The District of Columbia is suing a local hotel for allegedly price-gouging a meetings customer for event space and food and beverage service—an action drawing particular interest because both the property and booking party are affiliated with President Donald Trump.
In a civil action filed in the Superior Court of the District, the jurisdiction’s Trump International Hotel is accused of charging the Presidential Inauguration Committee (PIC) about $175,000 a day for meeting space, or about $1 million in total with the addition of food and beverage charges, for celebrations of Trump’s ascension to the Oval Office in early 2017. The activities included a seated luncheon for 500 and a three-hour reception, for which the PIC, a nonprofit, expected a charge of no more than $200,000.
Because the events generated significant room sales, the meeting space would usually have been provided for free as an added value, a custom in the hotel business and a practice usually followed by the hotel, the suit alleges. It notes that the same space was booked by another nonprofit organization during a morning of the same week, when no inaugural functions were planned, at a charge of $5,000.
Even the PIC’s own meeting planner, Stephanie Wolkoff, said the charge should not exceed $85,000 per day. Yet the hotel initially quoted a price of $450,000 a day, a charge outside the pricing guidelines set by the hotel for its meeting business, according to the suit. Because of objections from one of Trump’s key aides, Rick Gates, the price was negotiated downward.
No other hotel was asked to bid for the event, though eight public facilities such as museums and Washinton, D.C.’s landmark train station were asked for quotes for the use of their spaces.
In the suit, the District of Columbia notes that nonprofits are bound to act for the public good, and that the PIC’s own articles of incorporation state as much. The action accuses the PIC of violating that standard by aiming to enrich the hotel and its operator, the Trump Organization, a business owned by the president’s family.
It asks the court to create a trust funded by $1.03 million from the Trump International Hotel and the Trump Organization. The money would be channeled to other nonprofits for use on projects and causes that more clearly benefit the public good, the suit says.
The Trump Organization and President Trump have maintained that the hotel company has not benefited from its founder’s occupation of the White House. But the president has been sued several times under the emoluments clause of the U.S. Constitution. The phrase prohibits the chief executive from accepting personal favors or payments from other countries.
A local wine bar argued in one of those suits that it was losing business from foreign governments' representatives in Washington because they frequented the Trump International in hopes of currying favor with the president.
The suits have proceeded slowly and will now likely be dropped because Trump will leave office on Jan. 20.
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