The House Oversight Committee just unsubtly suggested to the federal government’s General Service Administration (GSA) that it’s time to default the Trump Organization’s lease on a prime hotel property in the heart of Washington, D.C.
It’s the first, but likely not the last major fallout from week’s surprise repudiation of ten years’ worth of financial statements for the Trump Organization by the companies longtime accounting firm Mazars was perhaps the biggest body blow ever received by the disgraced former president Donald Trump.
The announcement by Mazars that “the Statements of Financial Condition for Donald J. Trump for the years ending June 30, 2011—June 30, 2020, should no longer be relied upon” means that the banks that issued the loans underlying his many real estate transactions can legitimately call in their loans, creating a dangerous financial liquidity problem for the Trump Organization.
Still, in the three days since Mazars jettisoned Trump as a client, no bank has yet to telegraph its intentions regarding the massive debt load owed by the twice-impeached president whose dubious veracity looms over their business together.
Readers might remember the Trump International Hotel as a pit of corruption filled with goods the self-dubbed Make America Great guy bought from China. However, two Democratic representatives in the House Oversight panel instead recalled the government’s ownership of the property in light of this week’s news and already jumped on Trump’s enormous accounting scandal to urge the GSA, “to consider terminating the Old Post Office Building lease held by President Trump and the Trump Organization.” Unfortunately for the former guy, one of them happens to be the Chair.
Rep. Carolyn B. Maloney (D-NY), Chairwoman of the Committee on Oversight and Reform, and Rep. Gerald E. Connolly (D-VA), Chairman of the Subcommittee on Government Operations, sent a letter today to the GSA asserting that:
“New information, including that former President Trump may have submitted inaccurate financial information to the federal government to obtain this lease and that he stands to reap millions in profit from selling the lease, reinforce the serious ethical and legal concerns previously raised by the Committee.”
The rest of the House Oversight letter goes on to express concern that the GSA “has begun a 45-day review of the Trump Organization’s plans to sell the lease for the Old Post Office Building in Washington, D.C., to a Miami-based investor group for $375 million, which appears to represent a significant premium over market rates. If approved by GA, the sale
would yield a profit of approximately $100 million to the Trump Organization, of which approximately $76 million would flow to former President Trump based on his continuing ownership stake in the Trump International Hotel, Washington, D.C. (Trump Hotel).”
Reps. Maloney and Connolly go on to note that the documentation that the Trump Organization submitted in its bid for the Old Post Office Building lease “appears to be ‘incomplete, misleading, and in violation of the express terms of the solicitation’ given significant omissions in former President Trump’s listed assets and liabilities.”
The kicker of the two committee chairpersons’ letter to the GSA comes in this damning paragraph on the letter’s second page.
“In light of these new revelations, including further evidence that the former President submitted at least one financial statement with possible material misrepresentations to GA, we request that you consider terminating the Old Post Office Building lease to former President Trump and the Trump Organization under the authority provided in Article 27 of the lease, and end, once-and-for-all, the grave damage this inappropriate lease has done to presidential thics
and integrity in government contracting.”
The letter goes on to detail some of the most egregious falsehoods and misrepresentations made in Trump’s financial statements as uncovered by the New York State investigation being led by NY Attorney General Letitia James.
The financial statements:
- “misstated objective facts, like the size of Mr. Trump’s Trump Tower penthouse;
- Miscategorized assets outside Mr. Trump’s or the Trump Organization’s control as ‘cash,’ thereby overstating his liquidity;
- Misstated the process by which Mr. Trump or his associates reached valuations;
- Failed to use fundamental techniques of valuation, like discounting future revenues and expenses to their present value;
- Misstated the purported involvement of outside professionals’ in reaching the valuations; and,
- Failed to advise that certain valuation amounts were inflated by an undisclosed flat percentage for brand value, despite express language on the Statements asserting that the value of Mr. Trump’s brand was not reflected in the Statements pursuant to generally accepted accounted principles,” according to the letter.
It remains to be seen whether the GSA will heed the House Oversight panel to make a move to terminate the Trump Organization lease and put a halt to Trump’s ability to profit off of the deal to sell the failing hotel.
One can be fairly certain, however, that Donald Trump will soon be issuing a furiously deranged statement condemning the move as a partisan political attack on him personally rather than accepting responsibility for his allegedly fraudulent financial dealings.
You can read the entire letter from the two Democratic House Oversight Committee officials in this tweet posted by Congresswoman Maloney.
The financial docs Trump submitted for his lease of the Old Post Office, now the Trump Int'l Hotel in DC, were also compiled by Mazars and contain similar issues to the docs Mazars called unreliable.
— Carolyn B. Maloney (@RepMaloney) February 17, 2022
Here’s a copy of the Trump Hotel lease:
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Vinnie Longobardo is the Managing Editor of Occupy Democrats. He's a 35-year veteran of the TV, mobile & internet industries, specializing in start-ups and the international media business. His passions are politics, music, and art.