Trump Hotel lost money, despite lobbyists spending, documents show

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WASHINGTON – Despite all the political events paid for by Republicans and big bar bills from lobbyists, foreign dignitaries and other supporters of President Donald J. Trump, the Trump International Hotel in Washington lost around $ 74 million between 2016 and 2020, according to data released on Friday by House investigators.

The tally came from Mr. Trump’s own listeners, showing losses that typically increased during his tenure in the White House, even as Mr. Trump’s annual financial disclosure reports showed income of over $ 40 million. dollars a year, at least until the pandemic hits.

The hotel’s new annual income and loss account – which sits in a federally owned monument known as the Old Post Office Building – was released as House Democrats push the Biden administration to submit additional documents to determine if Mr. Trump broke federal rules. continuing to operate the hotel through his family while serving as president.

“The documents provided by the GSA raise new and troubling questions about former President Trump’s lease,” a letter sent by the House Oversight and Reform Committee to the General Services Administration on Friday said, requesting more information.

Documents released by House investigators estimated that the hotel also generated nearly $ 3.8 million in revenue from foreign government officials during Mr. Trump’s first three years in office, which ‘be it hotel stays, meals or other activities. The president drew foreign dignitaries who often liked to be seen at his hotel, sometimes even meeting with Mr. Trump’s assistants at the resort.

Millions more were spent by the Republican National Committee and various election campaigns and other political groups backing Republican candidates, or supporting Mr. Trump’s re-election efforts, according to reports from the Federal Election Commission. During his presidency, the Trump Hotel has become a showcase for lobbying and special interest maneuvers by Mr. Trump’s allies to gain his attention or support.

Yet the overall message was that the Trump International Hotel, despite all the headlines, is a losing deal, said David J. Sangree, an accountant who runs a company, Hotel & Leisure Advisors, which assesses the performance of the industry. hotelier and who looked at the audited reports at the request of the New York Times.

“You would expect a hotel in Washington, DC to make a profit,” he said.

The Trump family often has different ways of counting income and loss, such as presenting a set of numbers suggesting losses to property tax authorities in an effort to reduce tax bills and giving another to the public that suggests losses. higher yields a good reflection of Mr. Trump’s activity. insight.

New York prosecutors are already investigating whether Mr. Trump is essentially keeping two separate sets of books: one with glowing numbers that banks and insurers have received and another darker data set for tax collectors.

Eric Trump, who has helped run the family business since his father began his presidential campaign, called the hotel’s $ 74 million loss tally between 2016 and 2020 “utterly absurd,” as he understands a common accounting exercise which reduces the real profits of the company. by considering the annual depreciation of the value of the asset.

Revenues collected from foreign government sources, Eric Trump added, would have been much higher if the Trump family had actively worked to solicit this company. Instead, the company tried for most of the time Mr. Trump was in power to discourage it, he said.

The Trump family made annual payments to the Treasury for the Trump Hotel in Washington – totaling $ 355,687 between 2017 and 2019 – in an attempt to return the profits from those sales to officials of foreign governments. Payments from foreign governments have led to accusations in court cases that Mr. Trump violated the Constitution’s so-called emoluments clause, which seeks to prohibit federal officials from receiving payments from foreign governments.

Eric Trump also took issue with a suggestion by the House Oversight Committee that the Trump family received preferential treatment from Deutsche Bank, which funded the renovation of the old post office building before it reopened as a hotel. The committee wondered why the loan terms were changed to interest-only payments in 2018, but Eric Trump said the hotel’s relatively high estimated value allowed the company to defer principal payments. on the loan of $ 170 million for several years.

“They wrote an account that is willfully false,” Eric Trump said in an interview on Friday. “And they know it’s wrong.”

Former President Trump had filed annual public reports, as required by law, providing only gross hotel revenues, not profits. The information released on Friday includes profitability figures calculated in several ways.

Detailed financial reports prepared by Mr. Trump’s auditors, which were also released by the House on Friday, show a total loss of $ 74 million including a depreciation in the value of the hotel of around $ 8 million per year.

But even excluding depreciation losses, the documents still show that year after year, after factoring in taxes, rents, and rents paid to the federal government, the hotel was still losing money. He just lost less by that standard than the one highlighted by House Democrats on Friday.

For example, the August 2018 income statement showed that the losses for the previous year were about $ 5.3 million, after depreciation was removed, compared to the loss of $ 13.5 million. dollars for that year that the House committee had declared.

The losses in 2019, according to this adjusted calculation, would have been $ 9.6 million, compared to the $ 17.8 million cited by House Democrats.

Mr. Sangree said the Trump Hotel Washington’s net income, even after removing amortization and interest on the loan, is relatively low compared to other luxury hotels in major cities.

Financial reports released by House investigators provide once-confidential details of the hotel’s operations, showing that it earned an unusually high share of its income from its restaurant and bar, compared to its rooms in the hotel. ‘hotel. Each category grossed around $ 25 million in 2018.

Typically, room revenues are considerably higher than meals and bar service, Sangree said. But large crowds of lobbyists and friends of Mr. Trump gathered almost every night in the lobby of the Trump Hotel while he was President, and were sometimes even greeted by Mr. Trump himself then. that he was arriving at the hotel to dine at his steakhouse.

Some of Mr. Trump’s allies were such frequent patrons of the hotel bar, such as Rudolph W. Giuliani, the former New York mayor and Mr. Trump’s personal attorney, that they had tables they considered to be. theirs.

Still, the hotel would most likely post much higher profits under a different owner, Mr Sangree said, as it would no longer be difficult to sell to large companies that have stayed on the sidelines due to controversies over Mr. Trump. Hotel management fees have also been unusually high, he said, as a percentage of revenue.

“This hotel should get better,” Sangree said, noting that documents released Friday showed an average daily rate of around $ 500, which should be high enough to generate sizable profits.

The Trump family has moved twice in recent years to sell the lease they have with the federal government to operate a hotel on the site. The offers are still under consideration, after a dozen bids were filed for the property, including several major national hotel brands, said an executive involved in the negotiations.

With the departure of Mr. Trump, the hotel now attracts much less major Republican players to Washington. Her lobby is now often largely empty, as the search for a potential buyer for the lease continues.

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