Victory for Trump as judge throws out suit on foreign payments

Flags fly above the entrance to the Trump International Hotel in Washington.
Flags fly above the entrance to the Trump International Hotel in Washington. PHOTO: REUTERS

NEW YORK (REUTERS) - A federal judge in New York on Thursday (Dec 21) threw out a lawsuit that had accused President Donald Trump of violating the US Constitution by accepting foreign payments through his hotels and other businesses, handing him a major victory on an issue that has dogged him since even before he took office in January.

Though other lawsuits remain pending that make similar claims, the ruling by US District Judge George Daniels is the first to weigh the merits of the US Constitution's anti-corruption provisions as they apply to Mr Trump, a wealthy businessman who as president regularly visits his own hotels, resorts and golf clubs.

In a 29-page opinion granting the Trump administration's request to toss the suit, Judge Daniels said the plaintiffs did not have legal standing to bring the suit. The plaintiffs included the non-profit watchdog group Citizens for Responsibility and Ethics in Washington (CREW), a hotel owner, a hotel events booker and a restaurant trade group.

The lawsuit, filed after the Republican president took office in January, accused Mr Trump of running afoul of the Constitution's "emoluments" clause by maintaining ownership of his business empire while in office.

The emoluments clause, designed to prevent corruption and foreign influence, bars US officials from accepting gifts from foreign governments without congressional approval.

Mr Trump has ceded day-to-day control of his businesses to his sons. Critics have said that is not a sufficient safeguard.

The plaintiffs said they are legally injured when foreign governments try to "curry favor" with Mr Trump by paying to use his businesses, such as the Trump International Hotel in Washington or a high-end restaurant at a Trump hotel in New York City. The plaintiffs said this leads them to have lost patronage, wages and commissions.

US Department of Justice spokeswoman Lauren Ehrsam said the Trump administration "appreciates the court's ruling".

Judge Daniels, appointed to the bench by Democratic former President Bill Clinton, said in his decision that the plaintiffs' claims were speculative. Judge Daniels said Mr Trump had amassed wealth and fame even before taking office and was competing in the hospitality industry.

"It is only natural that interest in his properties has generally increased since he became president," the judge wrote.

The judge also said that if Congress wanted to do something about the president's actions, it could.

"Congress is not a potted plant," Judge Daniels said. "It is a co-equal branch of the federal government with the power to act."

CREW Executive Director Noah Bookbinder said that his legal team is weighing options on how to proceed. "While today's ruling is a setback, we will not walk away from this serious and ongoing constitutional violation," Mr Bookbinder added.

Some legal experts had raised concerns even before his inauguration on Jan 20 that Mr Trump would violate the emoluments clause as president.