Political fights, ethics questions for new Trump hotels
NEW YORK >> You might have expected the Trump Organization to tap the brakes on expansion plans given all the criticism over potential conflicts of interest while its owner sits in the Oval Office.
It’s hitting the accelerator instead.
The company owned by President Donald Trump is launching a chain of new hotels with plans to open in cities large and small across the country. Called Scion, they will be the first Trump-run hotels not to bear the family’s gilded name. The hotels will feature modern, sleek interiors and communal areas, and offer rooms at $200 to $300 a night, about half what it costs at some hotels in Trump’s luxury chain.
The company has signed letters of intent with more than 20 developers to build the hotels, said Trump Hotels CEO Eric Danziger. The last three were signed in just one week earlier this month.
“It’s full steam ahead. It’s in our DNA. It’s in the Trump boys’ DNA,” said Danziger. The “boys” are Eric and Donald Jr., who are running their father’s company while he is president.
The bold expansion plan raises some thorny ethical questions.
The Trump family won’t be putting up any money to build the hotels. Instead, it plans to get local real estate developers and their investors to foot the bill, as do most major hotel chains.
One of the first going up could be in Dallas. A development company there originally planned to raise money from unnamed investors in Kazakhstan, Turkey and Qatar, but recently told the Dallas Morning News that it now will tap only the company’s U.S. partners.
Ethics concerns
Government ethics experts say turning to outside money, whether foreign or American, raises the specter of people trying to use their investment to gain favor with the new administration — like contributing to a political campaign, but with no dollar limits or public disclosure.
“This is the new version of pay-to-play, ‘Get in there and do business with the Trump Organization,’” said Richard Painter, who was the chief White House ethics lawyer to President George W. Bush.
The Trump family will have to overcome some political obstacles, too. Already, politicians in a few cities mentioned as possible sites have vowed to fight the first family, raising the prospect of a struggle to get zoning and other permits to start
building.
The son of German and Polish refugees from World War II, CEO Danziger is no stranger to long odds. He never went to college, instead taking a job as a bellman at a San Francisco hotel at 17. He worked himself up over the decades to CEO spots at several major hospitality companies.
When Danziger led Starwood Hotels and Resorts
in the 1990s, he expanded the number of hotels from 20 to nearly 600.
The 62-year-old executive has similar ambitions for the Trump family. He said he hopes to open 50 to 100 Scions in three years, and is planning to add to Trump’s existing line of luxury hotels.
Danziger took over Trump’s hotel business in August 2015 with hopes of adding to the company’s
string of properties abroad. A review of trademark databases by The Associated Press shows the Trump family has applied for rights to use the Scion name in several countries, including China, Indonesia, Canada and 28 nations in Europe. An application for trademark rights in the Dominican Republic was approved as late as December.