President Donald Trump lost more than $73 million to his luxury DC hotel even as he claimed multimillion-dollar profits on his disclosure forms, the House Oversight Panel says after reviewing government documents.
Refurbished by the Trump Organization and leased from the federal government, the hotel was a regular feature of Trump’s 2016 presidential campaign and became a hub of supporter activity during his administration.
But far from being a revenue-generating one, it was a “failing company saddled with debt,” according to a letter the Democrat-led Oversight panel wrote to the General Services Administration, known as the country’s landlord.
“Overall, these documents show that the Trump Hotel was far from a successful investment, but a failing company that was saddled with debt that required bailouts from President Trump’s other companies,” wrote panel chair Rep. Carolyn Maloney (DN.Y.).
When he decided to hide the Trump Hotel’s true financial condition from federal ethics officials and the American public, President Trump hid conflicts of interest arising not only from his ownership of the hotel, but also from his role as the hotel’s lender and the guarantor of its third-party loans.’
Trump’s luxury hotel in Washington, D.C., lost more than $73 million in the four years he was in office, rather than bringing in millions, as public financial disclosures claim, according to the House Oversight Committee
The panel found that Trump’has provided misleading information about the Trump Hotel’s financial situation in its annual financial information; received undisclosed preferential treatment from a foreign bank for a $170 million loan to the hotel that the president had personally guaranteed; accepted millions of dollars in emoluments from foreign governments without a accounting of the source or purpose of the money; hid hundreds of millions of dollars in debt from GSA when bidding for the lease of the old post office; and made it impossible for GSA to properly enforce the lease’s conflict of interest restrictions by entering into opaque transactions with other affiliated entities,” the letter read.
The letter accuses Trump of “hiding” the losses from the public by not disclosing them.
But the letter does not state that Trump has necessarily broken the law.
While the committee has not reached a conclusion on whether President Trump’s federally-mandated disclosures were technically consistent with reporting requirements, it is clear that the disclosures have not provided the public with an accurate picture of President Trump’s businesses. their financial health and the nature and extent of the conflicts of interest they created,” Maloney writes.
Instead, it reads, “By portraying the hotel as a successful business, President Trump hid key ethical issues arising from his failing business. The hotel’s massive losses have reduced President Trump’s personal assets, compromised the hotel’s ability to repay loans from other entities owned by the president, and may have jeopardized other personal assets because of the personal guarantee he gave for the $170 million debt of the Trump Hotel.”
According to data collected by the committee from Trump Hotel’s financial statements from Trump’s accountant, the hotel lost between $2.5 million and $22 million each year, losing $73 million over the period.
The hotel’s money-losing record follows a report that Trump has been dropped from the ultra-exclusive Forbes 400 list of America’s richest people for the first time since its founding in 1996, worth $400 million below this year’s mark. outlet unveiled Tuesday.
According to the committee, Trump renegotiated a construction loan for the hotel with Deutsche Bank and converted it into an interest-only loan in 2018, with no principal due until 2024.
“The six-year grace period for loan payments represented a significant benefit to the Trump Hotel and the President himself, who not only owned the hotel but also personally guaranteed the loan,” Maloney wrote.
The Former President Is Worth $2.5 Billion, According To Forbes, after losing $600 million of his fortune during the COVID-19 pandemic.
Trump was in 339th place last year. His all-time high was at 71st in 2003, the year before he launched his NBC hit series The Apprentice.
But in March 2020, three years after Trump refused to divest from his brand name real estate holdings, the coronavirus pandemic rocked the economy.
Divesting when he took office in 2017 would have been an opportunity to diversify his wealth, Forbes argues.
Even if he had divested and paid maximum capital gains tax, investing the rest in broader portfolios like the S&P 500 could have made him 80 percent richer than he is today.
Instead, his limited wealth portfolio was hit by the particularly powerful impact of the pandemic on tourism and hospitality, as well as real estate prices in major cities.
Donald Trump is on the Forbes 400 list of the richest Americans for the first time since 1996
Trump’s rankings had declined throughout his years in the White House, peaking in 2003
In early September, reports emerged that Trump was in talks to sell his Washington, DC hotel.
During the Trump administration, the hotel was a popular spot for fans of the ex-president, as well as diplomats and lobbyists seeking to gain the favor.
But by the time Trump left office, the hotel had a 60 percent increase in revenue and a $170 million loan outstanding. Washington Post reported.
During the pandemic, operations were significantly curtailed by DC restrictions on bars and restaurants. Hotels were open for people to stay, but at one point, events and conferences were banned.
“We haven’t been that bad since the coronavirus, until I’d say probably a month ago. It really slowed down,” said a hotel employee Insider this past March.
Trump’s luxury apartments in New York City and other urban centers also lost value as parts of the city saw rents plummet.
The Trump International Hotel Washington DC features a spacious lobby and bar, where allies of the President often hang out
FORBES’ 400: THE TOP 10 RICHEST PEOPLE IN AMERICA
1) Jeff Bezos (Amazon): $201 BILLION
2) Elon Musk (Tesla): $190.5 BILLION
3) Mark Zuckerberg (Facebook): $134.5 BILLION
4) Bill Gates (Microsoft): $134.5 BILLION
5) Larry Page (Google): $123 BILLION
6) Sergey Brin (Google): $118.5 BILLION
7) Larry Ellison (Oracle): $117.3 BILLION
8) Warren Buffett (Berkshire Hathaway): $102 BILLION
9) Steve Ballmer (Microsoft): $96.5 BILLION
10) Michael Bloomberg: $70 BILLION
An Associated Press survey in June of more than 4,000 transactions over the past 15 years in 11 Trump-branded buildings in Chicago, Honolulu, Las Vegas and New York found that prices for some condominiums and hotel rooms have dropped by a third or more. decreased .
That’s a plunge that surpasses the declines in many comparable buildings, leaving units for sale in Trump buildings for sale for hundreds of thousands to as much as a million dollars less than they would have years ago.
“They’re giving them away,” says Lane Blue, who paid $160,500 in March for a studio in Trump’s tower in Las Vegas, $350,000 less than the seller paid in 2008.
Its Manhattan buildings, such as Trump World Tower, have lost more than 20 percent of their value since Trump took office, Insider reported earlier this year.
The pandemic has also hit commercial real estate demand — and the value of Trump’s stake in a building on 1290 Avenue of the Americas in Manhattan has fallen by $80 million to $685 million, according to an estimate by Bloomberg, which has financial disclosures investigated. real estate documents and loan documents.
In early 2017, Trump bragged that he didn’t have to divest from his real estate fortune, despite criticism from ethics watchdogs and past presidential precedents.
Although it was expected, the president is officially exempt from criminal conflict of interest laws that apply to other federal employees.
“I could actually run my business and run the government at the same time,” he said at a news conference at Trump Tower. “I don’t like the way that looks, but I could if I wanted to. I’d be the only one who could.’
At the time, his net worth was approximately $3.5 billion.
Forbes noted on Tuesday that a high capital gains tax could have kept Trump from separating from his real estate holdings.
The maximum possible federal capital gains tax is 23.8 percent. That of New York State is 8.8 percent.
His five most valuable properties were acquired long enough, the report claims, that he was likely sitting on years of profit.
Trump World Tower in Manhattan has lost more than 20 percent of its value since Trump took office until his departure
If the maximum penalties had been applied, Trump would have lost about $1.1 billion in assets, leaving $2.4 billion.
However, if the rest had been reinvested in a stock portfolio that tracks slightly more stable and diversified, such as the S&P 500 index, Trump would have been worth a whopping $4.5 billion today.
But he could also have avoided a capital gains tax entirely.
A section in the federal tax code allows government employees who divest from their assets to apply for a certificate exceeding the fine in an attempt to lure them away from potential conflicts of interest.
While Trump is not subject to conflict of interest laws and thus may not be eligible for the certificate, the former head of the Office of Government Ethics told Forbes he “would have been happy” if the president had run for office.
But no one on Trump’s transition team has reportedly even asked about it.
“They’ve never shown any interest in divestment,” said Walter Shaub.
If he had successfully filed for the Certificate of Divestment and reinvested his money in the same fund mentioned above, Trump would be worth $7 billion and ranked 133rd on the Forbes 400 list.