Group Asks NY and California to Divest From Trump Hotel Company

MANHATTAN (CN) — A legal advocacy group this week asked the state pension funds of New York and California to divest from President Donald Trump’s hotel management company, taking particular aim at Trump SoHo, a 46-story skyscraper overlooking the Hudson River.

Trump this week warned Department of Justice Special Counsel Robert Mueller, through The New York Times, not to expand his probe to Trump’s business transactions.

On Thursday, BloombergPolitics reported that Mueller has indeed expanded his investigation into Trump’s real estate and financial dealings, including those involving Trump SoHo.

On Wednesday, the advocacy group Free Speech for People asked two of the nation’s largest state pension funds to divest their investments in Trump’s businesses. The group asked for divestment in a letter to New York State Comptroller Thomas DiNapoli, and a similar letter to top officials at CalPERS, the largest state pension fund in the nation.

Free Speech for People, which describes itself as nonpartisan, was founded the day the Supreme Court equated money with speech in the Citizens United ruling. It seeks a 28th Amendment overturning Citizens United and the concept of corporate personhood.

“We ask that you evaluate whether the New York State Common Retirement Fund’s ongoing payment of management and performance fees to the CIM Fund III, which in turn directly pays President Trump’s hotel management company, violates the New York State Common Retirement Fund’s high ethical standards, fiduciary duties to its beneficiaries, and the domestic emoluments clause of the U.S. Constitution; and if appropriate, to divest,” the group’s president Shanna Cleveland wrote to DiNapoli.

In a Thursday statement about Trump’s alleged profiting from public funds, Cleveland told California and New York: “Despite knowing of this conflict at least as early as April, it does not appear that CalPERS, NYSCRF or CIM Fund III have taken any actions to remedy it.

“Now the development not only presents a serious emoluments problem for the funds, but it seems that Mueller is concerned that it may be further evidence of improper dealings between Trump and Russia. It’s not yet clear how that investigation will play out, but this does seem yet another reason to consider divesting from the property.”

Comptroller DiNapoli’s spokesman indicated on Friday that New York pensions was already in the process of divestment.
“The fund’s investment in CIM Fund III, which dates to 2007, is in the process of being liquidated as part of its normal cycle,” the spokesman wrote in an email. “As a limited partner, the fund has limited rights as an investor and does not make or control CIM’s investment choices.”

CalPERS declined to comment.

The Trump SoHo condos and hotel raised controversies even before last year’s election. Construction of the $450 million building — a collaboration between Trump, the Bayrock Group and billionaire Tamir Sapir, from the former Soviet republic of Georgia — was delayed by a workplace accident, financing troubles, and the discovery of 19th century bones of abolitionist churchgoers on the construction grounds.

Three years after it was completed in 2008, would-be buyers who sued Trump SoHo’s developers for fraud recovered 90 percent of their deposits.

On Thursday, BloombergPolitics focused more attention on the downtown hotel, involving Mueller’s probe of Russian investment in it and other properties.

That story came the morning after Trump told the Times that investigation of his family’s finances would cross a red line, and lashed out at Attorney General Jeff Sessions for partially recusing himself from the Russia investigation.

Trump’s attorney John Dowd told BloombergPolitics that he believed that investigating the president’s business transactions would extend beyond Mueller’s mandate.

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