Trump Lease of Old Post Office - A pending breach?
Started by Guest Vern Edwards · Dec 12, 2016 · 58 replies
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Guest Vern Edwards
Dec 12, 2016 · 9y ago
In an article in the November 28 online edition of Government Executive, Steve Schooner and Dan Gordon argued that President-elect Trump must either divest himself of his participation in the GSA lease of the Old Post Office in Washington D.C. before his inauguration or else be in breach of the lease. They base their conclusion on a clause in the lease, which they quoted as follows:
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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...
http://www.govexec.com/excellence/promising-practices/2016/11/gsas-trump-hotel-lease-debacle/133424/
According to Bernard Condon, a reporter for the Associated Press, David Drabkin, former GSA Chief Acquisition Officer, disagreed.
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David Drabkin, once the GSA's senior procurement officer, said he thinks the clause doesn't apply to Trump because it only prohibits adding elected officials to the lease after it was signed, not banning original parties to it who subsequently get elected to office.
What do you think? How do you interpret the clause? Do you agree with Schooner and Gordon or with Drabkin?
According to the Court of Appeals for the Federal Circuit, the principle rule of interpretation of Government contracts is:
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When interpreting a contract, “ ‘the language of [the] contract must be given that meaning that would be derived from the contract by a reasonably intelligent person acquainted with the contemporaneous circumstances.’ ”
TEG-Paradigm Environmental, Inc. v. U.S., 485 F.3d 1329 (Sept. 29, 2006). In their article, Schooner and Gordon described the clause as "clear, specific, and plain." In an article in POLITICO Drabkin was quoted as saying that the clause "is inartfully written."
tic
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joel hoffman
Dec 12, 2016 · 9y ago
Drabkin has been out there on the edge for many years. However ever I agree with his position (but don't know his reason) here. The future tense verb phrase is "shall be admitted to". President elect Trump is already, in effect, the leaseholder.
Edit in response to edited OP: That language is very clear and unambiguous.
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TAP
Dec 12, 2016 · 9y ago
I agree with Drabkin for the reasons stated. Clearly this phrase is written as future tense. May not be what was intended, but that's how it is written.
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joel hoffman
Dec 12, 2016 · 9y ago
And "admit" means "to allow", "to permit", "...entrance to", etc. See, for instance, the definition at Dictionary.com.
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Guest Vern Edwards
Dec 12, 2016 · 9y ago
Okay, Joel. Let's postpone argument and evidence and let others state their opinions.
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apsofacto
Dec 12, 2016 · 9y ago
Seems foolish to argue against prof. Schooner, but (hypothetically) is it legal to include this clause in a contract?
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No party to this lease shall pursue any elected office of the Government of the United States.
If the clause means what Prof. Schooner says, is it enforceable? Could that rapidly become bribing someone to not run for office?
Feels like a bigger problem for GSA than Trump, and I hope they can resolve it *prior* to the swearing-in ceremony, when they are still two different parties!
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Guest Vern Edwards
Dec 12, 2016 · 9y ago
apsofacto:
So do you agree with Schooner and Gordon, with Drabkin, or with none of them?
Everybody: Please just say whether you agree with Schooner-Gordan, with Drabkin, or interpret it entirely differently, in which case please tell us what you think it says.
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Todd Davis
Dec 12, 2016 · 9y ago
Drabkin.
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Retreadfed
Dec 12, 2016 · 9y ago
Based on the language quoted, Drabkin. Also, is Trump a party or beneficiary of the lease? If not, the clause does not apply.
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ktr1999
Dec 12, 2016 · 9y ago
I agree with Schooner and Gordon.
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apsofacto
Dec 12, 2016 · 9y ago
I'm on team Drabkin for now.
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Guest Vern Edwards
Dec 12, 2016 · 9y ago
Retreadfed said:
Based on the language quoted, Drabkin. Also, is Trump a party or beneficiary of the lease? If not, the clause does not apply.
The lease is held by Trump Old Post Office LLC. I presume that Trump is the owner or one of the owners of the LLC.
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Guest Vern Edwards
Dec 12, 2016 · 9y ago
FYI, the lease clause is modeled on the old FAR "Officials Not To Benefit" clause, 48 CFR 52.203-1, which was removed from FAR in 1995. That clause implemented the prohibition in 18 USC 431, which reads in pertinent part as follows:
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Whoever, being a Member of or Delegate to Congress, or a Resident Commissioner, either before or after he has qualified, directly or indirectly, himself, or by any other person in trust for him, or for his use or benefit, or on his account, undertakes, executes, holds, or enjoys, in whole or in part, any contract or agreement, made or entered into in behalf of the United States or any agency thereof, by any officer or person authorized to make contracts on its behalf, shall be fined under this title.
Note that the statute does not apply to the president or vice president.
FAR 52.203-1, Officials Not To Benefit (APR 1984), had said:
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No member of or delegate to Congress, or resident commissioner, shall be admitted to any share or part of this contract, or to any benefit arising from it. However, this clause does not apply to this contract to the extent that this contract is made with a corporation for the corporation's general benefit.
That clause could be traced almost verbatim to a statute enacted in 1808. The GSA lease clause extends the contractual coverage to the president and the vice president. I found no case law interpreting either that clause or the GSA lease clause.
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joel hoffman
Dec 12, 2016 · 9y ago
Vern Edwards said:
FYI, the lease clause is modeled on the old FAR "Officials Not To Benefit" clause, 48 CFR 52.203-1, which was removed from FAR in 1995. That clause implemented the prohibition in 18 USC 431, which reads in pertinent part as follows:
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Whoever, being a Member of or Delegate to Congress, or a Resident Commissioner, either before or after he has qualified, directly or indirectly, himself, or by any other person in trust for him, or for his use or benefit, or on his account, undertakes, executes, holds, or enjoys, in whole or in part, any contract or agreement, made or entered into in behalf of the United States or any agency thereof, by any officer or person authorized to make contracts on its behalf, shall be fined under this title.
That clause could be traced almost verbatim to a statute enacted in 1808. The GSA lease clause extends the contractual coverage to the president and the vice president. I found no case law interpreting either that clause or the GSA lease clause.
If the intent is to apply to an existing leaseholder who is later elected to public office, the GSA clause does not say that and I would agree with Drabkin that it is"inartfully written".
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REA'n Maker
Dec 12, 2016 · 9y ago
Drabkin.
Has anyone here read the actual lease agreement? How are the "benefits" (assumedly "profit sharing") delineated? Is it in the form of typical fee determinations based on achievements towards targets?
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Guest Vern Edwards
Dec 13, 2016 · 9y ago
The text of the lease is here: https://www.gsa.gov/portal/content/305477
It is very long and very unwieldy.
It seems to me that you would have to be an owner or employee of Trump Old Post Office LLC, the tenant, in order to have any of the tenant's share of, part of, or benefit from the lease.
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C Culham
Dec 13, 2016 · 9y ago
Different....
Share or part...the LLC carries the lease and is liable for the adherence to the lease. Trump as an individual doesn't share or have a part of the lease.
Benefit...aka profit is attributed to the individuals of the LLC.
Trump, assumed as a member of the LLC, has no issue until a profit is realized.
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Guest Vern Edwards
Dec 13, 2016 · 9y ago
Carl,
Why do you think that profit is the only benefit to be derived from the lease? Isn't cost recovery a benefit? Moreover, the clause does not limit "benefit" to monetary benefits.
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Guest Vern Edwards
Dec 13, 2016 · 9y ago
On 12/12/2016 at 5:42 AM, joel hoffman said:
And "admit" means "to allow", "to permit", "...entrance to", etc. See, for instance, the definition at Dictionary.com.
Joel:
If admitted means permitted or allowed, doesn't that work against Drabkin's interpretation?
Drabkin seems to have interpreted the word admitted as meaning allowed to enter, as in allowed to enter the deal for shares, parts, and benefit. He seems to have reasoned Trump entered the deal before he became an elected official and will not need to enter into the deal again after he becomes an elected official. But if admitted means simply permitted or allowed, as in permitted or allowed to have a share, part, or benefit, those actions will occur continuously after he is inaugurated so long as he has not divested himself, and so he would be in continuous violation of the lease.
I find your choice of definitions to be peculiar, since the first definition of admit at Dictionary.com is "to allow to enter; grant or afford entrance to."
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Sandi78
Dec 13, 2016 · 9y ago
I agree with Schooner and Gordon.
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jwomack
Dec 13, 2016 · 9y ago
Drabkin, but slightly different.
Drabkin’s rationale - “…it only prohibits adding elected officials to the lease after it was signed…”
I think the prohibition is more restrictive and also includes an individual’s status at the time the lease is signed.
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Todd Davis
Dec 13, 2016 · 9y ago
I doubt that it has any bearing on the interpretation of the contract in question, but FAR Subpart 3.6 restricts a contracting officer from knowingly (emphasis added) awarding a contract to a "Government employee or to a business concern or other organization owned or substantially owned or controlled by one or more Government employees." The policy even provides for an exception to the policy. The policy does not address what to do if after award, it is discovered (whether due to the contracting officer not knowing of the preexisting ownership or because ownership was acquired subsequent to award).
I'm not sure what statute, if any, or other source this restriction flows from. If there is one, maybe it also applies to leases of real property.
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Guest Vern Edwards
Dec 13, 2016 · 9y ago
Todd:
FAR Subpart 3.6 has absolutely no bearing on the matter at hand in this thread.
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C Culham
Dec 13, 2016 · 9y ago
Vern Edwards said:
Carl,
Why do you think that profit is the only benefit to be derived from the lease? Isn't cost recovery a benefit? Moreover, the clause does not limit "benefit" to monetary benefits.
Vern - Benefit via a contract is profit, privilege, and right acquired through the contract. The LLC acquired the profit, privilege, and right not Mr. Trump. Cost recovery as such is a right is to the LLC not Mr. Trump. Mr. Trump is only required to report the profits, if any, via his personal taxes per tax code. From my view the LLC is not only a shelter to liabilities but to the profits, privileges, and rights too.
Following the logic of Schooner and Gordon as the article tries to lay out Mr. Trump is both "landlord and tenant". Mr. Trump is not, the Trump Old Post Office LLC is.
Further if in fact the contract is in breach the LLC would be terminated for default not Mr. Trump. In the end I believe the article personalizes a matter rather than keeping it a purely business matter. It should be about the LLC and this is not made entirely clear by the authors with many references to "Mr. Trump" as opposed to the LLC. If the LLC is not operating properly then go through the process for T4D, instead Schooner and Gordon want to jump immediately to breach (default) and noting the confusion caused by the poor wording of the clause on which the breach would be based such a jump seems bad Federal Acquisition Regulation process to me.
Pandora's box all the way around!
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Guest Vern Edwards
Dec 13, 2016 · 9y ago
C Culham said:
Benefit via a contract is profit, privilege, and right acquired through the contract.
Carl:
Do you have an authoritative source for that assertion, or is that your personal definition?
If Mr. Trump is the owner of the LLC or one of the owners, won't he benefit from the lease? If so, wouldn't that put the issue in play? It wouldn't necessarily make either Schooner-Gordon or Drabkin right.
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joel hoffman
Dec 13, 2016 · 9y ago
Vern Edwards said:
Joel:
If admitted means permitted or allowed, doesn't that work against Drabkin's interpretation?
Drabkin seems to have interpreted the word admitted as meaning allowed to enter, as in allowed to enter the deal for shares, parts, and benefit. He seems to have reasoned Trump entered the deal before he became an elected official and will not need to enter into the deal again after he becomes an elected official. But if admitted means simply permitted or allowed, as in permitted or allowed to have a share, part, or benefit, those actions will occur continuously after he is inaugurated so long as he has not divested himself, and so he would be in continuous violation of the lease.
I find your choice of definitions to be peculiar, since the first definition of admit at Dictionary.com is "to allow to enter; grant or afford entrance to."
Vern, I think that the lease says that no elected official shall be allowed to enter any share or part of this Lease, or be allowed to enter into any benefit that may arise therefrom...
Mr.Trump already entered into a share or part of the lease and any benefits that might arise from the lease. He was not an official, elected or otherwise at the time that "he" was admitted to (was allowed to enter into) any share or part of the lease or to any benefit that may arise therefrom.
I think that the benefits would arise from the original lease transaction and obviously would occur during the lease. I don't think that one is re-admitted to the right to any share of benefits that may arise from an on-going lease.
He wouldn't be allowed to enter into any renewal option or new lease with new benefits therefrom.
So, I don't think that this specific clause would be cause for a breach of the current lease or of any benefits that may arise therefrom. There might be other reasons why he should divest himself of his participation in the GSA lease or to decline to receive profits while he is an elected official.
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C Culham
Dec 13, 2016 · 9y ago
Vern Edwards said:
Carl:
Do you have an authoritative source for that assertion, or is that your personal definition?
If Mr. Trump is the owner of the LLC or one of the owners, won't he benefit from the lease? If so, wouldn't that put the issue in play? It wouldn't necessarily make either Schooner-Gordon or Drabkin right.
Vern - The legal definition of "benefit" as it relates to contract law - Blacks and Legal Dictionary at law.com.
As I have tried to relate, No to your second question. Mr. Trump does not "benefit" the LLC does. Mr. Trump will gain potential funds from being a shareholder in the LLC just as I would being a shareholder for any corporation. The tax code just makes me, and Mr. Trump, have to handle those funds in a different manner for tax purposes depending on whether it is an LLC or a corporation.
Yes the issue is in play if not merely for "appearance" but personally I can not defend a proposition of breach based on the poorly written clause and am surprised that others would use it as the lynch pin to terminating the lease. From my view cure and show cause like that used in FAR related procurements could easily solve the matter for those that have suggested a concern. I do acknowledge the lease terms and conditions would dictate the exact process in lieu of a jump to termination outright.
My conclusion therefore is like yours Schooner-Gordon or Drabkin all have their views and the right answer if I have to go there is that due process of the lease should be followed and the issue is not egregious enough to suggest that breach/default is the automatic end all.
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Guest Vern Edwards
Dec 13, 2016 · 9y ago
C Culham said:
My conclusion therefore is like yours Schooner-Gordon or Drabkin all have their views and the right answer if I have to go there is that due process of the FAR should be followed and the issue is not egregious enough to suggest that breach/default is the automatic end all.
Emphasis added.
The FAR does not apply to the Trump deal. The Trump deal is not an acquisition. It is the sale of a lease. (The FAR also does not apply to acquisitions of leasehold interests by GSA.) I don't know what if any regulations apply to the Trump transaction. I found nothing in Title 41 of the CFR, Public Contracts and Property Management.
Just for the record, I haven't reached any conclusion on the Schooner-Gordon v. Drabkin disagreement. That's why I'm asking for the views of other Wifconers.
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C Culham
Dec 13, 2016 · 9y ago
Vern - You are correct regarding FAR. I got caught up in discussion as FAR related like most dicussions in WIFCON. I will edit my post.
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Retreadfed
Dec 13, 2016 · 9y ago
I have done a little research on Trump Old Post Office, LLC and from what I can find, it is at least partially owned by Trump International Hotels Management, LLC. Also there is another group called TIHM, LLC involved some way. Thus, it is not clear who are the members of the Post Office LLC.
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jwomack
Dec 13, 2016 · 9y ago
joel hoffman said:
He wouldn't be allowed to enter into any renewal option or new lease with new benefits therefrom.
Disagree, assuming a renewal option was part of the original agreement.
joel hoffman said:
He wouldn't be allowed to enter into any renewal option or new lease with new benefits therefrom.
Agree.
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Guest Vern Edwards
Dec 13, 2016 · 9y ago
Retread:
I'm pretty sure that Trump will benefit from the lease, whatever the business structure.
joel and jwomack:
Your comments about renewal options are off the mark. The Trump Old Post Office deal is not a run-of-the-mill, standard government contract. I have provided a link to the lease document, above. Use it and see page 32, "Term of Lease." The term is 60 years. I doubt that Trump will (a) be president by the time of any renewal and (b) alive.
I opened this thread with a really simple question, guys.
Vern
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Guest Vern Edwards
Dec 14, 2016 · 9y ago
It appears that GSA's Deputy Public Building Service Commissioner agrees with Schooner-Gordon and rejects Drabkin's interpretation.
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napolik
Dec 14, 2016 · 9y ago
A GSA spokeswoman issued a statement Wednesday contradicting the lawmakers' characterization of the discussions:
GSA does not have a position that the lease provision requires the president-elect to divest of his financial interests. We can make no definitive statement at this time about what would constitute a breach of the agreement, and to do so now would be premature. In fact, no determination regarding the Old Post Office can be completed until the full circumstances surrounding the president-elect’s business arrangements have been finalized and he has assumed office. GSA is committed to responsibly administering all of the leases to which it is a party.
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Guest Vern Edwards
Dec 14, 2016 · 9y ago
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joel hoffman
Dec 15, 2016 · 9y ago
On 12/13/2016 at 3:45 PM, Vern Edwards said:
...I opened this thread with a really simple question, guys.
Vern
Vern, Actually, you opened the thread with three separate questions.
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What do you think? How do you interpret the clause? Do you agree with Schooner and Gordon or with Drabkin?
I responded to the three questions.
Keep in mid that the post and cited article indicated that Schooner's and Gordon's conclusion is based upon the wording of a single contract clause (37). The other cited article indicated that Drabkin's position was that Clause 37 would not be the reason to cancel the lease. Drabkin said "Whether the language of the provision was inartfully drafted is another matter.".
I said:
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Drabkin has been out there on the edge for many years. However ever I agree with his position (but don't know his reason) here. The future tense verb phrase is "shall be admitted to". President elect Trump is already, in effect, the leaseholder.
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That language is very clear and unambiguous.
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And "admit" means "to allow", "to permit", "...entrance to", etc. See, for instance, the definition at Dictionary.com
In response to a comment by Vern concerning benefits continuously occuring during the lease, during Mr.Trump's term of office, I said:
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Vern, I think that the lease says that no elected official shall be allowed to enter any share or part of this Lease, or be allowed to enter into any benefit that may arise therefrom...
Mr.Trump already entered into a share or part of the lease and any benefits that might arise from the lease. He was not an official, elected or otherwise at the time that "he" was admitted to (was allowed to enter into) any share or part of the lease or to any benefit that may arise therefrom.
I think that the benefits would arise from the original lease transaction and obviously would occur during the lease. I don't think that one is re-admitted to the right to any share of benefits that may arise from an on-going lease.
I was attempting to say that Trump wasn't entering any "new" benefit because the benefits of holding the lease were already "entered" before he takes office. The benefits would directly result from the lease already entered into.
Not being familiar with the lease, I did state that any extension or renewal of the lease would fall under the clause 37 prohibitions because there would be a new "entering". Vern corrected me - The lease is for a 60 year period, no options for extensions and Trump wouldn't be involved in a renewal after 60 years.
I also said:
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So, I don't think that this specific clause would be cause for a breach of the current lease or of any benefits that may arise therefrom. There might be other reasons why he should divest himself of his participation in the GSA lease or to decline to receive profits while he is an elected official.
In rereading the originally cited article at http://bigstory.ap.org/article/0a939964cc7d4c6abdec6c2f6b44cbe4/lawyers-trump-has-sell-dc-hotel-taking-office , various sources cite other possible problems., outside of the questions and background that Vern described in his OP.
My answers to the original questions are based upon the information initially provided.
I don't know where this thread was veering off topic at the point that Bob interjected.
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Guest Vern Edwards
Dec 15, 2016 · 9y ago
Thanks for the extended review, Joel.
So... Where do you stand now? Do you agree with Schooner-Gordon or Drabkin?
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joel hoffman
Dec 15, 2016 · 9y ago
Vern Edwards said:
Thanks for the extended review, Joel.
So... Where do you stand now? Do you agree with Schooner-Gordon or Drabkin?
To repeat my response to one of your original questions, I agree with Drabkin, that clause 37 wouldn't result in a breach, and "Whether the language of the provision was inartfully drafted is another matter". I also said that I agree that there may be other reasons why Mr Trump may have to divest any control or economic interest in the lease arrangement.
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Todd Davis
Dec 15, 2016 · 9y ago
Someone else posted this in a different thread. Was part of the press release from GSA yesterday and I didn't see it mentioned in this thread. Not sure if this exception applies to the entity in question.
https://www.gsa.gov/portal/content/153578
The full language of section 37.19 is below:
No member or delegate to Congress, or elected official of the Government of the United States or the Government of the District of Columbia, shall be admitted to any share or part of this Lease, or to any benefit that may arise therefrom; provided, however, that this provision shall not be construed as extending to any Person who may be a shareholder or other beneficial owner of any publicly held corporation or other entity, if this Lease is for the general benefit of such corporation or other entity (emphasis added).
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Guest Vern Edwards
Dec 15, 2016 · 9y ago
Note the phrase "publicly held." Does it apply only to corporations or does it also apply to other entities? The company that holds the lease is a limited liability company.
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Todd Davis
Dec 15, 2016 · 9y ago
Corporations are often, but not always publicly held (publicly traded). I haven't researched the matter much, but I believe other types of business entities (e.g. LLC, LLP, sole proprietorship, etc) are not generally publicly held/traded, but may sometimes be made up of multiple owners (e.g. partnerships).
My interpretation of the provision is that it is referring to a shareholder or beneficial owner of 1) a publicly held corporation or 2) any other entity (not necessarily one that is publicly held). If the author meant for the term to apply to other publicly held entities (assuming such things exist), it would have been more clear to state "publicly held corporation or entity." Instead the words "or other entity" were used. So long as the lease is for the general benefit of the publicly held corporation or general benefit of the other entity, I think the exception may apply. In other words, maybe the restriction is concerned with a single person (shareholder/beneficial owner) solely benefiting, rather than they entity (whatever kind it may be) benefiting generally. If the other entity was a sole proprietorship, then I don't think the "general benefit" exception could apply.
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C Culham
Dec 16, 2016 · 9y ago
Vern Edwards said:
Note the phrase "publicly held." Does it apply only to corporations or does it also apply to other entities? The company that holds the lease is a limited liability company.
"or" - inclusive or exclusive? A court would have to decide in the end and good luck with that! The matter could also be decided when Mr. Trump and his organization figures out what they plan to do. In the end the clause is, as I have already noted, poorly written and to depend solely on it as a definitive conclusion that there is breach as a result of Mr. Trump having any connection to the LLC is careless thinking. With the full language of the clause noted I continue to disagree with Schooner, Gordon, Drabkin. An impossible task to figure out and for some reason "Snipe hunt" comes to mind.
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Guest Vern Edwards
Dec 16, 2016 · 9y ago
Some of you might be interested in learning that the language of the clause dates to a statute enacted in 1808, 2 Stat 484, Ch. XLVIII, Sec. 3:
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That in every such contract [a contract with the United States] or agreement to be made or entered into, or accepted as aforesaid, there shall be inserted an express condition that no member of Congress shall be admitted to any share or part of such contract or agreement, or to any benefit to arise therefrom.
That law was signed by Thomas Jefferson. The law ultimately was implemented by FAR 52.203-1, using almost the exact verbiage. The clause was removed from FAR in 1994.
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C Culham
Dec 16, 2016 · 9y ago
Vern Edwards said:
Some of you might be interested in learning that the language of the clause dates to a statute enacted in 1808, 2 Stat 484, Ch. XLVIII, Sec. 3:
That law was signed by Thomas Jefferson. The law ultimately was implemented by FAR 52.203-1, using almost the exact verbiage. The clause was removed from FAR in 1994.
Actually removed from the FAR in 1995 - https://www.gpo.gov/fdsys/pkg/FR-1995-07-21/pdf/95-17935.pdf - reasoning as stated in this reference because statute changed.
Begs the question as to why the dang clause is in the lease in the first place?
I will admit my research is left looking at what is dribbled out as each new comment is posted but my read of the above reference appears to indicate any violation is not a contract matter ( and I do mean lease in this context) but a possible criminal one. Should not this matter be of a concern and determination of the Attorney General and not that of contract (lease) professionals?
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Retreadfed
Dec 16, 2016 · 9y ago
Carl, why do you think there is a potential criminal violation here? It is not a crime to violate a law that is not a criminal statute.
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C Culham
Dec 16, 2016 · 9y ago
Retreadfed said:
Carl, why do you think there is a potential criminal violation here? It is not a crime to violate a law that is not a criminal statute.
Retread - Admittedly no research beyond this statement in the Fed Reg that I used as reference in my previous post.....
'The criminal provisions found at 18 U.S.C. 431 and 432 remain in effect."
Now that I read it especially 18 USC 432 it makes me wonder why someone is not calling out the leasing officer to be fined if in fact the clause applies even though Mr. Trump is still just an elect and not the President yet?
I am still left in the fog that Schooner, Gordon, Drabkin, and this thread for that matter, is trying to reason something that is beyond reason!!!!!!
Again the clause is sloppy and worthless and I have now come to the conclusion that it does not belong in the lease as there is no basis in statute to have it in the lease.
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C Culham
Dec 16, 2016 · 9y ago
Sorry meant to add this - 18 USC 432
"Whoever, being an officer or employee of the United States, on behalf of the United States or any agency thereof, directly or indirectly makes or enters into any contract, bargain, or agreement, with any Member of or Delegate to Congress, or any Resident Commissioner, either before or after he has qualified, shall be fined under this title."
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Guest Vern Edwards
Dec 16, 2016 · 9y ago
Carl:
You're right about the removal of the clause--1995. Thanks. Congress deleted the statutory requirement to include the clause in contracts in 1994, as part of the Federal Acquisition Streamlining Act.
The clause is in the lease to implement 18 USC 431-433 and 41 USC 6306, but the statutes do not include elected officials other than members of Congress. GSA added the prohibition against admitting other elected officials, i.e., the president, the vice president, and D.C. officials. I do not know why, but they were not the first to do so. Other versions of the same clause that were used in the 19th Century included such elected officials.
Violation of 18 USC 431 and 432 are criminal acts for which a fine must be assessed. That criminal statutes date to 1808.
I could find no instance of enforcement of the statute against a member of Congress or anyone else.
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C Culham
Dec 16, 2016 · 9y ago
Thank you Vern - A very interesting discussion especially considering the fact that I was watching a national news show last night where a pundit affirmatively stated that the Mr. Trump had in fact breached the lease. More experts!! I continue to wonder on what basis exactly and if the basis is the sole clause discussed in this thread then why hasn't the lease been terminated? Maybe it will be concluding that it will be a long shot to do so under the specific clause discussed in this thread, a very long shot!
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Guest Vern Edwards
Dec 17, 2016 · 9y ago
In my opinion, the key to the clause is the phrase "shall be admitted" and the key word in the phrase is "admitted." Everything depends on what it means to admit an official to a share, part, or benefit of the lease.
In effect, the clause says: The tenant shall not admit any elected offcial to any share, part, or benefit of the lease.
To commit that act of admittance would be to perform a prohibited act, which would be a breach of contract. So the question is: What kind of behavior by the tenant would constitute an instance of that act?
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C Culham
Dec 17, 2016 · 9y ago
Well I can't help myself......means if Mr. Trump doesn't go into the building all is good?
Seriously, your point does give pause for thought, I did not pull that out as the key. Quick thought is that if the LLC is made up of other entities that are not sole proprietorships (inclusive of Mr. Trump) how far do you go to conclude that an elected official is admitted to share, part, benefit? From posts and other readings it seems that the LLC is made up of other entities rather than individuals. Leads me back to my initial thoughts, if and when does a shareholder to an LLC or multiple levels actually receive share, part, benefit and I would add now does it matter what that value of share, part, benefit is it that they ultimately receive? If there are multiple levels of entities that the benefit flows through does it become de minimis when the elected official finally realizes the share, part, benefit?
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Matthew Fleharty
May 2, 2017 · 9y ago
For anyone still interested in this topic, in March, the GSA Contracting Officer concluded that the hotel lease is valid. As one would expect, there is still disagreement amongst contracting professionals regarding that determination.
The article linked below contains embedded links to the GSA Contracting Officer's letter, NPR's previous coverage, and an interview with Prof. Schooner regarding his thoughts on the lease.
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Gordon Shumway
May 3, 2017 · 9y ago
Make contracting great again!
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apsofacto
May 3, 2017 · 9y ago
Still on team Drabkin.
Has anyone switched sides since the thread began?
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Guest PepeTheFrog
May 3, 2017 · 9y ago
"worst real estate deal, ever...maybe in the history of real estate deals"
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joel hoffman
May 3, 2017 · 9y ago
On May 3, 2017 at 8:58 AM, PepeTheFrog said:
"worst real estate deal, ever...maybe in the history of real estate deals"
I doubt that. I wouldn't mind getting paid $250k a month rent ($3,000,000 per year) since the lease was signed in late 2013 for an old, money losing (read: Treasury draining) building that the tenant invested over $200 million to renovate and will likely keep renovating over the course of the 60 year lease. The lease was signed approximately three years prior to the election and three years prior to the opening.
Gimmee a break, already!
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REA'n Maker
May 16, 2017 · 9y ago
I'm more concerned about the implications of not agreeing with Drabkin: those with business ties to the government, however obtuse, can never, ever, hope to run for public office.
Now; who might be the primary beneficiaries of a paradigm whereby only those who have prepared their whole lives for the job of POTUS are eligible?...
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Matthew Fleharty
May 16, 2017 · 9y ago
Seems team Schooner has some more supporters:
'Pay Trump Bribes Here' Projected on Trump Hotel in Washington
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apsofacto
May 16, 2017 · 9y ago
Matthew Fleharty said:
Seems team Schooner has some more supporters:
He deserves better supporters that that!
