Trump case: A judge rules that an emol­u­ments suit can pro­ceed.

The Washington Post - - FRONT PAGE - BY ANN E. MARIMOW, JONATHAN O’CON­NELL AND DAVID A. FAHRENTHOLD ann.marimow@wash­post.com jonathan.ocon­nell@wash­post.com david.fahrenthold@wash­post.com

A fed­eral judge on Wed­nes­day re­jected Pres­i­dent Trump’s lat­est ef­fort to stop a law­suit that al­leges Trump is vi­o­lat­ing the Con­sti­tu­tion by con­tin­u­ing to do busi­ness with for­eign gov­ern­ments.

The rul­ing, from U.S. Dis­trict Judge Peter J. Mes­sitte in Green­belt, Md., will al­low the plain­tiffs — the at­tor­neys gen­eral of Maryland and the Dis­trict of Columbia — to pro­ceed with their case, which says Trump has vi­o­lated lit­tle-used anti-cor­rup­tion clauses in the Con­sti­tu­tion known as emol­u­ments clauses.

This rul­ing ap­peared to mark the first time a fed­eral judge had in­ter­preted those con­sti­tu­tional pro­vi­sions and ap­plied their re­stric­tions to a sit­ting pres­i­dent.

If the rul­ing stands, it could bring un­prece­dented scru­tiny to Trump’s busi­nesses — which have sought to keep their trans­ac­tions with for­eign states pri­vate, even as their owner sits in the Oval Of­fice.

Mes­sitte’s 52-page opin­ion said that, in the mod­ern con­text, the Con­sti­tu­tion’s ban on emol­u­ments could ap­ply to Trump — and that it could cover any busi­ness trans­ac­tions with for­eign gov­ern­ments where Trump de­rived a “profit, gain or ad­van­tage.”

“This in­cludes prof­its from pri­vate trans­ac­tions, even those in­volv­ing ser­vices given at fair mar­ket value,” Mes­sitte wrote.

In the past year, the Trump Or­ga­ni­za­tion has held sev­eral large events paid for by for­eign gov­ern­ments and re­ported about $150,000 in what it called “for­eign prof­its” last year.

“In sum, Plain­tiffs have plau­si­bly al­leged that the Pres­i­dent has been re­ceiv­ing or is po­ten­tially able to re­ceive ‘emol­u­ments’ . . . in vi­o­la­tion of the Con­sti­tu­tion,” Mes­sitte wrote.

Trump still owns his com­pany, although he says he has stepped back from day-to-day con­trol.

The Trump Or­ga­ni­za­tion and the Jus­tice Depart­ment had urged Mes­sitte to dis­miss the case, ar­gu­ing that the Found­ing Fa­thers had writ­ten this clause to stop of­fi­cials from tak­ing bribes — but not to stop them from do­ing busi­ness.

The com­pany did not re­spond to re­quests for com­ment. The Jus­tice Depart­ment re­leased a short state­ment say­ing that it is re­view­ing the de­ci­sion and that “we con­tinue to main­tain that this case should be dis­missed.”

They could seek to ap­peal the rul­ing.

The plain­tiffs now want to in­ter­view Trump Or­ga­ni­za­tion em­ploy­ees and search com­pany records to de­ter­mine which coun­tries have spent money at Trump’s ho­tel in down­town Wash­ing­ton — and how much they spent. They may also seek to re­view Trump’s tax re­turns, which — un­like other re­cent pres­i­dents — he has not made pub­lic.

“We are one step closer to stop­ping Pres­i­dent Trump from vi­o­lat­ing the Con­sti­tu­tion’s orig­i­nal anti-cor­rup­tion pro­vi­sions,” said D.C. At­tor­ney Gen­eral Karl A. Racine (D), who brought this case along with Maryland At­tor­ney Gen­eral Brian E. Frosh (D).

Frosh said his staff was al­ready pre­par­ing to seek fi­nan­cial doc­u­ments re­lated to the pres­i­dent’s D.C. ho­tel, which is lo­cated in a fed­er­ally owned build­ing, the Old Post Of­fice. Be­fore he be­came pres­i­dent, Trump won a fed­eral con­tract to op­er­ate the ho­tel in the his­toric build­ing.

Frosh sug­gested that, even­tu­ally, the added scru­tiny could cause Trump to di­vest him­self of the ho­tel.

“I think the de­ci­sion bodes ill for his own­er­ship of the Old Post Of­fice ho­tel,” Frosh said.

The law­suit, filed last year, is one of a spate of le­gal chal­lenges that have sought to pry into Trump’s past busi­ness and le­gal deal­ings. Two other law­suits — one filed by Demo­cratic mem­bers of Congress, an­other by a D.C. wine bar that be­lieves it lost busi­ness to Trump — have al­leged that he is vi­o­lat­ing the emol­u­ments clause.

Trump also has been sued for defama­tion by Stormy Daniels, an adult-film star who al­leges she had an af­fair with Trump in 2006, and Sum­mer Zer­vos, a for­mer con­tes­tant on “The Ap­pren­tice.”

In ad­di­tion, the New York at­tor­ney gen­eral has sued Trump and his old­est chil­dren, al­leg­ing that there was “per­sis­tently il­le­gal con­duct” at the Don­ald J. Trump Foun­da­tion, a char­ity they led. Separately, New York state’s tax­col­lect­ing au­thor­ity is in­ves­ti­gat­ing that char­ity to de­ter­mine whether crim­i­nal laws were bro­ken, state of­fi­cials have said.

This suit, filed by the at­tor­neys gen­eral, cleared an ini­tial hur­dle in March. Back then, Mes­sitte set­tled one le­gal ques­tion, rul­ing that the plain­tiffs had le­gal stand­ing to sue the pres­i­dent in the first place.

He also lim­ited the scope of the case to Trump’s Wash­ing­ton ho­tel; pre­vi­ously, the plain­tiffs had wanted to search for for­eign-govern­ment spend­ing at other Trump prop­er­ties as well.

The plain­tiffs were able to file in Maryland in part be­cause of the eco­nomic dis­ad­van­tage al­leged to other hos­pi­tal­ity busi­nesses and their em­ploy­ees in the state.

The next un­set­tled ques­tion: What, ex­actly, is an emol­u­ment?

That re­mained unan­swered for more than 200 years.

The Con­sti­tu­tion bars fed­eral of­fi­cials from tak­ing emol­u­ments from any “King, Prince, or For­eign State.” The Found­ing Fa­thers’ in­tent had been to stop U.S. am­bas­sadors over­seas — emis­saries from a new, poor, frag­ile coun­try — from be­ing bought off by jew­els or pay­ments from wealthy Euro­pean states.

But the mod­ern mean­ing of the clause had not been set­tled be­cause most pres­i­dents — act­ing on the ad­vice of their at­tor­neys — had steered clear of busi­ness en­tan­gle­ments while in of­fice.

Trump, on the other hand, has kept own­er­ship of his busi­ness em­pire, in­clud­ing more than 10 ho­tels and golf clubs world­wide.

Some of his cus­tomers have been for­eign gov­ern­ments. In par­tic­u­lar, the Trump In­ter­na­tional Ho­tel on Penn­syl­va­nia Av­enue in down­town Wash­ing­ton — just blocks from the White House — has rented out large ball­rooms to the em­bassies of Kuwait and the Philip­pines and hosted lead­ers from Malaysia and Ro­ma­nia.

At the hear­ing in June, the plain­tiffs had ar­gued that when ap­plied in a mod­ern con­text, the Con­sti­tu­tion’s ban on emol­u­ments should cover trans­ac­tions such as those.

They said emol­u­ment in this case should not mean just an out­right gift but also any trans­ac­tion that gave Trump “profit, gain or ad­van­tage.” That means it would ap­ply to trans­ac­tions in which a for­eign govern­ment paid Trump’s com­pany for a ser­vice or a ho­tel room.

To back up that ar­gu­ment, they cited 18th-cen­tury dic­tionar­ies show­ing that the term “emol­u­ments” at the time the Con­sti­tu­tion was writ­ten was de­fined more broadly than a sim­ple gift or bribe.

But Jus­tice Depart­ment lawyers, de­fend­ing the pres­i­dent, said the proper def­i­ni­tion was far more nar­row.

They said the pres­i­dent is not break­ing the law when for­eign of­fi­cials book rooms or hold events at his Wash­ing­ton ho­tel be­cause they are pay­ing for some­thing and not giv­ing Trump a gift.

If the plain­tiffs are al­lowed to con­duct “dis­cov­ery” at Trump’s ho­tel — ex­am­in­ing its books to iden­tify its for­eign cus­tomers — that could re­quire the pres­i­dent to pro­vide more de­tailed in­for­ma­tion about his per­sonal fi­nances.

Be­fore Trump took of­fice, his com­pany said it would do­nate all “for­eign prof­its” col­lected by the busi­ness to the fed­eral Trea­sury. At the end of last year, the Trump Or­ga­ni­za­tion said it do­nated $151,470 in Fe­bru­ary. But it de­clined to ex­plain the de­tails be­hind that num­ber — giv­ing no in­for­ma­tion about which coun­tries those prof­its came from or what the Trump Or­ga­ni­za­tion’s to­tal rev­enue from for­eign gov­ern­ments had been.

ALEX BRAN­DON/AS­SO­CI­ATED PRESS

Guards stand out­side the Trump Ho­tel in the Dis­trict. The plain­tiffs want to know which coun­tries have spent money at the ho­tel.

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