Carper Requests GSA IG Review of Old Post Office Building Lease

WASHINGTON—U.S. Senate Committee on Homeland Security and Governmental Affairs Ranking Member Claire McCaskill (D-Mo.) and Permanent Subcommittee on Investigations Ranking Member Tom Carper (D-Del.) sent a letter to General Services Administration (GSA) Inspector General Carol Ochoa requesting a review of GSA’s management of the lease with the Trump Old Post Office, LLC to develop and manage the Old Post Office Building in Washington, DC.

“As you are aware, recent events have raised important questions about GSA’s management of the Old Post Office lease. In 2013, GSA negotiated a lease agreement with Trump Old Post Office, LLC—a private company owned by now-President Donald Trump and his adult children,” the senators wrote. “Since President Trump took the oath of office, the Trump Old Post Office, LLC appears to be in breach of the plain language of the lease agreement.”

“Despite the warning signs from Members of Congress and ethics watchdogs, GSA chose not to take any action to address or enforce this provision of the lease or the other steps to mitigate the difficulties the lease creates for GSA and other government officials who oversee management of the agreement. Your office is in a unique position to review GSA’s management of the lease of the Old Post Office Building and identify any potential missteps.”

The senators reminded Inspector General Ochoa that the GSA IG office has previously led reviews of matters of significance, including audits of the Public Buildings Service’s lease administration practices.

The full letter can be found here and below.

Dear Inspector General Ochoa:

As the current and former ranking members of the Committee with jurisdiction over the General Services Administration and inspectors general, we write today to request a review of GSA’s management of the lease with the Trump Old Post Office, LLC to develop and manage the Old Post Office Building in Washington, DC.

As you are aware, recent events have raised important questions about GSA’s management of the Old Post Office lease. In 2013, GSA negotiated a lease agreement with Trump Old Post Office, LLC—a private company owned by now-President Donald Trump and his adult children. Under the terms of this agreement, the Trump Organization committed significant funds to transform the Old Post Office Building into a luxury hotel, and in return received the exclusive rights to run the hotel and retain all profits for a period of at least 60 years. In June 2015, when then-candidate Trump announced his intention to run for President of the United States, warning signs regarding a potential conflict of interest became apparent because the lease agreement includes a clause that prohibits elected officials from being party to the agreement, in order to prevent favoritism or preferential treatment to federal officials. The lease states:

“No…elected official of the Government of the United States…shall be admitted to any share or part of this Lease, or to any benefit that may arise therefrom; provided, however, that this provision shall not be construed as extending to any Person who may be a shareholder or other beneficial owner of any publicly held corporation or other entity, if this Lease is for the general benefit of such corporation or other entity.”

Since President Trump took the oath of office, the Trump Old Post Office, LLC appears to be in breach of the plain language of the lease agreement. President Trump has repeatedly stated that although he will resign from his positions at the various companies of the Trump Organization, he will not divest his ownership.^[1] As such, President Trump is now effectively both landlord and tenant of the Old Post Office Building, creating significant complications for the management of a federal building under a program designed “to maximize asset income and provide value to the Federal Buildings Fund and taxpayers.”^[2] Career GSA officials must now manage and renegotiate this lease under the scrutiny of the President of the United States and his adult children. While GSA officials must work to ensure the lease remains fair to the tenant, the Trump Old Post Office, LLC, they must also work to safeguard and maximize taxpayer dollars.

Despite the warning signs from Members of Congress and ethics watchdogs, GSA chose not to take any action to address or enforce this provision of the lease or the other steps to mitigate the difficulties the lease creates for GSA and other government officials who oversee management of the agreement.

Your office is in a unique position to review GSA’s management of the lease of the Old Post Office Building and identify any potential missteps. Your office has previously led reviews of matters of significance, including audits of the Public Buildings Service’s lease administration practices. There is no doubt that the current circumstances with GSA’s Old Post Office lease also require a thorough review.

With best personal regards, we are

Sincerely yours,                               

            Claire McCaskill                                                        Tom Carper

            Ranking Member                                                        United States Senator

 cc:       The Honorable Michael E. Horowitz

            Chairman, Council of the Inspectors General on Integrity and Efficiency