Chinese builders got Trump golf-club job

Dubai deal struck despite president’s vow not to engage in new foreign contracts

WASHINGTON -- A major construction company owned by the Chinese government was hired to work on the latest Trump golf club development in Dubai, United Arab Emirates, despite a pledge from President Donald Trump that his family business would not engage in any transactions with foreign government entities while he is president.

Trump's partner, DAMAC Properties, awarded a $32 million contract to the Middle East subsidiary of China State Construction Engineering Corp. to build a six-lane road as part of the residential part of the Trump World Golf Club Dubai project called Akoya Oxygen, according to news releases released by both companies. The club is scheduled to open next year.

The companies' statements do not state the exact timing of the contract except to note it was sometime in the first two months of 2017, just as Trump was inaugurated and questions were raised questions about a potential conflicts of interest between his presidency and his real estate empire.

The Chinese company is majority government-owned -- according to Bloomberg and Moody's, among others -- an arrangement that generally encourages growth and drives out competition. It was listed as the seventh-largest company in China and 37th worldwide with nearly $130 billion in revenue in 2014, according to Fortune's Global 500 list.

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The company, which has had a presence in the United States since the mid-1980s, was one of several accused by the World Bank of corruption for its role in the bidding process for a road project in the Philippines. It was banned in 2009 from World Bank-financed contracts for several years.

Meredith McGehee, chief of policy, programs and strategy at Issue One, which works to reduce the role of money in politics, said doing business with a foreign entity poses several potential problems for a president, including accusations that a foreign government becoming a factor in foreign policy.

The Trump Organization agreed not to engage in any new foreign deals or new transactions with a foreign entity -- country, agency or official -- other than "normal and customary arrangements" made before Trump's election.

McGehee said Trump clearly knew that foreign arrangements could be problematic because he outlined a list of vague restrictions for his company to follow while he is president.

She said the writers of the U.S. Constitution knew they could be, too.

The Emoluments Clause in the U.S. Constitution says officials may not accept gifts, titles of nobility or emoluments from foreign governments with respect to their office, and that no benefit should be derived by holding office.

"This is not just a concern of good government organizations," she said. "It was a fundamental concern of the Founding Fathers."

Trump pledged to donate profits from spending by foreign governments at his hotels to the U.S. Treasury, though he has been accused of violating the constitutional restriction and faces multiple lawsuits over the issue.

In some deals, the Trump Organization licenses its name and receives royalties from a project but does not have any influence over whom the developer hires. But in other cases, officials from the Trump Organization, including Trump's children, have taken a great interest in developments, walking the sites to check on progress.

An official of the Trump Organization, which is run by the president's adult sons, confirmed that the company licensed its name and brand to DAMAC Properties and has an agreement to manage the Dubai golf course.

The Chinese company was "appointed by DAMAC to undertake some infrastructure work and to build one of their hospitality developments," said the Trump Organization official, who spoke on the condition of anonymity. The official said the residential project and the golf course are "totally unrelated" despite marketing materials, including brochures, websites and news releases, showing them intricately tied together. DAMAC and the Chinese company did not respond to messages about the development.

Hussain Sajwani, DAMAC's chairman, who has family members listed in the Panama papers -- which relate to the financial dealings of offshore entities -- offered the Trump Organization $2 billion in deals after Trump's election, according to both sides. Trump said he rejected the offers to avoid conflicts of interest.

"Over the weekend, I was offered $2 billion to do a deal in Dubai with a very, very, very amazing man, a great, great developer from the Middle East," Trump said at a news conference in January. "And I turned it down. I didn't have to turn it down. ... But I don't want to take advantage of something."

Information for this article was contributed by Kevin G. Hall and Ben Wieder of the Tribune News Service.

A Section on 09/10/2017

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