The Trump Organization pulled out of a $250-million real estate project in ex-Soviet Georgia to avoid a potential conflict with Donald Trump's role as president, Trump's former business partner in the project told Reuters.
The Trump Organization declined to comment on the assertion that it quit the project due to conflict-of-interest concerns, and the Trump transition team did not respond to a request for comment.
Since winning election as U.S. president, Donald Trump has said he would take steps to ensure he had no conflict of interests with his business. However, he has given few details on how he will do that.
Trump planned to give his brand name to Georgian developer Silk Road Group, to build a 47-storey residential tower in the Georgian Black Sea resort of Batumi, a plan he had announced during his visit to the South Caucasus country in April 2012.
SRG and the Trump Organization announced their joint decision to terminate the project last week, but did not elaborate on the reasons.
"The only reason (for project termination) was that Mr. Trump was elected as the U.S. president and could not continue business abroad as it would pose a conflict of interest," Giorgi Ramishvili, SRG head, told Reuters in an interview.
"I appreciate that the Trump Organization said in the statement that it had continued to hold our company and Georgia in the highest regard."
Federal law does not prohibit the president's involvement in private business while in office, even though lawmakers and executive branch officials are subject to conflict-of-interest rules.
Nevertheless, Trump has come under pressure from Democrats, and some of his Republican allies, to avoid any conflict of interests. Trump has said he plans to transfer control of his businesses to his oldest three children.
Georgia will present the White House with a thorny foreign policy problem. A close U.S. ally seeking membership of NATO, it accuses Russia of propping up separatists in two breakaway regions on its territory. That could complicate Trump's drive for friendlier relations with Russian President Vladimir Putin.
Asked to comment on the reasons for pulling out of the Georgia project, the Trump Organization sent Reuters a joint statement with SRG announcing the decision but not giving a reason.
Alan Garten, the Trump Organization's general counsel, said the organization stood by its statement and declined to comment on Ramishvili's assertion the deal was cancelled due to conflict-of-interest concerns.
The Trump transition team, which typically defers to the Trump Organization on business issues, did not respond to a request for comment.
The Trump Organization has canceled licensing deals in some other countries, including Brazil and Azerbaijan, but has not publicly cited conflict of interest concerns as the reason for those decisions.
Ramishvili said his company, one of the largest private investment companies in the South Caucasus, would still go ahead with the Batumi tower project. He said his company was ready to invest not less than the $250 million that was originally planned.
"It won't have Trump's name, but it may be called the Fifth Avenue Tower as it will look similar to the Trump Tower in New York," Ramishvili said.
Ramishvili said he believed Trump would "keep Georgia on his mind" during his presidency.
"I'm sure that President Trump will always remember positive emotions that he had during his visit to our country, when he dubbed Georgia as one of the amazing places in the world," Ramishvili said.
"I'm happy that I've brought this iconic figure to Georgia and I'm sure that he will be a great president."
(Additional reporting by Emily Stephenson in Washington; Editing by Christian Lowe and Philippa Fletcher)