An ongoing investigation by the House Committee on Oversight and Reform has revealed that former President Donald Trump’s businesses may have billed the Secret Service more than $1.4 million. The charges profit businesses in which Trump is invested, and some of the lodging charges have far exceeded what the government normally pays hotels. How this became possible is a tale of unintended consequences and oversight neglect by the inspector general.
No Spending Limit
The chair of the House Oversight Committee, Representative Carolyn Maloney (D-NY), says the Secret Service paid nightly rates of up to $1,185 per room for agents to stay at Trump properties — an amount more than five times higher than normally applicable caps on government travel. The exorbitant rates essentially amounted to payments for the privilege of guarding the former president.
Unlike other federal officials, Secret Service agents assigned to protect individuals, including presidents and former presidents, are exempt from all limits on lodging expenses. This exemption began when a provision of the federal appropriations act that funded the government for fiscal year 2017 made spending caps inapplicable to Secret Service agents on protective assignments. Trump stood to gain financially when he signed that act into law on May 5, 2017, but helping him overcharge Secret Service agents probably wasn’t the legislation’s aim.
“The Secret Service has a bad track record for stewardship of taxpayer money.”
A proposal to exempt the Secret Service from the lodging expense caps was included in President Barack Obama’s budget request for fiscal year 2017, which he submitted in February 2016. The government’s fiscal years don’t coincide with calendar years; fiscal year 2017 started on October 1, 2016, while Obama was still in office.
The proposal, which included suggested language for the appropriations act, likely filtered up to Obama from the Secret Service through its parent agency, the Department of Homeland Security (DHS). Assuming the federal budget process followed its usual trajectory, the department would have submitted its funding request to the president’s Office of Management and Budget in September 2015. Before that, the Secret Service may have submitted its own funding request to the department as early as spring 2015, before Trump announced his candidacy for president.
What resulted was an appropriations act that expressly exempted the Secret Service from a law authorizing the General Services Administration to limit the maximum amount government officials may pay for lodging. The General Services Administration assesses prevailing lodging rates in various regions, then imposes spending caps under its Federal Travel Regulation. Agencies can waive those caps in certain circumstances, but the regulation forbids agencies from reimbursing employees for lodging expenses that exceed an applicable regional cap by more than a limit of 300%.
How the government enforces the lodging caps (or, when it issues a waiver, the 300% limit) depends on how the government pays for lodging. Typically, a federal agency issues credit cards to employees for travel expenses, and employees are personally responsible for any expenses that exceed what the agency is permitted to reimburse. Occasionally, an agency charges rooms to a centralized account and pays a hotel directly after arranging for rates within the range of what it can legally pay.
A Lifting of Limits, But with Controls
The basic idea of granting the Secret Service additional spending authority wasn’t new when Congress negotiated the fiscal year 2017 budget. Prior appropriations acts had allowed the Secret Service to go beyond limits on travel expenses for agents on protective assignments, but only with prior approval from the Senate and House appropriations committees. The statutory language granting authority to go beyond authorized amounts, with prior approval, first appeared in the fiscal year 1980 appropriation act for the Treasury Department, which was then the Secret Service’s parent agency.
The language of that act reflected lawmakers’ deliberate choice to include a congressional prior approval requirement. The Secret Service had initially proposed an absolute exemption. Though House appropriators had seemed more amenable to the agency’s request, Senate negotiators persuaded their House counterparts of the need for prior approval and Congress added that requirement.
Something else stands out from the budget negotiations that year: the reasons the Secret Service gave for needing an exemption from spending limits. At a May 22, 1979, budget hearing, Francis Long, the agency’s assistant director for administration, explained the two issues the exemption was meant to fix. He said the proposed language would allow the Secret Service to exceed the total amount Congress budgeted for travel expenses if unforeseen trips, partly attributable to a recent increase in the number of protected individuals, depleted the funding. It would also allow the agency to cover meals and other expenses of agents assigned to protect individuals close to their duty stations (something the government’s travel rules ordinarily prohibited). Neither of these justifications focused on paying exorbitant hotel rates. This history shows just how far the Secret Service’s payments to the Trump organization have strayed from the agency’s original reasons for seeking the exemption.
Thirty-seven years after Congress approved the exemption, the Obama administration’s fiscal year 2017 budget request proposed new language for the appropriations act that would remove the prior approval requirement. Congress replaced the language from prior appropriations bills with this proposed language. In a separate section, lawmakers added a requirement that the Secret Service notify Congress before exceeding spending limits but did not require the agency to obtain prior approval. We haven’t been able to determine whether the Secret Service complied with this notice requirement.
The Obama administration’s budget request didn’t offer a reason for the proposed language change, and lawmakers didn’t ask about it in House and Senate hearings on the Department of Homeland Security’s budget for fiscal year 2017. In the absence of any new justification for exempting the Secret Service from travel spending limits, Trump’s unprecedented use of this exemption to enrich himself seems inconsistent with the only public explanation of the legislative purpose for the exemption.
After Congress lifted the congressional prior approval requirement in 2017, managers of the Secret Service could have established effective controls to prevent excessive payments to businesses owned by the individuals agents are assigned to protect. But the Secret Service has a bad track record for stewardship of taxpayer money. In 2010, the Government Accountability Office (GAO) reported that the Secret Service lacked “necessary internal controls, including policies and procedures, in place to help ensure it can effectively manage and report on funds for presidential candidate protection.”
GAO issued another report in 2019 indicating that the Secret Service had failed to consistently submit semi-annual reports to Congress detailing presidential protection expenses in 2016 and 2017. Secret Service officials admitted they were not even aware they had failed to submit the reports until GAO requested copies. Agency managers had failed to standardize procedures for preparing these legally mandated reports.
These kinds of problems have persisted, if the Secret Service’s recent responses to congressional investigators are any indication. In an October 17, 2022, letter, House Oversight Committee Chair Maloney wrote, “The materials the Secret Service has provided raise significant concerns about the agency’s spending at Trump owned properties, including exorbitant rates, incomplete documentation, and invoices that do not appear to match agency financial records.” The committee gave the Secret Service until October 31 to produce missing records of trips and internal requests for authorization to spend more than standard government rates. (No word yet on whether the Secret Service produced additional records accounting for all payments to the Trump organization.)
Maloney’s letter also revealed that the Secret Service began paying the Trump organization more than 300% of the allowed government rate even before May 5, 2017, the date the 2017 appropriations act lifted the maximum limit on lodging expenses for agents on protective assignments. Maloney’s letter indicates that the Secret Service paid nearly 500% of the allowed government rate at Trump’s Washington hotel in March 2017.
“Waste might have been avoided if the DHS inspector general had publicly flagged the Secret Service’s payments to the Trump organization.”
The report of an unrelated GAO audit provides insight into how the Secret Service justified going over the 300% limit before May 2017. In 2019, GAO examined four unrelated protective assignments that took Secret Service agents to Mar-a-Lago in February and March 2017. Though lodging expenses didn’t exceed the 300% limit on those occasions, the Secret Service’s counsel explained to auditors that the agency would occasionally rely on a 1982 opinion by GAO’s comptroller general as authority for exceeding the 300% limit. In that opinion, the comptroller general had said the United States Information Agency could exceed statutory spending limits for lodging when use of a particular establishment is “an integral part of the employee’s job assignment” and when barring the employee from staying there would “frustrate the ability of the agency to carry out its statutory mandate.”
A couple of considerations may call into question the Secret Service’s reliance on that old opinion, however. First, as GAO noted in its report, Congress transferred GAO’s authority to adjudicate these issues to the General Services Administration in 1996, which suggests the Secret Service probably should have sought approval from the General Services Administration. And second, in its 2016 appropriation, which was extended into the first part of 2017 by continuing resolutions, Congress expressly required the Secret Service to obtain prior approval from the congressional appropriations committees before going over travel expense limits.
In this context, travel costs seemed to spiral immediately after Trump took office. In February 2017, the Secret Service reportedly sought an increase of $60 million for travel-related expenses in its budget for fiscal year 2018, which began on October 1, 2017. In May 2017, Newsweekindicated that part of the request, $25.7 million, was for security expenses at Trump Tower that included “personnel travel costs assigned to the protective details for the children and grandchildren of President Trump, as well as other functions supporting these details.” Democrats in the House of Representatives introduced a bill in March that year to prohibit the government from paying for hotel rooms at properties “owned or operated by the President or a relative of the President,” but Republicans controlled the House that year, and the bill went nowhere.
President Trump’s frequent trips to his own properties, as well as travel by members of his family, continued throughout his term. Trump extended Secret Service protection for his adult children for an additional six months after he left office, and the cost of their protection included payments to Trump properties. These trips cost more than just money: in June 2017, then-Secret Service Director Randolph Alles, a Trump appointee, testified before a House subcommittee that “over time our investigations drop when we have to do this much protection.”
Inconsistent Oversight Within the Department
Waste of public resources might have been avoided or exposed sooner if the inspector general for the Department of Homeland Security had publicly flagged the Secret Service’s payments to the Trump organization. But DHS Inspector General Joseph Cuffari, a Trump appointee, has had a disastrous tenure since his confirmation in July 2019. The Project On Government Oversight and lawmakers have called for his removal, as have members of his own staff. Among other failures, Cuffari failed to raise the alert about the Secret Service from destroying text messages relevant to the January 6 committee’s investigation of the Capitol insurrection, waiting months before telling the committee about the loss of those messages. Overriding the recommendations of his staff, Cuffari also quashed two unrelated investigations of the Secret Service that might have embarrassed Trump.
Cuffari has shown little interest in Trump’s fleecing of the American public. When Cuffari took office, he inherited one audit of a presidential trip to Trump’s Turnberry resort in Scotland. Auditors had nearly completed their work by the time the Senate confirmed Cuffari’s nomination to be inspector general, on July 25, 2019. The office of the inspector general completed its audit in August 2019, and Cuffari eventually released the audit report in March 2020. The tally of costs in that audit report appears to have omitted a $1,300 fee that Trump’s resort reportedly charged the Secret Service to move furniture. After issuing that one report, Cuffari does not appear to have examined expenses related to any other trip to a Trump property, despite media reports of massive payments to the Trump organization, the Secret Service stonewalling public inquiries about costs, and congressional scrutiny. He also does not appear to have monitored whether the Secret Service was complying with the requirement to notify Congress before exceeding spending limits.
It seems unlikely Cuffari was unaware of concerns about spending at Trump properties. Democrats on the House Oversight Committee, who were in the minority at the time, launched an inquiry into spending by the Department of Homeland Security at Trump properties. Their investigative efforts intensified when they held the majority in Congress. News organizations conducted their own investigations, too. For its part, the Trump organization’s messaging surrounding its housing of Secret Service agents included a claim from Eric Trump, the president’s son and an executive vice president of Trump’s businesses, that Secret Service agents paid “like $50” per night to stay at Trump properties. Maloney’s ongoing investigation has shown this statement to be untrue.
Time to Act
The excessive charges are unlikely to stop anytime soon. The Secret Service is still responsible for protecting Trump and he is still charging the agency for the access it needs to do so. Secret Service agents on protective assignments remain exempt from the caps on lodging expenses because Congress has included the exemption language in every subsequent annual appropriation bill after fiscal year 2017, including the pending fiscal year 2023 appropriations bill for the Department of Homeland Security.
“Even without congressional action, the Secret Service could refuse to pay more than the government rate for lodging.”
There are obvious fixes, of course. Even without congressional action, the Secret Service could refuse to pay more than the government rate for lodging and let Trump decide if he wants to decline his entitlement to protection. (Though Secret Service protection for a sitting president is mandatory, the law permits former presidents to decline protection.) Inspector General Cuffari could start conducting real oversight by gathering the information that Congress seeks about expenses. But these things are unlikely to happen, so it’s up to Congress to act.
Congress should either reinstate the limits on Secret Service agents’ lodging expenses or prohibit any payments to individuals they are protecting, other than any costs or damages protected individuals can show they have incurred. New restrictions should cover not only payments directly to protected individuals and any businesses they own, but also payments to their relatives or their relatives’ businesses. Congress should require the DHS inspector general to provide them with detailed reports accounting for all expenditures related to protective activities of the Secret Service.
The public has been overcharged for too long. Imposing these standards and restrictions is the very least that can be done in the name of responsible stewardship of taxpayer money.
Research support for this analysis was provided by Joanna Derman.