Malaysian Prime Minister Najib Razak is the subject of a Justice Department corruption probe which alleges he misappropriated billions of dollars from a government fund he controlled. In June, the Justice Department moved to seize $540 million in assets, including “[a] Picasso painting given to the actor Leonardo DiCaprio, the rights to two Hollywood comedies and a $27.3 million diamond necklace belonging” to Najib’s wife. In all, the Justice Department alleges $4.5 billion was misappropriated, including $731 million directly into Najib’s own bank accounts.
Despite the ongoing investigation into Najib, Trump invited the him to the White House for a friendly visit. The official agenda includes discussion of North Korea, among other topics. The meeting, which will take place on Tuesday, gives Najib a “much-needed dose of legitimacy” in advance of elections, which are expected in the next year.
Najib is returning the favor by spending cash at the Trump International Hotel, which Trump still owns. Upon arrival to the United States, the Malaysian leader and his large diplomatic contingent have set up camp at the Trump family’s wildly expensive D.C. hotel, ThinkProgress has learned.
The New Straits Times, a Malaysian newspaper with close ties to the government, posted video of Najib’s arrival in the District. He can be seen exiting his vehicle and entering Trump International Hotel.
Najib later held a press conference with the Malaysian press from inside the hotel, according to an Instagram account belonging to a member of parliament accompanying Najib on the trip.
At 5:30PM on Monday, nearly 10 hours after the press conference, a ThinkProgress reporter observed a large motorcade of 15 vehicles, including numerous small buses and SUVs, displaying Malaysian flags outside the Trump hotel. At 8AM Tuesday morning, the motorcade was still there. The Embassy of Malaysia would not immediately confirm that Najib and his contingent spent the night at the hotel.
In Malaysia, Najib has become an increasingly autocratic ruler, controlling much of the media and jailing political opponents.
Among those traveling with the Prime Minister was Roslan Sohari, who allegedly transferred about $500,000 in illicit funds into a bank account belonging to Najib’s wife.
How to stay profitable while your hotel is mostly empty
The large Malaysian contingent at the Trump International Hotel is a core part of the strategy that has made the venue profitable. Trump’s hotel is mostly empty—it averages 44% occupancy compared to an area average of 69%—but makes money by charging exorbitant prices. The average price of a room at the hotel is $652.98 per night, more than $150 higher than the average rate at the next most-expensive hotels in the area. (When Trump was developing the project, the projected nightly rate was only $416.)
The “Trump Townhouse” suite, more suitable for a prime minister, goes for more than $18,750 per night. And it’s not just room fees that bring in cash: services throughout the hotel are dramatically higher than other area hotels. The bar offers a $100 cocktail and the cheapest cocktail on the menu is $23.
The Trump hotel has actively courted visiting diplomats willing to pay these prices. In December, ThinkProgress reported that, following the election, Kuwait canceled their plans to hold their annual party at the Four Season and moved the event to the Trump hotel. Other foreign nations patronizing the hotel include Bahrain, Azerbaijan, and Saudi Arabia.
Trump has explicitly lent the prestige of the presidency to the hotel, frequently visiting its restaurant for a meal of well-done steak with ketchup.
The strategy is working. The hotel “raked in about $18 million in the four months following Trump’s inauguration,” including a profit of more than $2 million.
The one problem with Trump’s business strategy is that, according to many legal experts, its unconstitutional.
Article I, Section 9 of the Constitution provides that “no person holding any office of profit or trust under them, shall, without the consent of the Congress, accept of any present, emolument, office, or title, of any kind whatever, from any king, prince, or foreign state.” Najib’s stay will clearly be a financial benefit to the Trump hotel, which remains fully owned by Trump. It would, according to most legal experts, constitute an “emolument” under the constitution. Accepting an emolument could be considered an impeachable offense.
The purpose of the emoluments clause is to prevent a foreign government from buying influence with the President, a heightened concern when the leader of the government in question is under active investigation by the United States federal government.
Trump’s decision to retain full ownership of the hotel while in office has already spurred three major lawsuits, including a recent one by the Attorneys General from Maryland and the District of Columbia. That suit alleges that Trump is “flagrantly violating” the Emoluments Clause.
Trump has attempted head off his legal problems by pledging to donate “profits” from foreign governments staying at his hotels. But after making the pledge, USA Today revealed that the Trump Organization is not keeping records that would allow it to segregate the profits. Further, this scheme would not solve Trump’s legal issues. There is no exemption to the Emoluments Clause if the recipient of an emolument gives it away later.