Transcripts For CSPAN2 House Subcommittee Hearing On Trump International Hotel Lease 20240713

We will now proceed with Opening Statements. I wish you all a good morning and welcome to the fourth hearing in the economic Emergency Management subcommittee. One of the purposes of this committee is to protect taxpayer dollars by ensuring they are spent effectively, efficiently and with transparency. That brings us to todays hearing which is entitled landlord and tenant. You can tell from the title that today we will be investigating fairly unprecedented situation. The federal government owns the building that houses President Trumps d. C. Hotel hotel. Since President Trump has declined, he is essentially acting as both the landlord and the tenant. Before i was elected to congress , over three decades Teaching College students about American Government and politics. Serious discussions about the legislature holding the executive Branch Accountable to the highest legal and ethical standards and that is exactly what we hope to do today. First lets start with some facts. All federal workers in federally elected officials take an oath to uphold the u. S. Constitution. Of course that includes the president , all members members of the administration and all of us in congress. The constitution contains two clauses that are pertinent to our topics today. One prevents an elected official from receiving any present or monument from any king, prince without the consent of congress. Congress has given this president no such consent. A second unrelated clause accepting any federal or state taxpayer dollars beyond this president ial salary. A lot of people may not be familiar with the term, but the Founding Fathers thought of it broadly as any payment or benefit. They included it in the constitution to prevent u. S. Government officials from accepting bribes from Foreign Government or from parts of our own government that may be trying i think we can all agree that that is a pet practice that the public and the members of this coming congress do not abide. Explicitly stating that the tenant may not use the premises to violate federal law. For any purpose or in any way. That, of course includes the constitution. Moreover, section 37 of the lease states no elected official of the government of the United States shall be admitted to any share or part of this lease or any benefit that may arise therefrom. Yet the president continues to have a personal stake in the hotel. When people stare trumps d. C. Hotel, he directly benefits. Despite all the legal and ethical issues that arise from this unprecedented situation, the agency that oversees the lease, they have not done a thing about it. In fact, agencies independent Inspector General who is here today conducted an exhaustive report that founds that the gsa recognized that the president business interest in the Old Post Office lead raised issues that might cause a breach. Despite this observation, the Inspector General found they decided not to address those obvious issues. The Inspector General call that improper. I think that is kind of the least of it. When you take an oath to uphold a constitution, you are are bound by that old. Officials have turned a blind eye to these legal and ethical issues. The gsa failed to implement basic recommendations made by the Inspector General. Instructed to conduct a formal legal review that includes consideration of the constitution monument clauses and the terms of the lease. As far as i know gsa has pretended to conduct that view. Also instructed to revise the language of their leases to make it even clearer that the constitution is relevant. They have not done so in any way that satisfies the Inspector General and have not done so in any way. In addition to the legal issues, they have agreed to turn over documents. The jurisdiction and we have a legitimate purpose to examine. In 2008, congress directed them to lease out the Old Post Office building in order to make a profit. Relying on the opinion, not of their attorneys, but of the tough business lawyers, refused to turn over any basic financial documents that could help us determine the lease. How can we know that taxpayers investments are being protected if we cannot examine the financial records of the hotel. How can we ensure that National Policy is not being swayed by those spending money at the hotel that benefits people at the highest levels of our government. Also preventing us from looking at legal memos that were drafted when Government Officials who were supposed to have terms of this lease decided to look the other way. It is shameful and yet it is what we have come to expect from an executive branch and rejects transparency at every turn. Imagine a situation like we are in today. The Founding Fathers were wise enough to put the clause right in the constitution. We should be wise enough to enforce it. Our first panel today, we will hear from the agency that oversees and from the Inspector General who found that the gsa did not fulfill its obligation under the constitution. The second panel we will hear from legal scholars who can shed more light. I want to thank the witnesses for being here today. I look forward to hearing your testimony in answering our questions and i now recognize Ranking Member for Opening Statement. Thank you, chairwoman. Once again, here we are in the drama of everything related to President Trump is bad. Instead of focusing on Critical Issues like Disaster Recovery, our crumbling infrastructure, we are here today trying to answer a constitutional question that is currently before the court that i would offer no one on this day is even able to be answered. We are looking at a constitutional question, but this this is all about the president and his business. We have other business before the subcommittee that is critical to the american taxpayer. Seventynine bills that have been referred. We have only acted on nine of them. We could be in a hearing today examining some of those proposals. National preparedness month. Here we are, at the original plan for this hearing today was to focus on recovery areas. We are here focusing on an issue because of the perception of wrongdoing. Based on our markup last week, remarks by members at the markup, i am sure there are members on both sides of the aisle that would you it as a critical responsibility of this committee to address Disaster Relief. Right now, more than half the state and territories are still impacted by 73 open major disasters and emergency declarations. Additionally, spending over 5 billion a year a year on lease space. Struggling to pay for the basic maintenance of the building. Calling the gsa not to talk about those important things, but rather a decision that has already been made. A conclusion that has already been made by my colleagues. We are here today because of a lease that was endorsed by, advocated by democrats. Signed off on by democrats. Negotiated and executed under president barack obama. A lease where nearly all of the decisions were made before and after the election were made by the obama administration. Somehow it is the president s fault and this one decision, made after the president was sworn in, was done i a career Public Servant. Even with that, if you focus just on that, we have a longterm career Public Servant with leadership that is appointed making decisions and here we are today, the Inspector General still found there was no undue influence in that decision i am just at a loss for words when you look at this. Gsa has produced documents at the request of members over 10,000 pages nearly nearly 3800 documents that have been produced to the o po and more is expected. 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. When those demands start taking on an outside, beyond the mission, core mission of what is happening, we have the responsibility to make sure those requests are not only reasonable and legitimate, but not just a fishing expedition. Republicans, members and myself including sent a letter of february requesting documents on which they base their analysis and conclusion in her reports. It is factually incorrect. The assertion has been disputed by legal experts. It contains its own legal analysis on unsettled constitutional questions currently before the court. Now, the chairwoman she has talked about those constitutionally protected areas in our rights of oversight as the legislative body and indeed, it is. But this question is one that has to be resolved by the court, not by the legislative body. If we want to change the law to make sure we can change it lets go ahead and introduce something but to date nothing has been introduced and no markups on that given this issue and the facts using the proceedings is critical for us to verify every bit of the oigs report and accuracy and to understand the basis of that report we request requests for the oig report on the fbi headquarters however, so far on that we receive 177 document tunnels are largely publicly available Legal Research documents with law review articles that they use for constitutional analysis. To me that is unresponsive. I hope we can get back to the real work and i hope we can make sure that once again the committee operates in a bipartisan fashion. Todays hearing is certainly not that with that, i yield back. I think the Ranking Member and i now recognize the chairman of the tni committee who has spent some time working on that issue and is quite familiar with the documents that have been released and the players and all the issues americanized the Ranking Member. It is nearly three years since i had first questioned gsa regarding the lease and Pretty Simple, no member democrats were elected official of the government of the United States or government of the District Of Columbia shall be amended to any share part as a maze or two benefits that may arise therefrom. Now, the Ranking Member just went on and on the link below or here. We are here because President Trump ignoring all president s decided not to divest himself of his business interests and in particular, of the hotel, the trump hotel and in particular a hotel which has a lease that says no elected officials the benefit and the president was elected. He did not get a majority of the vote but was elected. 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. You have to question whether gsa and they do things that are competent but you can always hide and come up with but we dont even know today the only statements that we have were either intentionally or unintentionally put online. Now they would say this is back in 16 and they would say that this is proprietary and to read through it this is nothing proprietary in this document but now gsa says congress is not entitled to those in they were released mistakingly. How do we know what the income is and how do we know how gsa is calculate in the profits and apparently thats the discretion of the Contracting Officer. Thats a career officials that he referred to in this career official opined in november of 16 and there was absurd that anyone question this lease or the emoluments cost is a Contracting Officer. I asked a series of questions from a former official is this how Contracting Offices work human and then he went on in email to ivanka trump to say i want to get together with you and drink coffee and tell you about my great trip to new york. This is a Public Servant looking out after the Public Interest and is still the Contracting Officer and still has discretion in how the catholic the profits we dont know whether he gets a damn penny out of the thing or not. Heres the same as they give to us. Thats it. The cover page. The cover page is what congress is entitled to. What is the income you mac we dont know. What the prophet . We dont know. What is the government getting . We dont know. The gentleman does not want to know whether the taxpayers are getting ripped off or not . Thats extraordinary to me. Extraordinary. Will the gentleman yield . No, i will not yield. You went over time and i wont go the chairman went over time to. I have not gone over yet but you will make me. And then i asked for the legal opinions and we cant see them or have them. We cant see the legal opinions that are been questioned by the id but the gentleman knows they are fine and the legal opinions. The gentleman knows we get 3 million a year from the lease and the gentleman does know th that. We dont know on a monthly basis what the income of the hotel is and what or how they calculate this and what percent we are getting so the gentleman knows were getting more money under this lease than the previously. The gentleman is out of ord order. Thank you madam chair. You are not the chair. Will you be quiet now . Pinky. Heres the legal opinion that we recently received from gsa. Didnt come from we never seen a document out of the general counsels office and there is a general counsels office and its a document from michael [inaudible] and attorneys at law and this is the only legal opinion we have and that happens to be the trump hotel attorney. This whole thing is so out of line in terms of gsa oversight of the Public Interest in of the lease of this hotel from day o one. Date one. That is why we are here today. We are here principally because this president failed to divest himself of conflict of interest and put himself and expose himself not only in violation of belief but also to the emoluments clause of the constitution of the United States, both foreign and mastic. Thats right we are here today right on time. Thank you. The chair now recognizes the Ranking Member of the tni committee. Thank you, madam chair. We use to hear over and over and over again when republicans were in the majority are we doing infrastructure and why are we doing in the structure and resin infrastructure bill . That question is still valid today 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 focus on making the Community Reform efforts working instead but here we are again in a politically motivated hearing. We need to make sure our communities have the tools to prepare and recover from the next disaster. We saw just last week parts of texas being hammered by Tropical Storm melbourne. My home district in missouri is still recovering from these reporting and the devastating homes and people that still have not gotten back into their houses. In many communities that have a long way to go when comes to recovering from the last two and hurricane system instead todays hearing will be nothing more than a political spectacle and a chance for the president s opponents to undermine him continue to do their search for further their case on impeachment and that is what this case is about. Instead of working on Disaster Preparedness or any other of the countless number of infrastructure items that are clearly more important in this like to fix roads and bridges were instead were listening to politically motivated criticisms of the president and i know we Work 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 and takes us away from the important work this committee should be doing and with that, i yield back. Thank you, mr. Gray. Today we like to welcome our witnesses. The first panel we have mr. Daniel matthews, public building commissioner for the u. S. Gsa and we have the honorable [inaudible]. Look forward to your testimony and without objection our witnesses for statements will be included in the record. Since your written testimony has been made part of the record the subcommittee request that you limit your testimony to five minutes as well. At this point we will begin with mr. Matthews. Good morning. Members of the subcommittee my name is dan matthews was sworn in as commissioner of the Public Building Service in august 2017. Before that i served as majority and minority staff of the subcommittee for almost 15 years. I want to thank you for your help in securing Senate Authorization as well. Also i like to be discussed how pbs the tagging so most of the changes or challenges in federal real estate identified over the last decade. These problems include an overreliance on cause and the need reform the courthouse from construction program. In september 2017 gsa has got a halfmillion square feet from its portfolio and negotiated rental rates 11 below market as compared to the historic average of three5 below market. They avoided 1. 9 billion in lease cost. By investing scarce capital facilities such as the country in maryland the essay is reducing our reliance on leasing and improving the quality of the most important facilities. Finally, do they starting with the judiciary to have over a billion dollars in court houses on budget and on schedule. The last two years is a has made civilian progress in addressing the bipartisan priorities of this committee and i look forward to working with you on these issues in the future. Moving on to todays topic i would like to share context i believe is important. One of the longstanding Bipartisan Party radius committee was to address the despair and occupancy problems at the Old Post Office. This effort resulted in the bipartisan enactment of the readability act. While maintaining federal ownership and historical integrity of this facility. Pursuant to the act gsa conducted a full and open competition and in 2013 signed a 60 year lease with the trump post llc. Nobody pays rent and lease provides for the potential revenue sharing with the gsa and the american taxpayer. The street ever created a substantial benefit and taxpayers and prior to the redevelopment of the Old Post Office they operated the facility and a significant in a loss including six and a half Million Dollars in 2007 alone. As a direct result of the act instead of the multimillion dollar operating loss tsa now receives approximately 2 million in annual rent with property that has been fully representative repaired with full private funds. They did not seek to determine whether the president s interest in the hotel violated the monuments clauses or section 3719 of the lease in both of these issues continue to generate questions for members of congress. Respect to the monuments causes is inappropriate for gsa to weigh in on the issue as long as it was the subject of active litigation in the first of several lawsuits alleging violations was filed on generate 23, 2017. Accordingly the meaning navigation of the monument clause is the subject of active litigation for the entirety of the administration. Beginning in june of 2017 the department of justice had taken the position in those cases that the president s interest in the Trump International hotel does not violate the constitution. Committee can rest assured if and when these issues are resolved as a matter of law they would safely adhere to the legal determinations. With respect to section 37. 19 of the lease gsa filed a standard process for determining compliance with the terms of conditions and the career Contracting Officer with the Legal Authority and response ability to making contracting decisions with working consultation for the gsa office of general counsel to make this decision. As a result of the process of march 27 determination by the career contract officer at gsa found the compliance was the lease. As the committee is where following Contracting Officers determination gsa Inspector General conducted a 60 month investigation into the management and administration of the Old Post Office building and given the title of the hearing i think one key aspect of their view is absolutely vital to reiterate. But for general are no instances of undue influence or interference when the career Civil Servants charged with administering this lease. Furthermore, as noted in our response to the review gsa rated this report with singable recommendation because the agency understood it will take action with that recordation consistent with that recommendation prior to continuing to use the language and feature out leases. Lastly gsa has worked diligently to respond to congressional oversight request concerning the project including progress in this committee. Part of this effort was to provide more than 3000 documents and 10000 materials responses for the committees request. In conclusion, let me thank you for authorizing our perspectives in a timely manner we very much appreciate it. Thank you. We appreciate you getting your testimony to us ahead of time which was late last night. But the deadline being earlier but. Good morning, chairman titus, Ranking Member meadows and members of the subcommittee. Thank you for their virginity to testify here today regarding the office of Inspector Generals evaluation of gsas management and administration. Answer, but you pull the microphone closer so we can hear you better. Short as you know, gsa administers the grammy for the Old Post Office building pennsylvania avenue in washington dc. Trump Old Post Office llc is the tenant on the lease. On july 28, 2017 my office initiated an evaluation of gsas management and administration of believe based on numerous complaints from members of congress and the public. We focus our evaluations on gsas decisionmaking process for determining whether the president s possess interest in the lease cost the tenants to be in breach of the lease upon the president s inauguration. We do not seek to determine whether the president s interest in the hotel violates either at the monument clause of the u. S. Constitution or the interested parties provision in section 3719 of the lease. Or whether any violation caused a breach of the terms and conditions of the lease. Rather, we sought to determine whether there were improprieties in gsas decisionmaking process regarding those issues. Our evaluations found gsa, through its office of general counsel and its Public Building Service recognized that the president s interest in the lease raised issues under the constitutions emolument causes that might cause a breach of the lease. They decided not to address those issues. We found gsa attorneys made the decision not to address these issues by mid december, 2016 and for having been put on notice in the summer of 2016 of the president s status as a nominee of a Major Political party. The attorneys did so without preparing a decision memorandum to document the rationale for the position they were taking and they did so without conducting any research of the two emolument causes and did so without checking for any opinions about them from the department of Justice Office of Legal Counsel or contact to seek guidance from that office. Our report found gsa was correct in recognizing that there was a potential issue regarding the Old Post Office lease raising constitutional issues. We addressed gsas reasons for ignoring the constitutional issues and the effect this had on her analysis of section 3719 of the lease. Gsas lawyers stated various reasons for the decision to ignore the emolument clauses. They told us for example, constitutional issues were awry in gsas work and that the moments clause are not within gsas purview and that gsas role is only to opine on specific provisions of the lease. For reasons that we set out in our report we rejected these explanations. We rejected them largely because the decision to include the emoluments issues from gsas consideration of the lease was improper because gsa like all Government Agencies as an allegation to uphold and enforce the constitution and because the lease itself requires that consideration. In addition, we found gsas unwillingness to address the constitutional issues affected the analysis of section 3719 of the lease and that led to gsas conclusion that business structures satisfied the terms and conditions of the lease and as a result gsa foreclosed an early resolution of the issues. This includes a possible solution that wouldve been satisfactory to all parties. The uncertainty over the lease remains unresolved. At the conclusion of our report we recommended that before continuing to use the language gsa determine the purpose of the interested parties provisions and conducted a formal legal review of the office of general counsel to include consideration of the foreign president ial emolument clauses and revised the language to avoid ambiguity. I very much appreciate the interest of the committee and work of our office and im happy to answer questions you might have. Madam chairman i have a unanimous consent request. Chairman is recognized. I think that gentle woman. In light of the testimony indicating that there was a 6 milliondollar annual loss that mr. Matthews had i would ask that that be entered into the record both a briefing and a part of the lease that would indicate a base rent of 3 million which would be income to the u. S. Government not an expense as these documents be entered into the record. Without objection thank you. Thank you both for your testimony. Now move on to member questions. Each member will be recognized for five minutes and i will start by recommending myself. Mr. Matthews, before you accepted your current job in the summer of 2017 does anyone affiliated with the trump demonstration, Trump Transition Team from campaign or Trump Organization ask you for your opinion on whether the Trump Organization was in violation of the lease for the post office . I had no medication with anyone from the Trump Companies while i was being considered for this position. Have you ever had condition with any current or former gsa employees about how the white house or President Trump would respond if they were forced to the best from his business interests . Well, i work for his subcommittee and its majority staff director we certainly received briefings from gsa on this very question. Thank you. In january of this year your Office Issued a report that has been described as outlined the failures to address the issues with the lease. This includes those that pertain to the emolument, is that correct . On march 29 in 2019 gsa delivered the corrective action plan in response to the recommendations of how they should remedy the issues with the hotel lease, is that correct . To define gsas plan to remedy the situation was sufficient . We have not agreed with the agencies corrective action plan. In your judgment did gsa adequately clarify the section of the post office lease the benefits elected officials from being a party or beneficiary of a federal lease . It is my arms and he gsa has not undertaken the analysis requested. Gsa father to do the legal review of the emoluments clause that they failed to do when Donald Trump Took Office and that you recommended . Mac i have no information theyve done. Gsa went back and as they submitted another plan on augus . I think thats the right date. Did your office find that their plan to remedy the situation on the day was significantly different from the one that they submitted back in march . Know it is not. About the two document here in the first is gsa corrective action that in march 29 and the second is Inspector General medication within gsa on september 2019 and i would ask unanimous consent that they be entered into the record. With that objection, so ordered. Section 3719 of the lease states that no member of delegates of congress should be admitted to any share or part of this lease or any benefit that may arise there. Your agency said gsa needed to clarify this language. Is a true gsa attended 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 3719 that prohibits those state and local elected officials and the president and Vice President from benefiting from the lease. There we have dealing with the problem of the president becoming under the emoluments clause which dropped the president from the lease and say in the future this would apply only to members of congress but not the president and Vice President . For state and local elected officials. Both causes and. Thats my understanding. I find that astounding. On top of that is a correct that to date gsa has still in your judgment failed to uphold its constitutional obligations and the fact to conduct the legal review of the emoluments clause . Im not aware of their effort to look into the moments clause in connection with how it affects section 3790. Mr. Matthews, im sure we are in agreement that the president of the United States is an elected official of the government and given that the agencies independent ig is just that you failed to uphold your duties under the u. S. Constitution can you commit that to the gsa they will conduct a legal review of the monument clause as it pertains to the trump hotel . First i would like to respond to our corrective action plan. The respect to the interested parties provision gsa reads to no longer use the language contained in section 37. 9 in future out leases. Not current but future. In the future leases only congress [inaudible conversations] will you conduct that study of the legal implications for legal review of the emoluments clause . On that question we propose future out leases is to remove the ambiguity from the interested parties cause striking it and referencing the statutory basis for that clause as a direct reference to the statutory reference. That statutory reference is not superseding the constitution so it seems to me that the investigations reveal you completely ignored the serious and legal ethical questions here in response to their recognitions was not to follow the recommendations but to strike the president and Vice President and say that applies to congress. Thank you and my time is up. Miss muller will be recognized. And q, chairwoman titus in thinking Ranking Member meadows. I spent most of the 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. Listen to what the left thanks about what the president is doing with the hotel hes not involved with. Here i am the transportation and infrastructure subcommittee meeting and is one of the most bipartisan committees in congress and we are doing it again. This is disappointing. I find it disturbing and a waste of the American Peoples time in 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. Again, an issue that is very important to my home state in many of the other states that are suffering. Its an issue i want to work on. It is sad the political environment is so toxic that it is preventing us from doing what we came here to do. It was to Work Together on things that matter. Mr. Matthews, isnt it true that before the lease that we were losing 6 million a year on the Old Post Office and that now the taxpayer is actually receiving income . Yes, that is correct. We essentially are a 10 milliondollar operating revenues of that facility and its been a tremendously successful project with a bipartisan project from a real estate perspective and financial perspective from the taxpayer. We also have a building that had proximally 200 million of unfunded Capital Repair requirements fully renovated with mechanical, electrical, plumbing, all brandnew and building has been maintained to a High Standard with a very successful real estate project for the taxpayer. , date to the gsa announced the selection of the Trump Organization as the preferred developer for the Old Post Office building . The lease was executed on august 5, 2015 split when was it signed . That was when it was signed. What date did the president alerted the gsa to assign his interest to another party in order to comply with the lease . I believe that took place id have to check to get the exact date. I believe it was either early 2017 for late 2016. At like to know when it was finalized. Was that before or after his official inauguration . That was january 23rd 20 have to get that specific date but it was around the time. At what date wasnt determined following the review of the lease that the tenant was in full compliance in effect . March 23, 2017. Thank you. I go back my time. Gentle lady yields back and id like to make a clarification but 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. Thats something that needs to be cleared up. Madam chairman, it was when we had the subcommittee looking at proposed hearings you noticed it one way but when we were doing the whole day it was Disaster Relief and thats where the ambiguity is. That is scheduled later for next week and will get fema again. I have unanimous consent request. Madame chairman, i would ask unanimous consent of these three photos be entered into the record that show the delegate from dc, the mayor of dc along with President Trump at the groundbreaking along with the celebration and ribboncutting with the delegate from dc trying to demonstrate how everyone seemed to be happy about this till the president was elected. Without objection. Mr. Norton, youre looking good here and i would point out that this prior to the president being elected. I would point out one of the photos for the record is to my knowledge point of clarification to make clear on the unanimous consent request is that one of the pictures is actually after the opening of the trump hotel. Who cares. Could we have order in here . Smacked no objection smacked there is no objection to entering these into the records. Of the clear this is the lease signing which is prior to mr. Trump being inaugurated as the president. Prior to being sworn in. Thank you, madam chair. You keep referring to the income which is mandated by the lease and all youre talking about is the mandated rent payments. There is a provision of the proposed lease where and i again question gsas judgment in how they calculate this but we are supposed to receive an additional amount of money if the property is probable. According to these only released monthly statements that were leaked or intentionally put out by public spirited employee at gsa began to be profitable in february 2017. So, mr. Matthews, last year all you are quoting to us is the rent payment. What was the additional amount paid to the gsa under the terms of the lease out of profit of the trump hotel . Thank you for the question simple question give me the number. I need to correct something. The profitsharing is not based on profit but on Gross Revenues and those Gross Revenues are reported. What was the amount . We do not have the number and you not provided us that number. What additional payments were made to the government last year under this lease beyond that mandated rent . We received in the way it structured is based on Gross Revenues with a minimum payment of approximately 3 billion and a maximum payment with a percentage of the Gross Revenue and it escalates okay, how much do we received last year . Over and above the mandated rent. As it is right we received approximately Million Dollars based on all we got was the basement so you think this hotel is losing money. Im not saying no Gross Revenues or no sharing and is happy on the lease . Okay. You are telling us that and do you believe its legitimate for this committee and you work this committee for a long time so do you believe we have over site results ability. Yes, i do. Good. And how do we get redacted monthly statements and you cant give me a number so that we are getting the additional payments are required under the lease if you wont give us any financials. Will you give us a Financial Statement . Yes or no. Our goal. Yes or no. Our goal smacked yes or no. Okay you will not answer the question. You were asked earlier about you will not provide those so how about doing an audit. You do do audits of these is is that correct . Yes or no. We receive an annual audit Financial Statement. Who wants them connect. At the third party and we receive did you choose the thirdparty . The tenant provides. Sure. Okay. You dont feel you have any response ability to check into that for the Contracting Officer does. To the ig when you conduct an audit of the hotel to see whether or not the income which is required over and above the base rent is being properly paid to the taxpayers of the United States of america . Actually, gsa has specific authority under the lease to conduct such an audit. You just said they wont do it. The focus of that audit would be on determining whether the government is getting appropriate rent we have to think about that and we certainly have oversight over the payment issue and we have to think carefully about the resources it would take to do such an audit and any constraints on our ability to get the record independently of gsa. We would have to think about other its made for gsa to ask to do that audit were to have a outside auditor. Gsa has the authority and gsa has done this for other leases i would assume, have you . Have you ever audited a lease . Or do we let all of our tenants just send us their own financials and send us their own after theyve hired an accountant he met. I dont know offhand but i do receive a certified Financial Statements. Since you receive them how much additional money beyond the base rent did we get last year that the taxpayers did get under the terms of this lease . Was that number . We receive the base rent. Okay. So how you cap elated that within this whole purview theres no does no one stand there and 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 we are receiving the proper amount of rent. I think the gentleman. I would now recognize mr. Pence. Tank you, chairman, Ranking Member and the witnesses before us today. Ranking member meadows, i know you want to save tax billion payers billions of dollars in the public Building Space but it seems like we saved 9 million a year here at the trump hotel. I sincerely would 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 all americans by transforming how we approach federal real estate and saving taxpayer dollars instead of putting on a partisan show. Billions of taxpayer dollars could be saved if we continue to one, consolidate and reduce our space bar print and to negotiate good lease deals, three sell or redevelop properties that are underutilized and high value for people in more efficient buildings. Commissioner matthews when we met back in april you told me i had were i told you i had two priorities. Publicprivate partnerships and updating omb score rules to bring our approach to federal real estate to the 21st century. If we are serious about his warming 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 act of 2019. Legislation to provide gsa with flexibility to pilot the use Publicprivate Partnerships. Hopefully we get back to doing the work for the people we represent instead of grandstanding and selfpromoting. I yield back. Thank you. I now recognize [inaudible] thank you, chairwoman. Mr. Matthews in light of the Inspector Generals finding that the result that as a result of gsa failure to address the constitutional issues raised by the lease in question has gsa taken steps to address the emoluments and other constitutional issues at all . A couple points on that. One, we agreed with the recommendation of the report and as we understood it we are applying a new feature out leases and we have agreed to remove the interested parties provision and replace it with a reference to the underlying statute that is governed that provision to remove any ambiguity. Thats not the question i asked. I did not ask what you are doing moving forward on leases but about the lease in question. The lease in question there are a number of larcenies that are pending that are specifically designed to address this question is there or is there not in emoluments violation in that forum the department of justice speaks for the executive branch of government and the department of justice has argued before the court there is no emoluments violation and there is a violation of the constitution. It would not be appropriate for gsa to opine on that matter given that the courts are addressing that issue. Okay. Thats enough. In response to the question that was just asked you said you were uncertain whether you conducted audits on leases that the gsa has entered into and is that true . You dont know whether you you are the acting or currently running gsa. Is that right . And the commissioner, that is correct. And you dont know if your agency conducts audits on . We have thousands of leases. We conduct a variety of contractual Lease Administration activities every day. And you are unsure [inaudible conversations] we enforce contract actions every day. Sore, 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. We be happy to get back to you on that. What percentage of the activities that your agency that you are responsible for right now for the American People what percentage of those activities is managing leases . We have about 10 million going to the Federal Building fund over 8000 leases a proximally 5. 6 billion in annual rent expenditures with four privatesector leases majority of our portfolio and is one of our top priorities. That is a lot of money to not know whether or not you audit the activities. Are you concerned about the fact that you may or may not be auditing ten plus billion dollars in your annual funds that go to the federal government . We have Program Management reviews on a regular basis and contracting reviews on a regular basis. We have a whole office within gsa outside of dbs called a special procurement executives and we do contract reviews of different business lines on a regular basis. Every region this year alone we probably have gone through six or seven regions internal contract reviews of our leasing programs so theres tremendous oversight over this. The question was about a very specific type of audit and i dont know if we do that since i bought it across all the releases and i dont know if those lease terms frankly allow authorized in that pacific audit and this is an out we spit out leases are a very few minority of at least portfolio most of our leases we are the leasee and we are leasing a facility from a lessor. In this case is reversed smack how often do you have a profitsharing provision and a lease that you enter into as the gsa . Again, our out lease is relative. Because it sounds like that will take you long time to get to could you please find out how many and then report back to the committee. Also, find out how often you conduct audits on out leases specifically and for that to the committee 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 had over any of the leases that the gsa has entered into because it sounds as if youre 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 of the federal government. I go back to thank you. The lady yield back. Mr. Palmer is organized. At a point of inquiry before i begin my questions. It is a serious and massive reformation. Chairman Opening Statement i need to clarify did you say your conversation with the former gsa employee who gave him a different perspective on the lease arrangement . , i send my staff did. To that individual provide madame chairman commented that chairman individual provide document in electronic format or printed or was the content of the conversation recorded . May i respond . The former ranking staff who has jurisdiction over this issue met with a person from gsa and that person said there were dental issues to be resolved and that conversation was characterized and sent to gsa in a letter of inquiry in november and gsa said that is not conversation and they denied the whole thing. Thats the end of that. The gentleman has been transferred to new york and will talk to anybody. But it was a former he has been transferred to new york. Madame chairman, my inquiry is was that a former member of this Committee Staff that had that conversation and if there was documented in any Form Initiative and provided to the entire committee and the staff identified an individual identify. That would be my point of inquiry. I have no idea what hes talking about. We will take a minute to take that under consideration. Thank you, madam chairwoman. I have been advised it was an informal meeting to a former staffer. Im sure those meetings take place all the time we talk about that further back thank you. It would be my opinion that the information should been provided to the entire committee but i appreciate your response to the inquiry. Point of order. If indeed it is entered into the record it has to have something that is documented. You cant have a referral to a testimony that is not something of record according to the committee rules. This was not a testimony and not referred to as a testimony but referred to as an informal conversation with a former staff person. Point of inquiry then, was it subject to your investigation . You are saying is not part of your normal in litigation and this was 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 its not relative to the searing. Well, its as relevant as the pictures from the Ribbon Cutting are. I think we will now move on mr. Palmers question. Thank you, madam chair women. In your written testimony you make a point in your conclusion that it appears to say that procedures that the gsa followed in these out leases of Historic Properties is consistent with the other and i will read to you. Gsa otc has acknowledged that the constitution violation related found they would revisit the issue of potential breach of the appeal lease party provision but however, the fact remains gsa continues to use the language of provision and other sort appears to me that theyre basically doing what they always do and it like a cutandpaste a lease arrangement that occurred in 2013. Is that accurate . Mac are you asking about the origin . No, man. Im asking if you think this is consistent that is problematic the gsa has a hindered operating procedure for these out leases of Historic Properties . The point of a sentence that you are reading to me is that gsa has told us that if there is a constitutional violation it would have to go back and revisit whether there was a breach the point im making the same have the same language. Is consistent with the other leases and at the same line which in his other out leases. Yes, substantially similar but only differences which state and local officials apply. Thats my point. This is a standard lease. Adam chairwoman, i yield the balance of the time to the Ranking Member, mr. Meadows. I think 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 [inaudible] and so, with regards to the lease payments are they in breach of their Lease Agreement on going up until today . Are they paying the accurate amount of lease payments as agreed upon in the lease we all have connect. They are current on the rent. In your long history with this committee and with gsa in dealing with public buildings would it be foolish for them to underpay on their lease because that would in essence terminate the lease after all the improvements. It certainly would not be wise. 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 you do not default on the lease. One would think it would be important to remain in compliance with the lease, absolutely. Fundamentally the question we have before us today is not whether the Trump Organization is making the payments that have been negotiated under the Previous Administration and as i said in my Opening Statement is not this all boils down to in emoluments question and whether the president of the United States should get some kind of benefit tangentially from the operating of a hotel that he least prior to him becoming president. Is that correct . Yes, it is. We received or have a certified manual audit Financial Statement and we know the right amount being paid and you are right. At the end of the state comes down to that question which is for the courts and gsa is a position to opine on an answer. Part of the justice has. Does gsa have a number of buildings in the washington dc area that they are paying money taxpayer money out on an annual basis to maintain those buildings that is a net cost to the taxpayer . There are some and most of them are historic buildings. Are there more than a dozen of them . I dont know absolutely. And so what you do for a nonperforming asset were lost according to testimony is 69 a year smack yes and now youre making it a net plus a 3 million a year to the federal treasury. Thats great. Its been a very financially good for the taxpayer. Thank you. The chair now recognizes mr. Norton. Hooray for us. We dont even know if we are getting the share of the profits. The government is entitled to. The redevelopment act was my bill this building is not only in my district but in the Nations Capital was an embarrassment to anyone who came the first law was used for or eventually and so and finally we were able to get those taxes and they do pay property taxes to the district and hotel. You bet your life to cut the ribbon on this to make it a real asset for the federal government and it was underperforming and in plain sight because the government was losing millions of dollars every day let me ask you, mr. Matthews. You said in the gsa receives a Monthly Payment in here im quoting the amount you indicated with 267,653 dollars a month and i appreciate that statement. As with any testimony could you tell us how the congress can verify your answer . Obviously, we dont take it at face value with figures like that without having some way to verify them and therefore give credit to such an answer. Well, we received the rent and received payment in those go into the u. S. Treasury. We surely can provide you the financial transaction records that show those deposits remain and they remain possible mac mr. Matthews, gsa continues to provide congress with a monthly and annual financials statemen statements. I made this same request two years ago but we have still not received the Monthly Financial payments. I am asking you now at this hearing will you commit to providing this committee with these financial. Dot documents so we can verify that the Old Post Office is a performing asset as you have indicated today . With respect to the financial documents request i would say our goal is to accommodate the committees oversight request to the greatest extent possible on ensuring compliance with architectural operations to the tenant. Our staff are discussing these issues and to come to a professed while respecting our contractual obligations in the lease. You will engage with the committee . On this question of providing documents i have just asked for . Our staffs will correct. Yes mac as we speak. All right. Thank you very much, madam cha chair. The gentle lady your back. I thank you, madam chair, for letting me sit on the committee today and as we get into the fall season pumpkins are ripening and people are going crazy for Pumpkin Spice coffee and early birds are putting the witches and ghosts in their art so we will chase a few more witches and ghosts, i guess. Im in disbelief that we are here at a time with the fires in the west we have had and the hurricanes in the flooding in the south with the infra structure we should be working on loosening up art levies and infrastructure and everything for dealing with this once again that has been established to make money after it was losing money for years and its getting down to we have to ask our accountants is it making money. Thats Pretty Simple stuff. Do we want to see mr. Matthew matthews has the president signed the checks himself . I have a hat with his signature and we can compare signatures to make sure that its actually happening. You need that information . No, the lease is with the Trump Post Office llc now with the president himself. Will thats not what were down to hear but we want to talk about what this Committee Works on. I hope we do more Emergency Management before what we have going on but i do see a situation of a public building in california where theres a request for new Federal Buildings for the citizenship and Immigration Services which processed immigration applications, kind of a big deal right now. Right . Can you talk about the importance of expediting this . Yes. I can say a couple of things. Seismic interests are very important. We have an older inventory. So often times our buildings are not the current seismic codes and were in the process of upgrading a number of buildings across the country. Highrisk seismic areas, some in california and some in oregon, some in seattle, washington, and the and one of the Biggest Challenges is we our Federal Buildings fund, we receive 10. 5 billion in rent from our attendants every year and only receive appropriations out of the fund 9 billion to 9. 35 billion so every year were shorted a billion and a half dollars of funds that can only be spend on public building purposes under title 40 o and were not able to access that in properties and wore challenged to repair them, get them in good working order and make the same. We have thousands of employees in first building that need significant improvement, and if we had full access to the funds, wed be able to do that. Its sluice si critical to improve the Services Services si thank the chairwoman for her husband with the prospective we had for building in her district. We have courthouse thats 20 years old and a Fire Life Safety system. We proposed that project and for a good year and a half, that prospectus was blocked up in the senate and thank you for your help. Able to get it loose be nice, mr. Matthewsings u if we can get that prospectus going hoe. With hey a backlog of border and seismic issues in the state of california and oregon as well would you say this is a priority this committee should take up . Yes, very much appreciate that. Thank you. I should end it there id like to yield the rest of my time to mr. Meadows. So thank you for that answer. I thank the gentleman from california. After your report was released, i think a lecturer for the University Apartment wrote you detailing a factual error in your constitutional analysis of the emoluments clamps are you aware of that . Asking that we adopt his particular argument. But pointing out that he felt like you had a factual error. He expressed a different view. Well, did he say you were correct . He expressed a different viewpoint. Its an easy you have council behind you if you want to ask them. Did he agree with your analysis. No he did not. I would ask unanimous consent that we enter into the record the statement from professor Josh Blackman and lecturer seth tillman, detailing the exchange with miss ochoas office. Without objection. Thank you. I yield back. Now recognize mr. Garamendi. It wasnt me, john. Thank you. It certainly want mr. Meadow, thank you. The question has been raid why were here today dealing with this issue. All of us have taken the oath of office, and basically says i do solemnly swear i will support and defend the constitution of the United States against all enemies, foreign and domestic, and i would bear truth faith and allegiance to the same. We are here about the constitution of the United States. We know that article 1, section 9, clause 9, is the foreign emoluments clause which is very much the question before this committee at this moment. And article 2, section 1, clause says 7 of the president ial emoluments clause is before the committee. I think we would all agree thats the issue at hand and the reason were 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 then understand 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 5, line 6 through 9 of your report, you say, according to it, my question to you is can the gsa state definitively the Trump Organization llc is not in breach of the Old Post Office lease terms without, without any valuation of these constitutional questions . In other words, can you tell us definitively they are not in breach until such time as the constitutional emoluments clause issues are dealt with . Put that in the positive. Are they in breach of their lease because of the 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 the report is that without employing the doctrine of constitutional avoidance in their interpretation of section 37. 9 they foreclosed a way of takenning the emoluments issue off the table. Bussed ashied the fundamental constitutional issue of emoluments and said thats not relevant. Insuring . They said they were not going decide the issues. Dont think they said they were not revel. It was an issue relevant to the lease but decided they were not going to attempt to resolve the issue. On page 8 of your report you say that he dish suspect you mean the president here still retains his financial interest 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. Mr. Matthews . Does the president maintain a financial interest in the property . I believe its correct, yes. So, your answer is, yes, he does maintain a financial interest in the property . Im not familiar with all the detail of the financial struck tours of the company, but i believe thats correct. You believe thats correct. I do, yes. Thank you. Now, are you aware of any payments made to the hotel from Foreign Governments . For both of you, mr. Matthews first . Gsa, were not involved free daily management of the hotel. Thats why we did an outlease. Youre unaware of any payments from any Foreign Governments. 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 emoluments, that question is pending before the courts. We understand that. My question to you is, have you attempted to collect any information on payments from Foreign Governments, even though the lease itself raises that issue . We dont receive that so the answer is the financial miss ochoa, would you have any information about payments from Foreign Governments. Gentlemans time has expired. Like know answer the question. You may answer the question. We dont have direct access to the financial records of the hotel. Thank you. I yield back. Just for clarification, mr. La matta will be glad to hear this. He was talk about a request for funding for a new building at la noone na niguel. Gsa sent us the prospectrum tough three week othersing and staff are already meeting with them on that subject so we road like to share that information with him. Now mr. White supremacier is recognized. I. Thank you, maam. Were kind of here but district 14 in texas and a we had Hurricane Harvey and still trying to recover from and now Tropical Storm immet to missioned with things should be focused on but were here. Mr. Matthews youyear worn in august 2017. You stated that the lease was signed august 15, 2013. Correct. Do you know when the negotiations for the lease began . I believe they began in 201. 2012. Okay, so it was well were Donald Trumps announcement june 16 only the 2015 he was going run for president. Yes. Are you aware of the lawsuits that have been filed against trump over this hotel, the three lawsuits we call the crew . Yes. How but you, miss ocho was are you aware of this. Yes. Are you aware at east two members to the committeesorted with the lawsuits . Associated with the lawsuits . Am i personally aware. Yes, maam. I have how about you, mr. Matthews, did you know that. Yes. You did know that. Once the gsa Contracting Office made the decision but the emoluments clause and decided to move on, walt the sufficient for the two of you . Mr. Matthews . That decision was made by the Inspector Generals own report and testimony in december of 2016, and was it sufficient for you . Did you say, okay, well move on and do the American Peoples work. I didnt arrive until 2017 so that ship had sailed. When you get there it was sufficient. Was it sufficient for you miss ochoa. No, for the reasons stated. I got you. We would love for the committee to be able to do of and do the American Peoples work as well. Yield back to the Ranking Member. I thank the gentleman from texas. Miles an hour ochoa i want to follow up on my good friend from californias, mr. Garamendis question because he was talking beaut enemy to the that is privileged from memo that is privileged, from 2016. Is that correct . Theres not a memo from december 2016. So the privilege memo you were talk us about, what privilege memo are you talking about there . Im talking but the legal opinions that gsa razz lawyers wrote in connection with advising the congress. When were they written. In march of 2017. And they were written by whom . They were written by gsa lawyer whos part of the deem advising those team it was at that particular point had they that legal team, were they part of the Trump Administration . Were the political appointees is what im getting at, or people who had actually work at gsa during the procurement process . It was the same team of lawyers spanning both administrations. Career attorneys, yes. Eye sorry. Didnt hear you. Cue repeat that. The same team of lawyers load at the issue spanning both administrations. I again i think according to your testimony, it says the office of general counsel, odc, made the decision not to address the emoluments issue by middecembe. Do you stand by that. I do yes. Was President Trump in charge of that decision at that particular point . Had he been inaugurated at that point . No. So any nefarious purr 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 didnt ascribe or describe any nefarious is guess what im saying is, there seems to be an implication that this administration was the one that actually said that theres not an emoluments issue, and i guess you and i both know what the real story is, and those decisions were made under the Previous Administration. Isnt that correct . Guest according to your testimony. Id love to talk with you but the legal pound but i cannot. Did they happen in december do you stand by your testimony they happened in the midpart of december of 2016 . Made the decision to ignore the issue in december of 2016. All right. And do you think that president elect trump was putting pressure on them to make that decision at that point . I have made no such do you have any evidence that would suggest that. If we had found any such evidence we would have report that. I thought. So i yield back. Mr. Johnson is now recognized. Thank you. Mr. Matthews, prior to becoming public buildings commissioner at gsa you worked for several republican congressmen 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, where you ended up as staff director of the transportation and infrastructure committees subcommittee on public buildings. After that, you then went to the administration as commissioner of public buildings. Is that correct . Yes, thats correct. And you are what we call a political appointee. Isnt that correct . Yes, i am. And you have had absolutely no experience in running a Large Organization. Isnt that correct. No, thats not correct. What Large Organization have you managed . I was the assistant Deputy Commissioner of the Texas Department of health and assistant deputy director. Commissioner of the Texas Department of health and under our responsibility was several i dont want your range of responsibility. I will say that welcome back to the subcommittee that you now are public buildings commissioner answering to your prior subcommittee as a political appointee. Let me ask you this question, sir, on march 20, 2017, the Trump Post Office llc idea an estoppel certificate stating that the company was in full compliance with section 371960 the least agreement and gsa, your organization, the public buildings department, issued the letter. Isnt that correct . Yes, i worked for this committee at the time, butey so my point is that in issuing that estoppel letter, it was done three days of it was requested. The estoppel letter was issued three days after the trump team requested it. Correct . I dont know how many days. You dont know how many days. You wouldnt disagree it was three days. What kind of assessment would take place prior to granting an estoppel certificate by your department . Well what would normally happen . Well, there is an how long does is normally take. Theres a struck noor place for longer than three days . Again, i dont know if itself took three days or how long it was under consideration. Let me ask you this question. How many employee in your public buildings department. A little under 6,000. 6,000 employees and how many public buildings . Well, when you include or lease portfolio, well over 10,000 facilities. You have not had a chance with ale that responsibility to review what actually helped 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 staff director. In fact you have a degree in government and philosophy. From georgetown university, thats right. And now youre managing this Big Organization here. Have you received the phone calls from donald trump jr. , donald trump, eric trump, or anybody concerned with the Trump Organization during your tenure as public buildings commissioner . No. You have not . No. You certain about that . Yes, i am. How did or why was it that gsa did not embark upon a study to determine whether the post office lease to the Trump Organization was compliant insofar as the emoluments clause of the constitution is concerned . Again, that decision was made in december of 2016 by the Previous Administration. You could have had it reviewed yourself could you not . To determine the constitutionality. Isnt that your responsibility . I would public buildings economies center. I would say the conditions have changed since 2016. There have ban number of lawsuits filed, and this very question which youre asking is pending before the courts, and in that forum the department of justice, who speaks for the executive branch in that forum, has argued there is no violation of the constitution and so but your department never undertook such a review. Is that your testimony today . Im sorry. Is that for me thats for you. You should know, chore the commissioner. s time you can an that yes or no. No and wouldnt be appropriate. Thank you. I recognize mr. Perry. Thank you, madam chair. Inspect youre general ocho was according to the report the oig began evaluation of gsas management and administration of dsas ground lease of the Old Post Office building on july in july of 2017 in response to numerous complaints from members of congress, and the public at large but the management of the lease. The complaints generally raised two issues regarding lease. One, does the foreign emoluments clause or the president ial emoluments clause of the u. S. Constitution bar President Trump business interests in the trump Old Post Office llc tenant and, number two does the president s business interest in ten nat violate section 37. 1960 the lease . The next profit over the report explains the oig did not seek to determine the accuracy of either complaint, rather sought to determine whether there were any improprieties in gsas decisionmaking process regarding these issues. My question at this time is why was the evaluation aimed at the decisionmaking process regarding the complaints rather than addressing the complaints themselves . In other words, did something preclude you or gsa from evaluating the emoluments question itself . In the first instance the responsibility for evaluating those issues was with gsa management. They had made their decision by the time we opened our review, and thats why we scoped our review to look at whether there was anything improper in the way they went about making the decisions. The second case . In both cases. You said in the first case it was manage dish. In the first innings of dressing the issues, that what dsas management responsibility. Our oversight sended to how gs upholds itself responsibilities. Why didnt you just address the questions themselves . Do you know why . Youre the oig, so you would know why they made mat decision to look at the process as opposed to the questions themselves. Yes. Yes, i do know why. It because a matter of exercising judgment as to the scope of the review. Wasnt necessary for us to resolve the merits of the issues in order to determine whether the gsa was correct in recognizing there was a constitutional issue and whether their reasons for avoiding it were valid. Wasnt sentence to answer the question of the complaint by memberofcongress or the thats what youre saying right now. You answered the administration of it but not the questions themselves and made that judgment. I made the judgment that the review was appropriately scoped to address the concerns of the complaints. And the concerns the complaints were regarding the emoluments clauses themselves, not the process by which you would evaluate them and decided not to do that. Its one in the same. Its how did gsa come to its conclusions not, because we dont get the answer. The answer is that its settled constitutional law but obviously its not settled constitutional law. Let me ask you this. When did you start your role as the ig for the agency . In july of 2015. 2015. So you had been there a little while. Youre not a puppet of the administration. Youre can do the job you think youre supposed supposed to do s of who u. S. The president or not and what interest they have. Mr. Matthew, regard ago similar leases that might be close to the Old Post Office, do you receive monthly statements from other leases in accordance to what has been asked of you in this hearing . Yes. So you receive them from the trump hotel as well. We do. Do you safe breakdown of how much the profit or losses based on the lease on a weekly, monthly, whatever basis . We receive a Monthly Financial game an annual audited Financial Statement. The same for all of them. I believe it is for all of them, yes if can confirm that for you. Generally speaking. Might be a outliar but its the same for them and the slam for the trump hotel the Old Post Office. Thats right. What your being asked today, even though according to my good friend from california the rope for the focus of the hearing is on the emoluments clause but were concerned how much money were getting. Youre reporting the same as you do for the trump hotel as everyone else and what your being asked here today is to provide something wholly, separate, unique and different than any other lease you manage. Thats correct. How many leases do you manage. Over 8,000. Thank you, madam chair, i meals my time. I yield my time. I want to clarify there are only six of these outleases. When you talk about the thousands of leases you have, those would not be the same type as the type you have with the trump hotel. Is that correct . Debtor. Yes. Thank you. Now recognize mr. Brown. Thank you, madam chair. I want to thank my colleagues to the committee for their attention and diligence on this issue, and i understand and realize a number of the questions, lines of inquiry i had have already been covered. Im troubled, im like disturbingly frustrated to know that a federal government agency, the gsa, its offices, its attorneys, its supervisors, do not fulfill their responsibility to consider upholding and enforcing all of the laws of the country, whether its rules, executive order, statutes and, yes, the constitution, and to learn from the igs report that responsibility was shirked, its disturbing to say the least. I dont think any Public Servant, members of congress, the president , are above the law but i dont think that sentiment is shared at 1600 pennsylvania avenue. The bottom line is, if the president had fully divest from his company, this hearing would not be necessary. Instead we have to discern whether the president is putting his business and personal somes above our nations and we have the question why foreleaders, lobbyists and even the attorney general is choosing to spend tens of thousands of dollar ted Trump International hotel and whether the president is trying to enrich himself in direct violation of the stumps commissioner matthews i want to direct through questions thank you. Accord toking the january 2019 record bill the ensuspect fer general and contrary to both of your written and oral testimony today, gsa failed to appropriately consider the emoluments clauses so at the u. S. Constitution in regard to the Old Post Office lease as well as article or section 37. 19 of the lease. Mr. Commissioner, has anyone in the gsa office of general counsel provided you or any of your colleagues any guidance on the emoluments issue since the 20 january 2019 report was issued . The answer is, no. Bus this emoluments question is pending before the courts. I understand that. So in anticipation you have not made any inquiry of your general counsel on this issue . I wouldnt be appropriate for gsa to opine just asking yes or. No asking if you or any of your colleagues have made inquiry of your general counsel on the emoluments issue since the igs report in january of this year. Jest yes or no sounds leak the answer is, no, you have not. Thats correct . Correct. The committee has been requesting records relating to the trump hotel Financial Statements to the gsa. I know a number of members have asked about it. Has the gsa, office of general counsel provide you with guidance on how to track expenditures at the Trump International hotel or any other similarly situated hotel relating to rem or lease fees dederived from foreign, federal or State Governments . Well, under the lease, we the tenant obligated to provide monthly and annual audited Financial Statements do they report revenues by revenue source, whether its a foreign, federal or State Government . Yes or no. The financial documents . We are working with im just asking you a question. It is yes or notice. 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 breakdown. If the courts were to rule that theres a potential emoluments cause problem your saying you dont have the systems in place to identify whether Foreign Government paid rent or lease or for services at the hotel . Im not going to speculate on what the courts may or mat not do. Just going to wait until the court action. May or may not be for gsa. Have you asked your general counsel about guidance on this issue. Im not going speculate at im just asking you, have you asked your general counsel about the issue of whether or not you should or shouldnt track the sources of revenues or fees that are paid at the trump hotel . The tenant complies with the lease and the lease has provisions have you asked your general counsel. Im not going asking you inot going to answer that question yes or no. No. Are you going to answer yes or no to the question i privilege he asked . The answer im trying to answer your question. Let me reef state the question. Let me be a little simpler in the Financial Statement reclay million tie. The gentlemans time is expired. Okay. Only boy, five minutes flies. I recognize mr. Westerman. Thank you, madam chair, thank you to the witnesses for being here today. Madam chair i was excited to see we are going to be talk abouting but the millions of dollars of federal assets sit throughout unused, but unfortunately thats not really what this discussion is about. I thought we had this horse had been ridden hard and put it wet but apparentlied do it in the signal and somebody wants to bring it out and beat on a dead horse a bit more there are serious issues the committee should be addressing. Just in i home town of hot springs, arkansas, we have 200,000 square foot hospital that was the original armynavy hospital hearing your review of this lease and drafting the report . Did you reach out to outside Legal Counsel . No. So, all your legal experts were from within the i igs office. Is that correct . The team that did the review was within in the drafting. Yes. Theyre on your ig staff. , that . Yes. 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 at the department of justice. So, with the department of justice, obviously you were very critical with the gsa, you were very critical of the ds and not cop gut with gsa not consulting do. , that . Yes, and not reaching out to try to find a solution to the issue presented. When wor drafting the report did you take into effect the dojs position on this issue . We looked at gsas decisionmaking at the time that the decision was made and we looked at what was available to them in that did you take into account their position, their published position, as it relates to this particular question . The position that the department developed in litigation doesnt affect the conclusion. But by the ig statute youre bound to look aft all legal experts saying the three people you relied on were from doj but did you rely on any current doj opinion . In drafting it . We were aware of the doj litigating position. Just disagreed with it. No we didnt weigh in on the merits of the question that the doj litigatings position is create egg. Thats the merits whether there is a violation of the constitutional emoluments clause here. All we engaged in was really an issue spotting exercise because before we were about to criticize career attorneys for failing to address an issue, we wanted to make darn sure they were right when they realized it was a potential constitutional issue. Thats what our report was about. And so you used the key word there potential. Is that correct . Youre not making a definitive statement. Youre not suggesting that the Supreme Court is going to come down on your side or gsas side. Youre not making an point there just saying it could be a potential issue. Thats right. Were not trying weigh in one way or the. Other we didnt know how the lawsuits will when you did your report did you look and analyze the potential legal and financial exposure to the taxpayers that the crag officer may have had in making this decision . Was that part of your analysis . Excuse me. Can you repeat that . Well, the contracting every mida decision based on unsettled constitutional law. Did you look at the potential financial implications they plight arise from that that particular decision . We looked at the reasons that the Contracting Officer gave us and the lawyers gave us and the financial situation didnt come into play at all. There are only six outleases of the type with the trump otell in washington, dc. Thats correct. We have father more than six outleases. But of the let actually, in a july 18gao record prior to the 2019 report that we have been discussing, it analyzed the gsas outleasing program spree viewed, quote, the extent to which gsa prude clive e lease prognosis is related to the artist pacing of elected officials in outleases and according to the gao report there are six only six Federal Building with at least 20. Outleased by gsa. Do you disagree with that report. I have to have it in front of me but we outlease space in Federal Buildings across the country and our building, for example, i we hey have to outlease is can think of. One for a coffee shop, one for a Mexican Restaurant another for a sandwich shop. Does that total more than 20 of the building. No. Of the buildings with at least 20 outleased by gsa, the property republics there are circumstance buildings and all but one of the leases contains a provision restricting participation by elect officials and that is the sileo Federal Building in pittville, massachusetts. Are you familiar with that. Not that particular building. Host i spendow ochoa did you team raise this issue with the gsa . Squaring we had a discussion but the fact that they language of 37. 19 is still in two outleases. And that it has not been modified to resolve the ambiguity and we have also pointed out that with respect to one of those outleases can just a here using gast gsa told gao using that language was a best practice and intended to modify a close that didnt contain. The responses they commissioner matthews, mass the gsa modified that provision or added the language to the building lease that would respect participation bit elected officials. What we agreed to do is in future outleases to remove that interested parties provision and replate it with language referencing the underlying statute which those provisions were based pop. I. So the answer to my question is, no, it has not been revised for the conte building lease. Is that correct . Dont know. Id be happy to get that answer. If you could please provide that answer for the record, that would be helpful. With respect to future leases, as a practicing lawyer before i got here, litigating leases and contracts and disputes, how im curious how you determined that reference to the underlying statute was superior to an express provision in the contract and explicit provision in the lease requiring compliance . You explain the rationale for the decision. The rationale was removing ambiguity do county that referencing the statute in addition to the contractual provision is an appropriate correction to the ambiguity . I think the concern is that the interested parties provision itself and n the contract has some ambiguity to it and so our preposed corrective Action Program would elim nat that confusion in future contracts and replace with reference to the underlying statute. Simple play reference to the statute as amend from time to time . Yes, correct. I have one other quick question i want to follow up on, a question that my colleague, miss davids, asked youve but the auditing. It was my understanding that the lessee receives the auditor . Yes. And do you have a list of approved auditors . If we do id be hey to get it for you. Do how require any specific standard offed the odd tore, for example, gaap accounting. They have too comply with the standard. Do you have employees thats rue try audits specific statements i couldnt hear you. I believe my time is expired. Thank you very much, madam chairwoman i yield back. Mr. Meadows. Thank you, madam chair. Mr. Matthews, let me come back on this lease to make sure were crystal clear. It is a lease that allows for a base amount of money to be paid to the american taxpayer. Thats right. And then there are thresholds that are above that would basically be based off of Gross Revenue. Is that correct . Correct. So, the operational expense, wherever it, i were just looking at Gross Revenues and a percentage of that would adjust the lease payment. Thats correct. Is that not the most transparent way to do a lease where you have plusup from a base amount where you dont get into how much it costs you paid your waiters or how much you paid staff or anything else, if you do a Gross Revenue, is that not the most fair way to the american taxpayer to find an adjusted base lease . Is that correct . Yes, its correct. Miss ocho would would you agree with that. I havent considered those issues. You havent considered those issues. Let me ask you this, do you believe the american taxpayer is receiving more money under the trump hotel lease or less money . Than they did prior it be logged the Trump Organization. I accept what im hearing but the loss friar the hotel beginning operation in the 3 million daz year since. And the delegate from d. C. Has been very active on trying would you adegree with mr. Matthew the delegate has been very active on make sugar question use underutilize he buildings in the District Of Columbia and make them producing assets. Is that something the delegate i have been pestering you about for some time. Yes, and id say its been a bipartisan priority of commit prefor over 20 years. Would you say other than the fact the president of the United States is associate evidence we to trump hotel, would you say that is a good model for all of the underutilized properties in terms of taking it from what i once was to what it currently his. Absolutely. So miss ochoa let me back took you. Mother make a number of assertions through your report that are without citations in your report. And. I would have to disagree with that. You can disagree. Ill give you a chance to clarify. Because it doesnt give us any way to verify the accuracy or context of and that so in fact just in the last few weeks, i believe that chairman johnson, the senator from wisconsin, provide your office with some details highlights specifically where you your support supporting accumulation be useful in his oversight supporting documentation would be useful in his oversight. Do you plan to son to that. Of course weve been trying to respond to your questions several month is. Chairmans response, youre planning to respond to. That would will you give that to this committee as well. We can do that. Are you making a request. I am making a request for that. When can when can we expect those responses . I dont want to speak for the chairwoman but i assume she would want clarification for any report that the ig does. All along we have been providing equivalent information to the majority been working 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 look at what is being requested. Understand its a question for more documents. Well look at it and do what we can. We have been prioritizes documents from gsaf months no most of the documents that are not income nature that we turned over are the agencys legal memoranda, email exchanges among the attorneys, working on the matter, and with the Contracting Officer and between the Contracting Officer and the turns and the Trump Organization. We have produced and reproduced those and set them down to gsa to look another for the committee. Are you aware whys ocho would of any reason other, than perhaps a court decision, why that the Trump Organization would be in default of the current lease . Are you aware of anything other than perhaps this emoluments question thats out there . Theres section 37. 19. The two of them are not independent of each other, and so those together and so do you believe theyre in breach . I stand on my report, Ranking Member meadows. We did not make that ultimate determination. Id love to discuss the agencies legal decision bit i cannot. The gentlemans time is up. I want to clarify for the committee, the problem has not been getting information from the ig. The problem evidence getting information dsa. Enough i recognize mr. Cohen. Thank you, madam chair, it is miss ochoa . How do you mow nouns your name . Commissioner, how too you pronounce your last anytime. Ochoa. Thank you. You talk about section 37. 19. Correct. That seems to be clearly obvious that the exception put in here to say the Public Officials could engage in a lease is if they are for in the general benefit of a corporation or other entity, that and the corporation or other entity is publicly healed and the idea being that if an individual owns stock in hilton or another Hotel Company or a they werent the significant owner, significant beneficiary or involved in management 2005 be okay because its like de minimis involved and thats clear but the gsa has privileges at the odcs opinion on that section when they look to enter tet it. Why have an exert a privilege thats right than just release their opinion . As a lawyer its clear that the other entities connected to the Public Ownership and its exemption for people who own stock, its a de minimis amount of influence as distinguishes from somebody who is a primary partner. Is that not accurate. Id love to talk but the agencys legal opinions. I cant i think our report points out there is an interpretation along the lines you are you cant talk to me because its privileged . , theyre asserting privilege . Yes. Which is whoey in my opinion. Let me did you this question. Mr. Matthews a question. In 2017, august 2nd, the United States went to court at the request of gsas acting commissioner of public building to get leavehold interest in a property in middle myrtle beach. Tom rice is a friend ump like tom a lot and not questioning him. He entered into the lease before he was a electricitied toking on but gsa went to court and the complaint the United States contracts contracts win members of the federal government are pointed at the lease in question was voided upon congressmans rice assumption of office and id like to enter this into the record. So, when gsa contracts to congressman rices llc and disordered this corporates shell and regards congressman rice of the beneficiary of the lease. Is that act accurate jess. When its comes to President Trump why didos not try go beyond the corporate shell and see if President Trump was affected . Well, complains with the lease is determined by the crag officer, and that Contracting Officer in consultation were the office of general counsel made the determination that the tenant was in full compliance with the lease. The situations are not comparable. There is a statutory i understand all. That but youre looking for some reason to treat mr. Rice different than President Trump and there isnt a reason in my opinion. Inspector general ocho walk does this inconsistency concern you that they look at the president differently than at congressman rice . Way have been discussing that issue of dropping section 37. 19 from the contracts in lying of the fact that up until recently, gsa thought that was the best practice and in lying of the fact that during the course of the review were told they specifically inserted the additional language about state and local officials in the president and Vice President to prevent interference with contracts. There is not good policy to say that public elected officials cant benefit from government lease . Thats good possible policy. Why should be be concern boat that . Because we have new person involved. It President Trumps corporates shell she only shell the gsa has refuses to look through in order to determine a interest in a lease with the gsa . His is corporate shell the only one . Again with respect to whether or not the tan is in compliance with the lease have you gone is is the only corporate shell you tried not to go into . I wouldnt know the answer to that question. You should. Are you aware of any other leaseholds leases that you have with donald j. Trump may be the beneficiary . Id have to get back you not that it of. Is the monica hotel leased the same basically as trumps that is a percentage of the gross or a minimum . Id have to review itself specifically but i believe its an identitial leaves. Youve off audited the monica hotel. I believe do you though they pay over the minimum and pay based on the Gross Proceeds . Can you answer my last question. Id be happy to get back to you with that information. You need so work. I yield back. Thank you. Gentlemans time expired. A lot of questions for these two witnesses so well start a second round of questioning. Well begin with mr. Defastow. Thank you, madam chair. Just want to get back to this issue about the base rent. As of now, adjusted by cpi according to your tonight the base rent 267,000 a month. Is that correct. I dont in the exact number. Thats in your testimony. Okay. Good. So, if the proceeds of the hotel on an annual basis exceed 12 times that amount, okay . Which would be 3,211,836, the tenant is obligated to pay 3 of any overage, one dollars, thousand dollars, Million Dollars. Is that correct . Thats right. Okay, so, in the last released monthly that we have, from april to 2017, the gross was 1,965,000. So multiply that times 12 comes tout to 23,000,859 a year. Youre telling me were back to the point where the trump hotel is only grossing 267,653 a month and doesnt owe us a penny momentum. Asked you how much more are we getting and you stonewalled that and keep going back to the 267,653. Let me try one more time. On an annual basis, has the trump Hotel Revenues exceeded 12 times that amount, which is 3,211,836. Yes or no . I think the confusion yes or. No theres some confusion. Were due Additional Fund if they key 3,211,836. Im asking you specific question. Have their revenues exceeded that . Because you have not given us a statement. Im afraid youre conflating the Gross Revenues with the rent. The written obligated, gross rev enough that exceeds the rent is to be were to get 3 of it. You understand that. You just agreed to that. 3 of the Gross Revenues. Over and above the rent. The way this is structured look, if thats dish think youre misinterpreting the cramp our underring of staff is he pays a base rent and if his revenues exceed the base rent, we are due 3 of the gross over that amount. Thats not correct. Thats not the way it works. Thats the way the staff explained it to me. So, very quickly. The rent is based upon the Gross Revenues, and the grows the rent was set in the original lease and it was 250,000 and now up to 267,000 by cpi. Theyre floor, minimum written payment, approximately 3 million tuesday. Right. But d. You keep coming back to that and sigh were not getting a penny over that because theres no the trump hotel is lying money. Eye knopp dot good job of explaining this. This rent we receive is based upon the Gross Revenues. We receive 3 of the Gross Revenues in rent. Theres floor, minimum of 3 million tuesday in rent. 3,211,836 but youre saying were north getting a penny more that. They dont owe us anything else. The 3 provision has not been triggered. Getting the minimum rent amount. Thats right. So youre saying, then, that this hotel is a failure because in one month, they have revenues of 2 million, and youre saying now their revenues are somewhere around 267,000 daz month. Im not saying what the revenues are. You wont provide us the document so we dont know what the revenues are or arent. Will you provide us dont have to give us what was released here which is nothing proprietary but okay. Will you give us the gross number for last year . Again, we are working with Economy Committee to youre not working with the committee. Ive been asking for this dat for a very long time. And were going to only have one recourse if you keep stonewalling us here. Youre stonewalling us. Youre not youre telling us out were getting this base represent and nothing else but you wont substantiate there youre accepting their audits statements and you wont show us those. And you have then we have the legal opinions which we cant see either. So were looking into a black hole here. Theres document we gave congress. You even block out who signs for the tenant. What the hills that about . The chairmans time is expired. Mr. Meadows. Mets me sigh if if can add some case, sinned worked on years a long time. In order to hit that form house, is that correct . So what were essentially saying is the way the lease is structured, is that in order to get above thatfigure , you actually have to have gross receipts above 100 million so 200 million actually would have changed the amount that if paid to the federal treasury of the gross receipts are 200 million, is that correct denmark so im trying to explain that whats happening is this is a good deal for the american taxpayers. We can take the other embodiments question separately but indeed when you look at a hotel and we are getting a base amount of lease, the way this is structured is to protect the american taxpayer, not to penalize them, isthat correct Mister Matthews . Absolutely correct. I dont know whats so public about this because when we look at the lease its clear if youre looking at a lease how you would apply this. Have you actually worked on leases before Mister Matthews when you were a staffer . We reviewed them. You reviewed them. Did you work on legislation that applied to public buildings when youre a staffer . For a very long time. Did chairman mica have a issue with public buildings thats a softball question. Did he have a problem with what we need to be doing with public buildings . He made it a highpriority to protect the taxpayer in federal real estate. And will you commit to this committee that youre 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 smart if i give you other ways to verify this number that is beyond just an audited return, are you willing to do that . Wed certainly look at that, absolutely. Is there any malicious part on the part of you or the gsato try to cheat the american taxpayer out of revenue on behalf of the president ofthe United States . No, of course not. And at a loss because we continue to come back. Weve taken a nonreforming asset, weve make an performing asset. Weve taken a 6 million liability and we turned into a surplus of 3 million. Weve done that allwithout spending american taxpayers dollars. We allow the president of the United States when in his personal capacity to invest in washington dc. It was applauded by democrats. It was certainly championed by all of us as a good thing from washington dc and then wolof, all of a sudden its a bad thing because the president of the unitedstates happened to win an election in 2016. So were looking at an enemy here. Are there 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 agreewith that Mister Matthews . Its a fabulous economic performer for the taxpayer. Mister chill, im going to come back to you. Theres what i need and you know you come before my other Committee Number of times this is not the first time we go back. I love my ig and hereswhat im asking you to do. There are internal documents that you keep talking about with gsa. There are also internal documents you have from an it standpoint it comes to the constitutional analysis that you have actually put forth in this report. Are you aware of any other time where youre actually have been asked to come in and make substantial constitutional analysis as it relates to the ig work . First i have to say that there are no internal documents that we have not. Emails back and forth between your counsel as they were going back and forth whether this applied 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 first half. So the three people that you have, the internal deliberation, do we understand how making that decision . Absolutely, its laid out. In terms of their internal back and forth, can you get back to us . Youhave a problem with us having . With having . Theinternal deliberations of how you arrived at your constitutional analysis. I play that in the report. Thank you. There are two issues here, one of which is the financial situation with regard to the hotel and that could be discussed back and forth. The issue that i want to focus on is the emoluments issue. And in the emoluments issue both of you opined a while ago that the president continues to have a financial interest in the hotel. That was your earlier testimony. Without going back at that, a question then emoluments becomes pertinent. The constitution is very, very clear that the president cannot receive an emoluments from a foreign power, prince or state. Or from a, or from the United States beyond his salary. Or from a state. Its very clear language. Theres not much, there is no debate about that. The question then with regard to the hotel situation is does the president receive money from a Foreign Government . And that earlier question, neither of you had that specific information. And the question for Mister Matthews is why do not have that information . Youve been asked that question. So we received Financial Information based on the terms and conditions of the contract. Youre going to blow for your time here. Have you requested information about money from Foreign Governments and from State Governments . The question of whether or not there is an emollient a monument violation before the court not the essay. My question is have you asked for information . I think the answer is no you have not, correct . So you cannot. And so have you requested that information . We dont have directaccess to the hotels books and records. Requested that information . Weve not requested it. Madam chair, i would ask that the committee the request that specific information. Now i believe that we have a slide, its called tracking profits from Foreign Governments to the trunk hotel. This is a slide that was given to the committee and it came from the Trump Organization. And presumably, the Trump Organization gives back to the treasury whatever profits there may be. We have not determined that there are or are not profits but the question goes to out in the world where going to determine the accuracy of any profit contributed to the treasury when we have absolutely no information about any Foreign Government or any State Government paying anything at the hotel . So is this useful or is this just a sham . Open question. Mister matthews, have youever attempted to track any profit at been returned to the treasury . Thats not our role. The answer is no you have not. And miss ochoa . My question remains as an obstacle to the access to thatinformation. So the rationale the trumpet ministration use to get past the emoluments issue was that they would deliver to the treasury any profit. That was received. And yet we have absolutely no way to determine if there was any participation at the hotel by a Foreign Government or State Government. We do have press reports and we do have the testimony of the former governor of maine apparently the state of maine since 22,000 at the hotel. Now, the underlying question here goes back to the initial lease and the question of the estoppel. We have been denied the legal questions that were asked of the council. But we do know that there was a legal analysis done by the council. Is that correct . That is correct. We also know that harry, the Contracting Officer knew that the office of the general counsel recognized a violation of the foreign emoluments clause might be relevant to a breach and that this important issue remains open. This is your testimony miss ochoa, do you stand by that . Apparently the office of the general counsel raised a question about the monuments and that remains open today and i would simply say this is our task. Thank you. Thank you. We could talk about how much should become deleted under the lease, whether or not the lease was in violation of the monuments clause and other such issues that may escape the scrutiny of the American People, but one thing the American People to understand is that the American People dont get a good deal when the president of the United States is the tenant and also the landlord. Thats pretty much like the fox being in charge of security at the henhouse. Everybody knows that a set up that is doomed to benefit the lesser lessie who is the same person at the same time. How can that work out for the benefit of the American People and that is something that this subcommittee is will point to address, dont you agree with that Mister Matthews since you only work on this subcommittee . Isnt it our legitimate interest to oversee the operation of these General Service ministrations . Particularly in a situation where the box is over the henhouse . The committee and subcommittee absolutely have oversight jurisdiction over the gsa. Of all the things my friends on the other side of the aisle have been saying all morning to somehow these merge this hearing or to take away from its legitimacy, you dont agree with you . Im not going to opine on the minority. I understand your loyalty but you also have a loyaltyto the constitution, do you not . Yes i do. With that im going to yield a balance of my time to the gentleman from tennessee. Thank you mister johnson. Let me go back to Mister Matthews. Could you give us the agreement, Lease Agreement with monica hotel and gsa and let us know when you give it to us if they have paid more than the base rent and paid their rent based on the percentage of Gross Proceeds provision . Id be happy to take that request back and we will respond to your request. Thats good that youwill do that but you dont know for a fact if they have paid more than their minimum rent. I dont know and again, if there are provisions in the lease that respects the Financial Information we will have to work through that as well. It be interesting to know if it was a similardifference. The percentage of the trump family has decided at some point on their own that do not violate the emoluments clause, they would pay hotels profits. Mister trump would otherwise get through the treasury at the end of the year to avoid violating the constitution emoluments clause. Are you familiarwith that arrangement , decision . Just by press reports. Dont you think miss ochoa that the president had decided to donate his process so he would not violate the monuments clause, that an admission that the emoluments clause is effective as you have said and should have been considered in determining the lease. Im not going to ride provide an opinion on those statements. We did find in the report that there is an issue of constitutional issue with respect to the lease. Apparently the trump family agrees. Let me ask you this Mister Matthews, they get a percentage to the treasury. You know what amount of money they get to the treasury . Are you referring to the lease contract or this other arrangement . The other arrangement where the trump family donate his profits . I would submit to you you want to be familiar, the president of the United States your boss decides hes violating the constitution it doesnt givethis money to the treasury , and you dont know if hes actually getting the percentage of profits that he gets from Foreign Governments which you could know by auditing his books, if you dont know you are being derelict in your responsibility. The president has said this is a constitutional issue and hes going to get his profits to the United States treasury and yet you dont know what hes deciding to give and whether its enough or not. This is within your purview and mister trump as bessie basically said hes violated the constitution but hes going to donate a certain percentage but theres going to be nobody looking over his shoulder to see that he donates the right amount of money . I guess thats an answer you dont care. You want answer . What i would say is the question of an monuments violation that is pending, double litigation before the courts right now and in those , in that forum the department of justice has argued before the courts there is no constitutional violation right now. Mister trump has admitted it, mister trump doesnt give away money for no reason he doesnt even pay taxes ideal back. Madam chairman i have just a few unanimous requests. One would be for the record of the set tillman business transaction of President Trumps emoluments problem and document. I asked unanimous consent that that be included. And then the amicus brief that was filed on the same subject without going into a long dissertation, i asked unanimous consent that be included as well. I think the gentlewoman and i yelled back. Thank our witnesses and appreciate them staying with us so long. They will be dismissed and we will welcome oursecond panel. Lets take about a fiveminute break. Im sorry, not a break. Its a five minute recess. I want to welcome our second panel of witnesses, Mister Michael foster, legislative attorney for crs american law area miss list templates, hisdirector of Public Policy for the project on government oversight. Mister walter shot, Senior Advisor for citizens for responsibility and ethics in Government Group and former director of the us office on government ethics. And this john spakovsky, senior legal fellow for the Edwin Meese Center for legal and judicial date at the heritage foundation. And you very much for being here. Were looking forward to your testimony. Without objection our witnesses statements will be included in the record and is with the previous panels since your written testimony is included, we would ask you to please limit your comments to five minutes. We will now proceed with the witnesses, start with mister proctor. Writing member meadows and members of the subcommittee, my name is michael foster, legislative attorney in the American Law Division area you for inviting me to testify today on behalf of crs to provide Background Information on the monuments clause of the u. S. Constitution and recent litigation in certain those provisions in brief other what ill refer to as foreign and causes of the constitution, any Person Holding any office of profit or trust under the United States is prohibited from accepting of any present emoluments office or title of any kind whatsoever from a Foreign Government unless congress consents. Additionally a separate constitutional provision the domestic monuments clause provides the president of the United States shall receive during his compensation for his services which shall not receive in that period any otheremoluments. For most of their history these thoughts were examined by the courts. However recent litigation involving the president has resulted in courts more fully addressing the scope and application of the clauses. Though these causes and litigation raise a host of legal issues, which i addressed in more detail in my written testimony, the testimony today will focus on the issue thats arisen in the recent litigation, namely of what the issue of what the term emoluments clauses means. What constitutes an emoluments and in the constitution is a question thats divided legal scholars and has only recently been addressed by any federal court. Several definitions have been offered. The narrowest definition would limit an emoluments to compensation for services as an officer or employee of a foreign or domestic government and would not extend to ordinary business transactions between a Government Official and such a government. By contrast it would cover any profit, gain, advantage or benefit including ordinary fair market value transactions between covered officers and a foreign or domestic government. The department of justice Legal Counsel has also sometimes appeared to employ presumption a fact specific definition and rendering advice to the executive branch on how the acceptance of payments by executive Branch Officials would implicate the clauses. The opinions in assessing whether a benefit would constitute a prohibited emoluments i looked to the goals of limiting influence on the president and federal officers and have accordingly inquired into whether a benefit at issue could influence the recipients as an officer under the totality of the circumstances. Debate over the definition of an emoluments is centered on the clauses, history and purpose and historical practice. For instance proponents of broad definitions assert general anticorruptive and antiinfluence purposes support reading expensively and rely on contemporaneous dictionary definitions and precedents of past president s. In support of the office however some scholars rely on impeding contemporaneous dictionary definitions and usage by some founders as well as the possible Business Practices of president s like george washington. In 2018 and 2019 to Federal District courts address the scope of the monuments causes for the first time with the courts concluding the term emoluments is to find is any profit, gain or advantage of more than minimalist value. The court found significant use of modifiers like any other and rejected the proposition that the terms Office Related use in another part of the constitution could control under the clauses. With respect to the clauses of history and purpose the courts acknowledging the broader and narrower definitions of the monuments existed at the time of ratification found a way to historical evidence in the clauses anticorruption purpose to support a more expansive definition. Finally the courts chief executive Branch President in practice is consistent with anexpansive view of the meaning of the term emoluments read these Court Decisions construing the monuments causes are not final however. In fact one of the decisions has been reversed by the us court of appeals of the Fourth Circuit and the issue regarding standing of the plaintiff to sue the other decision has been certified for an immediate appeal to the us court of appeals for the District Of Columbia. Thus the import of these decisions as it relates to the meaning of the emoluments clauses remains unclear. Thank you and why would be happy to answer any questions. Thank you. We will now go to mister makowski. Is important to note that the lead to the government and trump Old Post Office llc and corporate entity not president gave operative more than three years before donald trump was elected the it comes from a number of erroneous conclusions. The it claimed the tsa shouldve considered whether the lead was a violation of the monuments causes it failed to consider that issue when determining whether the leaseholder was in violation of section 3719 of the lease. The emoluments question is a constitutional issue under the authority of the department of justice , not tsa. Doj has made it clear from the beginning of the administration and throughout the litigation filing that the executive branchdoes not believe the lease violates the emoluments clause. At his position is controlling the entire executive branch and it criticism of gsa therefore unwarranted. Furthermore, gsas position as a tenant will not violate section 3719 of the lease is also correct that provision state and elected official cannot be admitted to any share or part of the lease. That section was not violated when the lease was entered into in 2013. Since donald trump was not an elected official at the time. Elyse 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 trump since it clearly states, will not be construed as expending any person who may be a shareholder or other Beneficial Owner of a Public Health corporation or other entity. Old post office llc clearly falls within the definition of other entity. Trumps interest in this llc as you know were transferred to a trust after he was sworn in. He really wishes management control and announced all profits or Foreign Government statements be donated to the treasury. Therefore gsa was correct when the issued an estoppel certificate saying the tenant was in full compliance with the lease. Hes also important to note that after interviewing dozen employees and reviewing 10,000 documents, dig saying there was no undue influence or involvement of any kind by anyone including the executive office of the president. The igs conclusion that tsas unwillingness to draft a constitutional emoluments issue effective its analysis of section 33 the 19th makes no sense. Since it was and is the Justice Departments position that theres been no violation of the emoluments clause, there was and is no reason for gsa and consider the issue. Plaintext of the closet makes clear that was intended for gifts, presence and foreign State Governments as well as payments for Services Rendered in the president s official capacity. They were not meant to bar president from having private business interests or owning businesses in which customers including foreigners made the fair market value of products or services theyreceive an open exchange. As doj has pointed out its briefs , neither the text for the history of the clauses show they were intended to reach benefits derived from president private business pursuits having nothing to do with his office or personal service to a foreign power. The arguments advocated by those who say that the emoluments clause prevents anything of value being received by president is far outside the intentions of the framers. Under that theory, the governors tension, that Ronald Reagan received as president would violate the domestic emoluments clause. The doj opinion concluded that it not within the emoluments clause. Under this theory a president could not even hold us Treasury Bonds because the interest that he would receive in payments on those bonds would be considered a violation of the emoluments clause. The concerns raised by the ig have no basis in fact or law. There was no violation of the emoluments clause and Trump Organization elected to be a developer in 2012. There was no violation after the president was elected based on the specious claim that anyGovernment Official staying in the hotel is pain and emolument to the president. The president is not providing any services in his official capacity. Given the doj has maintained the beginning of the ministration the lease is not in violation of the emoluments clause was no reason for gsa to consider that issue contrary to the criticisms of the ig and gsa was correct in its assessment by the lease by its own terms. Does not apply to the situation. Its all much ado about nothing. Thank you, miss zimbalist. Chair titus, Ranking Member meadows, members of the subcommittee thank you for the opportunity to testify on behalf of the project. At the root of it we are here today to testify President Trump is not fully divested from his private businesses and his continued financial relationship with the Trump Organization creates a specific contract flecked of interest regarding organizations with the gsa. This arrangement locates the constitutions foreign and domestic emoluments clauses and present a possible violation of the clause in the lease meant to ensure Public Officials not benefit from the lease of this sort. As we heard earlier this year the gsa office seven factor general found shortcomings in the agencys process of determining whether the Trump Organization was in compliance of the lease. Early on in review the agencys office of general counsel acknowledged the president elects business interest in the Trump Organization might constitute a violation of the emoluments clause. Such a violationcould constitute a breach. Are going to leave to go to the floor of the u. S. Senate for a brief pro forma session. Findings on former agency officials. The tone of the letter was at times extremely contemptuous, appearing more concerned with protecting the president s reputation and ensuring the agencies operating in full accordance with the law. Ignoring the Inspector General statements that would not examine whether the president sinterest in the hotel violates the monuments causes, the general counsel misstated that the Inspector General is not tied any constitutional violation occurred. He further asserted the Inspector General found and emoluments violation is nearly impossible and repeat that claim pointing to ongoing litigation in which the Justice Department is arguing the president s business interest was a violation of the emoluments clause. The attorney , general counsel ignore the fact that in thoselawsuits Justice Department attorneys are exercising their law is the president s Civil Defense attorney. Theprogram grants described inthe apartments website defend actions against the executive office such as the emoluments clause , lawsuits the general counsel cited in his response. At the Justice Department is arguing for an interpretation of the law , those favorable to his client its hardly an impartial arbiter of fact or law in this situation. The present the departments assertions is impartial at the gsa general counsel it in his response is misleading. The conflict of interest in the lead for the host Old Post Office building may be managed appropriately but its inadequate and unfair to ask the public to trust an agency under the president s authority will manage those conflicts properly. Instead the Trump Organization and gsa contract cooperate fully with oversight efforts of members of congress. That oversight extends to examining the igs review of the agency decisionmaking process and therefore additionally concerned my lack of productive response to requests for record from the gsa Inspector General submitted by Ranking Member meadows area enclosing is important for us to take a step back and consider the broader policy implications of our conversation today on the issue is whether we as a country are okay with the system that allows elected officials and privately profit of their official actions. If the answer to that question is no as is suggested by the monuments causes in the constitution and we need a serious accounting of the laws and policy governing the conduct of those elected officials to ensure that they are sufficient. In this committee that starts with gsa contracts. Economic forward to your questions. Thank you, mister shaub Ranking Member meadows and members of the subcommittee, you for inviting me to discuss gsas management of the Old Post Office is the president s business leases from the government he leads. Nearly 3 years ago donald trump declared that quote, a president can have a conflict of interest. But thats not right. Conflict of interest arises when any officials personal interests are at odds with the duty to the American People. True, president and Vice President once covered by a law that prescribes criminal penalties for conflict of interest but this exemption is a part of high office. Conflict of interest in danger the fabric of our republic. Justice department and the office of government ethics have advised president s to act as though the law applied to the better part of four decades they did. The kinds of measures their appointees to prevent conflicts of interest. Now suddenly a landmark houses the trump hotel which is patronized by individuals and groups with interests affected by the federal government. For example tmobile infamously says executives to stay at the hotel while it sought federal approval of the merger. Obvious advocacy groups, businesses, nonprofits and political candidates frequent the hotel. Why wouldnt they . White house staff and other ladies minglethere with influence seekers. The hotel is even frequented by members of congress are responsible for oversight of the executivebranch. Crew has also tallied nearly 60 Foreign Governments visiting trunk properties. One diplomat suggested it would be rude to come to his city and state your competitor area today and transmitters was released that shows the ukrainian president was highlighting that he wanted to stay at a trump hotel and apparently he seemed to think that would ingratiate himself to the president. Bahrain, kuwait and the philippines posted major events at the hotel, romanian prime ministers personally stay there. The saudi government has been one of the Trump Organization your customers raising concerns about the kingdoms relationship with the administration. The consequence of these circumstances has been an unprecedented ethics prices. This scandal plagued demonstration as the one appointee after another resigned amid inquiries into their conduct while others remain in government under the cloud of ethics concerns. For their part gsa officials emphasize aspects of their work occurred before the inauguration. They claim that they work under any pressure. Thats the very real risk they face when they challenge the Trump Organizations least compliance. The election was over. They were about to get a whole new set of bosses and every careerofficial lucas. Gsa was thelead agency for the president ial transition. There are two main problems with gsas march 20 17thlease determination. First, gsa refused to even consider the constitutions emoluments clauses. In failing to consider them, gsa fell below the standard for Agency Action to consider an important aspect of a problem ready to rent as an Agency Action capricious. Gsa officials failed to fulfill their oath to support and defend the constitution. Second, the lease makes clear that an elected official and not be admitted to any part or share of the lease and cannot benefit from it. Rather than interpreting this contract language, gsa sidestepped the issue. The determination only recites steps taken by the Trump Organization to create the illusion of operation from the president. The Trump Organizations and the President Hotel profits will sit in the capital while using government but this doesnt solve the problem. Money in a property he owns and he will benefit any improvements they make with. Theres also nothing to stop them from them coming back in once he leads government can you elaborate on the role of the doj lawsuit and the one involving the constitutional interpretation. Justice department is the lawyer for executive branch including agencies and executive Branch Agencies and agencies such as gsa and 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 clauses but the point is they dont take, when they take a position in litigation in a particular federal issue is constitutional, unconstitutional, that is binding on the executive branch including other agencies. I not only worked at the Justice Department but i was a commissioner for two years at the federal Election Commission and when we had a case for example before the us Supreme Court, even if i as a commissioner personally believe or in my official capacity that a particular statute was unconstitutional , it was the solicitor general at the Justice Department that argued before the court and argued about its constitutionality. I had no power to change that so this idea that gsa cancome up with its own view of the constitutionality of the emoluments clause , its just not in accord with the way the law has been practiced, the way the Justice Department operates. Just look back to former attorney general eric holder who refused to defend certain federal statutes including those affecting gay marriage because he said they were unconstitutional. The federal agencies involved with those particular statutes do not have appeared in court and said we disagree with the attorney general. What youre saying is it would break historical precedent in terms of the executive branch to allow the gsa administrator here, i guess the ranking official at been here on the panel before you who is not an attorney to opine on the constitutionality of the emoluments clause , is that correct . He can opine all he wants but his opinion is irrelevant as is the opinion of the ig. The authority is the Us Department of justice. Miss hempowicz, is that correct . I want to clarify one thing and ill try to be brief. In your written testimony on page for you see the courts have adopted a broad definition of the monument. Is any benefit gain or advantage including profit from a private market, from private market transactions. Im not aware of any case that would identify private market transactions. Can you help me with the case that was decided where that definition was included . Is that in a majority opinion west and mark. I cant off the top of my head. I dont think there is one. So here i would ask you to clarify that because i dont think there is one. Weve looked and when you look at it, it seems like you made a definitive statement so perhaps you can go back and verify that. Either get us the citationor remove it and that would be very helpful. Mister foster, let me come back to you in the one minute 12 seconds i have remaining. Crm, im not a big fan and i applaud the democrats for continuing to have crs, as witnesses. I think its good in a bipartisan spiritof transparency. As the opinion on the other monuments clause , has changed over time . Has what crs interpreted as the emoluments, as it changed over time . And i know your new so if you dont know, dont answer. Thank you for your question you what i would say is grs determinations are based in the law and are based in existing legal precedent and theres very little legal precedent on the question of what an emoluments is. Its only recently been addressed by the federal courts. What youre saying is basically we need for crs to have a definitive opinion. We probably need the courtsto rule on this with the pending litigation that is out there. There always crs can look at Legal Provisions that havent been definitively interpreted. But you havent thats change over time. From 2012 to 2016 its changed in terms of your interpretation from crs, are you aware of that western mark ill let you get with them and you can get back with us and i yield back. Mister foster, we keep hearing from the gsa that they were trying to make this new practice consistent with underlying law and they quote eight usc section 431, station 603 a, thats a criminal provision and a civil provision and ithas to do with congress , members of congress in contrast. I would argue that thats 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 for your question. I have not reviewed those provisions in preparation for this testimony. I can say as a general matter that statutory law does not supersede the constitution. Would you agree with that, miss hempowicz . Yes. Also to and hearing how much money the post office is making now as a hotel. Its making all this money. Its great for the taxpayers and is making all this money but if its making money, its making money for the president because its a Revocable Trust which you can revoke anytime or defer the money until he leaves office or reinvest in the property so hes making money area at the president s making money. Mister shaub, isnt that a violation of the emoluments clause . It certainly is. The trust does absolutely nothing to separate him from his assets for his income. We tell of irRevocable Trusts all the time. Never address it again and eliminate this conflict of interest provision for future contracts. Theyre compounding a dereliction of duty with an even bigger dereliction of duty. Were you the director of theoge and didnt you give him some advice about how to avoid these conflicts of interest, could you share with us that advice . Ive been very public about the fact all president s should divest their financial interest in the same is true for the current president. Did he follow your advice . He did not. Thank you very much. Where did she come from . Sorry. We now have a new member with us. We will hear from ms. Miller. Thank you madame chairwoman. Thank you all for being here and once again i want to emphasize at the very first hearing we had on this committee was called the cost of doing nothing by investing in our nations infrastructure matters. Its more important to my constituents that we act swiftly to improve our nations infrastructure. Mister spakovsky, however. Is it for a contractor to make a determination based on an unsettled law in the court . I think thats very problematic for a federal agency and i can say that as former commissioner of a federal agency and in particular , when the Justice Department is taking a position again because they are the Controlling Authority to put on constitutional issues, gsa cant go against that and the position of the Justice Department throughout all of the litigation over the trump hotel and lease is that this is not aviolation of the emoluments clause. Thank you very much and i yield back my time to mister meadows. I just want to thank all of you and thank the gentlewoman from West Virginia and the chairman and i will yield back. Thank you miss meadows, any questions from the subcommittee . Id like to thank the witnesses for your testimony, your testimony has been helpful and i would ask unanimous consent the record remain open until such time as our witnesses have provided answers to any questions that may be submitted to them in writing and unanimous consent of the record remain open for 15 days for any additional comments and information submitted i members or witnesses to be included in the record of todays hearing. Without objection, so ordered. Due to fellow members have anything to add to mark the subcommitteestands adjourned. Weeknights this week we are featuring American History tv programs as a preview of whats available every weekend on cspan3. Tonight we look at world war ii. On august 25, 1944 us and french soldiers liberated paris after more than four years of German Occupation during world war ii. Military historian harry logan qualifies the operation. The Kansas City Public Library and u. S. Army command andgeneral Staff College hosted this talk. Watch tonight beginning at 8 pm eastern on cspan3 and enjoy American History tv this week and every weekend on cspan3. Today at 6 pm eastern, live coverage of Hillary Clinton and her daughter chelsea talking about their new book, stories of women who inspired them. Watch coverage from the politics and prose bookstore in washington dc today at 6 pm eastern on book tv on cspan2. I will tell you we were very surprised that we found that the millennial generation which will be 50 percent of the workforce in 2020 is at this stage of life the sickest generation of any other cohort group. And it relates seven of the top 10 officials Art Mental Health or Emotional Health related conditions. Generally stemming from detachment issues, lots of virtual contact, not enough human contact. We are seeing chronic conditions arise like high blood pressure, high cholesterol, things of that nature. In that generation that we would fully expect to see in people 20 or 25 years old. Tonight the ceo of the Blue Cross Blue Shield Association Talk about the future of healthcare, Prescription Drug costs and innovation on cspan at nine 10 pm eastern. Up next, education secretary betsy devos talks about an initiative pending in congress. Secretary devos was joined by white house counselor