Brian E. Frosh, the Maryland attorney general, said if the lawsuit progressed to the discovery phase, he and Karl Racine, the attorney general for the District of Columbia, would seek to obtain the president’s tax returns to gauge the extent of his business dealings. “It is unprecedented that the American people must question day after day whether decisions are made and actions are taken to benefit the United States or to benefit ,” he said. “The president’s conflicts of interest threaten our democracy.”
The Justice Department had no immediate response. But in a brief filed last week in response to the New York case, the department argued that the earlier lawsuit should be dismissed because the emoluments clauses were never intended to prohibit a president from owning a business while in office. Even if the president had violated those prohibitions, the department’s lawyers contended, it is up to Congress, not a federal judge, to act. They also argued that the plaintiffs had shown no financial harm.
In a statement, the Republican National Committee called the new lawsuit “absurd.” Lindsay Jancek, a R.N.C. spokeswoman, said, “The actions by the attorneys general represent the kind of partisan grandstanding voters across the country have come to despise.”
Monday’s complaint claims that businesses owned by Mr. Trump divert customers away from businesses that the District of Columbia and Maryland either own, license or tax, harming those governments financially. For example, it contends, the Trump International Hotel in Washington competes with facilities owned or operated by the city’s government, including the Walter E. Washington Convention Center, its armory and its Carnegie Library. It also competes with a government-owned conference center in Bethesda, Md., and a resort in Prince George’s County, Md., that generates tax revenue for the state, the suit claims.
Mr. Racine told reporters Monday that just as states intervened to challenge Mr. Trump’s efforts to limit travel from Muslim countries, he hoped to force the court to step in and evaluate Mr. Trump’s business entanglements.
“Congress has given the president a total pass,” he said. “State attorney generals are serving as a necessary check and balance in the Trump era where others failed.”
The suit also claims that the president has used his position to help his businesses. His visits to the Trump hotel in the renovated Old Post Office have raised the facility’s profile, it claims, and put competitors at a disadvantage. Although Mr. Trump’s businesses pay taxes, it states that overall, his business interests threaten revenue on which Maryland and the District of Columbia depend.
Moreover, the suit claims, the president’s business entanglements create an “intolerable dilemma” for governments like Maryland and the District of Columbia. If jurisdictions refuse zoning exemptions or requests from the Trump Organization, it claims, the president could retaliate by seeking to cut federal funds to those jurisdictions.
The Justice Department argues that the emoluments clauses should be narrowly construed to prohibit the president from accepting gifts or payments in his official capacity. It does not extend to ordinary commercial arms-length transactions like hotel stays or approvals of trademark applications, the department contends. The president’s defenders claim he has taken every reasonable step to distance himself from the Trump Organization, the family company now run by the president’s adult sons.
Some critics of the president said the Maryland suit crossed a new legal threshold because the Maryland and District of Columbia governments are legally considered “coequal sovereigns” with the president, making them the strongest possible opponents in the constitutional argument over emoluments. The lawsuit suggests that Maryland has a special standing to sue because the anticorruption prohibitions written into the Constitution helped induce Maryland to support the union.
The complaint “represents an important new front in the emoluments war,” said Norman Eisen, chairman of Citizens for Responsibility and Ethics in Washington, or CREW, whose lawyers are co-counsel in the case. CREW is also the original plaintiff in the New York lawsuit.