By Andrew Chung
WASHINGTON (Reuters) - President Donald Trump's legal troubles deepened on Wednesday as a federal judge refused to throw out a lawsuit accusing him of flouting constitutional safeguards against corruption by maintaining ownership of his business empire while in office.
U.S. District Judge Peter Messitte in Greenbelt, Maryland allowed the lawsuit filed by Maryland and District of Columbia to proceed, rejecting a Justice Department request that it be dismissed. The judge, however, narrowed the claims to include only those involving the Trump International Hotel in Washington and not Trump's businesses outside of the U.S. capital.
A U.S. judge in Manhattan in December threw out a similar lawsuit against Trump brought by another group of plaintiffs.
Both lawsuits accused Trump of violating the U.S. Constitution's "emoluments" provisions designed to prevent corruption and foreign influence. One bars U.S. officials from accepting gifts or other emoluments from foreign governments without congressional approval. The other forbids the president from receiving emoluments from individual states.
If the lawsuit presided over by Messitte continues to move forward, the plaintiffs have indicated they would seek a number of documents related to the president, including his tax returns, which Trump has refused to release.
The lawsuit, filed last June, said the Republican president has failed to disentangle himself from his hotels and other businesses, making him vulnerable to inducements by officials seeking to curry favor.
Maryland Attorney General Brian Frosh, a Democrat, said in an interview he was pleased with the judge's action.
"It demonstrates that Donald Trump is not above the law, that he like every other federal employee is governed by the emoluments clause, the original anti-corruption law of the United States. And we intend to hold him accountable," Frosh said.
Justice Department spokeswoman Kerri Kupec said, "As we argued, we believe this case should be dismissed, and we will continue to defend the president in court."
As part of the suit, the District of Columbia and Maryland said their local residents who compete with Trump's businesses like Trump International Hotel are harmed by decreased patronage, wages and tips.
Trump's attorneys said such claims were speculative and raised doubts that any harm to competition could be traced directly to Trump's status as president.
Messitte rejected that view, saying the plaintiffs' allegations were sufficient to allow the case to proceed.
"Their allegation is bolstered by explicit statements from certain foreign government officials indicating that they are clearly choosing to stay at the president's hotel, because, as one representative of a foreign government has stated, they want him to know 'I love your new hotel,'" the judge wrote.
Messitte also noted that since the 2016 presidential election, "foreign governments have indisputably transferred business from the Four Seasons and Ritz Carlton hotels in the District to the President's Hotel."
Trump's legal woes are mounting. His lead lawyer in the intensifying special counsel investigation into Russia's role in the 2016 presidential election resigned last week.
A New York state judge last week allowed a defamation lawsuit by a woman who accused Trump of sexually harassing her after she appeared on his former reality TV show to proceed.
He also is facing lawsuits from adult film actress Stormy Daniels and former Playboy model Karen McDougal arising from affairs they said they had with the president.
Trump, a wealthy real estate developer who as president regularly visits his own hotels, resorts and golf clubs, has ceded day-to-day control of his businesses to his sons. Critics have said that is not a sufficient safeguard.
This undermines democracy, the suit said, because Americans cannot be sure if Trump is acting in their best interest, or "international and domestic business dealings in which President Trump's personal fortune is at stake."
The suit said Trump had received millions of dollars in payments and benefits through leases of Trump properties held by foreign government entities, the purchase of condominiums in Trump properties, as well as hotel accommodations, restaurant purchases and the use of venues for events by foreign governments and diplomats.
Messitte's action contrasts with that of U.S. District Judge George Daniels in Manhattan, who threw out the similar case filed by a nonprofit watchdog group, a hotel owner, a hotel events booker and a restaurant trade group.
Daniels said the claims were speculative and that the U.S. Congress was the proper place to hold the president to account.
(Reporting by Andrew Chung; Editing by Will Dunham)