May 11, 2018

Menendez Questions President Trump’s Conflicts of Interests in Panama

Series of missives follow Trump Organization’s threatening letter to President of Panama suggesting political repercussions for not intervening on its behalf in hotel dispute

WASHINGTON – U.S. Senator Bob Menendez (D-N.J.), Ranking member of the Senate Foreign Relations Committee, today raised concerns about the Trump Organization’s effort to convince the Panamanian government to improperly intervene on its behalf in a commercial dispute. In four separate letters to President Donald Trump, the U.S. Embassy in Panama, the Trump Organization, and Secretary of Commerce Wilbur Ross, Menendez seeks assurances and clarification on whether the Trump Administration or U.S. embassies have provided any special support to the Trump Organization with foreign governments.

The letters come after it was revealed that lawyers for the Trump Organization sent a letter directly to Panamanian President Juan Carlos Varela asking him to disregard separation of powers and attempt to influence a judicial process to reverse the Trump Organization’s eviction from a luxury hotel in Panama formerly named the Trump Ocean Club. 

“Even if the Panamanian government rightfully refuses to intercede in the judicial proceedings, the letter’s threatening tone may suggest to the Panamanian government that improper, and perhaps illegal, actions are effective means of influencing U.S policy toward the country,” wrote Senator Menendez to President Trump.“Furthermore, the letter gives the American and Panamanian publics new reason to question whether any future government actions that benefit your firm’s operations in Panama do so at the expense of the public interest.”

Despite being ordered by a Panamanian judge to hand over control of the property to its majority owners, the Trump Organization refused to vacate the 70-story luxury tower during a standoff that ended with a police-escorted eviction on March 5, 2018.

In his letter to the U.S. Embassy in Panama and the Secretary of Commerce, Menendez seeks guarantees that the departments have taken steps to prevent any confusion of President Trump’s private business interests with those of the U.S. government.  The letter states he expects they “will treat the Trump Organization no differently than it would any other U.S. private business, and will take every effort to avoid any perception of special treatment or a conflict of interest.”

The Senator also asked the Trump Organization’s Chief Compliance Counsel what ethics reviews they have put in place regarding communications with foreign governments and if they have sent any similar letters to other foreign government officials.

Each letter lists out a series of oversight questions to be answered by May 21st, 2018.

A copy of the letter to President Trump can be found here and below.  

A copy of the letter to Secretary of Commerce Wilber Ross can be found here.

A copy of the letter to U.S. Embassy in Panama can be found here.

A copy of the letter to the Trump Organization can be found here.

Dear Mr. President:

I write to express my concern over recent actions taken by your firm, the Trump Organization, and its representatives in Panama. On April 10, the Associated Press reported that on March 22, lawyers representing your firm delivered a letter to President Juan Carlos Varela asking him to ignore Panama’s separation of powers and intervene in a judicial dispute that would directly affect your financial position.[1] The letter further suggests that actions by Panama’s courts may violate the U.S.-Panama Bilateral Investment Treaty and that your firm may seek legal recourse against the Panamanian government.

The letter raises serious conflict of interest questions that could impinge on the United States’ ability to conduct effective foreign policy. Even if the Panamanian government rightfully refuses to intercede in the ongoing judicial proceedings, the letter’s threatening tone may suggest to the Panamanian government that improper, and perhaps illegal, actions are effective means of influencing U.S policy toward the country. The letter’s reference to the bilateral investment treaty insinuates that President Varela’s response could affect official U.S.-Panamanian relations. Furthermore, the letter gives the American and Panamanian publics new reason to question whether any future government actions that benefit your firm’s operations in Panama do so at the expense of the public interest.

Given the possibility that some may confuse your private business interests with those of the U.S. government, I hope that you will clarify your position on this matter. To that end, I ask that you answer the following questions:

  1. Will you commit to President Varela, and the Panamanian and American publics, that there will be no repercussions from the U.S. government if he chooses to ignore your firm’s requests?
  2. Were you or any members of your staff aware of the letter prior to the publication of the Associated Press article on April 10?
  3. Have you or any members of your staff communicated with the Government of Panama about this issue?
  4. Have you or any members of you staff communicated to the Government of Panama that the letter does not reflect the position of the United States government? If not, do you plan to do so?
  5. Has the administration begun to evaluate, because of your firm’s letter to President Varela, whether the actions of the Panamanian government are consistent with the U.S.-Panama Bilateral Investment Treaty? If so, please share the administration’s findings with the Committee.
  6. Have you or any members of your staff communicated with the State Department about this issue? If so, please provide copies of that communication.
  7. Have you or any members of your staff communicated with your firm or its representatives about its dispute with the owners of the Bahia Grand hotel or any other business ventures in Panama? If so, please provide copies of that communication.
  8. Did you or your staff provide any support to your firm or its representatives in this matter?
  9. Do you believe that it is proper for a U.S. company owned by an elected official to request that the executive branch of a foreign government intervene in the proceedings of its judicial branch, thereby calling into question the judiciary’s independence and the rule of law?

I appreciate your prompt attention to this matter, and given the timely nature of this inquiry, I ask that you respond by May 21.

Sincerely,

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[1] Juan Zamorano and Stephen Braun, “Trump’s Company Asked Panama President to Help in Hotel Spat,” Associated Press, Apr. 10, 2017.

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