Transcripts For CSPAN House Subcommittee Hearing On Trump International Hotel Lease 20240713

International hotel lease at the Old Post Office building in washington, d. C. We will hear from two officials from the General Services administration that oversees government building leases. This is about three hours. [indiscernible] without objection, so ordered. We are now going to proceed with Opening Statements. I wish you all the good morning and welcome to the fourth hearing of the public buildings. One of the purposes of this is to protect taxpayer dollars by ensuring that theyre spending it with transparency and that brings up with todays hearing which is entitled the tenant in the Trump Administrations oversight and the International Hotel and you can tell from the title, we are going to be in investigating an unprecedented tuition and the houses President Trumps d. C. Hotel. Since President Trump has declined to confess from his businesses, hes essentially acting as both landlord and tenant. Before i was elected to congress i spent over three decades , Teaching College students about American Government politics. In those classrooms, we had serious discussions about the role of the legislature if the executive branch with legal and ethical standards and thats exactly what we hope to do today. Lets start with some facts, all federal workers and officials an oath to uphold the u. S. Constitution. And of course that includes the president and all members of the administration and all of us in congress. Second, the constitution clauses important to our topic today. One prevents an elected official from receiving and i quote any president or to mining key branch of our stay without the consent of congress and today, congress has given this resident of such consent and a second and related clause is accepting any federal or state dollars beyond its president ial salary. A lot of people may not be familiar with the term of emoluments, but our founding any payment,t is constitution,the to prevent officials from accepting bribes from Foreign Governments and from part of our own government that maybe trying to at least agree that this is the practiced from the public and members of this congress. Third, and explicitly states that they may not use the premise to violate federal law or in any way and that concludes the constitution. Moreover, the lease states that no elected official in the United States shall be admitted to any share or part of this lease or to any benefit that may arise therefrom. Yet the president continued to have a personal stake in the hotel. When people stay at trumps d. C. Hotel, he directly benefits, and legal situation, the General Service of ministration is not done anything about it. In fact, the independent Inspector General from the agency who is with us today conducted an exhaustive report that found that the gsa recognized recognized the president s business interest in the olds office lease raised issues under the emoluments clause that could cause a breach of lease. Despite this observation, the Inspector General found that the gsa decided not to address those obvious issues. The Inspector General called that improper. I think thats the least of it. When you take an oath to uphold the constitution, you are bound by that oath, yet gsa officials have turned a blind eye to these legal and ethical issues. When called on it, the gsa failed to implement basic recommendations made by the Inspector General. Gsa was destructed to conduct a formal legal review considering the constitutions emoluments clauses and the terms of the lease. As far as i know, gsa hasnt even pretended to conduct the review. Gsa was also instructed to provide the language of their reviews to make it clear that the constitution is relevant. They havent done so in any way to satisfy the inspector or this committee. Finally, addition to the legal issues, the gsa has refused to turn over documents to the subcommittee, which has jurisdiction over gsa, and that we have a legitimate purpose to examine. In 2008, congress directed gsa to lease out the Old Post Office building to make profit. Relying on the opinion not of their own attorneys but the lawyers, theys refused to turn over any basic financial documents that could help us determine if they are upholding the terms of the lease. How can we know that taxpayers investments are being protected if we cant examine the financial records of the hotel . How can we be sure that the National Policy is not being swayed by those spending money in the hotel that benefits people at the highest levels of our government . Us fromlso preventing seeing legal memos. It is shameful and yet what we have come to expect from an executive branch that continues to Stonewall Congress and rejects transparency at every turn. You could not have ever imagined a situation like today, but the Founding Fathers were wise enough to put the emoluments clause in the constitution and we should be wise enough to enforce it. In the first panel today, we will hear from the agency that oversees the d. C. Trump hotel lease and from the Inspector General who found that the gsa did not fulfill its obligations under the constitution. The second panel, we will hear from legal scholars who can shed more light on these issues. I want to thank the witnesses for being here today. I look forward to hearing your testimony and answering your questions. I recognize mr. Meadows for an Opening Statement. Thank you. In theain, here we are drama of everything related to President Trump is bad. Instead of focusing on Critical Issues like Disaster Recovery in kremmling infrastructure, we are here today trying to answer a constitutional question currently before the court, and i would offer that no one on this desk is even able to answer. We are looking at a constitutional question but no, this is about the president and his business. We have other business before this subcommittee that is critical to the american taxpayer. We have 79 bills referred to the subcommittee. We have only acted on nine of them. We could be at a hearing today examining some of those proposals. And it is National Preparedness month. Here we are, the original plan for the hearing today was to focus on recovery areas, some that affect my very state. Instead we are focusing on an issue because of the perception of wrongdoing. Based on our markup last week, the remarks by members at the market, i am sure members on both sides of the aisle would view it as a critical responsibility of this committee to address disaster relief. Right now, more than half the states and territories are still impacted by 73 open, major disasters and emergency declarations. Additionally, gsa spends over 5 billion per year on lease space that the federal Buildings Fund struggles to pay for the bakes the basic maintenance. Yet here we are today calling the gsa commissioner here not to talk about those things but to opine on a decision already made, a conclusion that has already been made by my colleagues opposite. Let us be clear, we are here today because of police of a lease endorsed by, advocated by democrats, signed off on by democrats, negotiated and executed under president barack obama. A lease where nearly all the decisions were made before and after the election were made by the Obama Administration, and yet somehow it is the president s fault in this one decision, made after he was sworn in, was done by a career Public Servant. Focusith that, if you just on that, we have a longterm career Public Servant with leadership that is appointed by gsa, making decisions here we are today, the Inspector General found there was no undue influence in the decision. Almost a loss for words when you look at this because gsa has produced documents at the request of members, over 10,000 pages, nearly 3000 documents that have been produced and more is expected. Yet our colleagues would argue that the gsa is not responding to their request. Let me be clear on this as well. I am a strong supporter of transparency and oversight and access to information. But when those demands start outsized, beyond the core mission of what is happening, we have a responsibility to make sure only requests are not reasonable and legitimate, but not a fishing expedition. Myselfcan members, included, sent a letter in february requesting documents on which the oigbased and allisons based analysis and conclusion in her report. This was not a fishing expedition because of the unusual nature of the report. The report has been cited as authority in pending legal cases yet it contains assertions without citation and in at least one instance is factually incorrect. The factual assertion has been disputed by legal experts. Its own legal analysis on unsettled constitutional questions currently before the courts. The chairwoman has talked about those constitutionally protected areas and our rights of oversight as a legislative body, indeed it is. This question is one that has to be resolved by the court, not by the legislative body. If we want to change the law and make sure we can change it, lets go ahead and introduce something. But today, nothing has been introduced, no markups on that. Factsthis issue and the in the legal proceedings, it is critical for us to verify every bit of the oig report and its accuracy and to understand the basic the basis of the report, we request that the case fell document, similar to the request the committee made last year on the fbi headquarters. So far, weve only received 177 documents, they are largely publicly available, Legal Research documents like law review articles. To me, that is unresponsive. I hope we can get back to the real work. I hope we can make sure that once again this committee operates in a bipartisan fashion. Todays hearing is not that, and with that, i yield back. I think the Ranking Member and i now recognize the chairman of the tni committee that has spent some time working on this issue and is quite familiar with the documents that have been released and some of the players and the issues. I recognize the Ranking Member. Yearsis nearly three since i first questioned gsa regarding the lease. It is Pretty Simple, no member delegate to congress or elected official of the government of United States or government of the District Of Columbia shall be admitted to any share part of this lease or benefit that may arise therefrom. The Ranking Member just went on at length about why we are here. We are here because president ,rump, ignoring all precedent decided not to divest himself of his business interests, and in particular, of the hotel, the trump hotel, and in particular, a hotel that has a lease that says no elected official shall benefit and the president was elected. He did not get a majority of the vote, but he was elected. So to say that this committee should not be pursuing this with gsa in that instance is bizarre. Secondly, this building was leased because it was losing money and the idea was it would make money and we would get a share. When gsato question does the stuff, they do a lot of stuff that is incompetent, a share of the growth because you can always hide we dont even know today. The only statements we have were either intentionally or unintentionally put online. They would say this is this is back in 2016. They would say this is proprietary. There is nothing proprietary in this document. Now gsa says congress is not entitled to those, they were released mistakenly. How do we know what the income is . How do we know how gsa is calculate in the profits . Apparently thats to the discretion of the Contracting Officer, i think thats career official he referred to. Ins career official opined november of 2016 that it was absurd that anyone would question the lease or the emoluments clause. This is a Contracting Officer. Of aed a series questions former official of this agency, is this how Contracting Officers work . He went on in the email to ivanka trump, i want to drink some coffee and tell you about my trip to new york. This is a Public Service looking out after the Public Interest, he is still the Contracting Officer, he has discretion in how they calculate profits, and we dont know if he gets a penny out of this or not. This is the statement, the cover page. The cover page of your thats what congress is the conger the cover page. That is what congress is entitled to butte what is the government getting . We dont know. The gentleman doesnt want to know whether the taxpayers are getting ripped off . That is extraordinary to me. Extraordinary. Will the gentleman yield . I will not yield. I will not yield, please be quiet. You went over tom and i dont want too much overtime. The chairman went over too. I havent gone over yet but you are going to make me. I asked for the legal opinions, we cannot see them, we cannot have them. We cant see the legal opinions questioned by the ig, but the gentleman knows they are fine, the legal opinions, whatever they are. The gentleman knows we get 3 million per year from the lease, the gentleman knows that. We dont know on a monthly basis with the income of the hotel is and what percent, what they are calculating this and what percent we are getting. But the gentleman knows we are getting more money under this lease than the previously spewed the previous lease. The gentleman is out of order. Thank you madam chair. Gavel] please stop interrupting. Are you going to be quiet now . This is the legal opinion we recently received from the gsa. It didnt come from the council, weve never seen a document out of the general counsels office. It is a document from michael best and frederick llp, attorneys at law. This is the only legal opinion we have, and happens to be the trump hotel attorneys. This whole thing is so out of line in terms of gsas oversight of the Public Interest of the lease of this hotel room day one. From day one. Thats why we are here today, principally because this president failed to divest himself of conflicts of interest and put himself and exposed himself not only in violation of of these but also emoluments clause of the constitution of United States, both foreign and domestic. That is why we are here today. Right on time. Thank you. Then chernow recognizes the Ranking Member of the tni committee for an Opening Statement. Chair,k you, madam Ranking Member meadows. We used to hear over and over again when republicans were in the majority, why are we doing infrastructure . Why are we doing infrastructure . Why isnt there an infrastructure bill . The question is still valid today and yet here we are, in a politically motivated hearing talking about the Old Post Office. In light of the disasters this year, i think we should be focusing on making sure our disaster Reform Efforts are working instead. Instead, here we are again in a politically motivated hearing. We need to make sure communities have the tools to prepare and recover from the next disaster. We saw just last week parts of texas being hammered by a Tropical Storm. My district in missouri is recovering from historic flooding that devastated homes and farms and people still havent been able to get into their houses. Many communities have a long way to go when it comes to recovering from the last two hurricane seasons. Instead, todays hearing is nothing more than a political spectacle and transfer the president s opponents to to doine him and continue their search for anything to further their case on impeachment. Thats what this is about. Instead of working on Disaster Preparedness or any other of the countless number of infrastructure items that are clearly more important than this, like fixing roads and bridges, we are instead going to be listening to politically motivated criticisms of the president. I know we have worked together in a bipartisan manner on this committee and i believe we can still do that if we put politics aside. Instead, this is a political distraction, it takes as away from the important work of the committee should be doing and with that i yield back. Thank you, mr. Graves. We would like to welcome our witnesses. The first panel, mr. Daniel matthews, a public building commissioner for the u. S. Gsa, and the honorable carol ochoa. Thank you for being here, we look forward to your testimony. Without objection, our witnesses. Mens be included in the record. Since your written testimony is part of the record, the subCommittee Requests you limit your oral testimony to five minutes as well. At this point, we will begin with mr. Matthews. Chairwoman and members of the subcommittee. I was sworn in as commissioner of the Public Service commission in 2017. Before that, i was a majority and minority staffer for almost 15 years. Let me begin by thanking you for authorizing our prospectuses, and for your help in securing Senate Authorization is welcome a particular for the lloyd george courthouse in las vegas. I would also like to briefly discuss how pbs is attacking some of the most difficult challenges in federal real estate, which this Committee Identified in the last decade. This included overreliance on costly leases, and reform the courthouse construction program. Gsa has cut three point 5 million square feet from its expiring lease portfolio, negotiated rental rates to 11 and avoided 1. 9 billion in future lease costs. By investigating our scarce areas, we are reducing our reliance on leasing. Constructing over 1 billion in courthouses on budget and on schedule. For the last two years, gsa has made significant progress in addressing the bipartisan priorities of the committee and a look forward to working with you on these issues in the future. Moving onto todays topic, i would like to share some context i believe is important. One of the longstanding bipartisan priorities of this committee was to address the serious disrepair and occupancy problems at the Old Post Office. This effort resulted in the bipartisan enactment of the Old Post Office redevelopment act, which developed dutch directed gsa to redevelop the post office while maintaining the historical integrity of the facility. Gsa conducted a full and open competition and in 2013 assigned 60 year lease with the Trump Organization. It provides for revenue sharing with the gsa and american taxpayer. This created a substantial financial benefit for the government and taxpayers. Prior to the redevelop and of the post office, gsa operated the facility at a significant annual loss, including 6. 5 million in 2007 alone. Today as a direct result of the act, instead of a multiMillion Dollar operating loss, gsa now receives approximately 3 million in annual rent for a Historic Property that has been renovated with private funds. While the Inspector Generals review of the lease did not determine if the president s involvement violates the emoluments clause, these issues continue to generate questions for congress. It would be inappropriate for gsa to weigh in on the emoluments issue while it is subject to active investigation active investigations. The meaning and application of the emoluments clauses have been the subject of active litigation for the entirety of the administration. Thenning in june of 2017, department of justice has taken the position in those cases that the president s interest in the trump International Hotel does not violate the constitution. The committee can rest assured that if and when these issues are conclusively resolved as a matter of law, gsa would faithfully adhere to the legal determinations. With respect to section 37. 19 of the lease, gsa followed standard process for determining compliance on the terms and conditions of police. The Contracting Officer has the Legal Authority and responsibility for making contract decisions, and worked in consultation with career attorneys from the gsa office of general counsel to make the decision. A a result of the process, in march 27 determination by the career Contracting Officer, gsa found the tenant in compliance with section 37. 19 of the lease. As a committee is aware, following the Contracting Officers determination, gsas spector general conducted a 16 month investigation into the management and administration of the Old Post Office building lease. I believe one key aspect of the review is vital to reiterate, the Inspector General found no instances of undue influence or interference on the career Civil Servants charged with administering the lease. Furthermore, gsa agreed with the report recommendation, the agency understood it, and we will take action with that recommendation, consistent with the recommendation for and will continue to use the language in future out leases. Lastly, gsa has worked diligently to respond to oversight requests, including from this committee. We have provided more than 3000 documents and 10,000 pages of materials in response to the committees request. In conclusion, let me thank you for authorizing our prospectuses in a timely manner. We think we appreciate that. Thank you. Thank you, mr. Meadows. We appreciate you getting your testimony ahead of time despite the deadline being earlier. Mr. Cohen . Titus, morning, chairman Ranking Members of the subcommittee. Thank you for the opportunity to testify here today regarding the Inspector Generals evaluation of the gsa management and administration of the post. Im sorry, can you hold the mic closer so we can hear you better . Sure. As you know, gsa manages the leaves through the Old Post Office building on pennsylvania avenue in washington, d. C. The Old Post Office llc is the tenant of the lease. On july 28, 2017, my office initiated an evaluation of battered with an administration of the lease based on numerous complaints from members of congress and the public. We focused our evaluation on gps gsa of v s decisionmaking gsas decisionmaking process and determining whether the president s business caused the tenant and breach of the least among the president s inauguration. We did not seek to determine whether the president s interest of the hotel violates either of the clauses of the u. S. Institution or the interest in section 37. 19 of the lease, or whether any violations breach the terms and conditions. Rather, we sought to determine any improprieties in this process regarding those issues. Our evaluation found that gsa , through its office of general counsel and public building service, recognized that the president s interest in the lease raised issues on the constitution that might cause a reach of the lease, but decided not to address those issues. We found that gsa attorneys made the decision not to address those issues by mid december of 2016 after having been put on notice in the summer of 2016 of the president s status as a nominee of a Political Party for the presidency. The attorneys did so without preparing a decision memorandum to document the rationale for the position they were taking. They did so without conducting any research, without checking for any opinions and the office of Legal Counsel or contacting or seeking guidance from that office. Our report found that gsa was correct in recognizing that there was a potential issue regarding the Old Post Office lease raising constitutional issues. Forddressed gsas reason ignoring the constitutional issues and the effect its had section 37. 19s of on the lease. Gsa lawyers gave us very deceptive reasons for these clauses. They told us, for example, the constitutional issues rarely arise in gsa work and that the clauses are not in joses purview and that the gsa was only to opine on specific provisions of the lease. For reasons we set out in the report, we rejected these explanations. We rejected them largely because the decision to include the issues from gsa consideration of the lease was improper because governmentll agencies, have an obligation to uphold the constitution and because the lease itself requires that consideration. In addition, we found that gsa s unwillingness to address these unconstitutional issues affected the analysis of the lease. That led to tsas conclusion that the satisfied to terms of conditions of this lease as a result, gsa foreclosed an early resolution of the issues, including a possible solution that would have been satisfactory for all parties and the uncertainty of the lease remains resolved. At the conclusion of our report, we recommended that before determining to use the language that gsa determine the purpose of the provision and a formal legal review of this office of general counsel that includes consideration of the president ial causes and advise revise the language to avoid ambiguity. I very much appreciate the interest of the committee and the work of our office, and im happy to answer any questions you might have. Madam chairman, i have a unanimous consent request. The chairman is recognized. I think in light of the testimony, you indicated that there is 6 million loss that mr. Matthews had. Did you enter it into the record in the briefing and the part of the release that would indicate a base threat of 4 million, which would be an income to the u. S. Government on the other expense as these documents be entered into the record. No objection. Thank you. Thank you both for your testimony and we now move on to member questions. Each member will be recognized for five minutes and i will start by recognizing myself. Mr. Matthews, before you accepted your current job in the summer of 2017, where you affiliated with the Trump Administration or Trump Transition Team or Trump Campaign or Trump Organization asking for your opinion and whether the Trump Organization was in violation of the least from the Old Post Office . I had no communication with anyone from the Trump Companies while i was being considered for this position. Have you ever have any communication when the current or former gsa employees about how the white house or President Trump would respond to your cash to divest from his to divest from his business interests . Well, i worked for the subcommittee as a majority staff director and we certainly received briefings from gsa on this very question. Thank you. Miss ochoa, in january of this year, your Office Issued the report thats been described in the gsa addressing the issue of this lease, including those that pertained to the policies. Is that correct . And on march 29 of 2019, just say delivered a tax plan and response to the recommendations about how they should remedy the issues in the hotel east, is that correct . Yes. And did you find that gsas plan to remedy the situation was sufficient . We have not agreed with the agencies corrective action plans today. In your judgment, did gsa clarify the section of the post office leased that had officials from being a party of a or a beneficiary of a federal release . Its my understanding the gsa did not take in the analysis we requested. Did gsa have a legal review of the cause that they failed to do when Donald Trump Took Office and you recommended . I have no information that theyve done that. So, gsa went back and is it correct that they submitted another plan to you on august 26 of 2019 . Is that correct . I think thats the right date. Ended your and did your office find that their plan would remedy the situation on that day and significantly different in the land that they submitted back in march . No, it is not. Ive got the two documents here. First is the gsa directive action plan in march 29 and the second is Inspector Generals communication with the gsa on september 6, 2019. I would ask for unanimous consent that they would be entered in the record. Without objection, we order. Section 37. 19 said that no member or elected official in the u. S. Shall be managing each share or part of this lease or independent way from. Miss ochoa, you said that the gsa clarified this language. Is it true that the gsa attempted to clarify this language by claiming that it should only apply to members of congress and not the president of the United States . The corrective action plan proposes to drop the language from section 37. 19 that prohibits the state and local a elected officials and the president and Vice President from benefiting from the committees. So theyre way of dealing with the problem of the president becoming under the clause, which was to drop the present from the lease and say that this would apply only two members of congress but not the president and Vice President. Is that correct . Or state and local elected officials. For both clauses then . I find thats my understanding. On top of that, is a correct that today, gsa, is stilling your judgment to uphold the constitutional by preventing the legal ranking . Of the monuments clauses . Yes, im not aware of their effort to look into the clause in connection with how it 37. 19. The section of mr. Matthews, im sure were in agreement that the president of the United States is an elected official of the government. Given that the independent ig is just failed to uphold your duties at the u. S. Constitution, can you commit that the gsa will conduct a legal review thate monument causes pertains to the trump d. C. Hotel . First, id like to respond to the corrective action plan. The respect to the interest of the provision, gsa agreed to no longer use the language contained in section 37. 19 in future leases, so only congress is timid not the president and case we got that. Will you conduct that study of legal implications or legal review . So, on that question, we propose to do in future is to remove the ambiguity by striking it and referencing the statutory basis for that cause. So theres direct reference to that reference. That statutory reference does not supersede the constitution, so it seems to me the investigation revealed yall just completely ignored the serious legal and ethical questions here and your response to the recommendations was not to follow the recommendations, but strike the president and Vice President and say that just applies to congress. Thank you and my time is up. Miss miller will be recognized. Thank you, chairwoman titus, and thank you ranking woman meadows. I spent most of my time on the Oversight Committee in hearings designed by my colleagues across the aisle with only one goal, to impugn and impeach our president. And now, instead of being productive in this committee, we are subjected to another display of political theater. And listen to what the left thinks about what the president is doing with the hotel that hes not involved with. In a transportation and infrastructure subcommittee meeting, its one of the most bipartisan committees in congress, and were doing it again. This is disappointing. I find it disturbing and a waste of the American Peoples time and dollars. I came to congress to work on issues that matter. Infrastructure is the future of america, and the future of our state. And my home state of West Virginia. When this hearing was first noticed, it was supposed to be a Disaster Recovery hearing. Issue that is very important to my home state and many of the other states that are suffering. Its an issue that i want to work on. It is sad that the political environment is so toxic that it is preventing us from doing what we came here to do, which was to Work Together on the things that matter. True thatws, isnt it before the lease, that we were losing 6 million per year on the Old Post Office, and that now the taxpayer is actually receiving income . Yes, thats correct. We have essentially a 10 million swing in the operating revenues of that facility. Its been a tremendously successful project, bipartisan project, from a real estate perspective and financial perspective from the taxpayer. We also have a building that had approximately 200 million in unfunded Capital Repair requirements, fully renovated, mechanical, electrical, plumbing, you name it. Its brandnew. Its held to a high standard. Its a successful real estate project for the taxpayer. On what day did the gsa announced the Trump Organization as the preferred developer for the Old Post Office building . The lease was executed on august 5, 2013. And when was it signed . Thats when it was signed, maam, august 5, 2013. And on what date did the president alert that they assigned his interest to another party in order to comply with the lease . I believe that took place id have to check to get that exact date. 2017 believe it was early or late 2016. Id like to know when it was finalized. Was that before or after his initial inauguration . January 23, id have to get that specific date, but it was right around that time. Ok. At what date was it determined, following the review of the lease, that the tenant was in full complaint and in effect . That was march 23, 2017. Thank you. I yield back my time. Id like a clarification. I dont know where this is coming from, that the hearing was noticed for disaster relief. This hearing has been noticed for this topic all along, and so thats something that needs to be cleared. Madam chairman, i think what it was is when we had the subcommittee looking at proposed hearings, you noticed it one way. But when we were doing the whole day, it was whole for disaster relief. Thats where the ambiguity is. I think thats scheduled for later. Next week we will be looking at fema again. I have a unanimous consent request. Adam chairman, i would ask unanimous consent that these three photos be entered into the record that shows the delegate from d. C. , the mayor from d. C. , along with President Trump at the groundbreaking, along with the celebration at the ribboncutting with the delegate from d. C. Trying to demonstrate how everyone seemed to be happy about this until the president was elected. Without objection, well enter it into the record. Mr. Norton, youre looking good here and i would point out this is prior to the president being elected. I would point out that one of the photos, for the record to my knowledge, just a point of clarification, to make clear on the unanimous consent request, is that one of the pictures is after the opening of the trump hotel. Who cares . Can we have a little bit of order in here, please . Can we have order . No objection. There was no objection to entering this in the record. This is the lease signing, prior to mr. Trump being eggnog rated as president inaugurated as president. Prior to. We now recognize him for five minutes. Thank you, madam chair. You keep referring to the income, which is actually mandated the lease, and all youre talking about is the mandated rent payment. Theres a provision of the proposed lease, where, and i would again question gsas judgment and how they calculate this, but we are supposed to receive an additional amount of money if the property is profitable. And according to the only released money statements that were leaked or intentionally put out by a publicly spirited employee at gsa, it began to be profitable in february of 2017. So, mr. Matthews, last year, all youre cording to us is the rent payment. What was the additional amount paid to the gsa under the terms of the lease out of the profits of the trump hotel . Thanks for the question. Is a simple question. Just give me the number. I actually need to correct something. The Profit Sharing is not based on profits. Its based on Gross Revenues. Ok, good. And those Gross Revenues are reported. What is the amount . Im asking you this simple question. We do not have that number. What additional payments were made to the government last year beyond the mandated rent . How much . We received, in the way its structured, its based on Gross Revenues with a minimum payment of approximately 3 million at a maximum payment, a percentage of the Gross Revenues. Up to 3 . That escalates. So how much did we receive over and above the mandated rent . As i testified, the mandatory 3 million base rent. So youre saying this hotel is losing money . Theres no Gross Revenues . Theres no sharing . Its not beyond the lease . Ok, so youre telling us that. Do you believe is legitimate for this committee . You worked this committee for a long time. Yes, i did. Do you believe we have oversight response ability . Yes, i do. Good. Then why cant i get anything except redacted statements . How do we know and you cant get me a number that were getting additional payments if you wont give us any financials . Will you give us the Financial Statements . Will you give us, yes or no . So, our goal yes or no . Our goal is yes or no . Ok, youre not going to ask answer that question. Youre not going to provide those. You do do audits, is that correct . Yes or no we receive an annual audited Financial Statement. Who audits . Its a thirdparty. Did you choose the thirdparty . Excuse me . Who chose the thirdparty . The tenant provides the Financial Statements. Ok, so you dont feel you have any responsibility to check into that, or the Contracting Officer doesnt . Id, would you contract to the ig, would you conduct an audit to see whether or not the income, which is required, over and above the base rent, is properly paid to the taxpayers of the United States of america . Actually, gsa has authority to conduct an audit. He just said they wont do it. The focus on of that audit would be on determining whether the government. We would have to think about that. We have oversight over the payment issue. Wed have to think carefully about the resources to do such an audit and any constraints on our ability to get the records. Wed have to think about whether it makes sense for gsa to ask us to do that audit or have and ask outside auditor. But gsa has the authority. Gsa has done this for other leases, i assume. Have you . Have you ever audited a lease . Overdue be that all of our tenants send us their own financials and send us their own legal after theyve hired an accountant . I dont know offhand if weve audited other leases, but we see servicer we receive certified audited statements. So since youve received them, how much money beyond the rent did we get last year, did the taxpayers get under the terms of this lease . What was that number . We just received the base rent. So somehow youve calculated, within the whole purview, there is no revenues over and above. Well, again, we received certified annual Financial Statements that tell us what the Gross Revenue is, and we know were receiving the proper amount of rent. I think the gentleman. Thank the gentleman. We will now recognize mr. Pence. Chairwoman, Ranking Member meadows, and the witnesses before us today. Ranking member meadows, i know you want to save taxpayers billions of dollars in the public lings space buildings space. It seems weve saved 9 million a year at the trump hotel. And id sincerely like to thank you for your leadership on this issue. I would like to take this opportunity to discuss real issues that impact hoosiers and allamericans, like transforming how we approach federal real estate and saving taxpayer dollars instead of putting on a partisan show. You see, billions of taxpayer dollars can be saved if we continue to one, consolidate and reduce our footprint, two, negotiate good lease deals, sell or redevelop properties that are underutilized, and four, put people in more efficient buildings. Commissioner matthews, when we met back in april, you told me i told you i had two priorities, Publicprivate Partnerships, and updating omb school rules to bring our approach to federal real estate to the 21st century. If we are serious about transforming how we approach federal real estate, it is critical for us to do things differently and put more options on the table, like p3s. Today, mr. Meadows and i introduced a Publicprivate Partnership for prosperity active between 19. Legislation to provide flexibility to pilot the use of Public Private partnerships. Hopefully, we get back to doing the work for the people we represent instead of grandstanding and selfpromoting. I yield back. Thank you, mr. Pence. We will now recognize mr. Davis. Miss davis. Thank you, chairwoman. Mr. Matthews, in light of the Inspector Generals finding that gsas failure to address the constitutional issues raised by the lease in has gsa taken any steps to address other constitutional issues at all . So, a couple points on that. We agreed with the single recommendation of the report and, as we understood new,nd we are applying a to feature out leases, weve agreed to remove the interested partys provision and replace it with a reference to the underlying statute. That governs that provision to remove any ambiguities. Sir, thats not the question i asked. I didnt ask what you were doing moving forward. I asked about the leasing question. So, the leasing question, there are a number of lawsuits that are pending, that are specifically denying to address this question, is there or is there not a monument violation . Executive branch speaks to the government. And there is no violation of the constitution. And it would not be appropriate for gsa to opine on that matter, given that the courts are addressing that issue. Ok, thank you. Thats enough on that one. So, in response to a question that was just asked, you said you were uncertain whether you conducted any audits on leases the gsa has entered into is that true . You dont know whether youve so, you are currently running the gsa, is that right . Im the public buildings commissioner, thats correct. And you dont know if your agency conducts audits on leases . We have thousands of leases. We conduct a variety of contractual Lease Administration activities every day. Audit youre unsure of an is one of those activities . I couldnt tell you, but we enforce contract actions every day. Sir, i would like you after this to submit for the record whether or not the gsa conducts audits on any leases that it enters into. I would be happy to get back to you on that. What percentage of the activity that you are responsible for right now for the American People, what percentage of those activities is managing leases . 10. 5 we have about billion floating through the federal Buildings Fund, over 8000 leases, 5. 6 billion in annual rent expenditures for private sector leases, the majority of our portfolio. Its one of our top priorities. That is a lot of money to not know whether you audit the activities. Are you concerned about the fact that you may or may not be plus annual billion funds that go to the federal government . We have Program Management reviews on a regular basis. We have contracting reviews on a regular basis. We have a whole office within calledtside tbs, procurement executives. We do contract reviews of different business lines on a regular basis. Every region, this year alone, weve probably gone through six or seven regions of internal contract reviews of our leasing programs. So, theres tremendous oversight over this. The question was about a very specific type of audit. I dont know if we do that same type of audit across all our releases. I dont know if those lease terms authorize is even present. This is an at least. Out leases are very few minority of our fully. Most of portfolio. Most of our releases, were leasing from a lease or. How often do you have a Profit Sharing provision and a lease that you enter into as the gsa . Again, our out leases it sounds like it will take you a long time to get to. Can you please find out how many and then report that to the committee . And then also find out how often you conduct audits and report that as well. From the answers you have given so far, in addition to the lease we are currently reviewing, i have Major Concerns about the oversight that you have over any of the leases that the gsa has entered into because it sounds as if you are not exactly sure what kind of review you are doing, and that is very problematic for the person who is ultimately responsible for the properties that the federal government has. I yield back. Thank you, the lady yields back. Now mr. Palmer. Madam chairman to have a point of acquiring before i begin my question if i may. Its a serious, i am asking for information. In chairman defazios in his Opening Statement i need to clarify that he said it had he had a conversation with a nice employee to give him a different perspective on the lease arrangement. No i said my staff did. Your staff did. Did that individual provide design individual provide documentation either in print or electronic format or was the content of the conversation recorded . The former ranking staff who has jurisdiction over this issue met with a person from gsa, and that person said there were substantial issues to be resolved. That conversation was characterized and sent to gsa in a letter of inquiry in november and gsa said its not a conversation and they denied the whole thing. Thats the end of that and then the gentleman has been transferred to new york and he wont talk to anybody. Ok but it was a former staff he has been transferred to new york, the gsa employee. My inquiry was that a former member of the Committee Staff had that conversation and if it was documented in any form, then it should have been provided to the entire committee. The staff identified and the individual identified. That would be my point of inquiry. I have no idea what hes talking about. We will just will just take a minute to take that into consideration. Thank you madam chairman. Was anve been advised it informal meaning to a former staffer. I am sure those kinda meetings take place all the time. We can talk about that further off line. Thank you madam chairman. It would be my opinion that that information should be provided to the entire committee. But i appreciate response to the inquiry. Thank you. Point of order. If indeed it is entered in the record, it has to have something thats documented and you cannot have a referral to a testimony that is not something of record. According to the committee rules. This was not a testimony. It was not referred to as a testimony. It was referred to as an informal conversation with a former staff person. Then was the subject to the investigation youre saying this is not part of your investigation and this was just a casual conversation . This was back in 2016. So, we will move on with the questions from mr. Palmer. Under the Previous Congress . Yes. So then its not its not relevant to this hearing . Well, its as relevant as the pictures from the Ribbon Cutting are. I think will now move on with mr. Palmers questions. Thank you madam chairman. Testimony, you make a point in your conclusion that appears to say the procedures that the gsa followed in these out leases of Historic Properties is consistent with the other out leases. And i will read it to you. Hasys the gsa ogc acknowledge that if the constitutional violation was found the issue of potential breach and gop and the provision. However, the fact remains that the gsa continues to use the language of the privation and never properties. So it appears to me they are basically doing what they always do. It is almost like a cutandpaste lease arrangement that occurred apparently in 2013. Is that accurate . Are you asking me about the origin of that language . No maam, im asking of this consistent which appears that you think is problematic that the gsa has kind of a Standard Operating Procedure for these out leases of Historic Properties. The point of the sentence that youre reading to me was that gsa has told us that if there is a constitutional violation found they have to go back and revisit whether it was a breach. They still have the same language in two existing leases. Its consistent with the other leases. It sees other leases of extra property. Its substantially similar. The only difference of what state and local officials applies to. That is my point. It is a standard lease. Madam chairman, i yield back my time to Ranking Member mr. Meadows. I thank the gentleman from alabama. Mr. Matthews, let me come to you. Is the Trump Organization in breach of their contract . No. In march 2017 the Contracting Officer found them in compliance. So, with regards to the lease payments, are they in breach of their Lease Agreement going up until today . Are they paying the accurate amount of lease payments as agreed upon in the lease that we all have . Yes. They are current on the rent. In your long history with this committee and with gsa and with dealing with public buildings, would it be foolish for them to underpay on their lease because that would say in essence terminate the least after all the improvements theyve made . It certainly wouldnt be wise. Ok well let me put it this way. If you had invested millions of dollars to upgrade the Old Post Office, would you make sure that youre making your Monthly Payments in accordance to the lease so that you do not default on a lease . One would think it would be important to remain in compliance with the lease, absolutely. All right. So fundamentally the question we have before us today is not the is not whether the Trump Organization is making the payments that have been negotiated under the previous administration, as i said in my Opening Statement. Boils down to an emoluments question and whether the president of the United States can get some kind of benefit from the operating of the hotel that he leased prior to him becoming president. Is that correct . Yes it is. We know, we receive and certified audited Financial Statement. We know the right amount is being paid, and youre right, at the end of the day, this comes down to that core question which is pending before the courts, and the gsa is not in a position to opine on that answer, that the justice of already asked. Does gsa have a number of buildings in the washington dc area that they are actually paying taxpayer money out on an annual basis to maintain those cost tos that is a net the taxpayer . There are some. Most of them are Historic Buildings. Are there more than a dozen of those . I dont know its a simple question. Nationally, absolutely. So in doing this what you took was a nonperforming asset, where we lost according to your testimony, 6 million a year. Is that correct . Yes. And you are now making a net plus of 3 million a year to the federal treasury, is that correct . Thats correct. Its been a very successful financial for the taxpayer. I yield back. Thank you i recognize miss northam. Well hooray for us. We dont even know if we are getting a share of the profits that the government is entitled to. The Old Post Office redevelopment act was my bill. This building is located not only in my district, in the Nations Capital it was an embarrassment. It was a who came, dump. The first floor was used Street Vendors essentially. And so, we finally were able to get those taxes. And by the way, that bill, they do pay property taxes to the district and d. C. Hotel tax. You bet your life i was pleased to cut the ribbon on this dump and make it into a real asset for the federal government. It was underperforming, and in plain sight, the government was losing millions of dollars every day. Let me ask you commissioner matthews, you said that the gsa now receives a monthly payment. And here i am quoting the amounts you indicated. 267,653 a month. I appreciate that figure. Testimony, could you tell us how the congress can verify your answer. Obviously we dont take at face withoutgures like that having some way to verify them, and therefore give credit to such an answer. We received the rent, we received payment that goes into the u. S. Treasury. We could certainly provide you the financial transaction records that shows you those deposits remain. I am sure that is possible. What gsa continues to provide congress with are monthly and annual Financial Statements. Twode this same request years ago, but we have still not received the monthly Financial Statements. Im asking you now, at this hearing, will you commit to providing this committee with these financial documents so we can verify that the Old Post Office is a performing asset as you have indicated today . With respect to the financial document request i would say our goal is to accommodate the committees oversight request of to the greatest extent possible while ensuring compliance with our contractual obligations to the tenant. And our staff i know are discussing these issues are and and we are trying to come to accommodate that request to provide information while also restricting our contractual obligations under the lease. You will engage with the committee on this question of providing the documents i have just asked for . Our stabs are correct. What . Our stabs are correct. All right. Thank you very much, madam chair. Thank you for letting me sit on the committee today and ask a couple questions as we get into the fall season here. Republicans are right and people are going crazy for Pumpkin Spice coffee and early bruise are putting the witches and ghosts in the yards, so we are going to chase more witches and ghosts i guess, right . Because i am in disbelief that we are here at a time with the fires in the west that we have, and the hurricanes and the flooding in the south, the infrastructure we should be working on goosing up our levees, and Water Infrastructure and everything around the country and we are dealing with this hotel here once again thats been established as making money and was losing money for years. Its getting down to asking are our accountants if it is actually making money. Is Pretty Simple stuff. Does the president sign the checks himself . I have a hat with his signature on it, if you can compare signatures to make sure it is actually happening. The ow the leases with that is about what we are down to. We want to talk about what this committee actually works on. I hope we do more emergency management. With what we have going on. But we do have a situation of a public building in california. Theres a request for a new Federal Building for the citizenship and Immigration Service centers which process immigration applications. Kind of a big deal right now. The existing building has an extremely high risk seismic classification and other issues in the building which have impacted federal workers and has caused delays in processing immigrant applications. Again, kind of a big topic these days. So, this committee has not acted on that. It has done other business here but a very high priority issue, the border, and we hear a lot of dramatics about how they are doing along the border. Theyou talk about importance of expediting this to let the committee do this work . Let me say a couple things. Seismic interests are honestly very important. We have an older inventory. So often times our buildings are not to current seismic codes. We are in the process of upgrading a number of buildings across the country. Some in california, some in oregon, some in seattle. Washington as well. And one of our Biggest Challenges is that our Federal Buildings fun we received about 10 billion in rent every year. We only receive appropriation out of that fund about 9. 5 billion a year. Every year we are being shorted about 1 billion of funds that can only be spent on public building purposes under title 40. But the money is sitting there in we are not able to access it. In Properties Like you are describing, we are really challenged to repair them, get them in good working order, and make them safe. We have thousands of employees who need and buildings that need real improvements. If we had full access to the funds that we could do that. Its critical to move this in a timely manner and again we thank , the chairman for her help particularly with the perspective we have for building in her district. We have a courthouse thats about 20 years old and the firelight safety system. We proposed that project and for a good one. 5 years that prospectus was blocked up in the senate. Thank you for your help. We were able to get it loose. It would be nice if we can get that going here, because we have a backlog at the border, we have obviously many seismic issues in my home state of california, and nearby oregon as well, and the west. So would you say this is a priority this committee should take . Yes, we very much appreciate that. Thank you. I should end it there. I think the gentleman from california. After your port was released lecturers released, a ar the university wrote factual error of are you aware of that . Can you hit your we adopt his particular argument. Pointing out he felt you had a factual error. He expressed a different view. Well did he say you were correct . He expressed a different view. It is an easy you have council behind you if you want to turn around and ask them. Did he agree with your analysis . No he did not. So i would ask unanimous consent that we enter into the record a statement from professor joshua blackmon, detailing the exchange with miss ochoas office. Thank you. I yield back. I will now recognize mr. Garamendi. [inaudible] it wasnt me, john. Thank you. No, it certainly wasnt, mr. Meadows, thank you. The question has been raised as to why we are here today dealing with this issue. All of us have taken the oath of office. It basically says i do solemnly swear that i will support and defend the constitution of the United States against all enemies foreign and domestic we are here to uphold the constitution of the United States. We know that article one section nine clause nine is a foreign emoluments clause which is very much to the question before this committee at the moment and article two section one clause seven of the president ial emoluments clause is also before the committee at this moment. I think we would all agree this is the issue at hand and the reason we are here is to carry out our solemn oath of office. And both of you before us also took the same oath of office. So let us proceed then with some questions and understanding of why we are here. Mr. Matthews, you stated just a moment ago that the tenant is in full compliance with the lease. My question goes to miss ochoa. On page 23 paragraph five line six through nine of your report, you say according to it, my question to you is can the gsa state definitely that the Trump Organization llc is not in breach of the Old Post Office lease terms without an evaluation of these constitutional questions . In other words, can you tell us definitively that they are not in breach until such time as the constitutional emoluments clause issues are dealt with . Put that into the positive. Are the in breach of their lease emoluments clause and the lease language itself . Its hard to have a full discussion of that issue without being able to discuss gsas legal opinions. Certain portions of our report have been redacted based on claims of privilege. What i can say and what we said in the report is that without employing the constitutional avoidance in their interpretation of section 3719, of takingclosed a way the emoluments issue off the table. Aside theshed fundamental constitutional issue of emoluments and said thats not relevant, is that correct . They said they were not going to decide the issues. I dont think they said it wasnt relevant. They recognized it was an issue they said it was an issue relevant to the lease but they decided they were not going to attempt to resolve the issue. On page eight of your report, you say that he, i suspect you mean the president here, still retains his financial interests in the property. Is that your view, is that correct that he does maintain a financial interest in the property . I believe thats a fact. Ok. Mr. Matthews, does the president maintain a financial interest in the poverty . I believe thats correct, yes. So your answer is yes, he does maintain a interest in the property . I am not familiar with all the details or the financial structure of the company, but i believe that is correct. You believe thats correct . I think it is yes. Thank you. Are you aware of any payments made to the hotel from Foreign Governments . For both of you. Mr. Matthews first. We are not involved in the daily management of our hotel. You were unaware of any payments from any Foreign Governments . I have certainly seen press reports. But you have not asked for or received specific information on that issue even though it would be a question of the emoluments and the lease itself . Well, with respect to the question of the emoluments, that question is pending before the court. We understand that, but my question to you is have you attempted to request any information on payments from Foreign Governments . Even though the lease itself raises that issue . We dont receive that level of information. Miss ochoa, do you have any payment from Foreign Governments . The gentlemans time has expired. Would you like me to answer the question . You can answer the question. We dont have direct access to the books and records of the hotel. Thank you and i yield back. Thank you. Just for clarification, he was talking about request for funding at a new building. Gsa sent us that perspective three weeks ago and minority and majority staff are already meeting with gsa on that subject to share thatlike information with them. Mr. Weber is recognized. District 14 in texas is a golf district and we had Hurricane Harvey two years ago we are still recovering from and now Tropical Storm and meld up imelda. You are sworn in in august, 2017. You stated the lease was signed august 5 2013. Correct. Do you know when negotiations for that lease began . I believe they began in 2012. 2012, ok. So it was well before Donald Trumps announcement he would run for president . Yes. Lawsuitsu aware of the that have been filed against trump over the hotel . Yes, thats correct. Were you aware of those . I am, yes. Are you aware that at least two members of this committee who are associated with those lawsuits . Am i personally aware . Yes. Did you know that . Yes. Ok, you did know that. Once the gsa Contracting Office made the decision about the emoluments clause and decided to move on, was that sufficient for the two of you . Mr. Matthews, go first. That decision was made by the Inspector Generals own report and testimony in december of 2016. Was a sufficient for you . Did you say ok, we will move on and do the American Peoples work . I did not arrive until 2017. There, itn you got was sufficient. Was it sufficient for you . No. Ok. Will we would look for this committee to do the same thing. Move on the American Peoples work as well. I will yield back the rest of my time. I think the gentleman from texas. I want to come back and follow up on my good friend from californias question. He was talking about a memo that i guess is privileged from december, 2016. Is that correct . No, theres not a memo from december, 2016. All right. So the privilege memo you were talking about, what privileged memo are you talking about . Im talking about the legal opinions that gsas lawyers wrote in connection with advising the Contracting Officer. When did those legal opinions get written . When were they written . Those were in march of 2017. And they were written by whom . They were written by gsa lawyers who were part of the team writing the contract. At that particular point, that legal team, were they part of the Trump Administration . Where they political appointees i guess what im getting at, or were they people who actually worked at gsa during the procurement process . It was the same team of lawyers spanning both administrations. These were career attorneys, yes. I am sorry, i did not hear you. Could you repeat that . Same team of lawyers looked at the issues spanning both administrations. But according to your testimony the office of attorney general made the decision not to address the emoluments issue by middecember 2016. Do you stand by that . I do. Yes. Ok. Was President Trump in charge of that decision at that particular point . Had he been inaugurated at that point . No. So any nefarious purpose of the emoluments issue being addressed, how would that have anything to do with the current president . If the decision was made in december of 2016 during the last months of the Obama Administration . Our report did not ascribe or describe any nefarious. No but i guess what im saying is there seems to be an implication that this administration was the one that actually said there is not emoluments issue and you and i both know what the real story is and those decisions were made under the previous administration. Isnt that correct . According to your testimony . Congressman meadows, id love to be able to talk to you about legal opinions but i cant. Do you stand by you testimony that they happened in the mid part of december 2016. They made the decision to gnore the issue in 2015. Do you think the president elect trump it was putting pressure on them to make that decision at that point . I made no such do you have any such evidence that would suggest that . If we had found such evidence we wouldve. Reported we wouldve reported. I thought. So i yield back. Mr. Johnson is now recognized. Prior to becoming public buildings commissioner at you gsa worked for several republican congressman out of california and then you went to work for the House Rules Committee on the republican side and thereafter, you came to the transportation and Infrastructure Committee subcommittee on public buildings d after that you went to the as commissioner of public buildings is that correct . Yes thats correct. You are what we call it political appointee is that correct . Yes i am. Youve had absolutely no experience in running a kind of organization what organization ave you managed . I was the assistant Deputy Commissioner of the Department Texas department of health under our responsibility i dont want your range of responsibility but i will say welcome back to the subcommittee hat you now are public buildings commissioner answering to your prior subcommittee as a political appointee. Let me ask you this question, sir. The trump 2017 ost office l. L. C. Requested a certificate stating that the company was in full compliance with section 30 7 19 of its Lease Agreement and gsa, your organization the, Public Buildings Department issued the letter is that correct . Yes i work for this committee. But yes my point is, in issuing, that letter it was done three days after itwas requested, was issued three days after the trump team requested it. Correct . I dont know how many days went by. You wouldnt disagree then that it was three days. What kind of assessment take place prior to granting the certificate by your department . What would normally happen . And how long does it normally take . Thats the question i want to ask. Theres a structure in place is three days i dont know how long it takes. Let me ask you this question. How many employees in your Public Buildings Department . Little under 6000. 6000 employees and how many in the public . When you include at least point a little over 10,000. Youve not had a chance to have that responsibility to review what actually happened on this Trump Post Office lease, is that correct . Even though you were the staff attorney for this subcommittee . Im not an attorney but i was a staff director. You have a degree in government and philosophy. Georgetown university, thats right. Now youre managing this Big Organization here. Have you received any phone calls from donald trump jr. , eric trump or anybody concerned with the trump rganization during your tenure as public buildings commissioner . No. You have not . No. Are you certain about that . Yes i am. Why did the tsa did not embark upon a study to determine whether stay post office leads to the Trump Organizations plan as far as the in monuments clause as its concerned. That decision was made in 2016 by the previous administration. You couldve had it reviewed yourself, could you not . To determine constitutionality isnt that your responsibility . Public buildings commissioner . I would say the conditions 2016. Hanged since there have been a number of lawsuits that in this very question that youre asking that has been among the courts and in that forum in the department of justice speaks of the executive branch and that forum and has argued that there is no violation of the constitution. Your department never undertook such a review. Is that your testimony today . Is that for me . Thats for you. You should know. Youre the director or the opinion. Chairmans times expired. You can answer that yes or no. No, it would not be appropriate. Id like to recognize now mr. Perry. Thank you madam chair. Inspector general watch ochoa, the oig began ministry and administration in the Old Post Office in july of 2017 in response to the members of congress and the Public Management of the least. The complaints generally raised two issues and does the monuments clause of the president ial law clause of the u. S. Constitution barr President Trump with business interests in the post office llc tenant and number two. Oes the president s business violate section 3719 of the lease . The next paragraph of the report explains that it did not seek to determine the accuracy of either complaint and rather, to determine whether there were any improprieties of the gsas decision to process regarding these issues. My question at this time is, why was the evaluation aimed at the decisionmaking process regarding this rather than addressing the complaints themselves. In other words, did someone preclude you or the gsa from evaluating the embodiments question itself . In the first instance, the responsibility of evaluating those issues was with the gsa management. They made the decision by the time we went with the review and thats why we respect our review to look at if theres anything improper in the way they came about those decisions. And the second case . In both cases . You said in the first davis case it was the first instance of addressing those issues it was the gsas managements responsibility. Ur oversight extended to how gsa fulfilled those responsibilities. Why didnt you just address the questions themselves you . You know why, youre the oig, ou would know why they carol made that decision, to look at the process of the question themselves. Yes, i know why. Its a matter of exercising judgment and it wasnt necessary for us to resolve the bearings of the issue in order to determine whether gsa was correct in recognizing there was a constitutional issue and whether there are reasons for avoiding. Was it necessary to answer the question of the complaint by members of congress than that we are seeing right now . Ou answered the administration of it but not the questions themselves when you made that judgment . I made a judgment that the review was appropriate to address the concerns of the complaints. Concerns of the complaints were regarding a clause of themselves and not the process in which you were to evaluate them i decided not to do that. One in the same. How does gsa come to this conclusion . Dont get the answer, right . According to use it settled constitutional law but its not ettled constitutional law. Let me ask you this. When did you start your role as the ig for the agency . In july of 2015. So youve been there for a while and youre not a pop it to the administration and youre doing the job that you think youre supposed to do of who is the president or not and what interest they may have. Mr. Matthews, regarding other similar leases that might be close to the post office. Do you receive monthly statements from other leases in accordance to what has been made of you in this hearing . Yes. So, you received them from the trump hotel as well . We do. Do you receive a breakdown of how much steep profit losses based on the lease of a weekly, monthly or whatever basis . We receive a Monthly Financial statement and an annual audit in the Financial Statement . It is the same for all of them . I believe it is. Genuinely speaking, right . Theres an outlier by the safe way for the all of them and no difference, right . Thats correct. Youre being asked today even though according to my good friend from california that the eason for this focus of this hearing is on the monuments cause but we are concerned about how much money were getting. Youre reporting the same is you do with trump hotel as everyone else. When youre being asked here today is to provide something and separate from any other lease that you imagine. Thats correct. Many leases do you manage . Over 8000. Thank you mister chair or madam chair. I yield the remainder of my time. We want to clarify that there are only six of these when [inaudible] you talk about the thousands of leases you have, those who would not be the same type as the type you have with the trump hotels as, that correct . Yeah. Now recognize mr. Brown. Thank you madam chair. I want to thank my colleagues on the committee and their diligence on this issue and i understand and realize the questions that are in the degree that i have. Let me just start with saying that im troubled and im disturbingly frustrated to know that a federal Government Agency in the gsa is officers and attorneys and supervisors who do not fulfill their responsibility to consider upholding and enforce all of the laws of this country and whether its rules or executive orders or statutes and the constitution and to learn of the igs report in that response and say its disturbing to say that the least i dont think that any Public Servant and members of congress or the president or above the law but i dont think that that sentiment is shared at 1,600 pennsylvania avenue. Bottom line is that if the president had fully divested from this company company, this hearing would not be necessary instead we have to discern whether the president is putting is business and personal interests above our nations. We have to question why foreign leaders lobbyist and even the attorney general is to thousands of dollars at the trump hotel and what the president enriching himself. I wanted to write this question to you mr. Matthews according to the office of Inspector General in january 2019 report the contrary to both your written and oral testimony here today, gsa failed to consider the clauses to the u. S. Constitution in regard to the Old Post Office lease. Mr. Commissioner, has anyone in the gsa office of General Council providing you or any of your colleagues any guidance on the issue since the january 2019 report was issued . The answer is no but this question is pending before the court. Yes i understand that so in anticipation you have not made an inquiry of youre gentle youre general counsel of this issue it would not be appropriate for gsa to opine. Im just asking yes or no im just asking if you are any one of your colleagues have made inquiry of your general counsel on the issue since the ig report since 2019 just yes or, no it sounds like no. Is that correct . Correct. The committee has been requesting records relating to the trump hotel Financial Statements and members have asked about his general counsel provided on how to track expenditure at the trump nternational hotel, were there any other similarly situated with derived from State Government . Under the lease the tenant is obligated to provide monthly and annual added Financial Statement. Do they report revenues by Revenue Source whether its a foreign, federal or State Government . Yes or no . The financial document, again, we are working with im just asking your question. It really is a yes or no question. I appreciate your desire to provide a lengthy explanation but is there a process where the revenues are reported by source specifically federal, state or Foreign Governments . We dont receive that sort of break down. So if the court were the rule that there is a potential monuments clause problem, are you saying that you dont have he system in place to identify whether or not a Foreign Government paid rent or lease or services at the hotel . I will not speculate on the course may or may not do you you are just going to wait what that may or may not be for gsa. Have you asked you a general counsel for guidance on this issue . Im not going to speculate. I am asking you if you asked general counsel by the issue of whether or not whether you should or shouldnt track the sources of revenues or fees that re paid a trump hotel . The tenant complies with the least the lease has provisions so have you asked general counsel . Im not going to discuss. That if youre not going to answer the question yes or . No no. Let me just be clear. Daniel matthews are you going to answer yes or no the question i briefly asked . I am trying to answer the question. Let me restate the question. Let me be a little simpler let me be a little simply the question. I am really reclaiming that time gentlemans time has expired. Five minutes flies . I recognize mr. West. Thank you madam chair thank you the witnesses are being here today. I was excited to see we were going to be talking about billions of dollars of federal assets theyre sitting out there unused but unfortunately thats not really what this discussion is about. I thought we had this horse has been written hard and put up with but apparently it died in the stable and somebody wants to beat on that dead horse a little more. But there are serious issues this committee should be addressing. Just in my hometown of hot springs arkansas we have 200,000 square foot hospital that was the original armynavy hospital used from the 1800s through world war ii, Historic Building currently needs a tenant. And we have a National Park there history we restored historic bathhouses we need to be doing more of that to take care of these old Historic Buildings instead of having hearings beat up on one of these buildings that is actually a Success Story of how we use federal assets. Its just a rhetorical question but when we go to start focusing on the real issues, and i would like to yield the remainder of my time to Ranking Member meadows. I will come back to when you were preparing your review of this lease and drafting the report, did you reach out to outside Legal Counsel . No. All your legal experts carol were from the igs office, is that correct . The team did it review was with. The drafting, youre ig staff is that correct . So who on your staff is a constitutional expert . Actually the three senior members of the team have over 70 years of combined experience handling constitutional litigation in the department of justice. So with the department of justice you are obviously very critical with the gsa you were very critical of the gsa and consulting doj. Is that direct . Yes not reaching out and trying to find a solution to the issue that was presented. So when you are drafting the report, did you take into effect the department of justice position on this issue . We looked at gsas decisions at the time the decision was made and what was available to them. Did you take into account their position, their published position as it relates to this particular question . The position that department developed litigation doesnt affect the conclusion in the report. By the ig statue, you are bound to looking at all those legal experts and you are saying that the three people that you relied on where from the department of justice but did ou rely on any current doj opinion in drafting it . We were aware of the department of justice litigated position. So you just disagreed with it . No. We didnt weigh in on the merits of the question that the department of justice litigation was addressing. Thats the merits of whether or not there is a violation of the onstitution in the causes. Here. All we engaged in was really an issue spotting exercise. Because before we were about to criticize attorneys for failing to address an issue, we wanted to make sure dont share they were right when they realized that was a potential constitutional issue. Thats what our report was about. So the key word here is potential. Is that correct . Youre not making a definitive statement. You are not suggesting that the Supreme Court is going to come down on your side or gsas side. Youre not making an opinion there. Youre just saying it could be a potential issue. Thats why we are not trying to weigh in one way or the other. We dont know. When you did your report did you look and analyze the potential legal and financial exposure to the taxpayer that the Contracting Officer may have had in making this decision. Was that part of your analysis . Excuse me can you repeat . The Contracting Officers obviously made a decision based on unsettled constitutional law. Did you look at the potential financial implications that might arise from that, that particular decision . We looked at the reasons that the Contracting Officer gave us. And the lawyers gave us. The financial situation didnt come into play at all. Ok. I see my time has expired. I now recognize miss fletcher. You thank you chairwoman for his hearing today and four witnesses even the. I want to clarify witnesses testify. I want to clarify a few things we heard and make clear that in response to one of the questions about the volume of leases that are similar to the ones, the one we are talking about. There are only six out leases of the type with the trump hotel in washington d. C. Thats correct . We have for more than six out leases. Ok but actually, in july 2018 prior to the night in 2018 will be discussing analyze gsa and i the extent to which elected [inaudible] according to the report there are six only six ederal buildings, that means with at least 20 outlease by gsa. Do you disagree with this report . Will need to have in front of me but we have space in Federal Buildings all across the country. Are building i have we have three out places that we can think of one is restaurant, a coffee shop and they want to sandwich shop. Is that more than 20 of the building . No. So at least one person at least the report can all but ne of these leases container a contains a provision restricting are you familiar with that . Not with a particular building. No. Raise this team ssue with gsa . [inaudible] but we had a discussion but the fact of the language of 30 7 19 in two at leases and it has not been modified to resolve the ambiguity and we also pointed ut that with respect to one of those outlease, its just a year ago gsa told gmo that using the language was the best practice to sa if they intended modify a lease that didnt contain it. So the response that the intended to modify commissioner matthews, has the gsa indeed modify the language that would restrict participation by elected officials . We agreed to do was a future out leases, to remove that interested parties provision, replace it with language referencing the underlying statute that provisions were based upon. The answer to my question is no, it has not been revised for the building . Is that correct . I dont know. I would be happy to get that answer for you. If you could please provide an answer for the record that would be helpful. With respect to the future leases, as a practicing lawyer before i got here, litigating leases contracts and disputes im curious as to how you determine that a reference to the underlined statute was superior to an expressed provision in the contact and explicit provision in the least requiring compliance. Can you explain the rationale for that decision . Rationale was to remove the ambiguity in the contract provision and referencing the statute explicitly would eliminate that ambiguity. Do you think that referencing the statute explicitly as opposed to explicit contract provision is an appropriate correction to the ambiguity . I think the concern is that interested parties provision itself and a contract had some ambiguity to it. So our proposed corrective plan will eliminate the use of that prosfligs future contracts and replace it with a reference to the underlying statute. Simply a reference to statute was amended from time to time . Thats correct. Another quick question i want to follow up on. I want to follow up on the question my colleague miss davis asked about the auditing. It was my understanding from your testimony that alesci select the order of the Financial Statements that you receive. Is that correct . Yes. Do you have a list of approved auditors . If we do would be happy to get it for you. Do you require any specific standards of the audit is for example even if its a non Public Company . They have to comply with a standards is my understanding. Do you have any employees who reviewed the auditing pilot cho statements for the six specific outlease buildings. I believe my time has expired thank you very much madam hairman i yield. Thank you, madam chair. Let me come back on this lease to make sure we are crystal clear. Its a lease that allows for a base amount of money to be paid o the american taxpayer of approximately 250,000 a month or 3 million a year, is that correct . Its correct. Then there are thresholds that are above that that we basically be based off the Gross Revenues. Is that correct . Correct. So the operational expense where it is, we are just looking at Gross Revenues and percentage of that they would adjust elise lease payment. Is that correct . Thats. Correct is that not the most transparent way to do a lease where you have a plus up from a base amount where you dont get into how much it costs that you paid your waiters, how much you paid aff or how much you paid, anything else the, Gross Revenue is that not let the most their way to the the american taxpayer to find it at the unadjusted basis. Is that correct . Yes. Miss ochoa would you agree with that . We havent considered those issues. You havent considered those issues . No i have not. Let me ask you this miss ochoa do you believe that the american taxpayer is receiving more money out of the trump hotel lease or less money . Then they did prior to the lease of the Trump Organization . I accept what im hearing about a loss to the organization. The delegate from d. C. Has been very active on trying, would you agree with us mr. Matthews, the delicate has been very active on making sure that we use underutilized buildings in the District Of Columbia and make them producing assets. Is that something that the delicate and i have been pestering you about for sometime . Yes i would say its been a bipartisan priority of this committee for over 20 years. Would you say other than the enact the president of the United States is associated with the trump hotel and would you say that is a good model for all of the underutilized properties in terms of taking it from what it once was to what it currently is . Absolutely. N its financial project. So miss ochoa, let me come back to you. You made a number of assertions throughout your report that are without citation in your report. I would have to disagree with that. Well you can disagree. Im going to give you a chance to clarify. It doesnt give us any way to verify the accuracy or context of that. In fact, just in the last few weeks i believe the chairman johnson the senator from wisconsin provided your office with some details highlighting specific where in your report supporting documentation would be useful in his oversight. The plan to respond to that . Of course, weve been working with the committee for several months trying to respond to your request. So chairman johnsons response, you are planning to respond to that. Will you give that to the committee as well . We can do that. Are you making a request . I am making a request for that. When can we expect those responses . I dont speak for the chair but i am assume that she would want clarification for any report that the ig does. All along we have been providing information to the majority that is true. When can we expect a clarification of that report with what chairman johnson is requesting and what i believe the chairwoman is alluding to . I havent had a chance to ook at what has been requested and i understand it is a request for more documents and we will look at it, and do what we can weve, been privatizing documents for four gsa months now most of that was a real lock rely on in the report that are public in nature but we already turned over, our are the agencys legal memorandum, email exchanges with on the neys, working matter Contracting Officer and, between the Contracting Officers between the attorneys in the trump rganization. E have produced and with itled them down for whittled them provide to gsa to these committees. Are you aware of any reason other than perhaps a Court Decision why the Trump Organization would be in the fall of the current leaves are you aware of anything other than perhaps a emolument section . Section 30 7 19. The two of them are not independent of each other. Those together do you believe that they are in breach . Im going to stand on my report. We did not make that ultimate determination i would love to discuss with you the agencys legal opinion but i cannot. Gentlemans time is up. I just want to clarify two of the committee the problem has not been not getting information from the ig the problem has been getting information from the gsa i now recognize mr. Cohen. Thank you manager. Commissioner, how do you pronounce your last name . This ochoa i thank you. Talk about section 37. 19. Correct. That seems to me to be clearly obvious that exemption that is put in here in just a public official could engage in leases that if they are a general bit of a corporation or an entity and corporation or other entity is publicly held and the idea of eing that individual owns some stock in hilton or another Hotel Company or wheat, the word significant owner a significant beneficiary or management would be ok because its like minimal involvement thats clear. But as that as previously noted that the gsa privilege that opinion when moves interpreted why would they exert a privilege rather than just release their opinion . To me as a lawyer, its pretty clear that the other entities is connected the Public Ownership and exemption for people who own stock, it is a tremendous id love to talk about legal but i cant. I think our report gives an interpretation along the lines. You can talk about it because its privileged . Yes. Which is hooey in my opinion. Let me ask you this question. Let me ask mr. Matthews as. Question in 2017 august the United States went to court at the request of gsas for a least hold property in myrtle beach south carolina. [inaudible] tom rises a friend how im not questioning him whatsoever but entered in this lease way before he ran for congress. The gsa went to court and the complaint that the United States can they as i have a come inaudible when gia say contracted congressman a report congressman as a beneficiary as elise with me gsa is that accurate . Yes that is accurate. When it came to President Trump what did you try not to go beyond a corporate shell and try to see if President Trump was ffected . The compliance with the lease was determined by the Contracting Officer. The Contracting Officer in consultuation the office of general counsel made a determination that the tenant was in full compliance with the lease. Situations are not comparable, there is a statutory i understand all. That basically you are looking for some reason to treat mr. Rice defended President Trump and it really isnt the reason. Inspector general ochoa is a concern of you that they look at the president different than they look at congressman rice . Weve been discussing that issue of dropping section 3719 from the contracts. In light of the fact that up until recently gsa thought it was best practice and in light of the factor in the course of the review we were told that they specifically inserted additional language about state local officials and about the president Vice President to prevent interference with contracts. Is it not good policy to say that public elected officials cant benefit from a government lease, thats good public policy. Why should we be concerned about that . We are concerned about it because we have a new person nvolved. Is President Trumps corporate shell is that the only shall hat has refused to look into o determine in a lease with gsa . It is corporate shall the only one . Again with respect to whether or not the ten isnt combined with a lease . I am asking have you gone is, this the only corporate shall you try not to go into . I wouldnt know the answer to that. Well you should. Are you aware of another hold of another hold where Donald J Trump might be the beneficiary . I have to get back to you now than i know. Is it run the same as trumps that is a percentage of the gross or the minimum . I have to review it, is pacific but i believe its an identical lease. Have you audited the monica hotel monica hotel pays over minimum Gross Proceeds of a happy to get back to you major youd be happy to get back to me. Need some work. Seems like a lot of questions to these two witnesses so you are in a starting starting our second round of questioning. Well begin we will begin with defazio. Madam chair, i just want to get back to this issue about the base rent. Adds of now adjusted by cpi, itording to your testimony, is 263,000 a month. Is that correct . I dont know the exact . Number it is in your testimony. If the proceeds of the hotel on an annual basis exceed 2 times that amount, which 3,111,836. The tenant is obligated to pay 3 of any thing over one dollar, thousand dollars, 1 Million Dollars is that correct . Thats correct. So in the last released monthly that we have from april 017. The gross was 1,965,000 dollars. So if you multiply that times 12 itcomes out 23 million 580,000 a year. You are telling me that somehow we are back to the point where the trump hotel is only grossing 267,000 dollars a month and doesnt owe us a penny more. I asked you how much more are we getting and you stonewalled that and you just keep going back to the 267,000 dollars. Let me try one more time on an annual basis has the trump Hotel Revenues exceeded 12 times that ,386. T which is 3,2111 yes or no . I think the confusion. Yes or no . No theres no confusion we are due additional funds if they exceed 3 Million Dollar 11,836 dollars. Im asking a simple question have revenues exceed that and lastly because you have not given a statement. Im afraid you are conflating the Gross Revenues with the rent. The rent is obligated. Ross revenue that exceeds around is to be, we had to get 3 . At the understand . That you just a great. 3 of the Gross Revenues. Over and above rent. The way this is structured. I think youre misinterpreting the contract. Because our understanding of staff, and i asked you this question before, is that he pays the base rent, and if his revenues exceed the base rent, we are doing 3 of the gross over that amount. That is not correct. That is not the way it works. Thats the way the staff has explained it to me. You tell me how it works. Very quickly. The way it works is the rent is based upon Gross Revenues the Gross Revenues. The rent was set of the original lease. No. Theres a floor. Right. Theres a minimum around. Payment that so we are. You keep coming back to. That. Are saying we are not getting a penny over that because theres no revenue over an above that is what youre telling us the trump without disillusionment . Im a for another new jobs planning. This with the rent to the rebel receives based on Gross Revenues. We receive 3 of the Gross Revenues in rent. It is a floor a minimum of 3 Million Dollars in rent. 3 million to 11,830. So if you are saying were not getting a penny more than that they are dont notice anything else it hasnt been treated. The minimum ting rent amount that is correct. So you are saying to this hotel is essentially a failure because in one month. No. Because it to Million Dollars and now you are saying that the revenue somewhere her 267,000 dollars. Im not saying the revenues are at all. You certainly arent because you wont provide us the documents. We dont know what the revenues are or are not. Will you provide us you dont have to give us what was released here. Which is proprietary will you give us the gross number four last year . We are working with the committee to accommodate you are not working with the committee have been asking for this that for a very long ime. We can only have one recourse if he keeps stonewalling us here. You are stone walling us. You are telling us that are we getting is the base rent and nothing else is the and you want substantiate that. You are accepting their audited statement, you wont show us those. Then we have the legal opinions of course which we cant see either. We are kind of looking into a black hole here. There is the document we gave kang. You even black out who signs with the tenant. What the hell was that about . The chairmans time has expired. Let me see if i can add some clarification since ive worked on leases for a long time. You have a floor and a lease and a lease amount is 3 of Gross Revenues with floor is that correct . Correct. In order to hit the floor mat amount, the Gross Revenues would have to be closer to hundred Million Dollars in order to hit that amount. Is that correct . Thats. Correct what we are essentially saying is the way the least structured is that in order to get above that figure, you actually have to have gross receipts above 100 million. 200 million, actually would change the amount that is paid to the federal treasury if it the gross receipts are 2 million. Is that correct . Yes thats. Correct so i am trying to explain that what happened is a good deal for the american taxpayer. We can take the other emoluments question separately, but when you look at a hotel and we are getting a base amount of leads the way it is structured is to protect the american taxpayer, not to penalize them is that correct . Absolutely. Correct i dont know what is so complicated about this. Because when we look at the least, it is very clear if you are looking at a lease, how you apply this. Did you actually work on leases before mr. Matthews when you were staffer . We reviewed them. You reviewed them. Did you work on legislation that apply the public buildings when you are staffer here . Yes for a very long. Time did the chairman have the issue with public buildings thats a softball question. Did he have an issue with public buildings in the accountability than what we need to do with public buildings . He did, he made a very high priority to protect the taxpayer and federal real estate. When you come in, to this committee you are willing to go and look at other ways to verify the Trump Organization is paying the proper amount to the American People. Are you willing to look, if i give you other ways to verify this number that is beyond just an audited audited return, are you willing to do that . We would certainly look at that, absolutely. Is there any malicious on the part of you or the gsa try to cheat the american taxpayer of revenue on behalf of the president of the United States . No, of course not. I am at a loss because we continue to come back, weve taken a non performing asset, we make it a performing asset we take a 6 Million Dollar liability and we turned it into a surplus of 3 Million Dollars, weve done that all without spending american taxpayer dollars. We allowed the president of the United States when it in his personal capacity to invest in washington d. C. It was applauded by democrats, it was certainly championed by all of us as a good thing for washington d. C. And then voila, all of a sudden, it is a bad thing because the president of the United States happened to win an election in 2016. We are looking at enemy here when they are important things for us to look at. But there is no doubt in my mind that this particular deal was a good deal for the american taxpayer would you agree with that mr. Matthews . Its been a fabulous economic performer for the taxpayer. So ms. Ochoa, im going to come back to you. Heres what i need and you know youve done before the committee the number of times this is not the first time that we go back. I love any oigs. Here is what im asking you to do. There are internal documents that you keep talking about with there gsa are also internal documents that you have from an ig standpoint when it comes to the constitutional analysis that you have actually put forth in this report. Are you aware of any other time where you have actually been asked to come in and make constitutional analysis as it elates to the igs work . I have to say there are no internal documents. Emails back and forth what whether they supplied or not you dont have those . What we relied upon for the analysis of whether there was a constitutional issue is all public source material. And we have provided that to you and your staff. So the three people that you have that internal deliberation we understand how they came to that decision . Absolutely. Its laid out no, no, no. In terms of their internal back and forth. Can you give that to. Can you have a problem with us having with having the internal deliberations how you got your International Constitutional analysis. That is laid out in the report. The gentlemans time has expired. Thank you. There are two issues here one of which is the financial situation with regard to the hotel and that can be discussed back and forth. The issue that i want to focus on is the moll identicals issue. In the emoluments issue, both of you said the while ago that the president continues to have a financial interest in a hotel in the hotel. That was your testimony. Without going back at that the question of emoluments becomes pertinent. The constitution is very, very clear that the president cannot receive an emolument from a foreign power, prince or state, or from a from the United States beyond his salary or from a state. Thats very clear language. There is no debate about that. The question with regards to the hotel does the president receive from a oreign government. In that earlier question, neither of you had that specific information and the question for mr. Mathews is why do you not have that information . You have been asked that uestion. Again, so we receive Financial Information based on the terms and crickets of contract. Excuse me. No, sir. Have you requested information about money from Foreign Governments and from State Governments . The question whether or not there is an emolument violation the courts thats not my question. My question is have you asked for that information . I think that answer is you have not. Thats correct. You have not. Ms. Ochoa, have youiested the information . We dont have direct access to the hotels books and records. We have access to we have not requested it at this point. Madam chair i would ask that the Committee Requests that specific information. Now i believe that we have a slide. Its called tracking profits from Foreign Governments to the trump hotel. Thats a lied. It was given to committee and it came from the Trump Organization. Presumably the Trump Organization gets back to the treasury whatever profits maybe, we have not determined whether they are not profitable my question is how the weather were going to determine the accuracy of any profit contributed to the treasury and we have absolutely no information about any foreign overnment or any State Government paying anything at the hotel . Is this useful or is this just a sham . Open question. Mr. Mathews . Have you ever attempted to track any profit thats been returned to the treasury thats not our role. So the scenes no, you have not. Ms. Ochoa . My question remains with any obstacles to our access. The oigs access to that information. Again the rationale that the Trump Administration used to get fast emoluments issue was that they were delivered to the treasury any profit that was received and yet we have absolutely no way to determine any participation in the hotel by Foreign Government or State Government. We do have press reports and we have the testimony of the former governor of maine apparently the state of maine spent 22,000 dollars at the hotel. The underlying question here goes back to the initial lease. We have been denied the legal uestions that we are asked of the counsel, but we do know illegal analysis that was done by the counsel, is that correct . That is correct. We also know that terry, Contracting Officer knew that the office of the general counsel recognized the violation of the Foreign Government clause might be relevant to breach and this important issue remained important. This is your testimony, ms. Ochoa. Do you stand by that . Yes. Apparently the office of the General Council raised the question about the emoluments. That remains open today and this is our task. Thank you. Thank you. You know, we can talk about how much calculated under the lease, whether or not the lease was in violation of the emoluments clause, mr. Service such issues that may have escaped the scrutiny of the American People. But one thing the American People do understand is that the american dont get dont get a good deal when the president of the United States is the ten and the landlord. That is pretty much like a fox being a charge of security at the henhouse. You know its a setup that is doomed to fit to benefit the lessor and lessee which is the same person at the same time back in that work at the benefit of the American People this subcommittee is well poised to address. Dont you agree that, mr. Mathews, since you work for this committee . Isnt it our general interest to oversee the operations of the General Services administration, particularly in a situation where the fox is over the henhouse . The committee and subcommittee absolutely have oversight jurisdiction over gsa yes. When my friends on the other side of the high of the aisle have been say all morning to somehow besmirch this hearing to chip at its legitimacy dont agree with . I will not going to opine on the mind or i understand your loyalty but you also have a loyalty to the constitution do you not . Yes i do. Thank you. With that i am going to yield the balance of my time gentleman from tennessee. Thank you mr. Johnson. Let me go back to mr. Matthews. Would you give us the agreement the Lease Agreement monaco hotel and gsa he and let us know if they have paid more than base rent and pay on percentage of ross proceeds . They have been more than what that. Than you dont know for a fact if there are provisions in the lease. It be interesting to note there were similar or different. The trump family has decided at some point on their own that to not violate the emoluments clause, they would pay hotel violating the constitution emoluments clause. Are you familiar with that arrangement and decision . Well, dont you think that if president decided to donate his profits, so as to not violate the emoluments clause, that is basically an admission that the clause is successful it even considered in determining , the lease . Im not going to provide an opinion on those types of statements. We did find in the report that there is an issue, a constitutional issue with respect to the lease. Thank you and apparently that the trump family agrees. Let me ask you, mr. Matthews, they give a percentage to the treasure you know the amount of money to give to the treasure . Are you referring to the lease contract . The trump family donates its profit. I am not familiar with that. You have to be familiar with that if the president of the United States, who is your boss that hes violating the constitution if it doesnt give this money to the treasury. And you dont know if he is actually giving the percentage of profit he gets from Foreign Governments, which he can know by auditing his books, and you dont know, you are being derelict in your responsibility. The president says this is a constitutional issue hes got to give his profits to the United States treasury. Yet you dont know what he has decided to give an or whether it is enough or not. At this is with a new preview and mr. Trump is basically said he is violated the constitution but so as not to seem as violating and, he is donating a certain percentage but its not gonna be anybody looking over shoulder to see done its the right amount of money did not violate the constitution . I guess thats an answer. You dont care. You want to answer . What i would say the question whether or not his violation, several litigation between before the court right now and in that form the department of justice has argued before the court is that there is no constitutional violation right now. Mr. Trump has admitted mr. Trump doesnt get money for no reason at all. He doesnt pay taxes. I yield back. Madam chairman, i have a unanimous request what will be for the record that that the amongst the consent that be included. Brief thate amicus was filed on the same project , without going along dissertation, i ask for unanimous consent as well. Without objection. I think the gentlewoman, and i yield back. We thank our witnesses, and we appreciate them staying with us for so long. They will be dismissed, and we welcome our second panel. We will take a fiveminute break. I am sorry, its not a break, a fiveminute recess. It is a fiveminute recess. Welcome our second panel of witnesses, mr. Michael hms. Liz have mr. Hans vonand spakovsky. Thank you very much for being here. We look forward to testimony. And brief, any Person Holding office of trust of the United States is prohibited from holding any office or title of any kind you has congress consent. Additionally, he shall not receive within that period any other emoluments from the United States or any of them. For most of their history, these clauses were little discussed and largely unexamined by the court. However, recent litigation by the president more fully investigates the scope and implications of the clauses. These raise a host of legal issues, some of which i address in more detail in my written testimony, my testimony today will focus on the interpretive issue in the recent litigation, mainly the issue of what emoluments and clauses mean. What constitutes an emolument is a key question that has only recently been addressed by legal courts. Several definitions have been offered. The narrow west definition would limit it to performances of services to an office or employee from a foreign or domestic government but would not extend to an ordinary business transaction. Broadtrast, the definition would cover any profit come again to my advantage, or benefit, including any fair market transaction between foreign and domestic government. The department of Justice Office hasegal counsel, or olc, also sometimes appeared employee to employee functional and rendering legal vice executive branch on whether or not the existence will implicate clauses. Some olc opinions would constitute a prohibited emolument has look to the goal of limiting the president and federal officers and have a benefits to whether at issue are intended to influence the recipient is an officer at the technicality of the circumstances. The debate over the definition of emoluments clauses are based on the history and practice. For example, anticorruptive and support reading expansively and rely on contemporary dictionary definitions. In limited definition, however, some scholars rely on contemporaneous definitions, as some business practices, like george washington. In 2018 and 2019, two Federal District courts systematically addressed the scope of the clause for the first time in the courts, and they used the modifier like any kind whatever, and authorize any parts of the constitution to control under the clauses. With respect clauses history and purpose, the courts, while acknowledging the broader in our and narrower definition of emolument both existed at the time ratification, find a way the historical evidence for Anti Corruption purposes for to expand the definition. These are not final, however. In fact, one of the decisions has been reversed by the west court of appeals before certain a plaintiff to sue, and the other has been certified to the District Of Columbia circuit, thus the import of these decisions that they relate to the emoluments clause is remains unclear. Thank you, and i would be happy to answer any questions at the appropriate time. Thank you very much. Mr. Hans vono to spakovsky. Thank you, madam chair. Its important to note that the lease between the government and trumps llc, a corporate entity , not the president , became operated before donald trump was elected. It comes down to a number of erroneous conclusions. The gsa should have considered whether the least of allegations and value of the laws come determination whether the leaseholder was in violation of section 307 19 of the lease. The question is a constitutional issue under the authority of the department of justice, not gsa. Doj has made it clear from the beginning of the administration answer out litigation filed against the president that the executive branch does not believe the least violates the emoluments clause. That position is controlling for the entire executive branch, and criticism is therefore unwarranted. Surthermore, the tenant provision is correct. That provision states that an elected official cannot be admitted into any share or part of the lease. That section is not violated when the least was entered into in 2013, since donald trump was not an elected official at the time. Also the lease was not with him , personally, but with a corporate entity in which he held a majority interest, along with other shareholders. The section does not apply to donald trump, since it i clearly states, shall not be construed to any person, such as a shareholder, or any Public Corporation or other entity. This clearly falls in the definition of other entity. Trumps interests in this llc, as you know were transferred to , a trust after he was sworn in, he relinquished management control, announced all profits from foreign payments will be donated to the u. S. Treasury. Therefore, gsa was correct when they issued a certificate saying the tenant was in full compliance with the lease. Its important to note that after reviewing 10,000 documents, the i. G. Found there was no undue influence, pressure, or unwarranted involvement of any kind than from anyone, including the executive office of the president. The i. G. s conclusion that gsas unwillingness to violate that section makes no sense. Since it was and is the Justice Departments position that there has been no violation of the emoluments clause, there is no reason for gsa to consider the issue. The plaintext of the emoluments clause makes it clear that gifts and presents from foreign estate and eState Governments, as well as payments and Services Rendered in the president s official capacity. They were not meant to bar a president from having private business interests or owning businesses in which customers, including foreigners pay the , fair market value for products and services they receive in an open exchange. As they have open out, nor the text were intended to reach benefit from a president s private business pursued, having nothing to do with his office or personal service to a foreign power. The argument advocated by those who say that the emoluments clause prevents from anything of value being received by president is far outside the intention of the framers. Under that theory, the governors pension that Ronald Reagan received as president would violate the domestic emoluments clause. The doj opinion concluded that did not fit within the emolument clause. Under this dubious theory, a president could not even hold treasury bonds, because the interest he would receive would be considered a violation of the emoluments clause. The concern raised by the i. G. Have no basis in fact or law. There was no violation of the emoluments clause when the Trump Organization was selected to be the developer of the trump hotel in 2012. Theres no violation after the president was elected based on the claims that any individual stay in a hotel is playing emoluments to the hotel. The president has not provided any services in that capacity as president. There is no reason for the doj with respecthose to the i. G. By its own terms, it does not apply to this situation. This is all much ado about nothing. Thank you. Chair and members of the subcommittee, thank you the opportunity to testify on behalf of government oversight. At the root of it we are here , today because president has not divested from us businesses. And his continued relationship patriots a conflict of interest with the gsa. This arrangement prevents a possible violation of a clause in the lease may to make sure that government officials not benefit from the lease of this sort to it as we heard this morning, earlier this he or, the gsas office of Inspector General found serious shortcomings. Early on, and the gsas review, the agency of the general counsel acknowledged that the president s business interests in the Trump Organization might constitute a violation of the emoluments clause. Officials did not consider this issue. Instead, gsa focused solely on donald trump being elected in the lease. Late based on a flawed legal analysis on the Trump Organization and the analysis by council not released to the public, it was determined that it was no violation of this election. For example, in an effort to limit the scope of the section, the Trump Organization has now narrowly interpreted the word admitted. However, the definition to put forth cleanly states that it could also mean give access to. Under this meaning the assertion , that the president was admitting to the lease before he was elected is unconvincing as it doesnt address the fact that he can still access benefits from the lease. I know the members of the minority have expressed frustration it didnt definitely answer whether present interest in private business is considered a violation of those emoluments clause is. But it appears that no one at gsa wants to be responsible for making that decision. With Contracting Office to determine that Trump Organization was in full compliance, they knew of this possible violation but in order. Ignored it. This calls in the question the prudence of his question to have an outqualified certificate to the Trump Organization. Even absent undue interference , serious questions remain about the gsas handling of this matter. Given the Inspector Generals findings, the Agency Response was grossly inadequate. Written by the agency general counsel response ignored all the Inspector Generals recommendations have placed the blame of the findings and former agency officials. The time of the letter was at times generally contemptuous appearing more concerned with , protecting the president s reputation than showing the ensuring that the edges of the court was acting well accordance with the law. The president s interest in a hotel in violation of the emoluments clause. He further asserted that the Inspector General found the emoluments clause violation is s. The general counsel ignored the fact that in those lawsuits, Justice Department attorneys are exercising their role as the president s Civil Defense attorneys. The federal Programs Branch of the civil division, as described in the website, describes action against the opposite the president such of the emoluments clause. As the Justice Department is zealously arguing for interpretation of the law, most favorable of the client, it is hardly impartial. The conflict of interest is apparent and the lease may well be managed appropriately, but it is an adequate and unfit to ask the public to blindly trust that an agency under the president s authority will manage those conflicts properly cared instead, the Trump Organization and the gsa should fully cooperate with members of congress. That oversight extends to the i. G. s review of the decisionmaking process and therefore additionally concerned by a lack of productive response to a request for records by Ranking Member meadows. In closing, its important for us to take a step back and consider the broader policy implications of our conversation today. The fundamental issue is whether we as a country are ok with a system that allows elected officials to privately profit of f their official actions. If the answer to that question is no, as suggested by monuments the emoluments clauses in the constitution, then we need to take a serious accounting of the laws and policies the conduct of our elected officials to make sure they are sufficient. In this committee, that starts with the gsa contract. Thank you. Members of the committee, thank you for inviting me to discuss gsa management, which he leads. Three years, ago donald trump declared that, quote, a president cannot have conflict of interest. Thats not right. Conflict of interest rise as one any officials personal interest or at odds with a duty to the American People. True president s and Vice President s are not covered by a lot of prescribe criminal penalty from the its not part of my Office Danger to constitution the Justice Department in the office of government ethics have advised president s to act as though the law applied and for the better part of for decades, they did. The kinds of measures their appointee stuck to prevent conflicts of interest. Now federally owned landmark houses the trump hotel, which is patronized by individuals and groups with interest affected by the federal government. For example, lobbyist advocacy groups, businesses nonprofits , and political candidates frequently hotel. Why wouldnt they . White house staff and other employees mingle there members responsible for your side of the tallied 64 Foreign Governments visiting Trump Properties one diplomat suggested it would be, quote, rooted to come to the city and staying at your competitor. Today a transcript was released to show that the ukrainian president was highlighting that he wants stayed at the trump hotel, apparently he seemed to think that it would ingratiate him to the president. Bahrain, philippines hosted major events, romanian Prime Minister personally stayed there, the saudi government has been one of the bigger customers , raising concerns about the kingdoms relationship with the administration. The consequence of the circumstances has been an unprecedented ethics races. The scandalplagued administration has seen one appointee after another resign amid inquiries into their conduct, while others remain in government under the cloud of ethics concern. For their part, gsa officials emphasized that aspects of their work occurred before the inauguration. They claim that they were not under any pressure. That defense ignores the very real risks in the face of the challenge of trumps organization beliefs compliance. The election is over, they are about to get a whole new set of bosses, and every career official knew this. In fact gsa was the lead agency , for president ial transition. In issues in gsa determination in 2017. They refused to consider the emoluments clause. It failed to even consider then waiting rendering arbitrary in capricious. More importantly, gsa officials failed to uphold their oath. To defend the constitution. Second, the lease makes clear that elected officials cannot be to any part and share of the lease and cannot benefit from it. Rather, gsa sidesteps the issue. Organization said the Hotel Profits will sit in a capital account while he is in government, but this does not solve the problem. The money stays in a property he owns, and he will benefit from any improvements they make with it. It is also nothing nothing preventing him from going back to when he leaves government. Notes that there is an irrevocable trust, but the trust is meaningless. The i. G. Said that does nothing to absolve conflict of interest. I discuss these issues in more detail in my written testimony, and in closing, i will just emphasize that needs gsa to conduct a new evaluation of the lease, one the properly takes into account the emoluments clause and the relevant contract language. Of, course the most effective way to avoid issues would be divestiture. Thank you again for inviting me. I happy to answer questions. Mr. Shaub. You, chairman defazio for the first question. Thanks, madam chair. Ms. Hempowicz, the gentleman sitting next to you said that because the Justice Department is defending the president and in civil litigation, that this becomes a controlling opinion over employees of the government of the United States. Is that correct . I believe he may have been talking about the office of Legal Counsel in its opinions involving this issue. Im unaware of anything in this situation, although they are notoriously private. And for you it would have to be an official opinion not involving pleading in civil lawsuit . I think. So i also think that gsa decided not to look into this issue the department of justice was not involved in any litigation. Thats a very good point. I mean, gsa has its own counsel. They say they certainly could not handle that. Why wouldnt they ask the office of Legal Counsel for opinion . Is a very great question, and they did exactly that 20 years ago when it involved than the president. Members of Congress Rather than the president. Mr. Shaub, you also talked about gsa and dereliction of duty and not asking that question. Would you like to expand on that a little bit . Mic is on, or get closer or something. Can hear me now . Yes. They had a duty to consider the issue. First of all, they swore an oath to uphold and support the constitution. Second of, all courts have ruled that in agencies failure even considered an important issue renders its actions arbitrary and capricious. That means that they havent done the basic thing that agencies do to evaluate a problem. They just simply punted. They decided not to address it. Of course we dont know what was in general counsels legal opinion, which led to the gestapo of the career employees shortly after that the employee was corresponding with ivanka trump, and saying this is all nonsense, theres nothing wrong with this lease. And by the way, i want to tell you about my trip to new york. Is that normal behavior by a Contracting Office of the government of United States dealing with the daughter and or ultimate beneficiary . Thats not normal for any government official. I spent four years of my career nominees,residential office and i never asked their daughters for coffee. [laughter] again, the general sitting next to you alleged that because the department of justice is right pleading in civil litigation case of the United States government. Thank you for your question. I cant speak to the legal impact of the department of justice pleadings. I do agree that generally the is binding within executive branch , unless or until they are overruled by the president. Thank you, madam chair. Mr. Meadows . Thank you, madam chairman. Mr. Von spakovsky, a new fire in your prior work, i believe you served as an attorney at the doj is that correct . , thats correct. Given that history, can you maybe elaborate on the role of the doj lawsuits, and particularly the one involving the constitutional interpretation . The Justice Department is the lawyer for the executive branch, including independent agencies and executive Branch Agency and and agencies such as gsa. They put forth an opinion. Is that correct . They put forth all kinds of opinions. They certainly have a long string of opinions on the emoluments clause is. But the point here is they dont take a when they take a position in litigation , whether it is constitutional or unconstitutional, that is binding on the executive branch. I know i worked at the justice i was ant, but commissioner for two years and federal election commission, and when we had a case, for example , for the u. S. Supreme court , and even as a commissioner, i personally believed in my official capacity that a particular statute was unconstitutional, it was solicitor general at the Justice Department who argued before the court and argued by the constitutionality. I had no power to change that this idea that the can gsa come out with its own view on the constitutionality of the emoluments clause. It is just not in the court with the way the law has been practicing Justice Department operates. Just look back former attorney general eric holder, who refused to defend certain federal statues, including the ones about gay marriage, because he said they were unconstitutional. They could not appear in court and say, oh, we disagree with the attorney general. So what you are saying is that it would break historical precedents in terms of the executive branch to allow the gsa administrator here, i guess, the ranking official who was on a panel before you, who is not an attorney, to appoint on the opine on the constitutionality of the emoluments clause, is that correct . He kind opine all he wants, but his opinion is irrelevant as is the opinion of the i. G. The Controlling Authority is the u. S. Department of justice. Ms. Hempowicz, i want to clarify one thing and then call votes. I will try to be very brief. I knew written testimony on page four broad definition immigrant is any benefit, gain or advantage camera, including profits from the private market transactions. Im not aware of any case that would identify the private market transactions. Can you help me with a case that was decided for that definition was included . Was that the majority opinion . Unfortunately, i cant off the top of my head, but i will tell you i dont think there is one. I would ask to clarify because i dont think there is one. We have looked. When you look at it, you made a definitive statement so perhaps you can go back and verify that even either give us a citation or a removal that would be very , helpful. I will be very happy. Mr. Foster, let me come back to you in the last minute i have. Crs, i am a big fan. Good in a is bipartisan spirit of transparency. What is the opinion of the emoluments clause . Has it changed over time . As what see are as interpreted as the emoluments. Has it changed over time . I know you are new, so if you dont know, dont answer. Thank you for your question. I think what i would say is that s determinations are based law and are based existing precedent, and theres very little legal precedent on whether the monument is its recently been addressed or federal courts. So what you are saying is that basically we need for to have a definitive opinion, we will probably need the courts to rule on this with pending litigation that is out there . There are ways that crs can look at Legal Provisions that havent been definitely but you have, and that has changed over time . From 2012 and 2016, that has changed, in terms of interpretation from crs. Are you aware of that . I am not aware of that. You get, and i will let with them and get back. Mr. Foster, we keep hearing we heard from gsa the they were trying to make new practice consistent with underlying law usc section 6 or 3a, thats a criminal provision in a civil position provision and it has to do with members of congress and, i would argue that its not really relevant here , and im just asking you do you think that supersedes the constitution that prohibits a president or any elected official from taking emoluments . Thank you very question. I have not review the provisions in preparation for the standalone. I can say its a general matter that statutory law does not supersede the constitution. Would you agree with that , ms. Hempowicz . Yes. Thank you. Also weve been hearing from our friends down here how much money in the post office is making as a hotel. Its making all this money its graphic taxpayers making all this. Money. If its making money is making , it is making money for the president. When the hotels making money, the president making money, mr. Shaub isnt, that a violation of the emoluments clause . It certainly is. Irrevocably trust does nothing to separate him from his assets and his income. We deal with this kind of trust all the time with president ial appointees coming to government and we help them work their , conflict of interest and consider those non entities. We also heard from the the that it the i. G. Was the best practice, thats the word, of the best practices but gsa to put something at , least like section 37. 19 that prohibits members of congress or elected officials members of the duration, if there is the best practice before President Trump came, and why isnt it the best practice now . Does that make any sense to you, mr. Shaub . The most confusing thing about the gsa response is that it seems like never addressed again and again, and avoided this conflict of interest provisions for future contracts, so they dereliction of duty. And where you when what when he was elected did you give him advice when he was elected . I think i been very public about the fact that all president s should divest their conflicting financial interest , and the same is true for the current president. Did he follow your advice . No he did not. , no he. Oh, hey, where did she come from . [laughter] we have a new member with us. From ms. Ow hear miller . Thank you, maam chairwoman. I want to thank you all for being here, and once again i , want to emphasize the very first hearing that we kind of this committee, which is called the cost of doing nothing while investing in our nations infrastructure matters. Its more important to my constituents that we act swiftly to improve our nations infrastructure. Mr. Spakovsky, how appropriate is it for contracted to make a speculation based on an unsettled law in the courts. I think that is very problematic for federal agency, and i can say as a former commissioner a federal agency, and in particular when the Justice Department is taking a position, again, because they are the Controlling Authority, particularly on constitutional issues, gsa cant go against that, and the position of the Justice Department, throughout all the litigation over the trump hotel and the lease, is that this is not a violation of the emoluments clause. Thank you very much. I yield back my time to mr. Meadows. I just want to thank all of you. You i want to thank the gentleman from West Virginia and i want to thank the chairman and i yield. Thank you. Any more questions from the subcommittee . Seeing none, id like to thank the witnesses and your contributions has been very informative, very helpful. I would ask now the record of todays hearings remain open as far as such time as witnesses have provided any answers to any questions that may have been submitted to them in writing and unanimous consent that the record be made open for 15 days for anything submitted by members or witnesses to be included in the record of todays hearing. Without objection, so ordered. If the members have anything to add, the subcommittee stands adjourned. Thank you. [captions Copyright National cable satellite corp. 2019] [captioning performed by the national captioning institute, which is responsible for its caption content and accuracy. Visit ncicap. Org] cspans washington journal,olicy issues that impact you. Coming up this morning, we will discuss the trump impeachment matt schlapp. Then brian fallon will discuss Progressive Court reforms. You will discuss battleground states with cleveland. Coms said richardson. Be sure to watch washington journal at 7 00 a. M. This morning. Join the discussion. The Supreme Court justices return for the new term today, with the Court Hearing cases on employment discrimination based on sexual orientation. , the Trump Administrations youing down of daca, and can listen to Supreme Court oral arguments on her website, cspan. Org, and watch on cspan. General david berger, the commandant of the u. S. Marine corps, discussed military priorities for the indopacific region at the heritage foundation. His talk focused on the future development of the marines and the role of technology in their future missions. This is one hour and 20 minutes. [applause] i am sitting here next to General Mills, thinking, General Mills and i are infantry guys, and when i l