The international real estate community is not unique in accommodating enterprises seeking to conceal income (tax evasion) or conceal the origin of income (money laundering). It functions exceptionally well for such purposes, though.
By the 2000s, Trump as grand-negotiator-of-the-big-deal was far more image than substance. Following a series of corporate bankruptcies that left investors holding the bag, his ready access to capital markets and the larger New York banks evaporated, along with many of his financing options.
He wasn’t a successful tycoon, though he still played one on TV — nothing left to pawn except his inflated reputation, which allowed him to license his name to businesses looking for a ready-made brand, e.g. vodka, mail-order steaks. His image was worth more than his real estate.
The towers and apartments where Trump held some degree of ownership could still regain value. It only required partnering with foreign bosses searching for a place to stash cash. Trump could inflate the value of his portfolio by averting his gaze while one LLC transferred dirty money into the next LLC.
After Trump’s seventh bankruptcy and cancellation of all his lines of credit, money to build or acquire new, grandiose projects flowed almost entirely from Russian sources; as Trump’s own son openly boasted, a “disproportionate” amount.
Citizens in Russia and other former Soviet states lost hundreds of millions, while Trump got a cut as these looted funds washed through offices and apartments in Trump properties. That is, after Trump’s business tanked, he was made to appear successful through the infusion of hundreds of millions in cash from dark Russian sources.
Trump might’ve been knowingly involved with the Russian “credit” sources — remember he claims to manage and control his empire through his astute command of details — or he might have signaled his willingness to profess ignorance about any deal that generated some desperately needed funds. Either way, Trump got his money, oligarchs cleaned their ill-gotten gains, and Russia got their man. (When Russian communications employ the term “polyezny durak,” or “useful fool,” they’re talking about Trump.)
Take just one example, Bayrock Group LLC, Trump’s partner in building Trump Soho, and its actual owner. Trump was a partner in the LLC, and Bayrock cut the checks Trump received when those apartments were sold. Deals that emerged from Trump’s relationship with Bayrock principles offer a window into their processes. In one court case, Bayrock’s core activities were described as “tax evasion and money laundering” that provided money for Trump’s latest projects, arriving “magically” from Russian and Kazakhstani sources.
Trump’s key Bayrock partners included Kazakhstani émigré Tevfik Arif, who had an office in Trump Tower, Russian émigré Felix Sater, who also maintained a Tower office, and a Russian mining oligarch.
A prototypical Russian-American mobster, Sater was repeatedly convicted of racketeering; he was about to go down for money laundering when he bought a Get Out Of Jail Free card after 9-11, by giving the CIA and FBI info on the black market for Stinger missiles.
The Bayrock oligarchs used Trump properties to get their cash out of Russia, using international financial networks akin to a money-laundering pyramid scheme. Moreover, the law firm of Trump’s political adviser, former NYC mayor Giuliani, helped set up a money-laundering account used by Bayrock in the Netherlands.
Moving stolen funds into U.S. cash and properties in the LLC account was win-win for the oligarchs and Trump. All Trump had to do was pay very little attention to the transaction.
In a 2011 deposition during a dispute over a Fort Lauderdale project, Trump claimed he had “never really understood who owned Bayrock” and “I know they’re a developer that’s done quite a bit of work.” Not really on top of things, this guy who’s always on top of everything without reading anything.
In 2006, Trump sent two of his kids, Donald Jr. and Ivanka, to the Hotel National Moscow right across from the Kremlin, cultivating potential partners (including Felix Sater) through several days. Subsequently, Trump actively pursued Russian partners and associates, some already operating in Canada and the US, and courting Arif, who had founded Bayrock as a “development company.”
During a trip to Moscow in 2013, Trump himself bragged in a 2015 interview, “I was with the top-level people, both oligarchs and generals, and top of the government people. I can’t go further than that, but I will tell you that I met the top people, and the relationship was extraordinary.”
At minimum, Trump has confessed to representing, accepting money from, and partnering with a corporation whose ownership was unknown to him. Across the globe their deals totaled hundreds of millions. But it seems more than likely Trump had to knowingly collaborate with oligarchs, mobsters, and groups clearly associated with the Russian government. It happened because he was financially desperate, and as we already know, totally devoid of scruples.
Trump continues to ignore his (fake!) promise to disclose his tax returns. During the campaign, he was “being audited” (which doesn’t preclude release of records); now, he says, nobody cares anyway. These are absurd excuses, designed to conceal his financial entanglements with Russian — and Chinese — interests.
The state-owned Central Bank of China has loaned Trump hundreds of millions of dollars. Trump-owned American companies carry at least $650 million in debt, much from the Bank of China. And you thought Russia was his only conflicted interest?
Jon Hauxwell, MD, is a retired family physician who grew up in Stockton and
lives outside Hays.