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Michel writes: "When Donald Trump assumed the presidency in 2017, two of his foreign projects - one in Panama and one in Azerbaijan - stood out for what appeared to be clear links to foreign money laundering operations."

Trump's former property in Baku, Azerbaijan. (photo: Artur Widak/Getty)
Trump's former property in Baku, Azerbaijan. (photo: Artur Widak/Getty)

Why Has Congress Stalled on Investigating Money Laundering Allegations at Trump Properties?

By Casey Michel, ThinkProgress

11 April 19

Stonewalled by investigators, interest in Trump's former projects in Panama and Azerbaijan seems to have disappeared.

hen Donald Trump assumed the presidency in 2017, two of his foreign projects — one in Panama and one in Azerbaijan — stood out for what appeared to be clear links to foreign money laundering operations. But with Trump’s presidency enveloped in an unprecedented number of scandals, congressional willingness to investigate the properties appears to have wilted — in no small part because of stonewalling by the current administration.

Both properties were closely associated with Ivanka Trump. Trump described the Trump Ocean Club property in Panama City, Panama, as Ivanka’s “baby,” while the Trump Tower Baku project, located in Azerbaijan’s capital, was something Ivanka herself claimed she “oversaw.” Both endeavors, however, have been swamped in controversy — not simply because of signs pointing to money laundering operations, but because both projects have since imploded, with neither any longer carrying Trump’s name.

In Panama, for instance, the indicators of money laundering at Trump Ocean Club Panama, which the Trump Organization helped manage, were impossible to miss. From purchases in cash to bulk sales, from sales to anonymous shell companies to purchasers using “bearer shares” — in which the company is owned by whoever holds a physical stock certificate, without any registry keeping track of ownership — the signs were all there. One of the property’s primary sales brokers, Alexandre Ventura Nogueira, admitted in a 2013 conversation secretly taped by a former business partner that he was “regularly laundering money” across Panama.

And in Azerbaijan, the Trumps chose to partner with one of the most notoriously corrupt members of the country’s notoriously corrupt regime. For good measure, Trump’s Azeri partners contracted with an Iranian construction company that appears to have been a front for Iran’s Revolutionary Guard Corps.

The Trump Organization has previously denied any knowledge of funding links to Iran’s Revolutionary Guard Corps, or any personal connection to Nogueira. The Trump Organization did not respond to ThinkProgress’s questions.

Still, despite formal requests for the from multiple members of Congress to open an investigation into Trump’s Azerbaijan property, and despite multiple questions sent by those in both the House and Senate to the Trump Organization about money laundering allegations surrounding the Trump Panama property, congressional investigators appear no closer to figuring out just how much the president knew about indicators pointing to foreign money laundering taking place at these two properties.

Pressuring Panama

It’s worth noting that the controversial projects in Panama and Azerbaijan appear to have made the president tens of millions of dollars along the way.

For instance, a 2018 report from ProPublica found that Trump made between $30 million and $55 million since 2007 via the Panama property. The building, according to a report from anti-corruption watchdog Global Witness, helped launder “proceeds from Colombian cartels’ narcotics trafficking” — with Trump himself “one of the beneficiaries” of the practice. Nogueira, the broker who later admitted to helping lead money laundering operations in Panama, said that he met with Ivanka Trump at least 10 times through the course of the building’s construction. He was later arrested in Panama on charges of both fraud and forgery. However, while he denies the charges, he eventually fled the country and has referred to himself as a “fugitive” in the eyes of Panamanian authorities.

“With [the Panamanian property] we found that there were some pretty consistent signs of money laundering,” said Eryn Schornick, a senior policy adviser on the anti-money laundering team at Global Witness. “There’s a bigger picture issue where it’s really difficult to understand who actually was buying those [Trump property] units, and who had legitimate sources of funds and who didn’t.”

It was precisely the type of set-up — which Schornick described as “a broader, endemic problem that we saw within the Trump Organization’s business pre-presidency” — that congressional investigators were eager to learn more about. How much did the president know about the source of the millions that poured into his Panama property via anonymous shell companies, much of which eventually lined his pockets?

In a series of 2018 letters, Reps. Norma Torres (D-CA) and Eliot Engel (D-NY) made a number of asks. To the Drug Enforcement Administration (DEA), the representatives requested a briefing about what the DEA knew about allegations of drug trafficking and money laundering at Trump’s Panama property. The letter noted that “this criminal activity may have tainted the Panama business interests of the Trump Organization, and, by extension, of President Trump, leading to possible conflicts of interest that would be of serious concern to us and to the Committee.”

In another letter, Torres and Engel contacted the Trump Organization directly with questions about the money laundering allegations. “Given widely reported allegations of money laundering and drug trafficking in connection with Trump Ocean Club Panama, we believe it is imperative to understand the Trump Organization’s knowledge of and role in sales at this property,” the two wrote.

Months passed, however, with little but silence. According to a source familiar with the letters, the DEA and Trump Organization both eventually responded — but those responses were simply “just acknowledgements that they’d received” the letters. “Neither response was noteworthy,” the source said.

The DEA confirmed to ThinkProgress that it issued a response in June, but did not respond to questions about money laundering and drug trafficking allegations surrounding the Trump property.

Management scuffles

Concerns about the Panama property weren’t limited solely to money laundering. They soon extended into how the president was personally profiting from alleged money laundering operations — and if he was using his position to pressure the Panamanian government to protect his private interests.

Questions came to a head in 2018 when a management scuffle broke out at the site, with new management booting the Trump Organization from the property. (The resort was re-branded in late 2018 as a JW Marriott, and there is no indication the president or his company are still profiting from the building.) Shortly thereafter, a Panamanian law firm representing the Trump Organization issued a letter to Panamanian President Juan Carlos Varela threatening potential “repercussions” to Panama if the government didn’t intervene on behalf of the Trump Organization.

The Trump Organization depicted the letter as simply a “routine” legal maneuver — but those in Congress didn’t see it that way.

Torres and Engel, joined by Rep. Jerry Nadler (D-NY), issued another letter to the Trump Organization, requesting information on whether the Trump Organization “sought to leverage the Office of the President and the diplomatic relationship between the United States and Panama to advance the company’s private interests.” The letter also requested information on other communications the Trump Organization had with foreign officials regarding Trump properties while Trump was president.

In the Senate, Sen. Bob Menendez (D-NJ) joined in the demands for answers. In a May 2018 letter to the Trump Organization, Menendez wrote that the “threatening tone” in the letter from the Panamanian law firm “may suggest to the Panamanian government that improper, and perhaps illegal, actions are effective means of influencing U.S. policy toward the country.” Menendez also requested information on whether the Trump Organization had communicated with the State Department regarding the management dispute, and whether the Trump Organization had been in contact with other foreign governments.

A spokesperson for Menendez told ThinkProgress that the Trump Organization did respond — but there was “not much in it.” A person familiar with the House letters to the Trump Organization said much the same.

Azerbaijan blues

In Azerbaijan, meanwhile, the Trump Tower Baku project was just as closely linked to allegations of massive money laundering — and boasted closer links to corrupt government officials. In order to develop the property, the Trumps worked with close relatives of Ziya Mammadov, Azerbaijan’s former transportation minister. Mammadov, as American diplomats described in a leaked State Department cable, is “notoriously corrupt even for Azerbaijan,” a country that retains a kleptocratic, dictatorial regime nearly three decades after gaining independence from the Soviet Union.

A series of exposes — including a New Yorker piece that dubbed the Baku property as Trump’s “worst deal” — uncovered all manner of malfeasance. One of the most striking pointed to evidence that the building’s construction may have been used to launder funds by those close to Iran’s Revolutionary Guard; Mammadov is close to the Darvishi family in Iran, with members who’ve headed firms controlled by the Revolutionary Guard. On Monday, the Trump administration designated the Revolutionary Guard a Foreign Terrorist Organization. All of the suspicious financing may have put Trump in direct violation of both Iranian sanctions and the Foreign Corrupt Practices Act (FCPA), the latter of which the president has previously referred to as a “horrible law.”

Thanks to sagging demand and late payments from the Azeri partners, the property’s prospects eventually fell apart, with the Trump Organization formally pulling out a few weeks after Trump won the 2016 election. The building — the construction of which Ivanka says she “oversaw” — currently sits empty, and was severely damaged in a fire in 2018.

A 2017 letter from a number of Democratic senators demanded answers regarding the questions of money laundering and potential bribery. Issued by Sens. Sherrod Brown (D-OH), Ben Cardin (D-MD), and Dianne Feinstein (D-CA), the letter was sent to both the Department of Justice and Treasury Department, calling for a formal investigation into the property.

From the DOJ, the senators requested information on whether the Trump Organization may have breached FCPA provisions, which prevent Americans and American firms from bribing foreigners, and whether the Trump Organization “acted with willful blindness regarding its business partners’ illicit acts in the Trump Tower Baku dealings.” And from Treasury, they requested that the Office of Foreign Assets Control — the body overseeing much of the U.S.’s sanctions regime — investigate whether the Trump property “violated U.S. sanctions law” through its dealings with those close to Iran’s Revolutionary Guard.

“Congress — and the Trump Administration itself — has a duty to examine whether the President or his family is exposed to terrorist financing, sanctions, money laundering, and other imprudent associations through their business holdings and connections,” Brown later said.

But the senators apparently received little information. The Treasury Department, according to those familiar with the inquiries, responded with little more than acknowledgment that it had received the questions, as did the DOJ.

A spokesperson for the Treasury Department confirmed to ThinkProgress that the department responded, “but we do not comment on possible or pending investigations.” The DOJ did not respond to ThinkProgress’s detailed questions.

What comes next

Despite the clear allegations of money laundering drenching both the Panama and Azerbaijan properties, the stomach for revisiting the concerns about the two properties appears limited. As one person familiar with the House Democrats’ inquiries into the Panama property told ThinkProgress, “We don’t have plans at the moment to revisit the Panama property.”

In conversations with those familiar with the congressional questions surrounding the buildings, it’s clear that this aversion has less to do with evidence available and more to do with the fact that there are dozens of other areas of potential concern surrounding the president’s activities. After all, there are other Trump properties that, unlike those in Panama or Azerbaijan, are still connected directly to the president’s business. It also doesn’t help that there are statute-of-limitation concerns surrounding FCPA enforcement, which are generally kept to within five years.

One of the projects is a new beachside resort in the Dominican Republic. Despite Trump’s pledges to refrain from any new foreign projects — and the Trump Organization’s recent announcement that it was freezing plans to construct new hotels — Schornick and Global Witness uncovered in December that local Dominican sales representatives have been touting the Trump Organization’s involvement in a planned resort. The Trump Organization’s argument is that the Dominican project is actually the same as a previous project, despite being located at a different location.

“Global Witness went undercover at the Cap Cana resort and discovered that the Trumps are pursuing what appears to be a new deal, in contradiction to Trump’s pledge not to,” the group’s report said. (The Trump Organization denied the allegation.)

In response, some Democrats in Congress called out the company for its plans. Feinstein, for instance, issued a statement, saying, “The Trump Organization’s pursuit of business abroad creates glaring conflicts of interest, with the president’s foreign policy decisions potentially being influenced by his personal financial interests. Foreign governments may also make decisions affecting the Trump Organization with the goal of receiving favorable treatment from the Trump administration.”

It’s unclear if any formal hearings will be held regarding the Dominican plans, let alone the Panama or Azerbaijan properties. But a Democratic congressional aide told Vox that the House Foreign Affairs Committee, chaired by Engel, would focus on Trump’s potential conflicts of interest abroad, including the Panamanian property. And given that some 70 percent of domestic real estate sales by Trump’s companies have gone to shell companies since Trump won the 2016 Republican nomination, the issue couldn’t be timelier.

“Trump as the businessman pre-presidency is interesting, yes — but what is happening now?” Schornick said.

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