Pentagon officials spent more than $17,000 at the Trump Ocean Club hotel in Panama in the first half of 2017, according to documents obtained by a government watchdog group. The money was spent to cover general lodging expenses, according to the documents. It isn’t clear why.
Property of the People filed the Freedom of Information Act request that produced the documents.
Neither the Pentagon nor the Trump Organization responded to requests for comment for this story.
The Trump Organization does not own the Panama property. Rather, as is the case with many Trump-branded properties, it licensed Trump’s name to the resort and managed it.
“With the Defense Department’s spending at Trump properties, and Trump’s refusal to divest from his sprawling business empire, once again we find the President’s hand deep in the taxpayer’s pocket,” said Ryan Shapiro, the group’s co-founder. “Trump’s venality and his administration’s open contempt for transparency creates a functionally unprecedented potential for conflicts of interest and corruption.”
Earlier this year, majority owner Orestes Fintiklis successfully pushed to remove the Trump name from the property. He said Trump Organization employees were grossly mismanaging the property, according to USA Today, and muscled them out. A Panamanian judge ruled in his favor, but the Trump Organization told the newspaper they would still fight for their contract.
According to filings in a 2018 lawsuit between Fintiklis’ company and the Trump Organization, the contract between the two entities was designed to incentivize Trump employees at the Panama hotel to perform well. The Trump Organization got 3.5 percent of the hotel’s operating revenue every year and additional payments “if certain contractually prescribed benchmarks are met.” Trump Organization employees had not “come close” to meeting those benchmarks for years, according to the lawsuit.
In other words, extra business from deep-pocketed guests like the Pentagon could have been a boon for the Trump Organization.
Jordan Libowitz, a spokesperson for Citizens for Responsibility and Ethics in Washington, said the Pentagon’s spending at Trump-branded properties could violate a law blocking the president from receiving payment other than his salary from the government.
“If there’s a profit-sharing agreement and his company benefits from people staying at this hotel, then it can be seen as a potential domestic emolument where the government is finding a way to pay the president’s company,” Libowitz said.
“We don’t know to a full extent how the Trump Organization’s internal business mechanisms work,” he continued. “We don’t know what money is going where and that’s a problem when the president still owns a significant share of the profit.”
This particular Trump-branded property has long been adjacent to scandal. NBC News found last year that the property had a host of seedy associations, and was “riddled with brokers, customers and investors who have been linked to drug trafficking and international crime.”
Despite massive criticism, Trump hasn’t meaningfully divested from his business. His two adult sons now officially run it. They say they don’t discuss it with him. The Daily Beast reported in December that an official at the Trump hotel in Washington D.C. told an acquaintance that Trump asked him how his presidency was impacting the business.