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The Spokesman-Review Newspaper
Spokane, Washington  Est. May 19, 1883

Panama’s government steps into Trump hotel dispute

This July 4, 2011, file photo, shows the Trump International Hotel Panama , third building from left, in Panama City. (Arnulfo Franco / Associated Press)
By Jeff Horwitz and Juan Zamorano Associated Press

PANAMA CITY – Panama’s government said Monday it was formally investigating a complaint that executives for President Donald Trump’s family hotel business were illegally occupying a 70-story luxury Trump hotel amid a management dispute.

The Public Ministry said it was investigating whether there was any “punishable conduct” in the matter at the Trump International Hotel in Panama. The dispute has included armed guards on the property, allegations of improperly shredding documents and a pitched fight for control over a room filled with computer servers. Employees acting at the direction of Trump’s hotel business retained physical control over the property, but the hotel’s owners were controlling at least some of the hotel’s bank accounts.

Monday’s announcement escalated an already tense standoff between the hotel’s owners and Trump’s executives, who were hired to manage the Panama business years before Trump was elected U.S. president. Hotel owners have been seeking to dump Trump’s brand and management team since October over allegations of poor financial performance and financial misconduct. Trump’s company disputes those claims and says it won’t physically leave before the business dispute is resolved in arbitration.

Both sides acknowledged that armed security guards hired by Trump’s executives were on the scene.

“I am your employer under the laws of Panama,” Orestes Fintiklis wrote to hotel employees in a letter Sunday. He is head of Ithaca Capital, which owns 202 of the hotel’s 369 units. “The Trump Organization, to gain financial and strategic advantage against me and the owners I represent, has been lying to you and putting your jobs and the hotel at grave risk.”

But Trump Hotels has refused to accept the termination of its hotel management contract, calling the firing illegal.

The contractual dispute is now being litigated in both U.S. courts and private arbitration. Owners have maintained that Trump Hotels must leave the property immediately – and last week Fintiklis led a team to hand-deliver termination notices to Trump’s top Panama managers.

Trump’s staff rebuffed the attempt. The Trump Organization also called the police, and key staff holed up in a security room. Allies of the owners’ association shut off power to the room – inadvertently killing the hotel’s phone lines and internet connections, which were routed through servers located in the same space. According to a legal claim filed by Fintiklis, Trump Hotel managers were shredding business records, which the Trump firm’s lawyer disputed.

“That is categorically untrue,” said Trump’s general counsel, Alan Garten.

Fintiklis did not respond to emailed requests for comment from the AP.

The bitter dispute simmered through the weekend, with the Trump Organization dispatching one of its top hotel executives, Jeff Wagoner, and other U.S.-based staff to Panama City to rebuff the owners’ push. The Trump team has also relied on a bolstered security staff to remain in control of the hotel.

Garten said Trump’s business has no intention of leaving the property before the dispute is resolved in arbitration.

“There’s always security in the hotel,” he said. “Right now, there’s more security.”

The Panama hotel is one of 12 remaining in Trump’s hotel portfolio. Since the president took office, hotels in Toronto and New York have reached deals to remove his name and management team from their properties. In the case of the former Trump SoHo hotel in Manhattan, the property’s owners paid to undo Trump’s licensing and management deal.