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AMERICAN OLIGARCHY

On October 26, 2016—less than two weeks to election day—travel writer Zach Everson covered the ribbon cutting at the Trump International Hotel in the Old Post Office building in Washington, DC, just a few blocks from the White House. Everson frequently covered hotel openings, which often featured lavish food spreads and “the owners sipping champagne with a few travel writers.” But this one was different. A horde of political reporters trailed Donald and Ivanka Trump as they toured the hotel. “The political reporters were amazed they had complimentary pastries,” Everson said in an interview.¹

A couple months later, Everson got an assignment from Condé Nast Traveller to cover the growing political and social scene at the hotel. In the course of researching that story, Everson booked a night at the hotel. One of his fellow guests told Everson he was about to leave for a restaurant outside the hotel, when he noticed workers polishing the banisters and the manager nervously pacing. The guest concluded, correctly, that the president was on his way, cancelled his outside reservation, and ate at the hotel instead.

To track presidential comings and goings for his story, Everson started monitoring social media feeds. And he noticed something: not even a year into Trump’s presidency, the hotel had become a unique locale in Washington. “It became like Melville’s white whale,” Everson said. “If you want it to be your opportunity and a place for you to go and rub elbows with the President, it’s that. If you’re a lobbyist or a businessman or a foreign leader and want to portray you are close to the president, it’s that too. It’s everything you hate or love about Donald Trump.” Everson quit travel writing to cover, full time, the Trump International Hotel. He began publishing a newsletter, 1100 Pennsylvania Avenue. He had plenty of material.

 

It wasn’t always clear that Trump, once elected, would get to keep his lease with the federal General Services Administration. The lease specifically stated that “no . . . elected official of the Government of the United States . . . shall be admitted to any share or part of this Lease, or to any benefit that may arise therefrom.”² To get around that, Trump moved his ownership interest to an LLC company, DJT Holdings Managing Member LLC. And the federal agency that reported to him allowed this. In a 166-page letter, in which he cited “legal professionals” who were quoted in a Politico article, GSA contracting officer Kevin Terry concluded that because “President Trump is not an officer, director, manager, employee, or other official in any of the entities” with an interest in the hotel, the Trumps could continue to hold the lease.³ Terry crucially ignored the fact that Donald Trump was still an owner and could financially benefit from everything from the $8 Budweisers sold at the bar to the $18,000 suites at the hotel.

“This is the best global example of a conflict of interest I can think of,” George Washington University professor of government procurement law Steven Schooner said in an interview. When he instructs foreign governments on what not to do, Schooner said, he uses the Trump International Hotel as an example. Having the president’s children—in this case Don Jr. and Eric Trump—negotiate with a federal agency is exactly the kind of tangled financial and government structure that the Department of Justice warns US companies to watch out for when they do business abroad, lest they run afoul of anti-corruption laws and the Foreign Corrupt Practices Act.⁴

In addition to ignoring the prohibition against having a lease with “an elected official,” the GSA also decided to ignore that the president could be violating the Emoluments Clause of the Constitution by accepting payments, as the hotel would quite frequently, from foreign leaders and from state governments using his hotel. In a report, the GSA inspector general sharply criticized the GSA for its “unwillingness to address the constitutional issues,” calling the omission “improper.”⁵ But the remedy was weak tea: the inspector general essentially told the GSA not to do it again, and the GSA said, essentially, okay.

By the time this report was issued, in 2019, the Trump International Hotel, just blocks from the White House, had become an open invitation to foreign leaders, political groups, lobbyists, and anyone who wanted things from Trump. Showing up at the hotel, and spending money there, was, for Donald Trump, akin to writing checks to a political fundraiser, but without disclosure laws. It was, as Robert Maguire of the Center for Responsive Politics and later Citizens for Ethics and Responsibility in Washington called it, “the new dark money.”⁶ Trump didn’t need, as President Obama had mockingly suggested at the White House Correspondents Association Dinner years earlier, a black and pink neon-lettered sign over the White House that said “Trump: The White House: Hotel, Casino, Golf Course, Presidential Suite.” He had opened its equivalent just down the block.

When they started their jobs in Washington, senior Trump officials Steve Mnuchin, Linda McMahon, and Gary Cohn moved into the hotel. Others took meetings there, or showed up for dinner. Vice President Pence was regularly driven five blocks to 1100 Pennsylvania in his motorcade from the White House. Lesser-known government appointees also patronized the hotel, in effect, kicking part of their government, taxpayer-funded salaries back to President Trump’s business.

There was always the possibility that Donald Trump, Ivanka Trump, or Jared Kushner would show up. The uncertainty itself lured daily crowds. They arranged themselves on the seafoam couches in the lobby in a room that feels like a giant terrarium, to sip, at bottom, a $12 Grenache, and, at the top, Hungarian Tokay from a crystal spoon for $140.

Rudy Giuliani showed up regularly. So did Rick Gates, before he was indicted. The gambling magnate Sheldon Adelson, the Republican Party’s largest donor, let himself be seen dining at the hotel. Lobbyists like Corey Lewandowski, fired from Trump’s campaign, and people like Sebastian Gorka, forced out of Trump’s administration, would always find a place at the Trump Hotel, and also a place in Trump’s heart. Republican government officials, like the governor of Maine, stayed at the hotel, while in Washington, on the Maine taxpayers’ dime. Political fundraising committees regularly held events at the Trump hotel; one diplomat told the Washington Post it would be “rude” to stay at a rival establishment. Republican members of Congress, keenly conscious of how their perceived power would be measured by proximity to Trump, frequented the space; one told Anita Kumar of Politico that events were held there because “donors want to come.”⁷ Industry groups, like the National Mining Association,⁸ held events there, often inviting administration officials, which meant that these groups were paying Donald, Ivanka, Don Jr., and Eric Trump to host cabinet members at their hotel.

T-Mobile, while seeking a merger with Sprint, sent nine of its top executives to stay at the hotel, in bright-pink company-branded T-shirts, spending $195,000, while they were lobbying the Justice Department, a block away, for approval of the $26-billion merger. Lobbyists paid by Saudi Arabia made five hundred nights’ worth of room bookings. And then there was a parade of foreign officials who had their own problems with corruption: Malaysia’s prime minister at the time, Najib Razak, arrived during a period when the Justice Department was probing a wide-ranging Malaysian money-laundering scheme; a candidate for president of Nigeria, barred from visiting the United States for years because of allegations of corruption, showed up weeks before his election day, seeking to launder his own reputation by staying in a hotel owned by the president of the United States. The prime minister of Romania, Viorica Dăncilă, arrived in 2019, and dined near Rudy Giuliani, Trump’s personal attorney, who while working for Trump had written a letter to the Romanian president urging the country to drop an anti-corruption probe. Giuliani, the erstwhile corruption buster, had been hired as a lobbyist to write the letter “to express my concerns about continuing damage to the rule of law in Romania being done under the guise of effective law enforcement.”⁹

Trump’s administration made sure there wouldn’t be meaningful competition for his hotel, which had been a very real possibility. For a decade, for both cost-savings and security reasons, the GSA had sought to relocate the FBI headquarters, which is across the street from the Trump International Hotel, to the Washington suburbs. The old FBI building, like the Old Post Office, had been seen as the site of a possible new hotel. But GSA’s Trump-appointed administrator, Emily Murphy, scrapped that plan. Questioned by Congress, Murphy was asked, “To your knowledge was the President or anyone at the White House involved in those discussions either with your predecessors or people you’re working with now or yourself?”¹⁰

Murphy answered: “Sir, to my knowledge—the direction that we got came from the FBI.” But Murphy concealed that she’d actually personally spoken to the president in the Oval Office about the decision. According to an inspector general report, “Murphy told us that she attended two meetings about the FBI project at the White House on January 24, 2018. The first meeting occurred in [then White House Chief of Staff John] Kelly’s office, and immediately preceded the second meeting. The second meeting was in the Oval Office with the President.”¹¹

In public filings, Ivanka Trump disclosed what she’d earned in income from the Trump International Hotel: $3,890,775, part of at least $82,000,000 in income she and Jared had earned in the year they became White House advisors. In 2018, Ivanka earned nearly another $4 million from the hotel. During the first two years of his presidency, Donald Trump reported, he earned $80 million from a property that was owned by the taxpayers.¹²

 

The hotel was an example of a larger phenomenon in Washington, where businessmen and de facto foreign agents profited from their proximity to the president. There was, for example, the businessman Elliott Broidy, who had once pleaded guilty to illegally making gifts to New York State officials. (His lawyers eventually persuaded a judge to reduce the charge to a misdemeanor.) Broidy resurrected himself as the owner of a private security firm and Republican Party fundraiser in 2016. After Trump was elected, Broidy struck up a mutually beneficial relationship with George Nader, the convicted child molester, later arrested for possessing child pornography, who was a middleman for Emirati and Saudi rulers. As a deputy finance chairman of the RNC, Broidy was able to get an Oval Office meeting with Trump. Afterwards, Broidy sent Nader a detailed email, telling Nader he’d pitched his causes right to the president.¹³ Broidy did one more thing: he helped pave the way for a photo of Nader and Trump at a Republican fundraiser in Dallas, over the objections of the Secret Service.¹⁴ The month after the photo, Broidy made his biggest donation ever, $189,000, directly to the RNC.

Broidy got something, too, from his relationship with Nader, the Associated Press reported. Not long after his meeting in the Oval Office, Broidy sent via Nader a contract for his private security firm to work in the Emirates. Broidy soon started getting payments, through a company in Canada. The first installment was for $36 million, a down payment on Broidy’s contract with the UAE, worth up to $600 million. (Broidy’s lawyer told the New York Times that he had never taken money from a foreign country “for any interaction with the United States government.”)

There were many other examples of this type of conduct. Trump personally lobbied the prime minister of Japan at Mar-a-Lago, according to ProPublica, to grant a casino license to major donor Sheldon Adelson.¹⁵ A consultant developed a plan for Tom Barrack to profit from infrastructure investment.¹⁶ Erik Prince urged the United States to leave Afghanistan and instead place the war in the hands of a private contractor: his. Chris Christie and Marc Kasowitz were hired as part of the legal team of Malaysian businessman Jho Low, under investigation for money laundering by the US Justice Department; another lawyer on the team was Bobby Burchfield, the outside attorney the Trump Organization hired to monitor its conflicts of interest.¹⁷ (Jho Low denied the charges.) A trio of Mar-a-Lago club members, private businessmen, unelected and unconfirmed, ran Veterans Administration policy from afar.¹⁸

It wasn’t new that rich business leaders were trying to monetize their connections to the president of the United States. What was new was that access was so easily given: that these leaders could cozy up to Trump at his hotel or his golf courses or at Mar-a-Lago, and, because so many protocols and norms were being tossed aside, the ensuing chaotic environment created fertile ground for people who wanted to influence the president. The door to the Oval Office was wide open.

 

There was, also, the bevy of cabinet officials who both participated in petty corruption and who beckoned in—or had been themselves—the lobbyists and industry leaders their agencies had once regulated. The Trump administration was bent on deeply cutting government, but this did not prevent its own appointees from helping themselves to the taxpayer dime.

Scott Pruitt, Trump’s first head of the Environmental Protection Agency, resigned after undergoing seventeen separate investigations for, among other things: living at below-market rent in an apartment co-owned by the wife of an energy-industry lobbyist; spending an excessive amount of government money on first-class flights; using government resources in an attempt to get his wife a Chick-fil-A franchise; sending a staffer to hunt for a used mattress from the Trump International Hotel; and spending taxpayer money on “security” enhancements, including a $43,000 soundproof phone booth in his office. Prior to joining the EPA, Pruitt had sued the agency fourteen times; as EPA chief, he rolled back the Clean Power Plan, lifted controls on air pollution, stopped efforts to ban neurotoxin-containing pesticides, supported ending US participation in the Paris climate accord, lowered automobile efficiency standards, and packed scientific advisory board panels with cronies.¹⁹ When Pruitt stepped down he was replaced by Andrew Wheeler, himself a former coal-industry lobbyist.

Other Trump cabinet appointees were similarly pushed out after embarrassing violations. Health and Human Services Secretary Tom Price overspent by at least $341,000 on flights, some on chartered planes—twenty of his twenty-one trips examined violated government spending rules.²⁰ The Department of Veterans Affairs chief David Shulkin charged taxpayers for a trip to Europe that included a riverboat cruise for him and his wife. Interior secretary Ryan Zinke chartered a plane to fly home from giving a twelve-minute speech to a Las Vegas hockey team, and while in office struck a land deal in his home state of Montana with the company Halliburton. After the latter incident was referred to the Justice Department, Zinke resigned.²¹ His replacement, David Bernhardt, a former oil and agribusiness lobbyist, apparently never stopped lobbying; he came under investigation for having used his previous position as deputy secretary to block the release of a scientific report showing the harmful effects of certain pesticides. (Bernhardt said that he had not committed ethical violations.)²²

Some cabinet officials lasted. Notable in that category: Treasury Secretary Steve Mnuchin, whose own government-funded travel included a trip that brought him to a prime viewing area for the 2017 solar eclipse. Wilbur Ross, the commerce secretary and billionaire financier, reached an agreement with the Office of Government Ethics to divest from his many businesses, but as the New York Times reported, he “retained investments in a shipping firm he once controlled that has significant business ties to a Russian oligarch subject to American sanctions and President Vladimir V. Putin’s son-in-law, according to newly disclosed documents.”²³ Five days before this story was published, Forbes reported, Ross shorted his stock, meaning that when the price dropped as a result of the story, he had positioned himself to make money. Ross also continued to secretly hold stakes in a Cypriot bank and companies co-owned by the Chinese government.

Instead of divesting, Ross was availing himself of a template used by the Trump family. He put some of his holdings into a trust for his family members, which meant, as commerce secretary, he “continued to deal with China, Russia and others while evidently knowing that his family’s interests were tied to those countries,” Dan Alexander wrote in Forbes. The ethics laws of the United States lacked the tools to track these many holdings; disclosure forms don’t require the listing of business partners, investors, or members of a limited liability company. “Maintaining all those conflicts of interest appears to be entirely legal,” Forbes wrote, “a reflection of ethics laws woefully unprepared for governing tycoons like Donald Trump and Wilbur Ross.”²⁴

In her book, Thieves of State, Sarah Chayes, who had lived and worked in Afghanistan as both an NPR journalist and head of a nongovernmental organization, examined Afghani corruption as a template for corruption around the world.²⁵ Officials subordinate to then–Afghan president Hamid Karzai maintained their own power by “paying off Karzai or his apparatus. What the top of the system provided in return was, first, unfettered permission to extract resources for personal gain, and second, protection from repercussions.”

In an interview years after her book was published, for the Trump, Inc. podcast, Chayes added: “What’s going on currently in the United States as far as I’m concerned is an American version of a phenomenon that I’ve been seeing all over the world. Which is to say networks made up of top government officials, captains of industry, and out and out criminals, woven together, are hijacking government and economic function and bending it to serve the purposes of their personal enrichment and not the public interest.” This network, Chayes said, is a key feature of corruption: “an operating system” in which “governing is kind of at best a front operation and at worst is one of the ways in which members of the network achieve their objective of enriching themselves.”²⁶

In the past, Chayes said, the US government had made an effort to set itself apart. Under Trump, with little compunction, it was becoming more and more like governments of the countries she had studied, the ones that had devolved into kleptocracy.