Lawsuit filed against Trump over foreign business payments

A group of prominent legal experts is suing Donald Trump, alleging the US president is in violation of the US constitution because he continues to own hotels and companies that do business with foreign governments.

Citizens for Responsibility and Ethics in Washington, a liberal watchdog group, filed a lawsuit against Mr Trump in New York on Monday citing the so-called foreign emoluments provision of the US constitution, which bans payments to the president from foreign powers.

The group said that by refusing to divest his businesses, the new president is “getting cash and favours from foreign governments, through guests and events at his hotels, leases in his buildings and valuable real estate deals abroad”.

The organisation is run by a group of lawyers including Norman Eisen, who was an ethics lawyer in the Obama administration, and Richard Painter, a former ethics lawyer for President George W Bush. However, it was previously headed by David Brock, a colourful Democratic party activist and staunch supporter of Hillary Clinton.

The lawsuit is one of a number of legal actions being planned by opponents of Mr Trump, with other groups looking to challenge Mr Trump’s decision to hand over management of his real estate business to his two eldest sons, instead of selling his business outright.

As part of the suit, Crew is focusing on three aspects of the Trump Organisation’s business: the Trump International Hotel in Washington; the foreign tenants renting space at Trump Tower in New York; and the Trump Organisation’s international business, including deals that are currently under discussion in China, India, the United Arab Emirates and other foreign countries.

It noted that multiple foreign embassies had started reserving the Trump International Hotel for various receptions and parties — a move that could be viewed as a way to curry favour with the new administration. Meanwhile, China and the UAE are currently tenants of Trump Tower in New York through two state-owned entities: the Abu Dhabi Tourism and Culture Authority, and the Industrial and Commercial Bank of China, one of Trump Tower’s biggest tenants whose lease would expire during Mr Trump’s first term, Crew said.

“[Mr Trump] is now committing and is poised to continue to commit many violations of the Foreign Emoluments Clause — some documented, and others not yet apparent due to the complex and secretive nature of the Defendant’s business holdings,” Crew wrote in its lawsuit.

Mr Trump’s lawyers have vehemently denied that he is in violation of the foreign emoluments clause, and have argued that Mr Trump is already going beyond what is mandated by the Constitution by promising to hand over to the Treasury any profits his businesses generate from foreign governments

One of the challenges here is that there are so many holdings of different types and different business interests not all [of which] we even know about

In a news conference this month, Sheri Dillon, a lawyer for Mr Trump, denied that the president would be violating the foreign emoluments clause of the constitution if the Trump Organisation continued to allow foreign governments to rent rooms or host events at the Trump International Hotel in Washington, or to rent out space in Trump Tower.

“Paying for a hotel room is not a gift or a present and it has nothing to do with an office. It’s not an emolument,” she declared.

To win its suit, Crew must convince the court it has suffered damages from Mr Trump’s decision not to sell his business, a claim some lawyers say may be hard to prove.

Yet if the lawsuit makes it into the discovery phase, it could force Mr Trump’s lawyers to disclose more about his business dealings and deals involving foreign governments, something ethics groups say would help shed light on the greater universe of Mr Trump’s business dealings, and the degree to which there are conflicts of interests.

“One of the challenges here is that there are so many holdings of different types and different business interests not all [of which] we even know about,” said Deepak Gupta, a Supreme Court litigator who is one of the lawyers bringing Crew’s suit.

“We’ve highlighted such prominent examples,” he continued. “The notion that a sovereign state has an ongoing commercial relationship with [Trump Tower through] the lease, that’s quite a significant entanglement.”