T-Mobile acknowledges that executives have spent $195,000 at the Trump International Hotel in Washington, DC, since the company’s proposed merger with Sprint was announced in April 2018 — but is “confident” it’s not a big deal. The company also insists lining the Trump family’s pockets shouldn’t affect whether the $26 billion deal is ultimately approved by the Justice Department and the Federal Communications Commission.
In a letter sent to Sen. Elizabeth Warren (D-MA) and Rep. Pramila Jayapal (D-WA) on February 21, T-Mobile’s vice president of federal legislative affairs, Anthony Russo, wrote that “[w]hile we understand that staying at Trump properties might be viewed positively by some and negatively by others, we are confident that the relevant agencies address the questions before them on the merits.”
Warren, however, isn’t so sure. In a tweet Tuesday, she alluded to the fact that T-Mobile CEO John Legere used to be an outspoken critic of Trump’s hotels, writing, “now that @TMobile has a $26 billion merger with @Sprint pending Trump Admin approval, he’s happy to spend $195,000 at Trump’s DC hotel... Sound shady? It is.”
Jayapal echoed Warren’s concerns.
Follow the money. $195,000 at the Trump hotel shortly after the announcement of their T-Mobile-Sprint merger? Something’s not right. The American people deserve better than an administration that appears to be for sale.https://t.co/jx28q2esUb
— Rep. Pramila Jayapal (@RepJayapal) March 5, 2019
In a joint statement sent to Vox, Warren and Jayapal said that “the American people deserve better than an administration that appears to be for sale to businesses eager to line the President’s pockets.”
It’s worth pausing here to note why the T-Mobile/Sprint merger is considered so significant. Many Obama-era regulatory regimes managed to keep the cellphone market competitive and costs down for consumers. But this horizontal merger would be significant, reducing the number of major cellphone carriers to just three nationwide. The companies are saying this would offer a nationwide 5G network and as many as 50,000 new jobs, but there’s no guarantee that wouldn’t come with higher monthly costs for customers.
Legere claims that T-Mobile’s pending mega-merger had no bearing on his company’s decision to spend money at the Trump International. But the fact that T-Mobile needed to write a letter to Congress assuring lawmakers it isn’t trying to buy off the president in the first place highlights the unprecedented conflicts of interest created by President Trump’s refusal to divest from his business interests.
Companies often used to go out of their way to avoid the appearance of conflicts of interest. Now it seems that’s just a side effect of doing business.
“I do not believe that my hotel choices would have any impact on that review”
News of T-Mobile’s largesse at the hotel Trump still owns and profits from just blocks away from the White House was first broken by the Washington Post in January. According to the Washington Post’s Jonathan O’Connell and David Fahrenthold, a day after T-Mobile announced its $26 billion merger with rival Sprint last April, Legere was one of nine company executives among a group of “VIP Arrivals” at the Trump International.
In a separate letter sent to Warren and Jayapal on February 6, Legere said that “to my knowledge,” no T-Mobile officials gave the Trump family a heads-up that he and other executives would be staying at the Trump International. But during his stay, Legere walked around the lobby wearing clothing emblazoned with T-Mobile’s logo.
The day after his company announced a merger with Sprint that federal regulators are sure to review, T-Mobile's CEO John Legere was at the Trump Hotel DC. https://t.co/dyfGLgkklt pic.twitter.com/FJtbH4ZU7Y
— Zach Everson (@Z_Everson) May 1, 2018
In his February 6 letter, Legere wrote that his hotel choices are based on “availability, security, meeting facilities and proximity to the activities scheduled in that city.” But as recently as four years ago, the CEO was an outspoken critic of Trump hotels.
“I am so happy to wake up in a hotel where every single item isn’t labeled ‘Trump’ and all the books and TV is about him,” Legere wrote in a now-deleted tweet he posted amid a Twitter feud he had with Trump months before he launched his presidential bid.
In his letter, Legere downplayed his choice to wear T-Mobile gear around the hotel lobby, writing that “[m]y entire wardrobe is made up of T-Mobile clothing and it represents me and my passion for this company — and it has proven to be an effective advertising and marketing strategy.”
Russo’s letter notes that Legere and another T-Mobile executive stayed at the Trump International Hotel on one occasion before the proposed merger with Sprint was announced in August 2017. But the vast majority of the money T-Mobile spent at the hotel came after that.
According to Russo’s letter, the $195,000 the company spent at the Trump International Hotel between the merger announcement and the present covers “a variety of types of business-related activities and include many categories of costs, including the cost of meeting space, catering, business center services, audio/visual equipment rental, lodging, meals, taxes and other incidental expenses.”
While $195,000 sounds like a lot of money in a vacuum, Russo claimed it only represents “approximately 14 percent of the $1.4 million T-Mobile incurred at hotels in Washington, DC, during the same period for travel and other business-related activities typical for T-Mobile in major metropolitan areas.”
“For context, T-Mobile incurred nearly $750,000 in actual or estimated costs at Hilton Hotel properties in Washington, DC, in the same period, or approximately 50 percent of its total hotel spend in Washington, DC,” Russo added.
Legere, echoing Russo, wrote that the Department of Justice and the Federal Communications Commission “are giving our transaction a thorough and objective analysis, as they should, and I do not believe that my hotel choices would have any impact on that review, nor should they.”
But ethics watchdogs don’t buy Legere’s explanation that his decision to repeatedly spend money at the Trump International has nothing to do with a lucrative merger that requires approval from the Trump administration.
“It’s currying favor with the president. It’s disturbing, because it’s another secret avenue for currying favor with the government,” Sheila Krumholz, executive director of the Center for Responsive Politics, told the Post in January.
Foreign governments are spending money at Trump’s hotels too
The problem of companies currying favor with the president by lining his pockets through his business is related to the emoluments issue Vox’s Matt Yglesias detailed in January.
Article I, Section 9, Clause 8 of the US Constitution prohibits the president from accepting gifts from foreign governments. Yet foreign governments, including Kuwait and Saudi Arabia, have spent money at Trump’s hotels.
In August, the Washington Post reported, “After two years of decline, revenue from room rentals [at the Trump International Hotel in Manhattan] went up 13 percent in the first three months of 2018.” The increase was largely due to Saudi Crown Prince Mohammed bin Salman’s patronage of the hotel during a visit to New York City, during which he and his entourage didn’t even end up staying there.
The DC and Maryland governments have sued the federal government, alleging that Trump is violating the emoluments clause, and have won standing.
There is no clause of the Constitution preventing presidents from doing business with domestic companies like T-Mobile. But before Trump, as a matter of course, presidents would divest from their private business interests before they took office.
Trump broke from precedent by refusing to divest — or disclose
Trump has broken a lot of precedents, but one of the biggest has been refusing to release his personal tax returns — something presidential candidates have long done to show transparency — and refusing to divest from his assets or put them in a blind trust.
The most frequently mentioned example of a president divesting from his business interests before taking office is Jimmy Carter, who famously put his family peanut farm in a blind trust before he was inaugurated in 1977.
“Well, it was a hard decision for me to make and this is something that I’ve had to face. I’ve literally given up my own method of making a living here in Plains,” Carter said at the time. “But I don’t want any decision that I make as president to have any effect on my own income. The trustee will try to do the best they can and take care of my remaining family here, my mother and Billy, not to disrupt their lives too much.”
Richard Nixon and John F. Kennedy also made moves to distance themselves from assets they owned and managed before taking office. Former George W. Bush ethics adviser Richard Painter told Fortune that before Trump, “every other President in modern times has tried as best they could to act as if the law did apply to them.”
Trump has, notably, declined to either divest or disclosure. Corruption, or the appearance thereof, doesn’t seem to bother him in the slightest.
“It should come as no surprise that a CEO of a major corporation would want to stay with us”
Shortly before he took office, Trump held a news conference in which he unveiled a plan to distance himself from his business interests that amounted to a “sham,” as Vox’s Libby Nelson put it back then.
He announced that he would put his businesses into a trust managed by his sons Eric and Donald Jr. — both of whom have since emerged as key spokespeople for their dad. Though the trust isn’t blind and Trump still profits from his business, he touted at the news conference that he was doing more than necessary to avoid conflicts of interest.
“I could actually run my business and run government at the same time. I don’t like the way that looks,” Trump said. “But I would be able to do that if I wanted to.”
Later, he added: “I have a no-conflict situation because I’m president … it’s a nice thing to have.”
While the situation may be nice for him, it raises questions about whether the executive branch is making policy in the public interest, or in the Trump family’s financial interest.
When the Post asked about T-Mobile’s Legere staying at the Trump International In January, Eric Trump suggested it has nothing to do with politics.
“It should come as no surprise that a CEO of a major corporation would want to stay with us,” he said, alluding to the service the hotel provides — though the quote could also refer to the financial incentives motivating Legere to spend money at Trump hotels.
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