DoJ: Trump-SoHo Breakup ‘Undermines’ Ethics Group’s Complaint

The Trump Soho hotel is seen in New York, Tuesday, Dec. 6, 2016. The Cavaliers have made other arrangements for players who do not want to stay at a New York hotel branded by President-elect Donald Trump. (AP Photo/Seth Wenig)
Seth Wenig/AP

The Justice Department said Friday that the Trump Organization’s deal to walk away from its Trump SoHo contract “undermines” a lawsuit’s claim that President Donald Trump is violating the Constitution’s Emoluments Clause.

The suit claims in part that Trump’s continued ownership of his business as President illegally disadvantages his competitors in New York City and Washington, D.C.

“On November 22, 2017, the owner of the Hotel announced an agreement to buy out the remainder of its management and license agreement with the Trump Organization, with the transition expected to take place by year-end,” Justice Department lawyers wrote to Judge George B. Daniels of the Southern District of New York.

They added: “This development undermines the hospitality Plaintiffs’ reliance on alleged competition with the Trump SoHo to demonstrate standing and is further reason that this Court should dismiss the Second Amended Complaint.”

The complaint against Trump was first filed in January by Citizens for Responsibility and Ethics in Washington, a watchdog group, and amended in April and again in May to include several hotels and restaurants and a Washington, D.C. event planner. It alleges that Trump is violating the Emoluments Clause by maintaining his ownership of the Trump Organization while serving as President.

As with many of the Trump Organization’s ventures, Trump does not own the hotel. Rather, the Trump Organization has a management and licensing deal with the property’s owners.

Recently, the development was the subject of a joint investigation from ProPublica, WNYC and the New York Times detailing what had been a potential criminal case against Ivanka Trump and Donald Trump Jr. for misleading prospective buyers of units in the building, which operated as a “condo-hotel,” as zoning laws prevented residents from using the building as a full-time apartment.

That case drew additional scrutiny due to one of Donald Trump’s personal attorneys’, Marc Kasowitz, fundraising for Manhattan District Attorney Cyrus Vance, who dropped fraud case against the Trumps.

Read the Justice Department’s filing below: