Should Taxpayer Funds Not be Spent at Properties Owned by the President, Vice President, or Cabinet Secretaries? (S. 2485)

What is S. 2485?

(Updated July 28, 2021)

This bill — the HOTEL Act — would prohibit executive branch employee travel expenses paid by tax dollars from being spent at properties owned by the president, vice president, cabinet secretaries, or their family members. Spending that falls under the protective missions of the U.S. Secret Service and other agencies would be exempted from this legislation. However, those expenditures would be subject to heightened oversight and transparency through reporting to ethics officials and Congress.

This bill’s full title is the Heightened Oversight of Travel, Eating, and Lodging Act. 

Argument in favor

The president, vice president, and cabinet members shouldn’t be allowed to use their political positions to enrich themselves or their companies. Barring the use of taxpayer funds to pay for government employees’ stays at properties owned by executive branch officials will help end this form of graft.

Argument opposed

Blocking taxpayer funds’ use at properties owned by members of the executive branch is unfair to such individuals and their companies. As long as the members of the executive branch don’t control their companies themselves, their companies shouldn’t be penalized for their relationships to elected officials.

Impact

Executive branch employee travel expenses; properties owned by the president, vice president, cabinet secretaries, or their family members; and executive branch employee travel expenditures at properties owned by the president, vice president, cabinet secretaries, or their family members.

Cost of S. 2485

A CBO cost estimate is unavailable.

Additional Info

In-Depth: Sponsoring Sen. Gary Peters (D-MI) introduced this bill to prevent potential conflicts of interest or abuse of tax dollars by barring federal agencies from approving travel expenditures to businesses in which executive branch top officials have a financial interest: 

“Executive branch officials like the President and cabinet secretaries should not have a profit motive in the travel decisions made by the federal employees under their supervision. Taxpayers in Michigan and across the country deserve to know that their hard-earned tax dollars are not being subjected to potential waste, abuse or conflict of interest when federal officials could stand to personally profit. This commonsense bill promotes good governance by ensuring that tax dollars are being used efficiently and that federal employees are not subject to undue pressure to patronize businesses owned by their top-level managers.”

In another press release, Sen. Peters called the Trump administration’s funnelling of taxpayer dollars into the President’s pockets “unprecedented”: 

“Since President Trump took office, the American people have witnessed an unprecedented arrangement that has funneled taxpayer dollars into the President’s pockets. As elected officials, we must hold ourselves to the highest ethical standards and ensure that we are using taxpayer dollars responsibly. This commonsense bill will ensure that taxpayer dollars are being spent to benefit hardworking middle class families… not the President’s bottom line.”

Original cosponsor Sen. Elizabeth Warren (D-MA), who is a candidate for the 2020 Democratic presidential nomination, adds:

“The federal government should serve the American people—not serve a President’s profit margins. The HOTEL Act sets reasonable limits on the per diem payments of executive branch employees by preventing Americans’ tax dollars from flowing into the pockets of cabinet secretaries, the President, and the Vice President.”

Original cosponsor Sen. Tom Udall (D-NM) adds that this bill is needed in light of President Donald Trump’s “unprecedented” conflicts of interest: 

“President Trump’s unprecedented conflicts of interest leave the door wide open to the First Family using the presidency – and taxpayer money – to personally enrich themselves. Every time the president plans a lavish trip to one of his private clubs, and every time an executive branch employee pays for a room with taxpayer dollars at a Trump property, President Trump stands to profit. The HOTEL Act is critical to making sure that taxpayer money isn’t being spent to pad any government official’s bottom line.”

Protect Democracy is among a number of government watchdog organizations that supports this bill. Its Policy Advocacy, Justin Vail, says: 

“The Constitution's Take Care Clause requires the president to serve the public interest, not his personal interests. President Trump steering taxpayer dollars towards his own businesses is corruption, plain and simple, and it is the type of abuse of power that erodes trust in our democracy. The HOTEL Act is an important step towards ensuring that president is not permitted to use the office to enrich himself. Protect Democracy applauds Senator Peters' leadership on this issue and calls on Congress to pass a full package of measures to prevent presidential abuse of power.”

The Dept. of Justice (DOJ) is defending the president’s business — including issues related to hosting foreign governments at Trump hotels — in court. As part of these cases, the DOJ contends that Trump’s actions as hotel operator are off-limits and unrelated to his position as president. 

Former White House Press Secretary Sean Spicer defended Trump’s travel to Mar-a-Lago in 2017. He said that Mar-a-Lago is “where [Trump] goes to see his family. He brings people down there. This is part of being president.”

This legislation has 36 cosponsors, including 35 Democrats and one Independent. It’s also supported by Protect Democracy, Common Cause, Citizens for Responsibility and Ethics in Washington (CREW), American Oversight, and Public Citizen.

Of Note: Sen. Peters has made multiple inquiries into the Trump administration’s patronage of Trump-owned properties. In February 2019, he, Sen. Dianne Feinstein (D-CA), and Rep. Elijah Cummings (D-MD) announced the findings of a Government Accountability Office (GAO) report which found that the Trump administration spent approximately $13.6 million of taxpayer money at the President’s Mar-a-Lago resort during his first few weeks in office. The GAO report found: 

• That President Trump’s first four trips to Mar-a-Lago cost federal taxpayers $13.6 million, including $60,000 paid directly to Mar-a-Lago;
  
• That about $10.6 million of that amount was spent on operating costs for government aircraft and boats, and $3 million went to personnel costs for staff supporting the president’s travel; and
  
• The Dept. of Defense (DOD) and Secret Service failed to regularly report to Congress on the cost of protecting the president.

In a joint statement, Sens. Peters and Feinstein and Rep. Cummings said: 

“This alarming report captures a snapshot of the tens of millions of dollars President Trump spends to travel to his Palm Beach resort – all at taxpayer expense – including government funds that are paid directly to a business in which the president himself has a financial interest. This is part of a troubling pattern of wasteful spending and serious abuse of tax dollars by the administration. We will keep investigating this issue to ensure taxpayer dollars are being used effectively and appropriately.”

Kathleen Clark, a law professor at Washington University in St. Louis and an expert in legal ethics, observes: 

“Trump appears to be commandeering federal resources in order to maximize revenues at Trump properties, and he does this by visiting properties close to the White House. And when he travels to the golf courses in Florida, Virginia and New Jersey, other agencies that are involved in supporting the president end up spending money.”

On September 5, 2019, Sen. Peters wrote to Vice President Mike Pence seeking answers about his decision to stay at the Trump International Golf Links & Hotel in Doonbeg, Ireland during his official visit to the country. Given that the Trump-owned property is 182 miles away from Dublin, where the vice president attending meetings during his visit, Sen. Peters expressed concerns that the vice president wasted taxpayer dollars on excessive travel between Doonbeg and Dublin and patronized a property that financially benefits President Trump at his behest. Sen. Peters wrote: 

“I am alarmed that you elected to spend taxpayer dollars for travel and lodging at President Trump’s privately-owned property – located on the other side of the country, more than 180 miles away from your meetings with government officials in Dublin. This raises serious concerns about wasteful expenditures and possible conflicts of interest related to taxpayer-funded travel by this Administration.” 

A top aide for Vice President Pence originally said that Trump had suggested his stay at Doonbeg. Later on, Pence’s office clarified that the decision was entirely the vice president’s. Pence defended the stay at Doonbeg, saying that his family has ties to it and that staying at a Trump property already under Secret Service protection made logistical sense to him. He told reporters: 

“I understand political attacks by Democrats, but if you have a chance to get to Doonbeg, you’ll find it’s a fairly small place, and the opportunity to stay at Trump National in Doonbeg, to accommodate the unique footprint that comes with our security detail and other personnel, made it logical.”

In response, Sen. Peters said he found it “hard to believe that [Vice President Pence’s] office was unable to identify lodgings that could accommodate the security and logistical needs of your trip in the capital of Ireland.”

On September 10, 2019, Sen. Peters called on the Dept. of Defense (DOD) Inspector General to conduct an independent investigation into whether the U.S. Air Force violated any laws, regulations, or policies related to taxpayer-funded travel when crew members of a C-17 military transport plane stopped to refuel at Trump Turnberry in Scotland while en route to Kuwait. In his letter, Sen. Peters cited reports that flights of this nature generally involve refueling stopovers at U.S. air bases in Germany or Spain, not airports near Trump resorts. In his letter to Principal Deputy Instructor Glenn Fine, Sen. Peters wrote: 

“Potentially unnecessary spending by the military at a for-profit business owned by the President raises serious concerns about conflicts of interest and threatens the trust that the American people have placed in our military. Taxpayers should never be forced to wonder whether our Armed Forces are making decisions based on operational concerns or to curry favor by prioritizing the President’s business interests.”

Additionally, according to a September 15, 2019 report, taxpayers paid over $1,000 for an executive branch employee’s two-night stay at President Trump’s Mar-a-Lago resort while they were traveling on official government business. 

On the whole, Trump-owned properties seem to have benefitted from the President’s place in the White House. For example, reports that although the Trump Organization had originally expected Trump International Hotel to lose $2.1 million in the first few months of 2017, it actually earned $1.9 million in that period. In large part, this was due to the hotel’s emergence as “a Republican Party power center and popular destination for conservative, foreign and Christian groups holding meetings in Washington.” Expenditures by these groups earned the Trump Organization $19.7 million through April 15, according to President Trump’s financial disclosure with the government.

Media:

• Sponsoring Sen. Gary Peters (D-MI) Press Release
  
• Sponsoring Sen. Gary Peters (D-MI) Tweet
  
• Senate Committee on Homeland Security and Governmental Affairs
  
• The Hill
  
• GAO Report (Context)
  
• ProPublica (Context)
  
• NPR (Context)