Agency Ignored Constitutional Questions About Trump Hotel Lease, Report Finds

The agency’s deliberation spanned several months before and after Mr. Trump took office.

Fearing public controversy, which might damage the government’s financial interests, the agency did urge that Mr. Trump divest himself of his financial interest in the property in a Jan. 31, 2017, meeting with his oldest sons, Donald Trump Jr. and Eric Trump, the report said. After his election, Mr. Trump turned management of the business over to them.

The contracting officer on the case “pushed hard for divestiture” in that meeting, but did not insist upon it because he did not believe that the new president’s interest in the property, a historic building known as the Old Post Office, created a problem that constituted a breach of the lease, the report said.

Two months later, the contracting officer, Kevin Terry, issued a certificate declaring that the Trump Organization was in full compliance with the provisions of the lease and that the lease was “valid and in full force.” Although Mr. Terry knew the constitutional issue was open, “nonetheless, he did not qualify his certification,” the report said.

Agency officials acknowledged that they may be forced to revisit the lease, depending on what the courts decide. But the inspector general, Carol F. Ochoa, noted that the agency has already agreed with the Trump Organization that President Trump’s interest does not violate the lease’s language prohibiting profits to elected officials. The report identified that as a “problem.”

It recommended that the agency’s lawyers conduct a “formal legal review” on how the emoluments bans relate to the agency’s business.

In his response to the report, Jack St. John, the General Services Administration’s general counsel, said he was “gratified” that the inquiry found no evidence of political interference in the agency’s decision-making.

“In fact, your office found no undue influence, pressure or unwarranted involvement of any kind by anyone, including the Executive Office of the President,” he wrote in response to the inspector general.