotel and some have indicated they did so specifically because of the President’s association, citing in particular the Kingdom of Saudi Arabia, officials of Kuwait and the governor of Maine when he visited to discuss business with the President.
The President, through his lawyers, had argued that the AGs had no standing to sue because they suffered no injury, and thus the case should be dismissed.
A similar claim was made in a New York lawsuit by liberal watchdog group, Citizens for Responsibility and Ethics in Washington, CREW, but it was dismissed on standing grounds.
In the Maryland and DC case, the judge held the AGs do have standing because of the potential tax income implications for them and may suffer a competitive disadvantage for hotels in their jurisdictions.
Case: DC v. Trump, 17-1596