In a new legal challenge to President Trump, Maryland and the District of Columbia filed a lawsuit Monday alleging that his failure to shed his private businesses has undermined public trust and violated constitutional bans against self-dealing.
The lawsuit, filed in a Maryland federal court, makes many of the same arguments in a lawsuit filed earlier this year by a Washington watchdog organization in a New York federal court. But some legal experts said it rested on stronger legal ground because the plaintiffs were governmental entities, which could have stronger standing to sue the president.
The complaint opens uncharted legal territory. No state has accused a president of violating the emoluments clauses of the Constitution. One of those clauses bans federal officials from accepting gifts from foreign governments. A second prohibits the president from accepting economic benefits from the federal or state governments, other than his salary.
Because Mr. Trump continues to own and profit from his business empire, the lawsuit claims, it is unclear whether he is making decisions in the country’s best interest or out of “self-interested motivations grounded in the international and domestic business dealings in which President Trump’s personal fortune is at stake.”
It argues that businesses owned by Mr. Trump divert customers away from businesses the District of Columbia and Maryland either own, license or tax, harming those governments financially. For example, it contends, the Trump International Hotel in Washington competes with facilities owned or operated by the city’s government, including the Walter E. Washington Convention Center, its armory and its Carnegie Library. It also competes with a government-owned conference center in Bethesda, Md., and a resort in Prince George’s County, Md., that generates tax revenue for the state, the suit claims.
The suit alleges that the president has misused his position to increase patronage of his family’s hotels and the restaurants in them by foreign diplomats and others. Mr. Trump and his family members have frequented the Trump hotel, in the renovated Old Post Office, and room prices there have shot up since the election, the complaint states. Although Mr. Trump’s businesses pay taxes, the effect is a financial loss to the governments, it asserts.
In the earlier New York case, the Justice Department has asked a federal judge to dismiss the complaint, arguing that the emoluments clauses do not prohibit presidents from owning businesses. That lawsuit was initiated by Citizens for Responsibility and Ethics in Washington.
In a 70-page brief filed Friday, the Justice Department also contended that even if Mr. Trump’s business interests did violate the Constitution, it would be up to Congress, not a federal court, to devise a remedy.
The department also argued that the plaintiffs in that case, who include a hotel and restaurant owner, had not demonstrated any revenue loss as a result of Mr. Trump’s businesses.
The Justice Department argues that the emoluments clauses should be narrowly construed to prohibit the president from accepting gifts or payments in his official capacity. It does not extend to ordinary commercial arms-length transactions like hotel stays, which benefit the Trump Organization, the family company now run by the president’s adult sons.
Some legal experts said the Maryland suit crossed a new legal threshold because the Maryland and District of Columbia governments are legally considered “coequal sovereigns” with the president, making them the strongest possible opponents in the constitutional argument over emoluments.
“It represents an important new front in the emoluments war,” said Norman Eisen, chairman of the board of Citizens for Responsibility and Ethics in Washington, whose lawyers are co-counsel in the case.
The complaint notes that in 1776, Maryland adopted its own ban on emoluments, and that the prohibitions against corruption written into the federal Constitution were inducements to Maryland and other states to support the union.
The plaintiffs are hoping to force Mr. Trump to release his tax returns should either of the lawsuits reach the discovery phrase. The Justice Department would most likely take such a fight to the Supreme Court, legal experts said.