A non-profit legal watchdog group, based in Washington DC, yesterday filed the federal lawsuit against Trump.
In the lawsuit, Citizens for Responsibility and Ethics in Washington (CREW) said foreign emoluments clause of the US Constitution prohibits Trump from receiving anything of value from foreign governments, including foreign government-owned businesses, without the approval of the Congress.
"We did not want to get to this point. It was our hope that President Trump would take the necessary steps to avoid violating the Constitution before he took office," said CREW executive director Noah Bookbinder.
Trump dismissed the lawsuit filed in a federal court in New York as "totally without merit." Earlier this month, Trump had said he would retain ownership of his businesses across the world during his presidency, but hand over the day-to-day affairs to his sons, Eric and Donald Jr.
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CREW alleged that since Trump refused to divest from his businesses, he is now getting cash and favours from foreign governments, through guests and events at his hotels, leases in his buildings, and valuable real-estate deals abroad.
"When Trump - the president - sits down to negotiate trade deals with these countries, the American people will have no way of knowing whether he will also be thinking about the profits of Trump - the businessman," it said.