inaudible without objections. We are now going to proceed with Opening Statements. I wish you all the good morning and welcome to the fourth hearing of the public buildings and sanctimony and one of the purposes of this is to protect taxpayer dollars by ensuring that theyre spending it offensively and with transparency and that brings up with todays hearing which is entitled the tenant in the Trump Administrations oversight and the International Hotel and you can tell from the title guy were going to be in investigating an unprecedented tuition and the houses President Trumps d. C. Hotel. Since President Trump has declined to confess from his businesses, hes essentially acting as both landlord and the ten it. Before i was elected to congress i spent over three decades Teaching College students about American Government politics. In those classrooms we, had serious discussions about the role of the legislature if the executive branch with legal and ethical standards and thats exactly what we had through today. Lets start with some facts, all federal workers and officials are taking an oath of upholding the u. S. Constitution. And of course that includes the president and all members of the administration and all of us in congress. Second, the constitution can change to files in our topic today. One prevents an elected official from receiving and i quote any president or to mining key branch of our stay without the consent of congress and today, congress has given this resident of such consent and a second and related clause is accepting any federal or state dollars beyond its president ial salary. A lot of people may not be committed to the monument but our Founding Fathers have any payment that included in the constitution to have officials from accepting bribes from Foreign Governments and from part of our own government that maybe trying to at least agree that this is the practiced from the public and members of this congress. Third, a government released the d. C. Hotel explicitly states that they may not use the premise to violate federal law or vote again for any concern in any way and that concludes the constitution and moreover section 37. 19 that no elected official in the United States shall be admitted to any share or part of this leads or to any benefit that they adhere from. If the president continues not a personal stake in a hotel. People stay at trumps d. C. Hotel there directing benefits and despite of what arises from this situation the agency that oversees the release and services of the administration has not done a thing about it. In fact, agencies Inspector General who is here with us today conducted an exhaustive report and found that the in gsa the Old Post Office leases issued either the constitutional mindless laws that has caused of release. Despite this observation the Inspector General found that the gsa decided not to address those issues and the Inspector General called that improper. I think thats the least of it. When you take an oath to uphold the public constitution youre bound by that official that has turned a blind eye to these legal and ethical issues. When called audit, the gsa failed to implement basic recommendations made by the Inspector General. The gsa was destructed to conduct and consider they constitutions of monuments and the terms of the lease. As far as i know, gsa i dont even present it pretended to conduct that. Gsa was also instructed to provides the language of making it even clear that the constitution is relevant. They havent done so in any way to satisfy since the Inspector General and havent done so in any way of satisfy this committee. Finally, addition to the legal issues, the gsa as turn over documents to the committee which has the jurisdiction over gsa and having a legitimate purpose to examine. And 2008, congress directed gsa to the Old Post Office building to make profit. They were lying on their attorney but on trumps Business Laws that refused to turn over any basic financial documents that could help us determine if they are upholding the terms of the lease. How can we know that taxpayers investments are being protected if we cant examine the financial records. How can we be sure that the National Policy is not being swayed by those spending money in the hotel that benefits people at the highest levels of our government. Gsa its also preventing loss for making legal memos that were trapped by officials that were supposed to come to terms of this lease and looked leather way and thats where they come to expect and continue to Stonewall Congress in return and you never ever imagine the situation will rise enough to put them right in the constitution and should be wise enough to endorse them gsa. Our first panel today will hear from the agency that oversees the trump hotel lease and from the Inspector General who founded the gsa did not fulfill its occupation in the constitution. The second panel will hear from legal scholars on some of these purple cases. I want to thank everyone for being here today and i look forward to hearing your testimony and answering questions and i now recognize the Ranking Member for noting statement. Thank you chairwoman we dina titus once. Again, here we are in the drama of bigger things related to President Trump is back and instead is focusing on Critical Issues like Disaster Recovery or crumbling infrastructure were here today trying to answer a constitutional question that firmly before the courts and offer that no one on this desk this even able to answer. We are looking at a constitutional question but this is all about the president and his business. We have other business before this committee that is critical to the american taxpayer. 79 bills that have been referred to the subcommittee. We only acted out nine of them. We could be in a hearing today examining some of those proposals add its National Preparedness month. Here we are, the original plan for the hearing today was the focus on recovery and some of that in my very state. Instead, were focusing on an issue because of the perception of wrongdoing. Based on our markup last week, the remarks by members and im sure that the members on both sides of the aisle that view it as a critical responsibility of this committee. To address the disaster relief. Right now, more than half of the states are still impacted by 73 open major disasters of emergency declarations. The spends gsa over five billion dollars a year and Federal Buildings trump struggle to pay for the basic needs of those buildings. And yet here we are today for elbowing the gsa and the commissioner here not to talk about these things but to make a pine on the decision thats already been in the conclusion thats already been main on the opposite. Let us be very clear, we are here today because of the least that was endorsed by and advocated by and democrats. Signed off on by democrats and negotiated and executed under president barack obama. The lease were nearly all the decisions were made before and after the election were made by the Obama Administration. Yet somehow its the president s fault and in this Decision Making after the president was sworn in five a Career Public Service and even if you focus just on that you have a long term Career Public Service with leadership thats appointed by gsa and making the decisions and here we are today and Inspector General still found that there was no undue influence in that decision. I am just at a loss for words on this when you look at this because gsa has produced documents and the requested members and so many documents that produce to the ohio and our colleagues would argue that they are not responding to their requests. Let me be clear on this as well im a strong supporter of transparency and accessed information. But when those demands start taking on a outside beyond the mission and core mission of what is happening we, have the responsibility to make sure that those requests are not only reasonable and legitimate but they are not just a fishing expedition. Republican members of myself included sent a letter that requesting documents to the ceo ig of the conclusion in her report. That was actually a request not as a fishing expedition because of the unusual later and its been decided as authority impending legal cases. It contains assertion without citation and at least one incident which was factually correct of the assertion which was taken by legal action. It could change its own legal analysis and the constitutional questions come from me before the courts. The chairwomans genius talked about those constitution protected areas and our rights of oversight as legislative body and answering this question which has to be resolved from the reports and not by the legislative body. If we want to change the law and make sure we can change it and lets go ahead and introduce something and nothing has been introduced and given this issue anthe facts using the Legal Proceedings its, critical for us to verify every oig support and to understand the basis of that report and we were crest that similar to the request of the oigs report on the fbi headquarter. However, so far weve, only receive 177 documents in those were largely publicly Available Research articles in the constitutional analysis and to me that is unresponsive. I hope we can get back to the will work and once again this could operate in a bipartisan fashion today that is certainly not what that and i yield back. I think the Ranking Member and i now recognize the chairman of the committee who has spent some time working on this issue and is quite familiar with documents that have been released and some of the players and all of the issues and the to recognize mr. Four years peter a. Defazio. Its nearly three years since i first questioned tsa regarding the least and its Pretty Simple. No congress were elected official of the government of the United States and he District Of Columbias should have part of its force of any benefit that may arise and the Ranking Member just went on to say we are here because President Trump is ignoring all precedent decided to not die cast itself of its business interests and the hotel any trump patel and in particular that hosted its elected officials a child benefit at the president was elected and didnt get a majority of the vote but was elected so to say that this committee should not be pursuing this with gee essay or that is bizarre and secondly. This building was least because it was losing money and the idea was its going to make money and we will get a share when with gsr does this stuff and a share of the profits as a share of the growth and we dont hardly a profitable in we dont even know today and the only statements we have are intentionally or unintentionally put online and they would say that this is back in 16 and they would say that this is proprietary and if you read through it its a simple one line disclosure and now the tsa says that congress is not entitled to those released mistakenly. How do we know what the income is . How do we know how gsa has calculating the profits . Thats the discretion of the contracting order and we think thats the career official that you referred to. This career official was in november of 16 and was absurd that anybody would question this clause and this is the contracting of it and thats a series of questions of a former official from this agency. Is this out Contracting Officers work . And then he went on in the email this was about ivanka trump to get together with you and bring some coffee and tell you but my great trip to new york. This is a Public Servant who was looking out after the Public Interest and still the Contracting Officer and has discretion and how they calculate the profits. We dont know if youre getting a benny out of this thing or not. Heres the statement i came to us and thats it. As a cover page a, cover page. Thats what congress is entitled to. How much whats the income . We dont know. Whats the profit . We dont know. Whats the government getting . We dont know. The gentleman doesnt want to know whether the taxpayers or getting ripped off or not and thats just extraordinary to me. Its extraordinary. With the gentleman yields. Well u. S. A question . I will not yield and please be quiet. The chairman went overtime to. I havent got over yet so youre going to make me. I asked for the legal opinions and we cant see them and we can have them. So we can see they legal opinions that had been questioned by the ig but the gentleman knows that the legal opinions or whatever they are. They know that they get 3 Million Dollars a year and a gentleman does know that. We dont know on a monthly basis what the income of the hotel is and what percent and how theyre calculating this and how what percentage getting. The gentleman knows were getting more money under this least in the previous leaf. The gentleman is out of order. Thank you madam chair. You are not the chairman its. Are you going to be quiet now . Thank you. Here is the legal opinion that we received from gsa a. Didnt come from the council and weve never seen a document out of the general counsels office and there is a general counsels office. Its a document from michael best and frederick our lp and this is the only legal thing we have and that happens to be the trump hotel this whole thing is so out of line in terms of gsa and its oversight and the release of this hotel from day one and that is why were here today and or hear principally because this president failed to divest and conflicts of interest and put itself not just in violation of the lease but also to the clause of the constitution of the United States in domestic and thats why were here today. Right on time he thank you. Will now recognize Ranking Member of the committee mister graves. Thank you madam chair. And Ranking Member meadows released. Youre over and over again with the majority of why are we doing infrastructure are why is the infrastructure bill and here we are. In a politically motivated hearing talking about the Old Post Office. And light of the disasters this year we should focus on disaster efforts and working instead and instead here we are a politically motivated hearing and the tools to prepare and does say and in part to texas and Tropical Storm melbournes from historic flooding houses when we have many communities that have a long way to go when it comes to recovering and the hurricane seasons and its going nothing more than a political spectacle and the opponents to undermine him and continues to give their search for anything of impeachment and thats what this is about. Instead of working on disaster for any other countless infrastructure items that are clearly more important than this they are instead of going to be listening to politically motivated criticisms of the president. We worked together in this committee and we can still do that if we put politics aside at this is a political distraction and take us from where this committee should be doing things. Thank you mister graves. Wed like to welcome our witnesses and our first panel we have mr. Daniel matthews and part of the u. S. Tsa and thank you for being here and we look forward to your testimony and without objections are full statements will be included for the record. Since your testimony has been a part of the record of the court request that you lend your oral testimony to five minutes as well. At this point, we will begin with mr. Matthews. Good morning chairman tight is and members of the subcommittee. I am matthews and i was sworn in in 2017. For that, i served as the majority of the subcommittee for almost 15 years. We begin by thanking you for authorizing your help in securing the Senate Authorization as well for the courthouse in las vegas. I like to briefly discuss the most difficult changes in challenges in this committee that they had over the last decade. These problems and overland costs and our agent and territory and the courthouse construction. Since up temperatures and 17, jesse has cut through enough million fees from its expiring portfolio and environmental rates in the market compared to this is stork average and avoid at 1. 9 Million Dollars by investing our capital and tsa such as the student federal in maryland. The tsa is reducing our alliance and equality annualization. Finally, its part of the constructive over a billion dollars of court houses and budgets on schedule. But the last two years, gsa as made some qualities of this committee and working on these issues. Moving on to todays topic, i like to share some context that is important. One of the longstanding priorities of this committee is to address the repair and problem at the Old Post Office. This effort recorded in the Old Post Office and the directed tsa we will maintain our federal ownership any facility. Pursuant to the act, it conducted a full and open competition in 2013 with a 60year lease in the policy and it pays rent and a potential revenue sharing and the american taxpayer. This joint effort created of substantial benefit for the government and taxpayers. Prior to relive element they, operate the facilities of significant loss. Including six and a half billion dollars in 2007 alone. Today, as a director of the act, instead of a multibillion operating loss, they now receive 3 Million Dollars in rent and restored a property thats been fully reckon aided in funds. While the Inspector Generals review did not seek to determine theirs best interest in the hotel and hes clauses. Section 30 7 19 of the release and both issues generate questions. And with respect with the inappropriate for tsa to weigh in on that issue as a subject of active litigation. The first of several losses in violations which was filed in january 2017. According lee the, meeting in applications of the clauses was the subject of active litigations and the entirety of the administration. The beginning of june into and 17 the, department of justice was taking a position in those cases for the president s interest which does not violate the constitution. The committee can rest assured that if and when this issue is resolved as a matter of law. They wouldnt hear those illegal determinations. With respect to section 37. 19. What gsa followed its process of the conditions of release. The Contracting Office was the Legal Authority and responsibility for making contract incisions and work in consultation with the exterior attorney for the gsa general counsel to make this decision. As a result of that process, and march in 2017, by the career Contracting Office the gsa found compliance with the release and as the committee is aware the Contracting Officers Inspector General conducted a 16 month investigation of the Old Post Office released at in the title of this hearing its the aspect of the review thats vital to reiterate and Inspector General found no instances about the influence of interference and the Civil Servants charged in this release and furthermore, as we have a response through the review they believe that the report recommendation and agency understand it and will take action of that recommendation consistently and prior to continue or the language of this business. Lastly, gsa i have moved on this Oversight Committee request. The gsa provided more than 3000 documents and materials and response to this request. And addition to numerous details. In conclusion, let me thank you for authorizing our prospective a timely matter. We very much appreciate that and thank you. Thank you mr. Meadows. We appreciate you getting your testimony ahead of time despite the deadline being earlier. Mr. Cohen. The morning chairmen titus and Ranking Members of the subcommittee. Thank you for the opportunity to testify here today regarding the Inspector Generals evaluation of the gsa management administration. Can you hold my closer. Sure. As you know, gsa manages the leaves through the Old Post Office building on pennsylvania avenue in washington d. C. The post Office Pelosi is the tenant of the lease and on july 28th 2017 my office initiated an evaluation of battered with an administration based on numerous complaints from members of congress and the public. We focused our evaluation on gps as decision process and determining whether the president s business caused the tenant and breach of the least among the president inauguration. We did not seek to determine whether the president interest of the hotel violates either of the clauses of the u. S. Institution or the interest in section 30 7 19 of the least. Or whether any violations breach the terms and conditions. Rather we, sought to determine that their word we need propriety in this process regarding those issues. Our evaluation found that gsa through its office of general counsel as a public building surface. Recognized that the president s interest in the least raised issues on the constitution that might cause the outreach of the lease and decided not to address those issues. We found that he gsa made the decision not to address those issues by mid december of 2016 and or having put on notice any summer of 2016 of the president s status as a nominee of a Political Party for the presidency. The attorneys did so without preparing a decision with documenting the rationale and the position they are taking. With so conducting any research with these clauses and did so without checking for any opinions and the office of Legal Counsel or contacting or seeing the guidance from their office. Our report found that it was correct and recognizing that there was a potential issue regarding the Old Post Office and using constitutional issues. Im affecting the gsa reason for constituting the issues and the effect its had on the malices of section 30 7 19. Gsa lawyers gave us very deceptive reasons for these clauses. They told us for example the constitutional issues or the rise in gsa work and that the clauses are not in joses purview and that the gsa was only to opine on specific provisions of the lease. The reason so we set out to report we, rejected those explanations and we rejected them largely because they decision to include the issues from gsa consideration of the lease is improper because like all Government Agencies has an obligation to uphold the constitution and because the lease itself requires that consideration. In addition, we found that gsa unwillingness to affect these analysis was 30 7 19 elise. That led to tsas conclusion that the satisfied to terms of conditions of this lease as a result, for gsa closed an early resolution and including a solution of the factory for all parties and the uncertainty of what remains resolved. At the conclusion of a report, recommended before to use the language that gsa determine the purpose of the provision and a formal legal review of this office of general counsel and consideration of the president ial causes and advise the language to avoid ambiguity. I very much appreciate the interest of the committee and the work of our office and im happy to answer any questions you may have. Madam chairman i have a unanimous consent request. I think in light of the testimony you indicated that there is 6 Million Dollar loss that mr. Matthews had. Did you enter it into the record in the briefing and the part of the release that would indicate a base threat of 4 Million Dollars which would be an income to the u. S. Government on the other expense as these documents be entered into the record. No objection. Thank you. Thank you both for your testimony and we now move on to member questions. Each member will be recognized for five minutes and allstar by recognizing myself. Mr. Matthews, before you accepted your current jobs in the summer of 2017 where you affiliated with the Trump Administration or Trump Transition Team or Trump Campaign or Trump Organization asking for your opinion and whether the Trump Organization was in violation of the least from the post office . I had no communication with anyone from the Trump Companies while i was be considered for this position. Did you ever have any communication when the current or former gsa employees about how the white house or President Trump would respond to your business interests . Well, i worked for the subcommittee as a majority staff director and we certainly received briefings from gsa on this very question. Thank you. Miss ochoa, your Office Issued the report thats been described in the gsa addressing the issue of the release and. Including those that pertained to the policies. Is that correct . On march 29th of 2019, just say delivered a tax plan and response to the recommendations about remedying the issues in the hotel east, is that correct . Yes. Did you find that gsa plan to remedy the sophistication was sufficient . We have not agreed with the agencies corrective action plans today. And your judgment, did gsa clarify the section of the post office leased that had officials from being a party of a beneficiary of a federal release . To my understanding, the gsa is not in the analysis we requested. Did gsa have a legal review of the cause that they failed to do when Trump Took Office and you recommended . I have no information that theyve done that. So, gsa went back and submitted another plan to you on august 26th of 2019. Is that correct . I think thats the right date. To your office find at their plan would remedy the situation on that day and significantly different in the land that they submitted back in march . No it is not. Ive got the two documents here. First is the gsa directive action plan in march 29th and the second is Inspector Generals communication with the gsa on september the 6th, 2019. Ill ask you that they would be entered in the record. With that objection we order. Section 30 7 19 said that no member or elected official in the u. S. Shall be managing each share or part of this lease or independent way from. Miss ochoa youre said that the gsa clarified this language. Is it true that the gsa clarified 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 30 7 19 and prohibits the state and local a lot of elected officials and the Vice President from benefiting from the committees. Youre dealing with the problem of the president becoming under the clause which was to drop the present from the lease and say that this would apply only two members of congress but not the president and Vice President is, that correct . Or state and local elected officials . For both clauses then. Thats my understandings under section 30 7 19. I find that astounding. On top of that, is a correct that today, gsa, is stilling your judgment to uphold the constitutional by preventing the legal ranking . Of the monuments clauses . Im not aware of their effort to look into the clause in connection with how it affects the action of 30 7 19. Mr. Matthews, im sure winner agreement that the president of the United States is an elected official of the government. Given that the independent ig is just failed to uphold your duties at the u. S. Constitution, can you commit that the gsa conduct a legal review thats pertain to the trump d. C. Hotel. First id like to respond to the corrective action plan. The respect to the interest of the provision, we gsa agreed to no longer used the language contained in section 37. 9 in future out laces and in future out laces so in future leeches only congress is timid not the president and case we got that. Will you conduct that study of legal implications or legal review . So, on that question, we propose to do in future is to relieve the ambiguity by striking it and referencing the statutory basis for that clause. The direct reference is what were prepared. That statutory reference does not proceed the constitution. It seems to me that i jeez investigation reveals its completely ignored the serious legal and ethical questions here. Your response to the recommendation was not to false. But it does strike the president the Vice President to say thats just congress. My time is up. Miss miller will be recognized. Thank you chairwoman titus and thank you Ranking Member meadows. Iran was my time on the Oversight Committee and a hearing designed by my colleagues across the aisle with only one goal, to impugn and impeach our president. And now instead of being productive and, this committee we, are subjected to another display of political theater. Listen to what the left thinks about what the president is doing with the hotel that is not involved with. Here i am, in the transformation of infrastructure and subcommittee meetings and its one of the most bipartisan committees in congress and were doing it again. This is disappointing and i find it disturbing. And a waste of the American Peoples time and dollars. I came to congress to work on issues that matter. Infrastructure, is the future of america and the future of our states and my home state of West Virginia. When this hearing was first noticed, it was supposed to be a Disaster Recovery hearing and again, its an issue thats very important to my own state and to any of the other states that are suffering its an issue that i want to work on and its its sad that the political environment is so toxic that its preventing us from doing what we came here to do which was to Work Together on the things that matter and mr. Matthews isnt it true that before the lease that we were losing 6 Million Dollars per year on the post office and now the taxpayer is receiving income . Yes thats correct. We have essentially a 10 Million Dollar swing in the operating revenues of the facility and tremendously successful project with the bipartisan project from that perspective and the financial perspective from the taxpayer. We have a building that has approximately 200 billion dollars of the capital require requirements and mechanical electable plumbing and you name it. Its part of the buildings being maintained and very successful project from the taxpayers. On what they did the tsa go from the Trump Organizations at the preferred developer from the Old Post Office building. Matt . You lease with the police was executed on august 5th 2013. When was it signed . Thats one assignment, august 52,013. What they did he learn the tsa that he pretended to alter the structure that signed his interest to another party in order to comply with the lease. Yes i believe that took place i have to check that exact date is not in my timeline. Lets see the early 2017 early 2016. Id like to know when its finalized. Was that before or after is official inauguration . Was it was january 23rd so id have to get that specific date but was right around that time. Okay. At what date was a determined the following review of the least that the tenant was in full compliance and in effect . March 23rd, 2017. Thank you. I yield back my time. The general leads back. I want to clarification. I dont know where is this coming from that the hearing was noticed for some disaster and as been notice for this topic all along and its something that needs to be clear. You madam chairman, i think what it was was that we had the subcommittee looking at proposed hearings and you noticed it one way but when we are doing the whole day it was a poll for disaster relief. I think thats scheduled for later next week and will be looking at that against. I gave a consent request madam chairman. I dont have unanimous consent that these photos be introduced to the record that show infidelity from the mayor of d. C. Along with President Trump and the groundbreaking along with the celebration and the Ribbon Cutting in d. C. That tried to demonstrate how anyone seems to be happy about this until the president was elected. Without objection, all added to the record. You are looking good here and this is prior to the president being elected. I would point out, one of the issues for the record is to my mind to my knowledge, just a point of clarification to make clear on this consent request is that one of the pictures is after the opening of the trump hotel. Who cares. Can we have a little bit of ordering here please. Object no objections. There was no objection to the record and we just want to make clear that its the least signing which was prior to mr. Trump being inaugurated as president. Prior to being president. Will now recognize mr. Defazio for five minutes. Thank you madam chair. We keep referring to the income which is actually mandated by the lease and all youre talking about is the mandated red payment and there is a provision of the proposed lease and percentage rent difference where i would question gsa and their judgment and how they calculate this. But we are supposed to receive a additional amount of money if the property is profitable. According to these only released monthly statements that were leaked intentionally put out by spirited employees, in 2017. Mr. Matthews, last year all you are quoting to us is rent payment. What was the additional amount paid to the tsa under the terms of the leaves on their profits of the trump hotel. Gsa simple question, just giving a number. Just to correct something the Profit Sharing is not based on profit, it is based on Gross Revenue. Okay. Gross revenues are reported. What was the amount . You have not provided us that number what additional payments were made to the government lastly under this lease . How much . We received in the way of structure its based on Gross Revenue minimum payment of approximately 3 Million Dollars in a maximum payment its percentage of Gross Revenue. 3 more . It escalates okay. So how much did we receive last year . Above and as i testified about 3 million. So thats based ranch what you are saying that this hotel is losing money . Im not saying that. Theres no gross, revenues theres no sharing its not the end of the lease, okay you are telling us then, do you believe its legitimate for this community, you worked for this community for a long . Time yes i did. Do you believe we have oversize responsibility . Yes i do. Then why cant we get anything other than monthly statements. How do we know, and you cant give me every number, how do we know that we are getting the additional payments required on the lease well give you an answer yes or no . Yes or no yes or no you are not going to answer the question. Okay you asked, you asked earlier so youre not gonna provide the. How about doing an audit sometimes you do audits of leases yes or no . We receive an annual audited Financial Statement. Its a third party. Did you choose the third party . Excuse me . Which is the third party . The tenant provides. Okay. Sure so you dont feel you have any responsibility to check into that or the Contracting Officer doesnt . Actually. To the ig, when you conduct an audit, did you conduct an audit of this without whether or not to see if the income was required over and above baseman was probably paid to the taxpayers of United States we have. America actually gsa has specific authority to conduct that audit he just said they want. Doing the focus on that shot it will be to determine whether the government is getting the appropriate rent. Yes we have to think about that certainly have Oversight Authority over the payment issue. We have to think carefully about the resources that we take to for such an audit, and constraints on our ability to get the records independently of gsa. We would have to think about whether it makes sense for gsa ask us to do that or to have an outside auditor. So gsa has the authority it has done that for other leases. Have you . Have you ever audited elise, or do we let all of our tennis send us their own financials and send us their own legal after they hired an accountant . I dont know offhand if we audit it other leases but we we Financial Statements since you received them how much additional money be on the base rent beyond the base rent then we get did the taxpayers of america got last year under the terms of this lease . What was the number . We just received a basement. So somehow youve calculated that within this whole purview that there is no revenue over and above we receive certified statements that tell us what the gross you did revenue is and we know we are receiving proper amount for that. Thank you gentlemen. Well now recognize mr. Pence huge. It is thank you chairman titus and they witnesses before us today. Ranking member meadows i know you want to save taxpayers billions of dollars and the Building Space and it seems like youve saved 9 Million Dollars here at the trump will tell. I sincerely like to thank your leadership on this issue. I would like to take this opportunity to discuss real issues that impact whose years and all americans like transforming how we approach federal real estate and state taxpayer dollars instead of putting on a partisan show. You see, billions of taxpayer dollars can be saved if we continue to consolidate and reduce our space footprint and negotiate middle east skills and resell redevelop properties that are under revelations and for, put people in more efficient buildings. But commissioner matthews, when you were there in april you told me that i had to priorities. Public private partnership and updating of the rules to bring our approach to federal real state in the 24 century. If we are serious about transforming how we approach federal real state it is critical for us to do things differently and put more options on the table like p threes. Mr. Meadows and i introduced the private Partnership Prosperity act in 2019 legislation to provide gsa flexibility to the use of public and private partnership. Hopefully, we get back to doing the work for the people and we represent instead of self promoting and i yield back. Thank you mister parents. Well now recognize miss davis. Thank you chairwoman. Mr. Matthews, in light of the Inspector General finding out the result is that adds over colt of the gsas failure of the constitutional issues raised by the least in question, has gsa taken any steps to address to address the other constitutional issues . A couple with a couple of points on that. We agree so, we agreed with the recommendation of the court and as we understood it they are applying a new future future out laces and we agreed to remove the parties provision and replace it with a reference to the statute that is governing to remove any ambiguities. Thats not the question i asked. I did not what youre doing moving forward on other leaders i asked about the leasing question please. The leaves and question, there are a number of lawsuits that are pending as specifically designed to address this question of is there or is there not a violation. In that forum, the department of justice and the executive branch of government and the department of justice has argued before the courts that there is no violation and no violation of the constitution. It would not be appropriate for tsa to what a client on that matter and the justice had written on it. Thats enough on that. Yes in response to a question that was just ask. You said that you are uncertain whether you conducted any audits or leases that the gsa has done with you . Is the fact is that true . You dont know whether its so youre currently writing the gsa. Is that right . Im the commissioner, thats correct. You dont know if your agency conducts audits on leases . We have thousands of leases and we conduct a variety of contractual lisa ministration activities every day. Youre unsure if the audit is one of those activities . In terms of audits i, couldnt tell you but we enforce contract actions every day. I would like you after this concludes to submit for the record whether or not the she as they conducts raw tickets on any releases that is reelected to. Id be happy to get back you are not. What percentage of the activities that your agencies that you are responsible for right now and for the American People what percentage of those activities is managing leases. We have about 10 Million Dollars in public funds, approximately 5. 6 billion in revenue and expenditure for private sector leases its a majority of our portfolio. Its 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 annual funds to the federal government . We have Program Management reviews on a regular basis, we have contracting reviews on a regular basis. We have a whole office within tsa outside of pbs which is caught special procurement executive, we do contract reviews a different business lines on a regular basis. Every region, this year alone weve probably got group probably six or seven regions of internal, contract reviews of program so theres tremendous oversight over this. The question is about was it about a very specific type of body that if we do the same type of outed across all of our leases, i dont know if those lease terms, frankly allowing authorizing that kind of specific out it, is even present. This is an out lease. At least are very few minority of our. Portfolio most of our releases, we are leasing a facility from a lesser. In this case its reverse. How often do you have a Profit Sharing provision in at least that you enter as the gsa . Again our out leases can you please, because its gonna take a long time to get, you could you please find out how many and report that to the committee . And then also find out how many how often you conduct audits on out from the answers that you have given so far in addition to the least that we are currently reviewing i have Major Concerns about the oversight that you have over any of the leases that that gsa has entered into because it sounds like you are not exactly sure what kind of review you are doing and that is very problematic for the person who is at risk ultimately responsible for the properties of the that the federal government has. I yield. Back thank you the lady yields back. Now mr. Palmer. Madam chairman to have a point of acquiring before i begin my question if i may. Its a serious, i am asking for information. Chairman peter a. Defazio in his Opening Statement i need to clarify then he said it had he had a conversation with a nice employee to give him a different perspective now i said my staff did. Your staff is. Did that individual provide design individual provide documentation either in print or electronic format or was the content of the conversation recorded . May i respond to the gentleman . The former ranking staff who has jurisdiction over this issue met with a person from gsa and that person said there were substantial issues to be resolved. The conversation was characterized and sent to gsa in a lot of inquiry in november and gsa said its not a conversation and they did not the whole thing. Thats the end of that and then the gentleman has been transferred to new york and he wont talk to anybody. Okay but it was a former staff. Hes been transferred to new york the gsa employee. Madam chairman mike was that a former member of the Committee Staff had that conversation and if it was documented in any form, then it should be provided to the entire committee. Staff identified in the league individual identify that would be my point of inquiry. I have no idea what hes talking about. That will just will just take a minute to take that into consideration. Thank you man chairman. Im sure those kind of meetings take place all the time and we can talk about that further off line. Thank you madam chairman. There would be my opinion that that information should be provided to the entire committee. But i appreciate response to the inquiry. Point of order here. If indeed it is in the record, it has to have something thats documented and can have a referral to a testimony that is not something of record. According to the committee rules. This was not a testimony analyst not referred to as a testimony and referred to as an informal conversation of the former staff person. Point of inquiry then was the subject to the investigation is . Youre saying this is not part of yours investigation and this was just a casual conversation . This was back in 2016. So, we will move on with the questions from mr. Palmer. Under the Previous Congress . Yes. So then its not its not relevant to hear . Its as relevant as the pictures from the Ribbon Cutting our. I think will now move on with mr. Palmers questions. Thank you madam chairman. Ig thank ochoa in europe ochoa. Written testimony ochoa thank you. What do you make a point and your conclusion appears that appears to say that the procedures of the gsa followed and the Historic Properties its consistent with the other allegations. Reaches it says, the tsa has acknowledged that the file found of the issue of potential breach and gop oh and the provision. However, the fact remains that the gsa continues to provision in other resort properties which are basically doing what they always do and its almost like a cut and paste arrangement that occurs in 2013. Is that accurate . Are you asked me about the origin of that anguish . No maam, im asking of this consistent which appears that you think is problematic that the gsa has operating procedures for these the store properties. The point of the sentence that youre reading to me was that tsa has told us that if there is a constitutional violation found it have to go back and revisit whether it was a breach. They still have the same language of the two existing leases. Its consistent with the other leases. It sees other leases of extra property. Its substantially similar. The only difference of what state and local officials applies to. Thats my point. Madam chairman, i yield back my time to Ranking Member mr. Meadows. I think the gentleman from alabama. Mr. Matthews let, me come to you. As the Trump Organization in breach of their contract . No. In two hours and 17 the officer found them in compliance. So with 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 the release that we all have . They are current on that. And your long history with this committee and with gsa and with the public buildings. Would it be foolish for them to underpay on their lease because that would say in essence terminate the least after all the improvements theyve made . It certainly wouldnt be wise. Let me put it this way. If you had invested billions of dollars to upgrade the Old Post Office. Would you make sure that youre making your Monthly Payments in accordance to the lease so that you do not default on a lease . One would think it would be important to remain in compliance with the least, absolutely. Fundamentally the, question we have before us today is not the Trump Organizations he which is making the payments that have been negotiated under the Previous Administration as i said in my public statement. This all boils down two and a monuments question of whether the president of the United States can get some kind of benefit from the operating of the hotel that he least prior to him becoming president. Is that correct . Yes it is. We know we receive and certified annual Financial Statement. We know the right amount is being paid and youre right, at the end of the day, this comes down to that core question which is fighting for the courts and the tsa is not in that position to comply on that answer to our what justice of already asked. This gee as a have a number of buildings in washington d. C. Area that they are actually paying money, taxpayer money, out on an annual basis to maintain that is a net cost to the taxpayer . There are some most of them are Historic Buildings. Are there more than a dozen of those . I dont its a simple. Question and so in doing this. Would you took was a nonperforming asset, where we lost according to your testimony 6 Million Dollars a year is that correct . Yes. You are now making it a net plus a 3 Million Dollars a year to the federal treasury is that correct . Thats correct. Its been a very successful financial release they tried transaction for the taxpayer . I yield. Back thank you i recognize miss northam. We dont even know if we are getting our share of the profits this year the government is entitled to. The Old Post Office redevelopment act was my bill. This building is located not only in my district, in the Nations Capital it was an embarrassment. It was an embarrassment to anyone who came, it was it was a dump. The first floor was used Street Vendors so we finally were able to get us taxes and by the way that bill, they do pay property taxes. So the district and d. C. Hotel tax. You bet your life, i was pleased to cut the ribbon on the stump and turned it into a real asset for the federal government. It was underperforming, in plain sight, the government was losing millions of dollars every day. Let me ask you commissioner matthews, you said that the gsa now receives a monthly replacement. Now i quote, 2000, i appreciate a huge figure as with any testimony. Could you tell us how calgary how congress can vary verify your answer. Obviously we dont take a face value things like that without having some way to verify that and therefore give credit to such an answer. We received durant, will receive payment, we surely can provide you to the financial transaction records to show that those deposits were made to the treasury im sure this is. Possible what gsa continues to provide congress with statements, i made the same request two years ago but we have still not received the monthly Financial Statements. Im asking you now, at this hearing, will you commit to provide this committee with these financial documents so we can verify that the Old Post Office is a performing asset as you have indicated today . With respect to the financial document requests i would say our goal is to accommodate the committees oversight request of the greatest extent possible, in compliance with a contractual obligations to the tenant. Our staff, i know are discussing these issues are and are trying to come to you or about a request about providing and also respecting our obligations you will engage with the committee . On this question of providing documents i have just asked . Four our stabs are correct. Thank you very much. Mr. Doug lamalfa it is recognized. Thank you for the committee today and for let me ask couple questions when we get into the fall season here and the pumpkins are ripe and Pumpkin Spice coffee and early birds are putting the witches and ghosts out on their yards so well see witches and ghosts i guess, right . Im in disbelief that were here at the time with the fires in the west that weve had and the hurricanes and the flooding in the south and the infrastructure we should be working on and filling up our levies and infrastructure and were dealing with a hotel thats been established as making money and was losing money for years. Its getting down to asking are accountants, it did in fact making moneys reasons . Its Pretty Simple stuff and we want to see is for mr. Matthews as the president signed the checks himself . I have the signature on it i can compare signatures to make sure if its actually happening and could you give that information . The trump hOld Post Office all i see with the president. Thats were going down to hear. We talk about this committee focuses on. The economic public buildings and i hope we do more emergency than what we have going on. We have a situation of a public building in california and theres a request for a new Federal Building for the citizenship and Service Centers which is processing applications which is kind of a big deal right now. The existing building has extremely high risk it other Health Issues in the building thats impacted workers and cause delays in processing applications. Its kind of a big topic these days. So, this committee has impacted on that and has done some other business here. A very high priority issue from order and we hear a lot of dramatics about what theyre doing along the border. Let the committee having to address this can, you talk about the importance of expediting this . Yes i see a couple things. Seismic interest are obviously very important its an older inventory. Sometimes our buildings are not to current size and coats so in the process of upgrading a number of buildings. Across the country and high risk seismic areas and in oregon and seven Seattle Washington as well and then in the fall area. One of our Biggest Challenges is that our Federal Buildings received about ten and a half billion dollars from our agencies every year and receive appropriation on that fund of about nine billion a year. So every year were short about a billion and half dollars of funds that can only be spent on public building purposes families and the money is sitting there and were not able to access it and Properties Like you are describing or challenged to compare this prepare them and make them safely. If thousands of employees sitting in these buildings and we need real significant improvement and if we had full access to the funds then we baby able to do that. Its critical to move this in a timely matter and we thank the chairman for her help it particularly with the perspective we have for building in her district. We have a courthouse thats about 22 years old and the Safety System we propose that project and for a good year and a half that perspective was blocked up and thank you for your health and were able to get loose and not alarm system. Mr. Matthews, we can get that perspective cause of a backlog and obviously many seismic issues in the state of california and nearby in oregon as well. Would you say that this is a priority . Yes, we very much appreciate i should wish i shouldnt it there id like to give the rest of my time to mr. Meadows so thank you mr. Matthews. You thank you east once your report rose released there was a lecturer for the University Department you detailed a factual error and your constitutional analysis of the monuments clause, are you aware of that . Adopt this particular . Argument pointing out that there was a factual error . He expressed a different view. Well, did he say you are correct . He expressed a different. View you got council behind you if you want to ask, did he agree with your analysis . No he did not. So then i would ask unanimous consent that we enter the record theres a statement from professor joshua blackmon, detailing the exchange with miss ochoas office. Thank you. I yield back i will now recognize mr. John garamendi it wasnt me john . Thank you know it certainly wasnt, mr. Meadows thank you. The question has been raised as to why we are here today dealing with this issue. All of us have taken the oath of office. It basically says i will solemnly swear that i will support and defend the constitution of United States against all army against all any enemies foreign and domestic we are here to uphold the constitution of the United States. We know that article one section nine clause nine is the four monuments clause which is very much to the question before this committee at the moment and going to section one clause seven, the president ial the claw president ial clauses also in front of the committee at the moment i think we can all agree this is the issue at hand in the reason we are here is to carry out our solemn oath of office. Both of you before us also took the same oath of office. I will let us proceed then with some questions and explain why we are here. Mr. Matthews, you stated just a moment ago the the tenant is in full compliance with elise. My question goes missed ochoa one. On page 23 paragraph five line six through nine of your report, you say according to it, my question to you is can the gsa state definitely that the Trump Organization llc is not in breach of the old posttropical eastern without an evaluation of these constitutional questions . In other words, can you tell us definitively that they are not in breach until such time as the constitutional monuments classes are dealt with . But down into positive, are the in breach of their lease because of this monument clause and the lease language itself . Its hard to have a full discussion of that issue without being able to discuss gsas legal opinions. Because of the claim of privilege. What have said in the report is without employing the constitutional avoidance other interpretation of section 30 7 19, therefore closed away taken monuments issue off the. Table the push decide the fundamental constitutional issue of the monuments instantly said thats not relevant is that correct . They said they were not going to decide the issue. I dont think definitely wasnt relevant to recognize there was an issue they said it was an issue relevant to the lease but they decided they were not going to attempt to resolve the issue. On page eight of your report, you say that he, i suspect you mean the president , here still retains his financial interests in the property. Is that your view, is that correct that he maintains financial interest in the property . I believe thats a fact. Okay. Mr. Matthews, does the president mentioned maintain financial interest in the poverty . I believe thats correct, yes. Your answer is yes he does maintain a interest in the property . Im not prevalent in the details but i think thats correct. You believe thats correct . I think it is yes. Thank you. Are you aware of any payments made to the hotel from Foreign Governments . Mr. Matthews first. She is a gsa, were not involved in the daily management of our hotel and we do not. Youre unaware of any payments from any Foreign Governments . Weve seen press reports. But you have not asked for or received specific information on that issue even though it would be a question of these deals itself . Well, with respect to the question of the monument, that has been before the courts we understand that my, question to you is, how you attempted to collect any information based on payments from Foreign Governments . Even though the lease itself raises that issue . We dont receive that . Such an information miss ochoa you have any payment from Foreign Governments . Its the gentlemans time has expired. Would you like me to answer the question . You can answer the question. We dont have direct access to personal records of the hotel. Thank you and i yield back. Thank you. Just for clarification mr. Lamalfa would be glad to hear this. You can all tell him that it wasnt a matter of the building hes in the gsa sentence that prospective three weeks ago and a majority staff are already meeting with gsa on that subject so if youd like to share that information with them. Mr. Randy weber is recognized. For now here in the district in texas is on the gulf of Hurricane Harvey two years ago and now Tropical Storm is the things that we should be focused on the summit. Mr. Matthews, you were sworn in an august 2017 when, you say that the least was side august the 5th 2013. Correct. Do you know when those negotiations at least began . I believe they began in 2012. Two thousand 12, okay. It was well before the announcement in june 16th that he was going to run for president. Yes, absolutely. Are you aware of the law that had been filed against trump over that they called the crew. Yes, thats correct. Were you aware of those . I am, yes. Are you aware that at least two members of this committee who are associated with those lawsuits . I personally am i personally aware . I have interviewed. Did you know that . Yes. You did know that. Once the tsas office made the decision that it started to move on, is a sufficient for the two of you . Mr. Matthews, will go the first. That decision was made by the Inspector Generals overpowered and testimony in 2016. This was it sufficient for you . Did you say okay will move on. Well, theres technical problem no all you know, what we will see. Wed love for this committee to be able to do the same thing and move on as well. I will yield back to the Ranking Member thermos of my time. I thank the gentleman from texas mr. Good friend from california mr. Garrett because he was talking about the memo that is privileged from 2016 is, that correct . No, theres not a memo from december 2016. The privilege memo that youre talking about. What privileged memo are you talking about . Im talking about the legal opinions that the lawyers wrote in connection to advising the Contracting Officer. When did those legal legal opinions get written . In march of 2000. 17 the were written by whom . They were written by gsa lawyers who are part of the team writing the contract. And at that point the team, that legal team, with a part of the Trump Administration . Where the political appointees i guess what im getting at, or with the people who had actually worked at gsa during the procurement process. It was the same team of lawyers spanning both administrations. Im sorry to hear you could you repeat . That the same team of lawyers a look at the issues spanning both administrations. The began looking. At thing according to your testimony the Office General counsel made a decision not to address the monuments issued by mid december 2016. Do you stand by that . I do. Yes okay. Was President Trump in charge of that decision of that particular point . Had he been inaugurated at this . Find no. So any nefarious purpose of the monuments issue being addressed, how would that have anything to do with the current president . If the decision was made in 2016 during the last months of the Obama Administration . Our report didnt ascribe or describe anything nefarious. I guess what im saying is there seems to be an implication that this administration was the one that apps actually said that there is no monuments issue and i guess you and im both know what the story is and that these decisions were made with the Previous Administration in my correct . According to your testimony . Congressman meadows id love to be able to talk to you about legal opinions but i cant. Do you stand by you testimony that they happened in the mid part of december 2016. Im a they made the decision to ignore the issue that in december 2000. 60 do you think the president elect trump it was putting pressure on them to make that decision at that point . I made no such we have any evidence that would suggest . That if we had found such evidence we wouldve. Reported we wouldve reported. I thought. So i yield back. Mr. Johnson is now recognized. Mr. Matthews prior to becoming public buildings commissioner at you gsa worked for several republican congressman out of california and then you went to work for the House Rules Committee on the republican side and thereafter, you came to the transportation and Infrastructure Committee where you ended up as staff director of the transportation and Infrastructure Committees, Sub Committee on public buildings. After that, you then went to the administration as commissioner of public buildings is that correct . Yes thats correct. You are what we call it political appointee is that correct . Yes i am. Youve had absolutely no experience in running a kind of organization what organization have you managed . I was a system defeated commissioner of the Department Texas department of Health Assistant deputy with the Texas Department of health and under our responsibility was several okay when i inaudible okay i will say welcome back to the subcommittee that you now public buildings commissioner answering two years prior subcommittee as a political appointee. Let me ask you this question, sir. March 20th 2017 the the trump postoperative requested a certificate stating that the company was in full compliance with section 30 7 19 of its Lease Agreement and gsa, your organization the, Public Buildings Department issued the letter is that correct . Yes i work for this committee. That yes but. My point is, in issuing, that letter it was done three days after it was rigged what after he was requested the letter was issued three days after the trump team requested it correct . I dont know how many days went by. You wouldnt disagree then that if he was three days, what kind of assessment take place prior to treading a thoughtful certificate this one. What would normally happen . Along how long does it normally take, thats the question im going to ask theres a structure in place is three days i dont know how long it takes. Let me ask you this question, how many employees and youre public buildings six . A little under 6000. 6000 employees and how many in the public . When you include at least point a little over 10,000. Youve not had a chance to have that responsibility to review this in this trump post Office Released is, that correct even know there was a staff attorney for this subcommittee. Im not an attorney but i was a staff director. You have a degree in government and philosophy. Georgetown university, thats right. Now youre managing this big Global Organization here. Have you received any phone calls from donald trump jr. , eric trump or anybody concerned with the Trump Organization during your tenure as public buildings commissioner bud . No. So you have not . Are you scared about that . Yes i am. Why did the tsa did not embark upon a study to determine whether stay post office leads to the Trump Organizations plan which was compliance as so far as the in monuments clause as its concerned. This that decision was made in 2016 by the Previous Administration. You couldve had it reviewed yourself, could you not . To determine constitutionality and that responsibility of the public buildings commissioner . I would say the conditions have changed since 2016 and our been a number of lawsuits that in this very question that youre asking that has been among the courts and in that forum in the department of justice speaks of the executive branch and that forum and has argued that there is no violation of the constitution. Your department never undertook such a review just, desire testimony today . Is that for me or thats where you. You should know, youre the director of the commission. Chairmans times expired. You can answer that yes or no. It would be appropriate for us to do that. Id like to recognize now mr. Perry. Thank you madam chair. Inspector general watch ochoa, the oig began ministry and administration in the Old Post Office in july of 2017 in response to the members of congress and the Public Management of the least. The complaints generally raised two issues and does the monuments clause of the president ial law clause of the u. S. Constitution barr President Trump with business interests in the post office llc tenant and number two. Does the president s business violate section 37. 1 nine of the lease. The next paragraph of the report explains that it did not seek to determine the accuracy of either complaint and rather, to determine whether there were any improprieties of the gsas decision to process regarding these issues. My question at this time is, why is the evaluation in the decisionmaking process regarding this rather than addressing the complaints themselves. In other words, did someone preclude you or the gsa from evaluating the embodiments question itself will . Any first instance, the responsibility of evaluating those issues was with the gsa management. They made the decision by the time we went with the review and thats why we respect our review to look at if theres anything improper in the way they came about those decisions. Any second case . Mission in both cases . We said in the first case it in the first instance of addressing those issues it was the gsas managements responsibility. Our oversight extended to how gsa fulfill those responsibilities. Why didnt you just address the questions themselves you . You know why, youre the oig, you would know why they made that decision when you look at the process of the question themselves. Yes i do know i. Its a matter of exercising judgment and it wasnt necessary for us to resolve the bearings of the issue in order to determine whether gsa was correct and if there was a constitutional issue and whether there are reasons for avoiding. Was it necessary to answer the question of the complaint by members of congress than that we are seeing right now . You answered the administration of it but not the questions themselves and you made that judgment . I made a judgment that the review was appropriate to address the concerns and cons. The concerns of the complaints were regarding a clause of themselves and not the process in which you were to evaluate them i decided not to do that. Its one in the same. How does the tsa come to this conclusion. We dont get the answer, right . According to use it settled constitutional law but its not settled constitutional law. Let me ask you this, why did you start your role as the ig for the agency . And july of 2015 she. So youve been there for a while and youre not a pop it to the administration and youre doing the job that you think youre supposed to do of who is the president or not and what interest they may have. Mr. Matthews, regarding other similar leases that might be close to the post office. Do you receive monthly statements from other leases in accordance to what has been made of you in this hearing . Yes. So, you received them from the trump hotel as well . We do. Do you receive a breakdown of how much steep profit losses based on the lease of a weekly, monthly or whatever basis . We receive a Monthly Financial statement and an annual audit in the Financial Statement . This is a ball of . You for all of them yes. I can check that for you. Genuinely speaking, right . Theres an outlier by the safe way for the all of them and its no difference which. Thats correct. When youre being asked today even though according to my good friend from california that the reason for this focus of this hearing is on the monuments cause but we are concerned about how much money were getting. Youre reporting the same is you do with trump hotel as everyone else. When youre being asked here today is to provide something only separate unique and different than any other least thats correct. How many leases do you manage . Over 8000. Thank you mister chair or madam chair. We want to clarify that there are only six of these when inaudible you talk about the thousands of leases you have, those who would not be the same type as the type you have with the trump hotels as, that correct . Yeah. We now recognize mr. Brown. Thank you madam chair. I want to thank my colleagues on the committee and their diligence on this issue and i understand and realize the questions that are in the degree that i have. Let me just start with saying that im troubled and im disturbingly frustrated to know that a federal Government Agency in the gsa is officers and attorneys and supervisors who do not fulfill their responsibility to consider upholding in and force all the laws of this country and whether its rules or executive orders or statutes and the constitution and to learn of the igs report in that response and say its disturbing to say that the least i dont think that any Public Servant and members of congress or the president or above the law but i dont think that that sentiment is shared with the 1600 pennsylvania avenue. Bottom line is that if the president had fully divested from this company company, this hearing would not be necessary instead we have to discern whether the president is putting his business and personal interests above our nations, we have to question why foreign leaders lobbyist and even the attorney general shes to spend thousands of dollars at the trump hotel and what the president enriching himself. I wanted to write this question to you mr. Matthews according to the office of Inspector General in january 2019 report the contrary to both your written and oral testimony here today, gsa gsa failed to do to clauses the u. S. Constitution in regard to the Old Post Office these. And mr. Commissioner, has anyone in the tsa office of general counsel provided you or any of your colleagues any guidance on the monuments issue since the january 2019 with what was issued . The answer is no but this question is pending before the. Court yes i understand that so in anticipation you have not made an inquiry of youre gentle youre general counsel of this issue it will be appropriate im just asking yes or no im just asking if you are any one of your colleagues have made inquiry of your general counsel on the monuments issue since the ig report since 2019 just yes or, no it sounds like no. Is that correct . Correct. The committee has been requesting records recording to the trump hotel Financial Statements and members have asked about his general counsel provided on how to track expenditure at the trump International Hotel, were there any other similar with other hotels with derived from State Government . Under the lease the tenant is obligated to provide monthly and annual added Financial Statement. Do they report revenues but Revenue Source whether its a foreign, federal or State Government . Yes or no . The financial documents that we are working with im just asking your question. It really is a yes or no question. I appreciate your desire to provide a lengthy explanation but is there a process where the revenues are reported by source specifically federal, state or Foreign Governments . We dont receive that sort of break down. So if the court were the rule that there is a potential monuments clause problem, are you saying that you dont have the system in place to identify whether or not got Foreign Government paid rent or lease or services at the hotel . I will not specate on the course may or may not do you will just wait or issues that may or may not be for gsa. Have you asked you a general counsel for guidance on this issue . I will not speculate i am asking you if you asked general counsel by the issue of whether or not whether you should or shouldnt track the sources of revenues or fees that are paid a trump hotel . The tenant complies with the least the lease has provisions so have you asked general counsel . Im not going to discuss. That if youre not going to answer the question yes or . No no. Let me just be clear. Are you going to answer yes or no the question i briefly asked . I am trying to answer the question. Let me restate the question. Let me be a little simpler let me be a little simply the question. I am really reclaiming that time the gentlemans time has expired. Five minutes flies . I recognize mr. West. Urban thank you madam chair thank you the witnesses are being here today. I was excited to see we were going to be talking about billions of dollars of federal assets theyre sitting out there unused but unfortunately thats not really what this discussion is about. I thought we had this horse has been written hard and put up with but apparently it died in the stable and somebody wants to bring it on and be done in that horse a little bit more. But there are serious issues this committee should be addressing. Just in my hometown of hot springs arkansas we have 200,000 square foot hospital that was the original armynavy hospital used from the 1800s through world war ii, Historic Building he currently needs a ten. And we have a National Park there history we restored historic bathhouses we need to be doing more of that to take care of these old Historic Buildings instead of having hearings beat up on one of these buildings that is actually a Success Story of how we use federal assets. Its just a rhetorical question but when we go to start focusing on the real issues, and i would like to yield the remainder of my time. I will come back to when you are preparing your review of this lease and drafting the report, did you reach out to outside Legal Counsel . No. All your legal experts were from within the igs office is that correct . The team did it review was with. Inside the drafting, youre ig staff is that correct . So who on your staff is a constitutional expert . Actually the three senior members of the team have over 70 years of combined experience handling constitutional litigation in the department of justice. So with the department of justice you are obviously very critical with the gsa you were very critical of the gsa and not of the, the gsa not Consulting Department of justice is that correct . Yes not reaching out and trying to find a solution to the issue that was presented. So when you are drafting the report, did you take into fact the department of justice position on this issue . We looked at gsas decisions at the time and we look at what was available to. Then did you take into account their position their published position as it relates to this particular question . The position that department developed litigation doesnt affect the conclusion in the report. By the ig statue, you are bound to looking at all those legal experts and you are saying that the three people that you relied on where from the department of justice but did you rely on any Current Department of justice opinion . In drafting it . We were aware of the department of justice litigated position. You just disagreed . With it no. We didnt weigh in on the merits of the question that the department of justice litigation was addressing. Thats the merits of whether or not there is a violation of the constitution in the causes. Here are we engaged in was really an issue spotting exercise. Because before we were about to criticize attorneys for failing to address an issue, we wanted to make sure dont share they were right when they realized that was a potential constitutional issue. Thats what our report was about. So the key word here is potential. Is that correct . You are not making a definitive statement. You are not suggesting that the Supreme Court is going to come down on your side or your gsa side youre not offering an opinion there you just see this potentially. Sure thats why we are not trying to weigh in one way or the other. We dont know when you did your report did you look and analyze the potential legal and financial exposure to the taxpayer that the Contracting Officer may have had in making this decision. Was that part of your analysis . Excuse me can you repeat . Not the Contracting Officers obviously made a decision based on unsettled constitutional law. Did you look at the potential financial implications that might arise from that, that particular decision . We looked at the reasons that the Contracting Officer gave us. Financial situation didnt come into play at all. Okay. I see my time has expired. I now recognize miss fletcher. You thank you chairwoman for this hearing today and four witnesses a. Testify i want to clarify few things we heard and make clear that in response to one of the questions about the volume of leases that are similar to the ones, the one we are talking about. There are only six out leases of the type with the trump hotel in washington d. C. Thats correct . We have for more than six out leases. Okay but actually, in july 2018 prior to the night in 2018 will be discussing analyze gsa and i the extent to which elected inaudible according to the report there are six only six Federal Buildings, that means 20 at least by gsa. Do you disagree with this report . I will need to have in front of me but we have space in Federal Buildings all across the country. And now are building i have we have three out places that we can think of one is restaurant, a coffee shop and they want to sandwich shop. Is that more than 20 of the . Building no. So at least one person at least the report can all but one of these leases container a provision restricting and that is a familiar . With that not with a particular building. No did your team reached this issue with the gsa . inaudible but we had a discussion but the fact of the language of 30 7 19 in two at leases and it has not been modified to resolve the ambiguity and we also pointed out that with respect to one of these at least its just a year ago gsa told gmo that using the language was the best practice for gsa the intended to modify elise that didnt contain it. So the response that the intended to modify commissioner matthews, has the gsa indeed modify the language that would restrict participation by elected officials . What we agreed to do was a future out leases, to remove that interested parties provision, replace it with language referencing the underlying statue. That provisions were based upon. The answer to my question is no, it has not been revised for the building . I dont know i will be happy to give that answer for you if you could please provide an answer for the record that would be helpful. With respect to the future leases, as a practicing lawyer before guy here, litigating leases contracts and disputes im curious as to how you determine that a reference to the underlined statute was superior to unexpected expressed provision in the contact and explicit provision in the least requiring compliance can you explain the rationale for that decision . The rationale was to remove the ambiguity in the contract provision and referencing the statute explicitly would eliminate that ambiguity. Do you think that referencing the statute explicitly as opposed to explicit contract provision is an appropriate correction to the ambiguity . I think the concern is that interested parties provision itself and a contract had some ambiguity to it. So our proposed corrective plan will eliminate the use of that night and instead reference just that simply a reference to statute was amended from time to . Time thats correct. Another quick question i want to follow up on. I want to follow up on the question my colleague miss davis asked about the auditing. It was my understanding from your testimony that alesci select the order of the Financial Statements he receives that . Correct yes. They have a list of approved auditors . If we do would be happy to get it for you. Do you require any specific standards of the audit is for example even if its a non Public Company . They have to comply with a standard since my understanding. Do you have any employees who reviewed the auditing pilot cho statements for the six pacific and buildings i believe my time has expired thank you very much madam chairman i yield. Back thank you man chair. Let me come back on this lease to make sure we are crystal clear. Its a lease that allows for a base amount of money to be paid to the american taxpayer of approximately 250,000 dollars or 3 million a year is that correct . Its correct. Then there are thresholds that are above that that we basically be based off the Gross Revenues that . Correct correct. So the operational expense where it is, we are just looking at Gross Revenues and percentage of that they would adjust elise lease payment. Is that correct . Thats. Correct is that not the most transparent way to do a least we have a plus up, from the base amount where you dont get into how much it costs that you paid you are waders, how much she paid staff or how much you played, anything else the, Gross Revenue is that not let the most their way to the the american taxpayer to find it at that unadjusted basis . Yes. Miss ochoa would you agree with that . You havent considered those . Issues no i have not. Let me ask you this miss ochoa do you believe that the american taxpayer is receiving more money out of the trump hotel lease or less money . Then they did prior to the lease of the Trump Organization . I accept what im hearing about the loss of the delegate from d. C. Has been very active on trying, would you agree with us mr. Matthews, the delicate has been very active on making sure that we use underutilized buildings in the District Of Columbia and make them producing assets. Is that something that the delicate and i have been pestering you about for sometime . Yes i would say its been a bipartisan priority of this committee for over 20 years. Would you say that other of the than the fact that the president of the United States is associated with the trumpet out, would you say that is a good model for all of the under properties in terms of taking it from what it once was to what it currently is . Absolutely. It is financial project. So miss let ochoa me come back to you. You made a number of assertions throughout your report that are without citation in your report. I would have to disagree with that. Well you can disagree. Im going to give you a chance to clarify. It doesnt give us any way to verify the accuracy or context of that. In fact, just in the last few weeks i believe the chairman johnson the senator from wisconsin provided your office with some details highlighting specific where in your report supporting documentation would be useful in his oversight. The plan to respond to that . Of course, weve been working with the committee for several months trying to respond to your request. So chairman johnsons response, you are planning to respond to that. Will you give that to the committee as well . We can do that. If you are making a request for. That i am making a request to. That when can we expect those responses . I dont speak for the chair but i am assume that she would want clarification for any report that the idea does . All along we have been providing information to the majority and that is true. What can we expect the 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 has been requested and i understand as a request for documents we will look at it, and do what we can weve, been privatizing documents for four gsa months now most of that was a real lock rely on in the report that are public in nature but we already turned over, our key the agencys legal memorandum, email exchanges with it of one of the attorneys working in the matter, Contracting Officer and, between the Contracting Officers between the attorneys in the Trump Organization. We have produced and reproduce doesnt return them down for the to gsa look at to provide to these committees. Are you aware of any reason other than perhaps a Court Decision why the Trump Organization would be in the fall of the current leaves are you aware of anything other than perhaps a monument section section 30 7 19. The two of them are not independent of each. Other so those together do you believe that they are in breach . Im going to stand on my report. We did not make that ultimate determination i would love to discuss with you the agencys legal opinion but i cannot. Gentlemans time is up. I just want to clarify two of the committee the problem has not been not getting information from the ig the problem has been getting information from the gsa i now recognize mr. Cohen. Thank you manager. He commissioner how do you pronounce your last name . This ochoa i had a dry. Thank you you talk about section 37. 37 point 19th correct. That seems to me to be clearly obvious that exemption that is put in here in just a public official could engage in leases that if they are a general bit of a corporation or an entity and corporation or other entity is publicly held and the idea of being than individual home stocking or hilton, or another Hotel Company or wheat, the word significant owner a significant beneficiary or management would be okay because its like minimal involvement thats clear. But as that as previously noted that the gsa privilege that opinion when moves interpreted what would have exert of privilege rather than just release their opinion. To me as a lawyer, its pretty clear that the other entities is connected the Public Ownership and exemption for people who wont stop in the its a distinguished were in the summer his partner id love to talk about legal but i cant. I think our report gives an interpretation a long line you can talk about it because its . Privileged yes. Which is who in my opinion . Let me ask you this question. Let me ask mr. Matthews as. Question in 2017 august the United States went to court at the request of gsas for a least hold property in Myrtle Beach South Carolina inaudible tom rises a friend how im not questioning him whatsoever but he gsa went to court and the complaint that the United States can they as i have a come inaudible when gia say contracted congressman a report congressman as a beneficiary as elise with me gsa is that accurate . Yes that is accurate. When it came to President Trump what did you try not to go beyond a corporate shell and try to see if President Trump was affected . The compliance with the lease was determined by the Contracting Officer. Contracting officer in consultation with the opposite general counsel made a determination that the tenant was in full compliance with elise. Situations are not comparable, there is a statutory i understand all. That basically you are looking for some reason to treat mr. Rice defended President Trump and it really isnt the reason. Inspector general ochoa is a concern of you that the look at the president that they look at congressman rice . Weve been discussing that issue of dropping section 37. 19 from the contract in light of the fact that up until recently gsa thought it was best practice and in light of the factor in the course of the review we were told that he specifically inserted additional language about state local officials and about the president Vice President to prevent interference with contracts. Is it not good policy to say that public elected officials cant benefit from a government lease, thats good public policy. Why should we be concerned about that . We are concerned about it because we have a new person involved. President trumps corporate shell is that the only shall that has refused to look into because of at least with gsa . It is corporate shall the only one . Again with respect to whether or not the ten isnt combined with. Elise i am asking have you gone is, this the only corporate shall you try not to go into . I wouldnt know the answer to that. Well you should. Are you aware of another hold of another hold where Donald J Trump might be the beneficiary . I have to get back to you now than i know. Of is the i have to review it, is pacific but i believe its an identical. Police have you audited the monica hotel monica hotel pays over minimum Gross Proceeds of a happy to get back to you need some work seems like a lot of questions to these two witnesses so you are in a starting starting our second round of questioning. Well begin we will begin with mr. Peter a. Defazio. I want to go back to this issue of base. Rand just according cpi coating your testimony base run i dont know the exact . Number in if the proceeds of the hotel on an annual basis exceed 12 times that amount, which would be 3 million twitter 11,836 dollars. The tenant is obligated to pay 3 of any thing over one dollar, thousand dollars, 1 Million Dollars is that correct . Thats correct. So in the last released monthly that we have from april 2017. The gross was 1,965,000 dollars. So if you multiply that times 12 comes out 23 Million Dollars. You are telling me that somehow we are back to the point where the trump hotel is only grossing 267,000 dollars a month and doesnt always up anymore because i asked you how much more are we getting and you stonewalled that and you just keep going back to the 267,000 dollars. Let me try one more time on an annual basis has the trump Hotel Revenues exceeded 12 times that amount which is 300 yes or no . I think the confusion. Yes or . No theres no confusion we are due additional funds if they exceed 3 Million Dollar 11,836 dollars. Im asking a simple question have revenues exceed that and lastly because you have not given a statement. Im afraid you are conflating the mix revenue with the rent. Gross revenue that exceeds around is to be, we had to get 3 . At the understand . That you just a great. That 3 of the Gross Revenues. Over and above rent. The way this is structured. Look, if you dont i think you are misinterpreting the contract. Our understanding of staff and asked you this question before, is that he pays the basement and if his revenues exceed the base rent, we are doing 3 of the gross over that amount. That is not correct. Thats not the way works. Thats the way the staff has explained it to me. You tell me how it works. Very quickly. The way it works is the rent is based upon Gross Revenues the gross the rent was set of the original. Least no. It was john a 50,000 thousand thats it theres a floor. Right. Theres a minimum around. Payment that so we are. Asking you keep coming back to. That you are saying we are not getting a penny over that because theres no revenue over an above that is what youre telling us the trump without disillusionment . Im a for another new jobs planning. This with the rent to the rebel receives based on Gross Revenues. We receive 3 of the Gross Revenues in rent. It is a floor a minimum of 3 Million Dollars in rent. 3 million to 11,830. So if you are saying were not getting a penny more than that they are dont notice anything else it hasnt been treated. We are getting the bay, minimum rent amount that is correct. So you are saying to this hotel is essentially a failure because in one month. No. Because it to Million Dollars and now you are saying that the revenue somewhere her 267,000 dollars. Im not saying the revenues are at. All you certainly arent because you wont provide us the documents. We dont know what the revenues are or are not. Will you provide us you dont have to give us what was released here which is proprietary will you give us the gross number four last year . We are working with the committee to accommodate you are not working with the committee have been asking for this that for a very long time. We only have one recourse if he keeps stonewalling us. Here you are stonewalling us. You are telling us that are we getting is the base rent and nothing else is the and you want substantiate that. You are accepting their audited statement, you wont show us those. We have the legal of billions of course which we cant see either. We are kind of looking into a black hole here. This document we cant even see it you even black out who science with the talent. What the hell was that about . The chairmans time has expired. Let me see if i can add some clarification since ive worked on leases for a long time. You have a floor in elise and elise amount is 3 of Gross Revenues with floor is that correct . Correct. In order to hit the floor mat the Gross Revenues would have to be closer to hundred Million Dollars in order to hit that florida. Thats. Correct what we are essentially saying is the way the least structured is that in order to get above that figure, you actually have to have gross receipts above 100 million. 200 million, actually would change the amount that is paid to the federal treasury if it was receiving 2 million is that correct . Yes thats. Correct so i am trying to explain that what happened is a good deal for the american taxpayer. We can take the other monument section separately, but indeed when you look at a hotel and we are getting a base amount of leads the way it is structured is to protect the american taxpayer, not to penalize them is that correct . Absolutely. Correct i dont know what is so complicated about this. When we look at the least, it is very clear if you are looking at elise, how you would apply this. Did you actually work on leases before mr. Matthews when you were staffer . We reveal them. You review them. Did you work on legislation that apply the public buildings when you are staffer here . Yes for a very long. Time did chairman have the issue thats a softball question, they have an issue with public buildings in the accountability than what we need to do with public buildings . He did, he made a very high priority to protect the taxpayer and federal real estate. When you come in, to this committee you are willing to go and look at other ways to verify the Trump Organization is paying the proper amount to the American People. Are you willing to look, if i give you other ways to verify this number that is beyond just an audited audited returned, are you willing to do that . We will happily look at that absolutely. Is there any malicious on the part of you or the gsa try to cheat the american taxpayer of red union on behalf of the president the United States . No of course not. I am at a loss because we continue to come back, weve taken a non performing asset, we may get a performing asset we take a 6 Million Dollar liability and we turned it into a surplus of 3 Million Dollars, weve done that all without spending american taxpayer dollars. We allowed the president of the United States when it in his personal capacity to invest in washington d. C. It was applauded by democrats, it was certainly championed by all of us as a good thing for washington d. C. And then all of a sudden, it is a bad thing because the president of the United States happened to win an election in 2016. We are looking at enemy here when they are important things for us to look. Out but there is no doubt in my mind that this particular deal was a good deal for the american taxpayer would you agree with that mr. Matthews . Its been a fabulous Economic Performance for the taxpayer. So mister chairman i will come back to you. Heres what i need and you know youve done before the committee the number of times this is not the first time we go. Back here is what i am asking you to do. There are internal documents that you keep talking about with there gsa are also internal documents that you have from an ig standpoint when it comes to the constitutional analysis that did you have a chilly put forth in this report. Are you aware of any of the time that youve been asked to come in and make substantial constitutional analysis as it relates to the igs work. I have to say there are no internal documents. Emails back and forth what whether they supplied or not what will rely upon for the analysis of whether there was a constitutional issue is all public source material and we have provided that to you and staff. So the three people that you have that internal deliberation we understand how they came to that decision . Absolutely. Its laid out no, in terms of internal back and forth. Can you give that to. Us they have a problem with us having that. With having material . The internal deliberations how you got your International Constitutional conclusion. Its in the. Report the gentlemans time has expired. Thank you. Two issues here one of which is the financial situation with regard to the hotel and that can be discussed back and forth the issue that i want to focus on is the monuments issue. In the monuments issue both of you said the while ago that the president continues to have a financial interest in a hotel he. Without going back at that the question of the monuments because britain and. What the constitution is very clear that the president cannot receive a monument from a foreign power, prince or state, or from me from the United States beyond his salary or from a state. Very clear language the question with regards to the hotel does the president receive from a Foreign Government. None of you had a specific information in the question is mr. Matthews is why do you not have this information. Youve been asked that question again will receive Financial Information waste on the terms and conditions of contract. Excuse me. inaudible have you requested information about money from Foreign Governments and from State Governments . The question whether or not theres monuments violation thats not a question my question is have you asked that information and i think my your answer is no you have not. Thats. Correct so you have. Not miss ochoa have you requested . Information we dont have direct access to the hotels books and records. We have access to have you requested that information . Weve not requested at this. Point madam chair i would ask that the Committee Requests that specific information. Now i believe that we have a slide. Its called tracking profits from Foreign Government for john hotel thats a slide it was given to the committee and it came from the Trump Organization. Presumably the Trump Organization gets back to the treasury whatever profits maybe, we have not determined whether they are not profitable my question is how the weather were going to determine the accuracy of any profit contributed to the treasury and we have absolutely no information about any Foreign Government or any State Government paying anything in the hotel. Is this useful or is this just a sham . Open question mr. Matthews. Have you ever attempted to track any profit thats been returned to the treasury thats not our role. So the answer is no. Minnesota . The one thing we once inaudible again the rationale that the Trump Administration used to get past the monuments issue was delivered to the trailer treasury any profit was received and yet we have absolutely no way to determine any participation in the hotel by Foreign Government or State Government we do have press report and we have the testimony former governor of maine apparently the state of maine spent 22,000 dollars at the hotel. The underlying question here goes back to the initial lease and weve been denied the legal questions that we are asked of the counsel what we do know illegal analysis that was done by the council is that correct . That is correct we also know that terry, Contracting Officer knew that the office of the general cancer recognize the violation of the Foreign Government clause might be relevant to breach and this important issue remained important that is your ten in your testimony to stand by . That yes. Apparently the office of the General Council raised the question about him all humans that remains open today and this is our task thank. You thank you we can talk about how much calculated under the way is whether or not the least was in violation ammoniums cause ice issues there may have escape the scrutiny of the American People but one thing the American People do understand is that the american dont get dont get a good deal when the tan is pretty much like a fox being a charge of security in the henhouse you know its a setup that is doomed to fit to benefit the lesser and lesser which is the same person at the same time back in that work at the benefit of the American People this subcommittee is well post poised to dont you agree mr. Matthew since work to this committee . Isnt it our general interest to oversee the operations of the General Services administration, particularly in a situation where the foxes over in the henhouse . The committee and subcommittee absolutely have oversight jurisdiction over gsa yes. So when my friends on the other side of the high of the aisle have been say all morning to somehow besmirch this hearing to chip at its legitimacy dont agree with . You i will not going to opine on the mind or i understand your loyalty but you also have a loyalty to the constitution do you not . Yes i do. Thank you. With that i am going to yield the balance of my time gentleman from tennessee. Thank you mr. Johnson. Let me go back to mr. Matthews. Would you give us the agreement the Lease Agreement monaco hotel and gsa he and let us know if they have paid more than base rent and pay the rent based on percentage of gross if they have been more than what you dont know for a fact if there are provisions in the least it be interesting to note there were similar or different. The trump family has decided somehow on their own, that do not violate the clause they would pay Hotel Profits to avoid constitution are you familiar with that arrangement just by press. Report dont you think that if president decided to donate his profits was not to violate the clause its basically an admission that the clause is successful it even considered in determining the least . Im not going to provide an opinion on those types of statements we did find in the report that there is an issue constitutional issue with respect to the lease. Thank you and apparently that the trump family agrees. Let me ask you mr. Matthews they give a percentage to the treasure you know the amount of money to give to the treasure . Are you referring to the lease contract . Are this other arrangement with the trump family dont isis profit im not familiar with. That you have to be familiar with. That if the president of the United States who is your boss at this now that hes violating the constitution if it doesnt give this money to the treasury. And you dont know if he is actually giving the percentage of profit he gets from Foreign Governments which he can know by auditing his books, and you dont know, you are being developed in your responsibility. The president says this is a constitutional constitutional issue hes got to give his profits to the United States treasury. Yet you dont know what he has decided to give an or whether it is enough or not. At this is with a new preview and mr. Trump is basically said he is violated the constitution but so as not to seem as violating and, he is donating a certain percentage but its not gonna be anybody looking over shoulder to see done its the right amount of money did not violate the constitution . I guess thats an answer. You dont care you want to answer . What i would say the question whether or not his violation, several litigation between before the court right now and in that form the department of justice has argued before the court that there is no constitutional violation right now. Mr. Trump has admitted mr. Trump doesnt get money for no reason at all. He he doesnt pay taxes i yield. Back madam chairman i havent a unanimous unanimous request what will be for the record that that the amongst the consent that be included what inaudible was filed on the same project without going along dissertation i ask for unanimous consent as well. I yield back. I appreciate our witnesses thing with a long and it will be dismissed and we welcome our second panel. We will take a five minute break. Sorry its not a break a five minute recess i want a wet come our second panel Michael Foster manage a project on government oversight mister walls walter shaub for and the former director of the u. S. Office on government i thinks and mr. Because ski center for legal and judicial thank you very much for being here we look forward to testimony without objection full statements will be included in the record as with the previous we will ask you to limit your comments to five. Minutes we will not proceed with witnesses and start with mr. Foster. Members of the subcommittee, my name is Michael Foster. Im a legislative attorney in the American Law Division American Research service thank you inviting me to testify here on the half of scars to provide background to recent allegations concerning these provisions. In brief what will refer to as a foreign monument any Person Holding any office over the United States is prevented from accepting any presents a title from Foreign Government unless congress can sense it is in prison and weve know him monument should not receive any money move from the United States. For most of the history this causes were largely and discussed and not examine. However in recent litigation involving the president s all in the discover the cause host of legal issue some of which i dressed in more detail american testimony, testimony today will focus on the primary interpretive issue that is risen in recent litigation, namely the issue of literary monument means what constitutes a monument that is a key question has divided legal scholars several potential explanations a definition monument would be compensation would not extend to ordinary business transactions between a official and a government. By contrast a broad definition would cover even even if barr fair market value transactions between foreign and domestic government. Department of Justice Office of Legal Counsel also sometimes appeared employee functional and rendering legal vice executive branch on whether or not the existence will implicate clauses. Some learning influence on the president and federal officers and in on whether to benefit that issue are intended to influence the recipient is an officer at the technicality of the circumstances. The debate over the definition of a monument better history for instance the big Anti Corruption and rely on the dictionary definition in support however some scholars rely on consumer around the uses by some factors as well as some Business Practices like george washington. In 2018 2019, to Federal District courts such a systematically address the scope of the clause for the first time in the courts that if any was defined but a definition of gain more than that basic value regarding the court fence its significant the use and rejected the proposition Editors Office related use another part of the constitution to control under the clauses. With respect clauses history and purpose, the courts while acknowledging the broader in our definition of a monument both existed at the time ratification, find a way the historical evidence for Anti Corruption purposes for to expand the definition. Finally the executive branch but its in what expensive view of the emoluments. These definitions are not final however. In fact one of the decisions hasnt been reversed by the west court of appeals before certain on a separate issue regarding the standing bring thus the importance of these decisions are released in a meeting with the emoluments clause remains unclear. Thank you and i would be happy to answer the questions may have thank you very much when i go down to mr. Thank you. Its important to note that the lease between the government and trumps llc, a corporate entity not the president , became operated before donald trump was elected. It comes down to a number of erroneous conclusions. The gsa should have considered whether the least of allegations and value the laws in violation of section 30 7 19 of the lease. The question is a constitutional issue under the authority of the department of justice, not gsa. A doj has made it clear from the beginning of the investigation, that the executive branch does not believe the police violates the clause. That is controlling for the entire executive branch, and so the criticism is unwarranted. Provision states that an elected official cannot be admitted into any share or part of the least. That section is not violated when the least was entered into in 2013, since donald trump was not an elected official at the time. The lease was not with him personally, but with a corporate entity in which he held an interest along with other shareholders. The section does not apply to donald trump, he should not be in strewed as a person like a shareholder or other entity. This clearly falls in the definition of other entity. Trumps interest and the llc, were transferred to a trust after he was sworn in, he relinquished management control, announced all profits from foreign payments will be donated to the u. S. Treasury. The tenant was in full compliance of the least. Its important to note that after reviewing 10,000 documents, the ig found there was no undue influence, pressure or unwarranted involvement of any kind than from anyone including the executive office of the president. The ig conclusion wasnt makes no sense. Since it was and is, the Justice Departments position that there has been no violation of the clause, there is no reason to consider the issue. The plane taxed of the emoluments clause, makes it clear that gifts and presents from foreign eState Governments, as well as payments and Services Rendered in the governments official capacity. They were not meant to barr a president from having private business interests, to pay the fair market value and which they receive in an open exchange. As they have open out, nor the text were intended to reach benefits from a private business pursued, having nothing to do with his office or personal service to a foreign power. The argument advocated by those, who say that the emoluments clause prevents from anything of value being received by president , its far outside the intention of the framers. Under that theory the governors pension that Ronald Reagan received would violate the domestic emoluments clause the doj opinion concluded that did not fit within the emolument clause under this the government could even hold Treasury Bonds because the interest he would receive would be considered a violation of the emoluments clause the. Concern raised by the ig have no basis in fact. There is no violation when the Trump Organization was selected to be the developer of the trump hotel in 2012. Theres no violation after present president was elected based on the claims that any visual stay in a hotel is playing emoluments to the hotel the. President is not provided any services in that capacity as president. Even the doj has maintained since the beginning of the administration that the leases and no violation of the images cosby was no reason reason for the tsa to him and if they were correcting the lease on their own terms it does not apply and this is much ado about nothing thank you. Thank you members of the committee thank you the opportunity to testify on behalf of the root of it today who we are here today because president has not divested from us businesses. Organizational lease with the g s a. This arrangement possibly implicates the constitutions emoluments clause and also potentially presents like to make sure that government officials not benefit from at least of this sort. As we heard this morning, earlier this year the tsa Inspector General found serious shortcoming in the agencies process on determining whether the Trump Organization was in compliance with. Elise early on jesses review, the agency opposite general acknowledged that the president likes business interest in the Trump Organization might constitute a violation of the emoluments causes that my conceded which of the lease. Officials did not consider this issue instead gsa focused solely on donald trump being elected in the late based on a flawed legal analysis on the Trump Organization and the analysis by council not released to the public it was determined that it was no violation of this election. For example, in an effort to limit the scope of the section the Trump Organization has now really interpreted the word admitted. However, the definition to put forth cleanly states that it could also mean give access. Two under this meeting the assertion that the president was admitting to the least before he was elected is unconvincing as it doesnt address the fact that he could still axis benefits from the lease. I know the members of the minority have expressed frustration that it didnt definitely answered weather present interest in private business is considered a violation of those losses. But it appears that no one at gsa wants to be responsible for making that decision. With Contracting Office to determine that Trump Organization was in full compliance they knew of this possible violation but in order. This this calls in the question the prudence of this question to have an outqualified certificate to the Trump Organization. Even absent undue interference questions remain about the gsa handling of the situation. The Inspector Generals findings the Agency Response was wesley inadequate. Written by the agency general counsel response ignored all the Inspector Generals recommendations have placed the blame of the findings and former agency officials. The time of the letter was at times generally contemptuous appearing more concerned with protecting the president s reputation then showing the agency that ensuring that the edges of the court was acting well accordance with the law. The president s interest in a hotel in violation of the emoluments clause. Further asserted that the Inspector General found the monument violation is merely possible to dispute that claim it would Justice Department arguing the attorney, general counselor ignore the fact in those lawsuits Justice Department attorneys are exercising their role as the president Civil Defense attorney. The federal Programs Branch of the Civil Division as the described in the website describes action against the opposite the president such of the emoluments clause, as the Justice Department is zealously arguing for interpretation of the law most favorable to decline, its hardly impartial. To present the departments assertion as impartial as Current Council did and his response is misleading. With the for Office Building maybe managed adequately but its unfair as it was the public trusted its that the Trump Organization and the g s i should cooperate fully with oversight efforts with members of congress. That oversight expense to examining the ideas review of the agency decisionmaking proper process. Therefore additionally concerned by a lack of productive response the thing submitted by Ranking Members medicine. In closing, its important for us to take a step back and consider the broader policy implications of our conversation to. The fundamental issue is whether we as a country are okay with a system that allows elected officials to privately profit of their official actions. If the answer is no, as suggested by monuments clauses in the constitution, that we need to take a serious accounting of the laws and policies the conduct of our elected officials to make sure they are sufficient. With this committee starts with the gsa contract. Thank you. Members of the committee thank you for inviting me to discuss gsa management of your post Office Nearly three years ago donald trump declared that quote a president cannot have conflict of interest. Thats not right. Conflict of interest rise as one any officials personal interest or at odds with a duty to the American People. True president s and Vice President s are not covered by a lot of prescribe criminal penalty from the its not part of my Office Danger to constitution the Justice Department in the office of government ethics have advised president s to act as though the law applied and for the better part of for decades they did. Did the kinds of measures theyre appointee stuck to prevent conflicts of interest. Now federally owned landmark houses the trump hotel which is patronized by individuals and groups with interest affected by the federal government. For for example the lobbyist advocacy groups, businesses nonprofits and political candidates frequently hotel. Why wouldnt they. White house staff another employees medal mingle there members responsible for your side of the tallied 64 Foreign Governments visiting Trump Properties one diplomat suggested it would be quote rooted to come to the city and staying at your competitor. Today a transcript was released to show that the ukrainian president was highlighting that he wants stayed at the trump hotel, apparently he seemed to think that it would ingratiate him to the president. Bahrain, philippines hosted major events, romanian prime minister, saudi government has been one of the bigger customers raising concerns about a kingdoms relationship with the administration. The consequence of the circumstances has been an unprecedented ethics races. One appointee after another resign amid inquiries into their conduct, while others remain in government under the cloud of ethics concern. For their part usa officials emphasized that aspect of their work occurred before inauguration. The claim that they were not under any pressure, that the feds ignores the very real risks in the face of the challenge of trumps organization beliefs compliance. Election is over, they are about to get a whole new set of bosses and every career official new this. In fact it gsa was the lead agency for president ial transition. There are two main promises in middle east termination in 2017. They refused to consider the amendments causes it felt even consider then fell gsa below standard, failing to waiting rendering arbitrary in capricious. More importantly officials failed to uphold their oath. Second the least makes clear that elected officials cannot be to any part and share of the lease and cannot benefit from technical problem rather gsa sides that the issue. The determination link the creating the illusion of separation for the president that this doesnt solve the problem the money stays in a property he knows and will benefit from any improvements made with. It is also nothing nothing preventing him from going back to when he leaves government. Tsa also noting that theres a trust but the trust is meaningless. I gee i said it does nothing to absolve conflict of interest. I discuss these issues in more detail in my written testimony and in closing i will just emphasize that needs gsa to conduct a new evaluation of the least, one the properly takes into account the emoluments clause and the relevant contract language. Of, course the most effective way to avoid issues would be divestiture. Thank you again for inviting me i happy to answer questions. Thank you mister shaub we shall we go to chairman the peter a. Defazio first question . Thanks madam chair. Miss hempowicz gentleman sitting next to you said that because the Justice Department is defending the president and civil litigation if this becomes a controlling opinion over employees and the government of the United States. Is that correct . I believe he may have been talking about opposite Legal Counsel in his opinions involving issue, im unaware of anything interact in this situation although they are notoriously. Private and for you it would have to be an official opinion not involving pleading in civil lawsuit . I think. So i also think that gsa decided not to look into this issue the department of justice was not involved in any litigation. Thats a very good point. Has gsa its own council saying that he couldnt handle that i wouldnt ask the office of Legal Counsel for opinion . I think its very question an general highlights and instance were 20 years ago when they did exactly damage question involving members of Congress Rather than the president. Mr. Shaub, you also talked about gsa the election of duty and not asking my question john expand on that a little bit . Microphone you can hear me . Now yes. They had a duty to consider the issue. First of all this were an oath to uphold and support the constitution. Second of, all courts have ruled that in agencies failure even considered an important issue renders its actions arbitrary and capricious. That means that they havent done the basic thing that agencies do to evaluate a problem. They just simply punted. They decided not to address. It of course we dont know what was in general counsels legal opinion which led to the gestapo of the career employees shortly after that the employee was corresponding with ivanka trump it was all nonsense theres nothing wrong with this leased by the way i want to tell you about my trip to new york. Is that normal behavior by a Contracting Office of the government of United States dealing with the daughter of ultimate beneficiary . Thats not normal for any government official. I spent the assume four of my career with president ial the and i never with president ial nominees and i never asked their daughters are coffee. inaudible again the general sitting next to you alleged that because the department of justice is right pleading in civil litigation case that that the thank you very. Question i cant speak to the legal impact of the department of justice pleading i do agree that generally the is the binding with an executive branch thank you madam chair. Mr. Meadows . Mr. Von spakovsky a new fire which he said he served as an attorney as at the doj is that correct . Thats correct. Given that history can you elaborate on the role of the doj lawsuit and particularly the one involving the constitutional interpretation . Justice department is the lawyer for the executive branch including independent agencies and executive Branch Agency and agencies such as gsr. They put forth an opinion. They put forth all kinds of opinions they certainly have a long string of opinion the values clause but the point here is they dont take a position in litigation constitutional or cant or not constitutional that is binding on the executive branch i was a commissioner for ten two years and federal Election Commission and when we had a case for example for the front of the u. S. Supreme court even as a commissioner i personally believed in my official capacity that a particular statute was unconstitutional, it was insulators solicitor general the Justice Department argued before the court and argued by the constitutionality. I had no power to change that this idea that the can gsa come out with its own view on the constitutionality of the emolument clause is just not in the court with the way the losses law has been practicing Justice Department operates. Just look back former attorney general, who refused to defend certain federal statues including the ones about game marriage because he said they were unconstitutional. They could not appear in court and say all we disagree with the attorney general. So what you are saying is that you would break historical precedents in terms of the executive branch to allow the gsa administrator in the ranking official who was on a panel before you who is not an attorney, to appoint on the constitutionality of the emoluments clause is that correct . He kind of pine all he wants but his opinion is irrelevant as is the opinion of the ig. The Controlling Authority is the u. S. Department of justice. Miss hempowicz i, want to clarify one thing and then call votes i will try to be very brief. I knew written testimony on page four broad definition immigrant is any benefit, gain or advantage camera, including profits from the private market transactions. Im not aware of any case that would identify the private market transactions. Can can you help me with a case that was decided for that definition was included . Was that the majority opinion. Unfortunately i cant off the top of my head but i will tell you i dont think there is one. I would ask to clarify because i dont think there is one weve looked, when you look at it, you made a definitive statement so perhaps you can go back and verify that even either give us a citation or remover that would be very helpful. I will be very happy. To mr. Foster let me come back to you in the last minute i have. Remaining im a proud the democrat to continue having cpr us come at witnesses i think its got to the bipartisan spirit. I was the apartment on the emoluments clause, has it changed over time . As what see are as interpreted as the emoluments. Has it changed over time . I know you are new so if you dont know, dont answer. Thank you for your question. I think what i would say is that cras his determination are based law and are based existing precedent and theres very little legal precedent on whether the monument is its recently been addressed or federal. Court so what you are saying is that basically we need for soares to have a definitive opinion we will probably need the courts to rule on this with pending litigation that is out there . There are ways that stars can look at Legal Provisions that havent been definitely but you have enough changed over time . From 2012 and 2016 that has changed in terms of interpretation from cra. Are you aware of . That im not. Aware that i see a staff of the i will see you and you can get back. Without mr. Foster, we keep hearing we heard from gsa the they were trying to make new practice consistent with underlying law and i quote usc section six or three eight thats a criminal provision in a civil position provision and it has to do with members of congress and, i would argue that its not really relevant here and im just asking you do you think that supersize the constitution the prohibits a president or any elected official from thinking emoluments . Thank you very question. I have not review the provisions in preparation for the standalone i can say its a general matter that statutory law does not supersede the constitution. Would you agree with that miss hempowicz . Yes. Thank you. Also weve been hearing from our friends down here how much money in the post office is making as a hotel. Its making all this money its graphic taxpayers making all this. Money if its making money is making money for the president look at how this distrust we can do for the money until he leaves office or he can reinvest money in the property. So he is making. When the hotels making money, the president making money, mr. Shaub isnt, that a violation of the emoluments clause . It certainly is. Irrevocably trust does nothing to separate him from his assets and his income. We deal with this kind of trust all the time with president ial appointees coming to government and we help them work their conflict of interest and consider those non entities. We also heard from the the and gsa also ig it was the best practice, thats the word, of the best practices but gsa to put something at least like section 37. 19 that prohibits members of congress or elected officials members of the duration, if there is the best practice before President Trump came, and why isnt it the best practice now . Its the most confounding thing about gsa response is that it seems like never addressed again again and avoid this conflict of interest provisions for future contracts so they are compounding in the direction of duty with the even bigger their election. Immediately and where you when what when he was elected did you give him advice when he was elected. . I think been very public about the fact that all president s should divest their conflicting financial interest in the same is true for the current president. Did you follow your advice . He did not. No he. Didnt oh thank you all very much we can have to go, oh whether she come from . Sorry. We have a new member with us. Hear from miss miller . Thank you maam chairwoman. I want to thank you all for being here and once again i want to emphasize the very first hearing that we kind of this committee which is called the cost of doing nothing while investing in our nations infrastructure matters. Its more important to my constituents that we act swiftly to improve our nations infrastructure. Mr. How spakovsky appropriate is it for contracted to make a speculation based on law thats not how things are problematic for federal agency and i can say as a former commissioner a federal agency, and in particular when the Justice Department is taking a position again, because they are the controlling just cant go against that and the position of the Justice Department all the litigation over the trump hotel is that this is not a violation of the emoluments clause. Thank you very. Much i yield back my time to mr. Meadows. I just want to thank all of you i want to thank the gentleman from West Virginia and the chairman and i yield. Back thank you must. Meadows any more questions seeing none id like to thank the witnesses and your contributions has been very informative, very helpful. I would ask now the record of todays hearings remain open as far as such time as witnesses have provided answers and made. Unanimous consent records remain open submitted by members or witnesses to be included in the record of todays hearing. Without objection, if the members have anything to add then subcommittee stands adjourned thank you this is one hour. Good afternoon, how is everybody good afternoon how is everybody doing. I really appreciate the opportunity thank you for the opportunity is great to see. You also want to
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