Page 96 - Forbes - USA (February 2018)

TRUMP’S TENANTS

which rents retail space from the presi- prevent the possibility of outside influence, Trump’s presidency,” his lawyer said in that
dent in New York City, advocated on health so that no one has to wonder, after the fact, January press conference. Apparently, the
care reform. Nike, which pays an estimated whether it happened. Yet one of the coun- Trump team defined “foreign deals” strict-
$13 million in annual rent to Trump, spoke try’s primary conflict-of-interest laws doesn’t ly as projects not on U.S. soil, because one
up on the Trans-Pacific Partnership. Star- apply to the president. By holding on to his year later, with no fanfare, the signs in the
bucks, with locations in three Trump build- assets, Trump has chosen to test whether the windows of a couple Trump properties re-
ings, weighed in on immigration. Microsoft Emoluments Clause follows suit (he got one vealed new tenants: yoga retailer Lululemon
on net neutrality. Columbia University on case dismissed in January; two others are ac- and sandwich shop Pret A Manger, based in
the federal budget. There are even three law tive). So the president remains in business Canada and Great Britain, respectively.
firms that are tenants and have lobbying di- with the world’s two most populous coun- It could soon get more complicated. Just
visions that push various client interests— tries. Even if he tries to avoid a bias, there’s a around the corner from Trump Tower sits
while the firms pay the president a com- clear feeling in foreign capitals that currying Niketown, which, after opposing Trump on
bined $4.1 million each year for rent. favor with his business can’t hurt. It’s a glob- the Trans-Pacific Partnership and NFL pro-
The constitutional issues surrounding al perception problem, at best. “He does not tests, announced it was leaving the building
a landlord-in-chief transcend the foreign forget his friends,” said Emin Agalarov, who this spring, even though it still had years left
Emoluments Clause. Three months after helped broker the infamous Russia cam- on its lease. The roughly 65,000-square-foot
Trump became president, the U.S. Postal paign meeting in Trump Tower, according space should command about $13 million
Service, part of the executive branch, start- to Donald Trump Jr. When President Trump in rent per year, and Donald Trump owns it
ed a new lease in a Brooklyn housing devel- announced a travel ban from seven Mus- debt-free. Whoever steps in has the chance
opment where Trump owns a 4% stake, ac- lim-majority countries, it was hard to miss to make annual payments to the president,
cording to his financial-disclosure report. that the ban excluded Saudi Arabia, Egypt, at whatever price they want, and the public
While he’s in process of selling the stake— Azerbaijan and the United Arab Emirates— will have no foreseeable way to know how
his lawyer Garten says that Trump’s business all places where he had previously pursued that compares with market rates.
has no day-to-day control over properties business deals. In May the prime minister The tragedy of this $175 million mess is
where it holds minority investments—the of Georgia made a visit to the White House, that it was completely avoidable. Right after
president and his partners continue to col- where, according to two of Trump’s former Trump was elected, most assumed the sep-
lect an estimated $25,000 in annual rent business partners, the president asked about tuagenarian would divest his assets and
from the federal government, whose found- his old project in the former Soviet republic. engage in the biggest job in the world with
ing charter, the Constitution, appears to In the U.S., Trump’s foreign tenants, even clean hands. Since his company basically
prohibit the president from getting any gov- ones without official government ties, can consists of assets and management deals, he
ernment compensation except for his salary. pose diplomatic complications. Gucci rents could have set in motion a liquidation pro-
a Fifth Avenue retail space at Trump Tower cess. His iconic towers would still carry his
hortly before President Trump’s in- for an estimated $21 million a year, pay- name. And when he left office, he could
auguration, one of his lawyers, Sheri ing the Trump Organization more than any surely take that cash hoard to again buy
SDillon, stood inside Trump Tower other tenant in the president’s portfolio. That properties or leverage his higher profile to
with the soon-to-be commander-in-chief creates a potential headache with the Ital- yet more and better licensing deals. Short-
and revealed his plans to maintain his busi- ian government, which is reportedly investi- ly after the election, he tweeted: “Legal doc-
ness interests while insulating his presiden- gating whether Gucci dodged $1.5 billion in uments are being crafted which take me
cy from foreign influence. “President-elect taxes. The company said it is working with completely out of business operations. The
Trump has decided, and we are announc- authorities and “is confident” about its oper- Presidency is a far more important task!”
ing today,” the lawyer said, “that he is going ations. French insurance giant AXA pays an By “completely out,” the president meant
to voluntarily donate all profits from foreign estimated $41 million to rent space in a New letting his sons run it, and this creature of
government payments made to his hotels to York skyscraper in which Trump holds a habit keeps his full ownership, along with
the United States Treasury. This way, it is the 30% interest. According to a prospectus filed the scores of payments that come with it.
American people who will profit.” in November, the French firm may have to Among them: Rupert Murdoch’s media
Left unsaid: The Trump Organization disclose business with Iranian entities, which empire, which appears to be paying Trump
makes more money from the Chinese bank could open it up to U.S. sanctions, at the dis- $50,000 a year or so to lease an antenna
alone than it ever could expect from hotel cretion of the president of the United States, atop a New York skyscraper and whose far-
visits by members of a foreign government. who just so happens to take in an estimated flung assets include the New York Post, a
And the president has made no pledge to $12 million from AXA each year. And so on. newspaper founded by the person who saw
hand over that money. Or the incoming rent Despite all this, Trump does not seem the problem coming two centuries ago, Al-
from the state-owned Bank of India, which to think ongoing rental payments from for- exander Hamilton. F
leases space in San Francisco, part of a deal eign entities pose a problem. Quite the op- With additional reporting by Deniz
that expires in 2019. posite. “No new foreign deals will be made Çam, Angel Au-Yeung, Yinan Che and
The point of anticorruption laws is to whatsoever during the duration of President Humberto J. Rocha.

94 | FORBES FEBRUARY 28, 2018