Trump Won't Face Legal Consequences For Holding Onto His DC Hotel And Other Business Interests While President

The Supreme Court dismissed cases accusing Trump of violating the US Constitution by refusing to divest from his businesses because he's no longer in office.

WASHINGTON — Former president Donald Trump spent four years unsuccessfully trying to shake off lawsuits that accused him of violating the US Constitution by refusing to divest from his business interests while in office.

But by losing the presidency, he finally won.

Trump never faced legal consequences for keeping a financial stake in his Washington, DC, hotel and other businesses that reportedly profited from their connection to a sitting president. The US Supreme Court on Monday dismissed the two remaining cases against Trump as moot now that he's out of the White House, and the justices vacated judgments against him in the lower courts. The Supreme Court's orders also left unsettled what exactly the Constitution allows when a future president takes office with extensive business holdings that offer foreign and local government actors a financial line to the White House.

No court had definitively ruled yet on whether Trump did, in fact, violate what are known as the Constitution's emoluments clauses, which broadly prohibit elected officials from accepting gifts or other things of value — referred to as "emoluments" — from foreign and domestic governments. But judges had ruled that Trump's opponents cleared a variety of threshold hurdles to pursue these cases and adopted a broad definition of "emoluments" that was likely to cut against Trump if the litigation went forward. The Justice Department — which had represented Trump in his official capacity as president — petitioned the Supreme Court in the fall to intervene.

Both cases were filed in 2017 and spent years winding through the courts as judges wrangled with the thorny and largely unprecedented legal questions about what kind of legal exposure a president could face over their personal business holdings. Noah Bookbinder, executive director of Citizens for Responsibility and Ethics in Washington (CREW), the group behind the original case against Trump, released a statement in response to Monday's dismissal orders saying the cases had at least succeeded in making the American people "aware for four years of ... pervasive corruption."

"These two emoluments cases continued to move forward successfully, including wins in two federal appeals courts, through four years of the Trump presidency, despite advancing novel legal theories and having the weight of a presidential administration arrayed against them," Bookbinder said. "Only Trump losing the presidency and leaving office ended these corrupt constitutional violations and stopped these groundbreaking lawsuits."

Monday's orders marked almost four years to the day that CREW sued Trump in federal court in Manhattan, filing the case almost immediately after he was sworn in. Trump had handed over day-to-day control of his businesses to his adult children after becoming president, but he refused to divest his own financial stake. Representing restaurant and hotel owners in New York, CREW accused Trump of violating both the foreign and domestic emoluments clauses. The group cited public reports about Trump making favorable comments about foreign governments that did business at his properties and quoted foreign diplomats who said they were staying at Trump’s hotels to gain favor from the president.

In June 2017, Karl Racine and Brian Frosh, the Democratic attorneys general of DC and Maryland, brought a second case against Trump on behalf of local residents and businesses. That case, filed in federal court in Maryland, ended up focusing on the Trump International Hotel in downtown Washington, which became the lodging, dining, drinking, and event spot of choice for Trump and his political allies as well as those trying to curry favor with the administration throughout his presidency.

More than 200 Democratic members of Congress filed a third case against Trump in federal court in Washington, focusing on the Foreign Emoluments Clause, which prohibits officials from accepting financial benefits from a foreign government "without the consent of the Congress." Members focused on foreign diplomats staying at Trump's DC hotel, foreign governments leasing office space from Trump properties, and other alleged benefits the then-president reaped. A federal district judge denied Trump's efforts to get that case dismissed, but the US Court of Appeals for the DC Circuit rejected it after finding the members lacked standing to sue. The Supreme Court in October refused to revive that case.

Trump had failed to get rid of the New York and Maryland cases by the time he left office. A New York federal district judge dismissed CREW's original case early on, finding the group and its clients lacked standing, but the 2nd Circuit brought it back to life in September 2019. US District Judge Peter Messitte in Maryland repeatedly rebuffed arguments by Trump and the Justice Department in the case filed by the attorney general offices in DC and Maryland; he adopted Racine and Frosh's argument that the term "emolument" covered a broad range of things of value, and rejected the Justice Department’s narrower position that it should cover only money that a public official received in exchange for official acts or an employer-employee arrangement.

A three-judge panel of the 4th Circuit reversed Messitte's rulings, but the full appeals court revived the case in May 2020.

Racine and Frosh released a statement on Monday saying they were proud of the rulings they won in the district court, which would "help stop anyone else from using the presidency or other federal office for personal financial gain the way that President Trump has over the past four years." Although the Supreme Court vacated the 4th Circuit opinion last year that allowed the case to go forward, Messitte's opinion adopting a broad interpretation of "emolument" will remain on the books, they noted; it isn't precedent that binds any other federal court, but could be cited by lawyers trying to bring a similar case against a president in the future.

"The Emoluments Clauses were specifically inserted into the Constitution to prevent federal officials, including the President of the United States, from profiting from their positions in government. President Trump illegally profited from his office by receiving improper emoluments in the form of money from foreign governments, federal agencies, and state governments that conducted business at his hotel to curry favor with him and his administration," Racine and Frosh said.

The Supreme Court's dismissal orders neatly tied up one of the many legal messes that Trump left for the Biden administration; the Justice Department hadn't signaled yet what it would do if the Supreme Court had agreed to hear the emoluments cases.

A Justice Department spokesperson and personal attorney for Trump did not immediately return requests for comment.

Skip to footer