Lawmakers Question Trump’s Stake in Subsidized Housing Complex

https://www.nytimes.com/2017/07/10/us/politics/trump-conflicts-subsidized-housing-complex.html

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WASHINGTON — Two congressional Democrats are demanding more information about President Trump’s potential conflicts of interest stemming from his part ownership of the nation’s largest federally subsidized housing complex, which they say could benefit financially from decisions made by the Department of Housing and Urban Development.

Mr. Trump stands to make millions from his 4 percent stake in Starrett City, a sprawling affordable housing complex in Brooklyn, according to a 10-page letter written by Representative Elijah E. Cummings of Maryland, the House Oversight Committee’s top Democrat, and Representative Hakeem Jeffries of New York, whose district includes the complex. The lawmakers sent the letter on Friday to the president’s eldest son, Donald Trump Jr., and Allen H. Weisselberg, the Trump Organization’s chief financial officer, who oversees a trust that holds the president’s business assets. The letter was also sent to Ben Carson, the secretary of the housing department, and Representative Trey Gowdy, Republican of South Carolina and the chairman of the oversight committee.

“Many real estate companies receive government subsidies to support affordable housing, but unique conflicts exist with regard to Starrett City because the president is on both sides of the negotiations,” the letter said. “He oversees the government entity providing taxpayer funds and he pockets some of that money himself.”

Mr. Cummings and Mr. Jeffries said Mr. Trump’s financial disclosures show that the president’s stake in Starrett City is valued at $5 million to $25 million, while the complex as a whole is probably valued at more than $625 million. The letter, citing a Washington Post report, said Starrett City’s owners have received more than $490 million in rent subsidies since May 2013.

The congressmen also pointed out that about a decade ago, the owners of Starrett City had reached an agreement to sell the complex for $1.3 billion and that Mr. Trump had praised the deal, which would have made him about $52 million. However, that deal and others to sell the complex were blocked by the housing department because federal officials were concerned that the buyers might not be able to maintain the apartments as affordable.

The lawmakers said they are now concerned that Mr. Trump’s “representatives,” through the department, could increase his profits from the complex by approving its sale, raising rents or putting “a thumb on the scales to benefit the president and his business partners when Starrett City is refinanced during the president’s term in the office.”

The men added that they also worry that Mr. Trump’s proposed budget would make steep cuts to many housing programs but “would leave the type of federal aid that flows to the owners of Starrett City mostly intact.”

The congressmen are requesting a number of documents related to Mr. Trump’s stake in Starrett City, including communications between the Trump Organization and partners of the complex, as well as communications with banks or lenders about the complex since Mr. Trump’s election. They also want communications the Trump Organization has had with the White House or the department about the complex, and records related to how much federal housing assistance Starrett City has received in the past and how the president’s potential conflicts of interest will be managed.

Mr. Cummings and Mr. Jeffries are also concerned about the appointment of Lynne Patton, a longtime Trump family associate, to lead the department’s New York and New Jersey office. Ms. Patton, a former event planner who had no housing experience before Mr. Trump took office, was the vice president of the Eric Trump Foundation and worked on the president’s campaign before she became the senior adviser and director of public engagement for the housing secretary.

“We have serious concerns that her self-described loyalty to the president and his family could influence HUD’s discretion on issues related to Starrett City,” the letter said.