Trump’s Hotel Profits Back in Spotlight With Court Reversal
Trump’s Emoluments Victory Is Reversed by Full Appeals Court
(Bloomberg) -- A U.S. appeals court revived a lawsuit accusing President Donald Trump of illegally profiting from his Washington hotel, setting up a fresh fight over his finances.
The Court of Appeals in Richmond, Virginia, on Thursday reversed a July decision that dismissed the case brought by the attorneys general of Maryland and Washington, D.C. They accuse Trump of violating the Constitution’s “emoluments” clauses by taking money from both domestic and foreign governments that use the hotel.
Maryland Attorney General Brian Frosh in an interview called the clauses “the nation’s original anti-corruption law” and said Trump has “been violating them from day one of his presidency.”
The Justice Department noted that six of the 15 judges on the panel dissented and vowed an appeal to the U.S. Supreme Court. The president’s lawyer, Jay Sekulow, called the case “another example of presidential harassment.”
The decision comes as the Supreme Court weighs two pivotal cases that could delve into Trump’s business affairs, including one suit by House Democrats seeking access to the president’s financial records and another tied to a probe by the Manhattan district attorney.
The 21-page majority opinion drew two blistering dissents spanning some 80 pages.
“Make no mistake about what has really happened here,” five of the dissenting judges wrote. “By discarding centuries of settled practice and precedent that kept true to the genius of the Constitution and its separation of powers, the majority has only confirmed one of the founders’ worst fears: that, while no man may be above the law, a group of judges, so emboldened, may consider themselves beyond it.”
In the interview, Frosh said the underlying dispute still needs to play out in court, with evidence of the president’s finances since Trump took office.
“He’s trying to prevent the American people from seeing the foreign benefits he’s receiving,” Frosh said.
The president has become “even more brazen” since the suit was filed, Frosh said in a news conference afterward, citing Trump’s attempt to bring the G-7 meeting to one of his resorts in Florida and his habit of charging Secret Service personnel for stays at his hotels.
Washington, D.C., Attorney General Karl Racine called Trump’s request for a ruling in his favor before a trial -- the motion the appeals court rejected Thursday -- a “hail Mary,” saying the Justice Department “sought to subvert the trial court process and immediately go to what they believed would be a friendlier venue.”
The two AGs claimed taxpayers they represent were being harmed because the Trump International Hotel has become a magnet for foreign dignitaries, state government officials and lobbyists, drawing business away from Maryland and D.C. competitors. They sought a court order compelling Trump to abide by constitutional restrictions.
Thursday’s ruling, by an enlarged “en banc” panel of appellate judges, reversed Trump’s win in July from the same court in which a three-judge panel, all appointed by Republican presidents, threw the case out. The larger panel held that allowing the executive to define what constitutes an emolument would be a “faulty premise.”
“The framers, concerned about the corrosive effect of power and animated by fears of unduly blending government powers, dispersed the authority to enforce the law and the authority to interpret it,” the judges said. “To hold otherwise would mean that the president alone has the ultimate authority to interpret what the Constitution means.”
The Justice Department said it’s disappointed with the ruling.
“As the six dissenting judges noted, this unprecedented suit seeking to enforce the Emoluments Clauses against the President of the United States should have been dismissed, and the court of appeals erred by not even considering the merits of the president’s defenses,” department spokeswoman Brianna Herlihy said in an emailed statement.
Citizens for Responsibility and Ethics in Washington, which filed a similar emoluments case in federal court in Manhattan, praised the ruling. Trump lost the New York case on appeal, though that decision may also be reheard en banc.
“Trump should finally do the right thing and end the harms caused by his unconstitutional conduct,” CREW said in a statement. “Now is the time to divest from his businesses and stop violating the Emoluments Clauses of the Constitution.”
U.S. District Judge Peter Messitte in Maryland twice refused to dismiss the suit by the AGs, leading to Trump’s first appeal. By then, the AGs had started to collect evidence, serving subpoenas on Trump’s businesses and the Donald J. Trump revocable trust.
Trump handed day-to-day control of his business empire to his two adult sons and a chief financial officer before taking office but refused to shed any of his holdings, including the Trump International Hotel just blocks from the White House. He even hired a director of diplomatic sales.
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