Trump Reverses Move to Hold G-7 at His Resort After Criticism

Shahien Nasiripour

(Bloomberg) -- President Donald Trump pulled his Trump National Doral golf resort in Miami as the venue for the 2020 Group of Seven meeting after facing widespread criticism that he was using a major government event for personal gain.

The search will start for a new location, including the possibility of using Camp David, he said in a tweet late Saturday night. In earlier posts, Trump defended the decision to pick the resort, touting the venue’s various amenities.

Mick Mulvaney, the acting White House chief of staff, said Sunday that Trump had only wanted to “put on absolutely the best show” at Doral, and had been “honestly surprised at the level of pushback.”

“I thought I was doing something very good for our Country,” Trump said, responding to what he called “crazed and irrational hostility.” He added that he would have offered his resort at no profit and even no cost to the U.S. if permitted.

The swift reversal also follows Republicans’ discomfort with defending Trump’s move to spend taxpayer cash at his financially struggling property. It was a decision government ethics experts decried as a blatant misuse of authority, and the latest example Trump is violating the Constitution’s emoluments clause, which prohibits U.S. officials from receiving payments or gifts from foreign governments.

While Florida Republican Senator Marco Rubio said hosting the G-7 at Doral could give a boost to the local economy, some Republicans found the decision a bridge too far. When Senator Lisa Murkowski, an Alaska Republican, was asked if it’s appropriate for Trump to host the summit at a hotel he owns, she had a simple answer: “No.”

Republican Representative Mike Simpson of Idaho told the Washington Post that the move was politically insensitive. “They should have known what the kickback is going to be on this, that politically he’s doing it for his own benefit.”

By selecting the Doral golf resort in Florida to host the 2020 G-7 meeting, Trump would have chosen a struggling property among his holdings to showcase on the world stage. Neither the White House nor the Trump Organization would release Doral’s earnings, but Trump’s financial disclosures suggest that annual revenue has fallen by 25% since 2015.

The resort, with its four golf courses, lost $2.4 million in 2014, according to the New York Times. Company records disclosed in a property tax dispute show that net operating income rebounded to about $12 million in 2016, but it fell by almost 66% the following year, according to the Washington Post.

The Miami Herald reported in August that Miami-Dade appraisers had this year lowered the value of the 643-room hotel and conference center by 2%, based on falling income. The facility also lost a major professional golf tournament in 2017 after hosting it annually for a decade.

Mulvaney announced the move to hold the G-7 at Doral at a raucous press conference on Thursday. The facility was selected from an initial list of about a dozen other sites, and about 10 properties were visited as part of the process, Mulvaney said, without providing specifics.

Three Democratic Senators wrote on Thursday to Trump, Secretary of State Michael Pompeo and other top officials, demanding documentation on the process used to select Doral, along with evidence it had been vetted along with multiple other properties, as Mulvaney said.

Senators Gary Peters of Michigan, Ron Wyden of Oregon and Sherrod Brown of Ohio asked for a list of all cities and venues that were under consideration; a timeline of the process; any bids submitted by other locales; the agencies involved in the selection and where officials may have traveled on fact-finding missions; and various other information.

Also on the wish-list: a copy of a “negotiated contract” with Trump National Doral.

The Campaign Legal Center, an ethics group, called the choice of Doral “corruption pure and simple.” Walter Shaub, a former director of the U.S. Office of Government Ethics and a regular Trump critic, tweeted that “there here is no level of corruption greater than a President participating in the award of a contract to himself. We have reached the bottom.”

Congressional Probe

Trump made the decision on Doral resort in spite of an ongoing impeachment investigation by Congress and lawsuits that allege he’s using his office to enrich himself. Those accusations have gained steam after numerous reports documenting spending at Trump properties by companies seeking federal government approval, representatives of foreign governments, and federal and state agencies.

A prominent example is Trump’s hotel in Washington, near the White House. It’s become a magnet for lobbyists, Republicans, foreign governments, and other favor-seekers booking rooms and eating meals, while trying to ingratiate themselves with Trump and his allies.

“He’s not making any money off of this,” Mulvaney said of Trump’s initial decision on the G-7. In fact, Mulvaney said, “it was millions of dollars cheaper by doing it at Doral than it was at another facility.”

The comparative savings, Mulvaney said, amounted to roughly 50% -- without providing the kind of evidence that Democrats demanded.

The comments did nothing to silence critics that Trump would benefit personally from hosting the gathering, and see it as as part of an ongoing pattern.

In 2017, for example, White House officials spent hundreds of dollars on liquor at another Trump-owned property in Florida, a tab that taxpayers picked up after the White House intervened, according to federal records unearthed by the Washington-based nonprofit group Property of the People.

Critics also noted that Doral, like other Florida resorts, is relatively deserted during the hot, humid summer months. Had Trump not backtracked, those hundreds of empty rooms would instead be filled by delegations from the G-7 and other countries, members of the media, and other personnel.

Trump’s son, Eric, who leads the constellation of entities that collectively form the Trump Organization, declined to comment on the initial decision. The president, when asked in August whether he had any ethical concerns about appearing to use public office to bolster his own businesses, said, “No. Not at all.”

Had the event gone ahead at the Doral next year, it was almost certain to generate a blizzard of what marketing professionals refer to as “earned media.” A recent survey of marketers found that such exposure, and the free publicity it generates, often is more valuable to companies than advertisements.

Trump’s 2016 campaign impacted business at his global properties. His name came off buildings in Panama, Canada, and New York. Visitors shunned some of his hotels, including Doral, which had an occupancy rate 24 percentage points below that of nearby competing resorts, despite advertising significantly lower nightly rates, according to company documents submitted in a property tax dispute that were reported by the Washington Post.

One guest at Doral alleged he was bitten by bedbugs. In a possible sign of how far it’s fallen, over the summer, the property, which Trump has described as “luxurious,” was set to host a golf tournament sponsored by a strip club before the event was canceled.

The financial bump from hosting a G-7 can be elusive, as former U.K. Prime Minister David Cameron learned after he announced in 2012 a summit at another financially struggling luxury golf resort -- Lough Erne Resort in Northern Ireland.

It was in bankruptcy after the owners defaulted on about $49 million of debt, U.K. corporate records show. The property, built for an estimated $70 million, was listed for sale in 2012 at about $16 million, according to news reports. The U.K. paid less than $2 million to host the 2013 world leaders’ conference, hardly enough to engineer a turnaround.

Two years later, an investor group bought it for close to $13 million, according to U.K. records and news reports.

--With assistance from Jihye Lee.

To contact the reporter on this story: Shahien Nasiripour in New York at snasiripour1@bloomberg.net

To contact the editors responsible for this story: Kevin Whitelaw at kwhitelaw@bloomberg.net, Linus Chua, Ros Krasny

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