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Questions remain over Trump Organization's donation of foreign profits

The Trump Organization raised more questions than it answered this week when it said it delivered on a pledge to dona...

Posted: Feb. 28, 2018 9:17 AM
Updated: Feb. 28, 2018 9:17 AM

The Trump Organization raised more questions than it answered this week when it said it delivered on a pledge to donate foreign government profits from its hotels to the US Treasury.

The company declined to provide substantive details of its donation, including the amount of the contribution and how it defined profits from countries outside the US.

"On February 22, 2018, The Trump Organization made a voluntary donation to the United States Treasury," the company's chief compliance counsel, George Sorial, said in a statement Monday. "This annual donation represents profits from foreign government patronage for the period beginning January 20, 2017 through December 31, 2017."

A Treasury Department spokesperson confirmed receipt of the check but declined to answer any of CNN's questions, including the amount and whether the Trump Organization-provided documents to support that the total represents all foreign government profits from its hotel.

For its part, the Trump Organization noted that the contribution was made voluntarily.

The Trump Organization tallied the earnings using an industry standard, Sorial said, and in accordance with the company's internal guidelines.

The lack of transparency prompted an immediate backlash from political opponents and government watchdogs who say President Donald Trump is defying an anti-corruption clause in the Constitution by accepting foreign government profits through his company. The issue is at the heart of multiple lawsuits against the President, including one that a New York court dismissed in December.

"It would be nice if President Trump would be transparent," said Scott Amey, general counsel for the Project on Government Oversight. "A list of properties, the foreign governments involved and the benefits surrendered would help ensure that the President is making good on his promise and honoring the anti-corruption protections created by our founding fathers."

Amey added that the donation may resolve the constitutional dilemmas -- though others disagree.

The President's pledge to forgo foreign government profits from his hotels has been controversial since he announced it.

In January 2017, just before taking office, Trump tried to address concerns over the possibility of foreign influence. During a news conference, one of his attorneys said Trump's business would voluntarily donate all profits hotels derived from foreign governments to the US Treasury.

"This way, it is the American people who will profit," said Sheri Dillon, Trump's attorney from the firm of Morgan, Lewis & Bockius LLP.

But months after that, the plan to donate those profits faced renewed scrutiny by watchdog groups when the Trump Organization conceded it was difficult to determine whether certain payments were attributable to foreign governments.

In response to inquiries from congressional Democrats, the Trump Organization told lawmakers in May it would "track and identify" revenues received from three distinct sources: direct billings from a Trump-owned property to a foreign government, payments tied to banquet and catering business and all payments received by check or electronic payment from a "reasonable identifiably foreign government entity."

At the time, the company also said it was "impractical" to require all guests to identify themselves -- a policy that would "impede upon personal privacy and diminish the guest experience of our brand."

One of the President's most controversial properties is his Washington, DC, hotel. Little is known about the hotel's operations, its financial performance or its customers. Congressional Democrats and government watchdogs say they want more transparency to ensure it's not a conduit for corruption. Last month, CNN reported that rooms, on average, at the property are more expensive and less occupied than those of its luxury hotel peers.

The property serves a de facto clubhouse for Trump's supporters. It hosts GOP events -- as well as parties for foreign governments. In 2017, the Kuwaiti Embassy threw its annual Independence Day party there, according to NPR.

That's just one example of foreign government spending at the hotel. There's also a lobbying firm for Saudi Arabia, which paid the hotel more than $270,000 from October 2016 through March 2017. Last year, an industry group with ties to the Turkish government held its annual conference at the property.

The Attorneys General of Maryland and the District of Columbia cite Trump's DC hotel in their lawsuit against the President for allegedly breaching the Constitution. When asked about the Trump Organization's donation to Treasury, a spokesperson for Maryland's AG said it won't impact their case.

"With this announcement, President Trump's businesses seem to confirm that they accepted payments from foreign governments in violation of the Foreign Emoluments Clause," said the spokesperson. "Whether the Trump Organization donated the proceeds from those foreign emoluments is irrelevant to our case, but we would certainly be interested in learning more about which foreign governments have paid the President."

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