Maryland argues in court that Trump’s business ties hurt the state, violate the Constitution

Attorneys for the State of Maryland told a federal court Thursday that the state has been harmed by payments President Donald J. Trump’s real estate company receives from foreign governments and other states, and that those transactions violate one of the nation’s earliest efforts to combat corruption.

The arguments, which spanned most of the day in U.S. District Court in Greenbelt, focused on a narrow but crucial question in a lawsuit filed by Maryland and the District of Columbia in June: whether those two jurisdictions are positioned to claim the payments made to Trump’s hotels are unconstitutional.

Central to the lawsuit is the idea that the Trump International Hotel in downtown Washington is sucking business from hotel and convention centers in Maryland and the District — particularly among foreign diplomats, but also among other states that have booked the Trump property while on business in the nation’s capital.

Steven M. Sullivan, Maryland’s solicitor general, told the court the state had been harmed because its hotels and restaurants could not possibly compete with a hotel owned by the president for customers seeking to curry favor with the White House.

He pointed to a visit last year by Maine Gov. Paul LePage. LePage stayed at the hotel; later, Sullivan said, the Trump administration agreed to a LePage request to ease logging restrictions at a national monument in his state.

There is no evidence the decision was related to the hotel stay, but Sullivan said the possibility of a quid quo pro puts states in a quandary.

“Pay to play, or risk that the president will favor those states that have provided” payments, Sullivan said. “This scenario presents the kind of harm to the states that the founders sought to prevent.”

Attorneys for the president reject that argument. The administration has repeatedly characterized the suit as a political stunt brought by Democrats. Deputy Assistant Attorney General Brett Shumate said neither Maryland nor the District have pointed to a single specific example in which they have been harmed by the hotel.

Shumate said that the lawsuit was based on “abstract political disagreements with the president.” Without concrete examples of ways Maryland had lost business, Shumate said, the state cannot demonstrate it has standing to sue.

“It's not enough for the plaintiffs to speculate about possible, future harm,” Shumate said. “They can’t identify any specific lost revenue.”

At issue in the underlying lawsuit are two provisions known as the emoluments clauses, which were added to the Constitution to ensure the president’s decisions are not influenced by gifts or payments from foreign governments or states.

The definition of an emolument is unclear — as is who is harmed if the president violates the clauses — partly because the provisions have been tested so rarely.

Maryland attorneys have argued that the state has standing to sue because the emoluments clauses were a “material inducement” that brought the state into the Union in 1788. Put another way, the attorneys are suggesting Trump is reneging on a 230-year-old pledge made by the framers of the Constitution to secure Maryland’s support for ratification.

U.S. District Court Judge Peter J. Messitte gave attorneys for Maryland and the District some hope that their case would be allowed to proceed. He repeatedly told Shumate that he would not be bound by the decision last month by Judge George B. Daniels of the Southern District of New York in a similar emoluments case.

Daniels dismissed that case, which had been brought by hospitality industry workers.

“Don’t cite Judge Daniels to me,” Messitte told Shumate during one particularly tense exchange. “You make your own argument and let it stand here in this court.”

Messitte pushed Shumate: Who could be eligible to sue under the clauses, if not Maryland and the District?

“Does anybody ever have standing based on your argument?” he asked.

Shumate responded by saying that longstanding uncertainty over that question did not confer standing on the plaintiffs at hand.

Both Messitte and Daniels were appointed to the bench by President Bill Clinton, a Democrat.

Maryland Attorney General Brian E. Frosh and District of Columbia Attorney General Karl A. Racine, both Democrats, emerged from the courthouse projecting high spirits.

“We came into this case confident about our standing and we leave this courthouse even more confident,” Racine said.

Frosh attended the hearing, but did not speak in court.

“I think the judge was skeptical of the president’s case that we don’t have standing,” Frosh said.

“Judge Messitte cornered the Justice Department lawyer, I thought. He asked him, ‘Who’s protected by the emoluments clauses?’ And he said, ‘All Americans.’ And then he said, ‘Okay, who has the right to bring this suit?’ And the Justice Department lawyer said, ‘I don’t know.’

“That’s not a winning position.”

A Justice Department spokeswoman did not respond to a request for comment.

The arguments Thursday centered on whether the court should grant the Trump administration’s request to dismiss the case. If Messitte allows the litigation to proceed, it could have significant implications for Trump’s real estate empire. To assess the impact Trump’s hotel has had on the region’s hospitality industry, Maryland attorneys would almost certainly have to subpoena records from Trump’s companies that have been kept from public view.

Trump has been dogged since before his election by questions about how he would separate his business holdings from his presidency. He announced before his inauguration that he would retain ownership of his real estate company but turn its daily operation over to family.

The arguments Thursday come during a dispute between Frosh and Gov. Larry Hogan, a Republican, over the resources provided to the attorney general’s office to sue Trump. The Democratic-controlled Maryland General Assembly last year granted Frosh unilateral authority to sue the federal government without Hogan’s consent.

Frosh has joined 18 lawsuits against the administration and is leading two.

State lawmakers included $1 million in funding for the effort, but The Baltimore Sun reported this week that Hogan has withheld that money from the budget. The governor has suggested Frosh instead divert resources from his office’s Consumer Protection Division.

Asked about the cost of the litigation, Frosh descried it as “peanuts.” He said the Maryland attorneys working on the case were doing so in addition to their regular responsibilities.

“I can’t think of a cost, apart from the gasoline that we burned to come here today, that is significant to Marylanders,” he said. “We’re working within our existing budget.”

john.fritze@baltsun.com

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