The Trump Organization should be suspended from all federal contracts and programs, according to a referral sent today by Citizens for Responsibility and Ethics in Washington, the Project on Government Oversight and government contracts expert Professor Steven L. Schooner, the Nash & Cibinic Professor of Government Procurement Law at The George Washington University’s Law School.
Failing to suspend the Trump Organization and all of its entities and top officers such as Donald Trump, Allen Weisselberg, Donald Trump Jr. and Eric Trump from its government contracts would open the government up to further abuses and set a dangerous precedent.
It is standard practice for the government to suspend contractors under indictment, which the Trump Organization currently is.
Under federal law and regulations, the government may only award contracts to “responsible” contractors that have “a satisfactory record of integrity and business ethics.” Integrity and business ethics are sorely lacking from the Trump Organization.
“Over the past decade, the Trump Organization has entered into a variety of contracts and business arrangements with federal agencies,” said CREW President Noah Bookbinder. “Donald Trump used the presidency to enrich himself by promoting his businesses as extensions of his administration and enabled the Trump Organization to avoid accountability for its conduct.”
“The Trump Organization has behaved so egregiously in so many contexts that suspending the Trump Organization entities and senior officers from federal business is clearly necessary to protect the government from their abuses,” said Bookbinder.
In July, the Manhattan District Attorney’s Office indicted two key Trump Organization entities and its Chief Financial Officer Allen Weisselberg on several counts of criminal tax fraud and falsifying business records.
The Trump Organization also recently paid two multi-million-dollar settlements with the State of New York in cases involving claims of fraud and other serious wrongdoing.
Last week, the House Committee on Oversight and Reform reported that Donald Trump concealed from the General Services Administration hundreds of millions of dollars in debts when bidding on the Old Post Office Building lease, and provided misleading information about the financial situation of the Trump International Hotel Washington in his annual financial disclosures.
“Each of these instances makes clear that the Trump Organization lacks business integrity and fails to meet the government’s requirements for suitable contractors,” Bookbinder said. “These indictments and settlements and the Organization’s documented history of misconduct leave the federal government no choice but to immediately suspend the Trump Organization from present and future government contracts.”
The 15-count indictment against the Trump Organization and its chief financial officer is for tax related crimes dating back 15 years; both the company and CFO pleaded not guilty.
There could be more indictments as New York Attorney General Letitia James said, “this investigation will continue and we will follow the facts and the law wherever they may lead,” in a statement on July 1.
The Trump Organization holds a lease with the General Services Administration for its downtown D.C. hotel located in the Old Post Office Building, but that is not mentioned in the indictment.
Schooner also pointed out “one key issue that the indictment raises is whether the Trump Organization should (finally, belatedly) be suspended (or proposed for debarment).”
Suspensions are temporary exclusions from doing business with the government when an investigation is ongoing and debarments are exclusions for a set period of time after an investigation or legal proceedings against a contractor. This can be for either procurement or nonprocurement (such as grants and cooperative agreements) situations.
The relevant section of the Code of Federal Regulations “specifies that indictment (alone) constitutes adequate evidence for suspension for, among other things, making false statements, tax evasion, violating [federal] criminal tax laws, lack of business integrity or business honesty,” Schooner said in a recent tweet.
“The recent indictment against the Trump Organization certainly could impact future federal business, but it is unlikely to impact its Washington hotel lease,” said Scott Amey, general counsel at the nonprofit Project On Government Oversight. However, he agreed there is a “strong” case to either suspend or debar the company.
Schooner and Amey, along with Kathleen Clark, a law professor at the Washington University in St. Louis and an expert on government ethics, wrote in Government Executive in January 2020 that the Trump Organization should be banned from doing business with the federal government due to the first impeachment investigation as well as various lawsuits that raised issues about the company.
Virginia Canter, chief ethics counsel for the group Citizens for Responsibility and Ethics in Washington, said determining if the indictment will impact the lease is “not an easy question.” However, it “really raises questions about whether or not the Trump Organization has what is referred to as ‘present responsibility’ to perform its obligations under the Old Post Office lease.”
In reference to the counts of falsifying business records, “If they’re doing it at the top level, maybe they’re doing it at another level as well?” she asked. Also, Canter said she would like to know what GSA is doing to “ensure that the government’s interest, the public’s interests, taxpayers’ interests are being protected in terms of the administration of this lease.”
Eric Montalvo, a founding partner at the Federal Practice Group, said, “I would not expect the federal government to be jumping in immediately to act, but they certainly would have an interest in making sure that none of the activities that are being alleged somehow impact the GSA contracting activities.”