October 3, 2018
President Trump has many well documented conflicts of interest that leave his administration vulnerable to foreign influence and corruption. One instance where Trump’s business interests may have presented consequences for the American people is the case of the FBI headquarters.
After 12 years and $20 million were spent planning a relocation of the FBI headquarters, the project was abruptly cancelled. Trump was more involved in the cancellation than a senior administration official first suggested. If the headquarters had moved, its location just down the street from Trump’s eponymous hotel would have been available for competing retail and hotel space. If the president spiked the FBI headquarters move to protect his business from competition, he put his own bottom line above fiscal responsibility and national security.
Need for a New Headquarters
With a location in downtown Washington D.C. that is hard to secure, and a deteriorating structure that is too small to accommodate a growing workforce, the state of the current headquarters in the J. Edgar Hoover Building is bleak. The FBI has been asking for a new headquarters since at least 2005. The General Services Administration (GSA) agreed that a new headquarters was necessary, as did the nonpartisan Government Accountability Office, which noted that “[s]ince September 11, 2001, the Federal Bureau of Investigation’s (FBI) mission and workforce have expanded, and the FBI has outgrown its aging headquarters.”
Given the unsustainable status quo, the FBI and GSA worked to estimate costs and identify options for a new headquarters. The most expensive option was modernizing the current headquarters, at an estimated $1.7 billion. A later estimate found the renovation would cost between $850 million and $1.1 billion, but would only accommodate 52 percent of the headquarters workforce. Another option was rebuilding from scratch on the same site, which was estimated to cost at least $850 million.
The final–and winning–option was moving to a new site where the staff could be centralized and more easily secured. The estimated cost was $1.2 billion, but would ultimately save the government about $1 billion over 20 years by eliminating the need to lease other facilities.
Consensus for Relocation
In 2012, GSA proposed going forward with relocation of the headquarters, a plan which had the benefit of addressing all of the FBI’s major concerns. By 2014, GSA narrowed the options to three sites in the D.C. metro area. In 2016, the FBI secured funding in President Obama’s budget, and GSA’s project executive at the time, Bill Dowd, was confident that the amount, in addition to the value of the current building, “would be sufficient to afford the new campus.” GSA requested proposals from real estate firms, and announced it would select a location and developer in March 2017.
Going ahead with a move would leave the FBI’s downtown site to be developed into a mixed-use complex likely including offices, a hotel, restaurant, apartments, and retail space.
Trump International Hotel
Meanwhile, the Trump International Hotel opened in September 2016 in the Old Post Office, just down the street from the FBI headquarters on Pennsylvania Avenue. In January 2017, President Trump was sworn in, giving him power over GSA, while also leasing the Old Post Office building from GSA (even though his lease appeared to prohibit him from holding office and the lease at the same time).
The area is prime real estate for a luxury hotel, and GSA received at least 10 bids on the site, including from other high end hoteliers. Indeed, the Trump Hotel has been extremely profitable for the president, and he reported over $40 million in hotel-related revenue for calendar year 2017.
A Change of Plans
The plan to move the FBI headquarters came to an abrupt halt in July 2017, after 12 years and roughly $20 million were spent planning. After twice postponing the announcement of the final location, GSA cancelled the move altogether, but acknowledged that “cancellation of the project does not lessen the need for a new FBI headquarters.”
At a Senate hearing, GSA’s public building service acting commissioner Michael Gelber explained that “[a]fter internal and interagency deliberations, GSA determined that moving forward without full funding would put the Government at risk for project cost escalations.” David Wise, director of the U.S. Government Accountability Office’s physical infrastructure team said that swapping the headquarters location “just didn’t really work out.”
In February 2018, the FBI announced that instead of moving, it will build a new headquarters on the old site. The plan is estimated to cost $3.3 billion and will require 2,300 staff to move to other locations — a costly plan that does not address the needs that prompted the project.
Why Cancel the Move?
The decision to cancel the FBI’s move was met with puzzlement and frustration about wasted time and resources from elected leaders of both parties, especially as justifications for the cancellation seemed to fall short.
House Minority Whip Steny H. Hoyer (D-MD) said of the cancellation “the Trump administration and Republicans in Congress are putting the safety and security of our country at risk.”
Sen. John Barrasso (R-WY), who chairs the Senate Committee on Environment and Public Works, requested a detailed report on the project after it was put on hold and questioned the cancellation of the move, saying “[t]he security and efficiency arguments for their case are clear. What is not clear is why this project was suddenly halted, why Congress was not notified in advance, and what happens now.”
Sen. Chris Van Hollen (D-MD), who is on the same committee, observed that “[t]here is no question that the President stands to gain financially by keeping the FBI in its existing building and blocking any competition for the Trump Hotel from being developed there.”
President Trump’s Involvement
Members of Congress continued to question the motive for the cancellation of the move. During a House Appropriations Committee hearing in April 2018, Rep. Mike Quigley (D-IL) asked GSA Administrator Emily Murphy “To your knowledge, was the president or anyone at the White House involved in those discussions, either with your predecessors, or people you’re working with now, or yourself?” Murphy responded that “The direction that we got came from the FBI. It was the FBI that directed to GSA as to what its requirements would be.”
A GSA Inspector General report released on August 27th, 2018 revealed that Administrator Murphy’s testimony was “incomplete and may have left the misleading impression that she had no discussions with the President or senior White House officials” about the FBI headquarters project. In fact, Murphy met twice about the FBI project with President Trump, and once with White House Chief of Staff John Kelly (without President Trump). One of the meetings with Trump was just weeks before the announcement that the headquarters would be rebuilt on the same site.
Why have the President and his Chief of Staff taken such an interest in the FBI headquarters project, and why did the GSA Administrator conceal their interest? The president’s financial stake in his nearby hotel might help answer those questions. CREW is currently in litigation with GSA to obtain records about the move’s cancellation to understand the underlying motivation and President Trump’s full role.
After more than a decade of planning, the FBI settled on a costly option that does not address the key needs that prompted the project. There is reason to believe that the president sabotaged an upgrade for the infrastructure of the FBI that would have saved significant taxpayer dollars. There is also reason to believe that doing so would serve the interests of his family business. If personal profits played into the decision to cancel the FBI move, President Trump proved once and for all that his primary concern is not the public interest, but his own bottom line.