The premium liquor costs are only the beginning of government spending at Mar-a-Lago that emerges in hundreds of pages of receipts and email correspondence between Trump Organization employees and staffers for the State Department, which oversees presidential diplomatic travel and works with the Secret Service and White House. The emails show that the president’s company refused to agree to what was essentially a bulk-purchase agreement with the federal government, and that it charged the maximum allowable federal rate for hotel rooms. The Trump Organization could be obstinate when it came to rates for, say, function rooms at Mar-a-Lago, a problem that was eased when the president signed a law lifting the maximum “micro-purchase” the government can make.
The documents reveal the intersection between Trump’s conflicting interests. The emails show that “Mar-a-Lago wanted to have the government money without the government rules.
A few months after Trump’s inauguration, the State Department proposed a contract that would pay $200,000 for all room costs for federal employees who stay at Mar-a-Lago over the first term of his presidency. But Mar-a-Lago rejected the government’s proposal. Instead, Trump’s resort bills the government the maximum permitted by federal rules: 300% of the government’s per diem rate, which works out to $546 per night.
Mar-a-Lago rejected the proposed flat-fee arrangement, according to the emails, because of concerns the club’s lawyers had about the Federal Acquisition Regulation, or FAR, which governs federal purchases and is overseen by contracting officers. FAR seeks to promote competition and maintain “the public’s trust.”
The emails suggest the Trump Organization was worried that the lack of competitive bidding could run afoul of federal rules, among other concerns. A State Department staffer wrote in May 2017 that Mar-a-Lago’s attorneys brought up federal “small business set-aside” requirements, which set strict rules for sole-source government bids for small businesses. The State Department staffer wrote that Mar-a-Lago’s “concerns are based on their general lack of knowledge on the applicability of the FAR regulations.”
At least 24 White House and federal staffers stayed at Mar-a-Lago during the Xi visit. They included then-Secretary of State Rex Tillerson; then-chief of staff Reince Priebus; then-Secretary of Defense Jim Mattis; Treasury Secretary Steven Mnuchin; then-National Economic Council adviser Gary Cohn; and other advisers, past and present, such as Bannon, Hope Hicks, Stephen Miller and Sean Spicer.
The State Department also broke with protocol regarding taxpayer-funded travel and applied for a Citibank travel card just for Mar-a-Lago visits.
Meanwhile, other problems emerged. Mar-a-Lago can't process charges over $10,000, which led to problems when the club split bills and charged the government card for multiple transactions, emails show.
Mar-a-Lago refused government requests to waive the costs of its “function room” for press and other official meetings in April 2017, leading to a near-violation of a $3,500 government spending cap. Last year, Trump signed a law that lifted that cap, known as the “micro-purchase threshold,” from $3,500 to $10,000. The law does not appear to have been aimed at facilitating spending at Mar-a-Lago, but it allows the club to avoid additional government contracting rules when charging sums below $10,000.
In one instance, after the government was charged more than $3,500 for conference space at Mar-a-Lago, it asked the Trump Organization for a 10% discount so that it wouldn't violate the micro-purchase threshold. Mar-a-Lago relented, but only after months of haggling.
In the emails, the director of presidential travel support, Michael Dobbs, frequently described the creation of a charge card unique to Mar-a-Lago as a "headache."
As Steve Schooner, a professor of government contracting law at George Washington University, put it, "The fact that we have a State Department contracting officer saying this is a headache is a reminder that, but for the relationship with President Trump, this would not be a contract the government would be having. That's a problem."
Many of the expenses incurred by White House staff are arranged and paid for by the White House's Office of Administration. These expenses are not required to be made public. The same goes for Secret Service spending to protect the president on such visits. The Government Accountability Office released a report last month evaluating spending at Mar-a-Lago in February and March 2017 and found that a total of $60,000 was spent at the hotel during four trips; the figure ran to $13.6 million when costs for plane travel, secret service, security and other logistics were included.
Six government contracting experts said Mar-a-Lago may be violating rules requiring competitive bids. They argue that Mar-a-Lago's practice of invoicing meeting spaces, hotel stays and meals separately is a way to get around federal spending rules.
"Mar-a-Lago didn't want to compete, they wanted to sneak around the requirements, and charge much higher prices than the competition," said Tiefer, who served as deputy general counsel with the House of Representatives for 11 years. "It's not the first time in history that vendors have tried to get around the rules by charging individual components. This is familiar to every contracting officer, and it's wrong. It's not just a technicality. It's not a game. The only safeguard the public has against the Trumps swallowing up all the government business is at least minimal competition."
Several experts contend the State Department is exploiting loopholes in government spending rules to facilitate official gatherings at Mar-a-Lago. "It's one of the biggest fears coming true, that they are bending over backwards to help the Trump Organization," said Scott Amey, general counsel of the Project On Government Oversight. "I'm frustrated the State Department would exploit the system to bill Uncle Sam and the taxpayers. To have the government bicker to get a 10% discount shows the Trump Organization isn't putting the American public first. It's a worst-case scenario when it comes to conflicts of interest, with the president and his children putting themselves and profits ahead of the public."
Source: Derek Kravitz for ProPublica, May 1, 2019
Posted by: Peter Brian
