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The Trump Organization's Problem With Possible Money Laundering
Written by <a href="index.php?option=com_comprofiler&task=userProfile&user=46209"><span class="small">Casey Michel, ThinkProgress</span></a>   
Wednesday, 08 May 2019 13:07

Michel writes: "From Azerbaijan to Indonesia, Kazakhstan to the Republic of Congo, allegedly corrupt foreign officials have parked their money in Trump buildings time and again."

Trump Tower. (photo: Getty)
Trump Tower. (photo: Getty)


The Trump Organization's Problem With Possible Money Laundering

By Casey Michel, ThinkProgress

08 May 19


From Azerbaijan to Indonesia, Kazakhstan to the Republic of Congo, allegedly corrupt foreign officials have parked their money in Trump buildings time and again.

ver the past two decades, investing in luxury real estate has become one of the go-to means of laundering dirty money. It’s happening almost everywhere real estate is appreciating quickly: Manhattan, Paris, Malibu, London, Miami, and Hawaii are all targets, as well as everywhere from Boston to Buffalo to Boise. The ability to purchase high-dollar real estate via anonymous shell companies has helped an untold number of crooks and kleptocrats wash their ill-gotten gains and protect their wealth from prying eyes.

These kleptocrats and corrupt foreign officials, of course, couldn’t have done it themselves. They required the help of “enablers“: lawyers, accountants, company-formation agents, and developers who gladly helped with transactions, taking their own cuts along the way. While kleptocratic foreign officials gutted their own home countries’ finances, and engaged in grand corruption, individuals in Western democracies helped or turned a blind eye to signs of money laundering time and again.

This ability to park these stolen gains in Western real estate has been, unfortunately, perfectly legal over the past few decades. For example, American lawyers can set up untraceable companies on clients’ behalf, watch their clients use those companies to purchase real estate, and subsequently claim attorney-client privilege for the transaction. Canada permits the formation of anonymous shell companies, and British territories have pushed back against registries tracking company ownership. Australian authorities even hesitated to impose anti-money laundering restrictions on accountants.

In the U.S., one beneficiary of the influx of foreign officials’ money is the current president. For decades, as multiple news reports and investigations have found, President Donald Trump’s buildings — those he helped build and those to which he licensed his name — have drawn alleged kleptocrats who may be looking to funnel some of their money out of their countries.

Both Trump and the Trump Organization have denied that they engaged in any illicit activity in attracting the funds, and denied any wrongdoing along the way — as do all of these related foreign officials. But for years, Trump and his business partners may have profited from the continued willingness of Western governments to permit foreign actors — arms dealers and narco-traffickers, dictatorial rulers and their cronies — to set up anonymous shell companies, skirt past anti-money laundering checks, and stash their money in New York or London or Paris.

All of this was, for years, perfectly legal. Due to new requirements out of the Treasury Department, which reveals the identity of the actual owner of numerous purchases across certain cities in the U.S., the best days of laundering-via-real-estate in American real estate may be behind us. But that hasn’t stopped Trump properties from profiting from anonymous shell companies to this day, as we’ve seen happening recently at the Trump International Hotel and Tower in Vancouver.

Now, two years into Trump’s presidency — and thanks largely to the work of pro-transparency activists — details have finally begun to emerge about the alleged kleptocrats and foreign corrupt officials who were drawn to investing in Trump-linked properties.

A number of foreign ruling families and officials turned to apartments and buildings linked to Trump’s companies to safeguard their funds. Some are still in power. Some have since been deposed. But their involvement in Trump-linked properties raises any number of questions about potential influence they may have on the president, given his continued involvement in the Trump Organization. While Trump and his associates have denied that the existence of such financial involvement has had any undue influence over his work as president, plenty of others — including congressional Democrats — believe otherwise

The Republic of Congo

Who: The ruling Sassou-Nguesso family

Where: Trump International Hotel & Tower, New York

Context: Last month, prominent anti-corruption watchdog Global Witness, which often tracks illicit funds moving from corrupt official into the West, uncovered that the daughter of the long-time ruler of the Republic of Congo, Denis Sassou-Nguesso, had allegedly pilfered millions of dollars from state coffers to purchase a luxury apartment at the Trump International Hotel & Tower in New York. While there’s no indication the Trump Organization broke the law, Global Witness unearthed property documents listing assorted transactions that showed Claudia Sassou-Nguesso allegedly used a Portuguese middle-man to move millions through a shell company, then used an American law firm to purchase a $7.1 million unit overlooking Central Park. (For years, allowing shell companies to purchase real estate was not illegal in New York, although those behind shell companies now have to identify who the beneficial owner of said company is.)

None of the entities involved — including the Trump Organization and the hotel’s board — raised any red flags about why the daughter of the Republic of Congo’s dictator, who has remained in power for over two decades, would have the means to spend millions on an apartment in the Trump building. The Republic of Congo government, meanwhile, claimed that the entire purchase was a “private affair” and that the contract at the heart of the claims is clean.

The apartment purchase pales in comparison to the nearly $70 million the Sassou-Nguesso family has spent on luxury goods and real estate in France. Because President Trump personally ran the companies that may have profited from the deal through the 2016 campaign, the Democratic-led House is in the process of subpoenaing records about the president’s finances, which would shed some light on the transaction.

Haiti

Who: Former Haitian dictator Jean-Claude “Baby Doc” Duvalier

Where: Trump Tower, New York

Context: Kleptocrats’ desires for Trump-linked condos stretches back decades: The first known deal between Trump and a blossoming kleptocrat happened in 1983, when Haitian dictator Jean-Claude “Baby Doc” Duvalier snagged a $1.65 million unit in Trump Tower, which had just been completed.

As Transparency International, an anti-graft organization focused on combating grand corruption, tabulated, Duvalier pilfered some $800 million from Haitians in the 1970s and ’80s, making Duvalier one of the most notorious, and lucrative, kleptocrats in the past half-century. Switzerland in 2011 passed anti-money laundering legislation colloquially known as “Lex Duvalier.”

As with others, Duvalier used middlemen and cut-outs to purchase the apartment, including American lawyers and a French friend. But Duvalier didn’t hide his tracks well. As investigators later uncovered, Duvalier looted the state treasury via writing checks — some of which, according to one of the investigators hired by the Haitian government to track down Duvalier’s loot, included “Apartment in Trump Tower” written on them. The Trump Organization has denied any wrongdoing.

Azerbaijan

Who: Former Transportation Minister Ziya Mammadov

Where: Trump International Hotel and Tower, Baku, Azerbaijan

Context: Rather than park his money in a high-end real estate purchase, Mammadov partnered with the Trump Organization to construct a brand new building.

Trump’s project with Mammadov, slated to rise in Azerbaijan’s capital of Baku, eventually fell apart due to sagging demand and late payments from Trump’s Azeri partners, according to The New Yorker. But before Trump Hotel Baku collapsed, the project was tainted by serious financial malfeasance. From Mammadov’s alleged connections to Iran’s Revolutionary Guard Corps front companies to the fact that the Trump Organization attempted to build the project in the midst of the Azeri regime’s transformation into a kleptocratic dictatorship, there’s a reason The New Yorker dubbed the building Trump’s “worst deal.” (The Trump Organization denied that it knew about any of Mammadov’s alleged corruption, or his alleged ties to Iran’s Revolutionary Guard Corps.)

And then there’s Mammadov himself. Described by one U.S. State Department official in a leaked cable as “notoriously corrupt even for Azerbaijan,” While he’s denied participation in any corrupt activities, Mammadov stands at the center of a pattern of alleged corruption across the country. Or he did until recently: In 2017, the Azeri dictator announced that he’d fired Mammadov from his post as transportation minister. The reason? Mammadov’s alleged corruption.

Kazakhstan

Who: Former Kazakhstani official and oligarch Timur Kulibayev

Where: Trump Tower Batumi, Batumi, Georgia

Context: Earlier this year, Kazakhstan’s long-time dictator Nursultan Nazarbayev announced he’d be stepping down from the presidency after nearly three decades in power. While the country’s political future is suddenly uncertain, one name has consistently been bandied about as a potential successor: Timur Kulibayev, Nazarbayev’s son-in-law and one of the most powerful businessmen in the country.

Kulibayev is worth some $3 billion, and has previously been connected to questionable dealings in the West, including significantly overpaying for a London-area mansion once owned by Prince Andrew. (He’s denied any allegation of financial malfeasance, as has the Trump Organization.)

After Trump’s deal in Georgia first came online in 2011, Kulibayev’s businesses signed on to help finance Trump Tower Batumi, a planned enclave full of condos along Georgia’s Black Sea coastline. As McClatchy described,  thebuilding’s funding was also connected to the scandal-plagued BTA Bank, which had recently been overseen by former Kazakhstani oligarch Mukhtar Ablyazov. (BTA Bank recently sued former Trump associate Felix Sater regarding the Trump Organization’s proposed plans to construct a Trump Tower in Moscow, although this lawsuit is not related to the plans in Georgia. Sater is fighting the suit.) Despite a groundbreaking ceremony in 2012, the plans for the Georgian tower eventually faltered, and the Trump Organization has since pulled out.

Kazakhstan

Who: Former Almaty mayor Viktor Khrapunov

Where: Trump SoHo, New York

Context: One of the unfortunate realities of the post-Soviet space is that many of the nominal “pro-democracy” opponents of the current dictatorial regimes made their own fortunes in much the same way as regime insiders. Such is the case in Kazakhstan, where Viktor Khrapunov is wanted on allegations of swiping some $300 million via all manner of corrupt dealings while mayor of Almaty, Kazakhstan’s largest city. (Khrapunov denies the charges.)

Thanks to ongoing court cases surrounding Khrapunov’s wealth, the public has learned that Khrapunov’s step-daughter owned three apartments at the former Trump SoHo apartment building in New York. The funds used to purchase the units allegedly wound through assorted offshore shell companies, as well as a former bank linked to terrorist financing. The hotel purchases were apparently made to try to establish Khrapunov’s step-daughter’s U.S. residency, but they also helped her father hide some funds funneled out of Kazakhstan. (The Trump Organization denies any wrongdoing.)

The Philippines

Who: Special envoy to the U.S. for Trade, Investment, and Economic Affairs Jose E.B. Antonio

Where: Trump Tower at Century City, Manila, Philippines

Context: Before his appointment as Filipino special envoy to the U.S., Jose E.B. Antonio had steered Century Properties Group, a Filipino company that helped finance the construction of the $150-million Trump Tower in Manila. There are questions aplenty about Trump’s ongoing involvement with this Trump Tower, but the president’s most recent financial disclosures indicate that his companies were, as of 2016, still profiting from the building.

Antonio’s involvement with a Trump property while liaising directly with Washington on behalf of Manila raises a raft of ethical questions — not least of which how the White House will ensure that Trump’s private interests don’t cloud American interests in its relationship with the Philippines. (The Trump Organization has denied that the president’s foreign entanglements, like those with the Philippines, have affected American policy.) Meanwhile, while there’s no indication Antonio has engaged in grand corruption, he remains one of the wealthiest scions in the Philippines, a country that Transparency International recently ranked among the bottom half of the most corrupt countries in the world.

Indonesia

Who: Vice presidential candidate and billionaire Hary Tanoesoedibjo (Hary Tanoe)

Where: Trump International Hotel and Tower Bali, Bali, Indonesia; Trump International Hotel Lido, Java, Indonesia

Context: Described by The New York Times as a “billionaire media mogul with his own political ambitions,” Hary Tanoe’s vice presidential run in 2014 ultimately fell short. But that hasn’t stopped Tanoe from dreaming of future political prospects. Even after that unsuccessful run, Tanoe has hinted that his future lies in politics — including at the presidential level.

Amidst these flirtations with public office, Tanoe entered into a partnership with Trump to help finance construction of two so-called “six-star” luxury resorts in Bali and West Java. Trump’s company agreed to the partnership despite Tanoe’s dubious financial history, which includes governmental allegations of tax fraud that have followed him the past few years — and the fact that he was banned from traveling abroad in 2017 after allegedly sending threatening text message to Indonesia’s deputy attorney general, as the Financial Times reported.

Tanoe’s work with Trump has raised plenty of unanswered questions. Some of them have to do with concerns about accessing Chinese state funds to finance Tanoe’s projects, which, if true, would link Trump directly a Chinese state-owned company — at a time when tensions between Beijing and Washington are greater than they’ve been in decades. Given how involved Trump has been in crafting U.S.-China policies, the potential for Chinese investment in the Indonesian property offers Beijing leverage against the American president, an unprecedented situation in the history of Sino-American relations. (Tanoe denies any wrongdoing, and the Trump Organization has stood by its Indonesian projects and partners.)

Former Soviet Union

Who: Former Soviet official Tevfik Arif

Where: Trump SoHo, New York; Trump International Hotel and Tower Fort Lauderdale, Fort Lauderdale, Florida; Trump International Hotel & Residences Phoenix, Phoenix, Arizona; Trump Tower Moscow, Moscow, Russia

Context: No list of links between Trump businesses and dubious foreign officials would be complete without a nod to the ongoing questions surrounding the Trump campaign’s involvement with Russia. While Arif, a Kazakhstan-born former Soviet official, wasn’t mentioned in the final report from special counsel Robert Mueller, Arif’s financial entanglements with Russia date back years.

The founder of Bayrock Group and business partner of Felix Sater (who once wrote that he and former Trump lawyer Michael Cohen would “get Putin on this program and we will get Donald elected”), Arif’s financial history is potentially the murkiest of all the current and former governmental officials Trump’s companies have worked with. Some of the projects panned out (such as one in Florida), while others never got off the ground (such as one in Moscow).

Still, Arif’s Bayrock repeatedly helped fund Trump-linked projects, as multiple investigations have found. (Arif and the Trump Organization have denied any financial wrongdoing.) Arif’s continued ability to use Bayrock to keep Trump-linked properties afloat a decade ago raised numerous eyebrows, especially given that much of the source of his financing remained ultimately unclear — and much of which emerged from the notoriously corrupt former Soviet space. Even more notably, Arif’s Bayrock acted, as Bloomberg’s Timothy O’Brien wrote, as a “bridge” between Trump and Russian investors, accelerating the questions that continue to circle the president even after the completion of the Mueller report.

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+11 # BetaTheta 2019-05-08 16:39
It's right out of a James Cagney movie: "Ya can't pin this one on me, coppers! I'm legit!"
 
 
+5 # treerapper 2019-05-09 01:02
With this sort of criminality, one definitely needs to use the "Al Capone" strategy. There is so much criminal behavior that at least one has to be indictable. NY State - we need you to catch those chickens quicker.
 
 
+1 # wilhelmscream 2019-05-09 06:48
Criminal empire; like “Lethal Weapon 2” w/o L.A.P.D.
 
 
+2 # 1dfnslblty 2019-05-09 07:30
Damning essay ~ and congress idles.
The People need to expose the true power-behind-the-throne.
Protest Loudly
 
 
+3 # WorkingClass 2019-05-09 09:21
Money laundering will turn out to be Trump's Achilles Heal. The reason he is fighting so hard to keep all his financial records secret.
 
 
0 # DongiC 2019-05-09 09:39
Are there any laws against money laundering? Or does Trump and his family just walk home Scott free? What a truly evil bunch.