As Trump’s taxes return to the news, here is the parallel context and setup where he went from failure on the verge of collapse to being propped up by money connected to Putin’s Russian government and the Russian mafia and then to failing repeatedly and spectacularly in those related business ventures, but in ways that allowed him to hide the dire straits of his finances and run as a “successful” “billionaire” for president in 2015-2016. And, oh, he managed to fail in these ventures in ways that helped to bring on the global financial crises and America’s Great Recession of 2008. As the house of cards image of Trump lied and cheated his way to building up comes tumbling down, a detailed look at that shady time when Trump was boosted by dirty Russian-connected money is essential.
In response to the bombshell report on Trump’s taxes that was released today, I am releasing a chapter on the scandals, bankruptcies, and financial problems of Trump from my eBook published on November 23, 2019. These controversies surrounding the financial and business history of the Trump Organization (which even Steve Bannon has apparently described as a “criminal enterprise”) are of greater interest in light of this new New York Times report, but they should have been of far greater, sustained interest from 2015, when Trump began his candidacy for the presidency and when most of this information was already publicly available. This research of mine was mainly conducted and published in different forms in 2016 and 2017, though some important segments came later., and the resulting material is best understood by reading my full eBook, eBook, A Song of Gas and Politics: How Ukraine Is at the Center of Trump-Russia, or, Ukrainegate: A “New” Phase in the Trump-Russia Saga Made from Recycled Materials, available for Amazon Kindle and Barnes & Noble Nook (preview here), a detailed look at Trump-Russia and how its Ukraine machinations led to Trump’s impeachment, including Trump’s deeply relevant and deeply shady business history. For helpful and important background on some of the figures mentioned, but not fully introduced, below—including Russian President Vladimir Putin’s top Russian mafia “godfather,” Semion Mogilevich, and his intricate work in Ukraine with Ukrainian oligarch Dmitry Firtash (and his front-company Highrock) and now convicted-by-Mueller’s-team-felon Paul Manafort for Putin stooge Viktor Yanukovych in Ukraine, his Party of Regions and benefactor Rinat Akhmetov, and their schemes to bend Ukraine to Moscow’s will and fight pro-Western Ukrainian leader Yulia Tymoshenko; including Manafort’s work with Russian oligarch and top Putin operative Oleg Deripaska to advance Russian interests; including background on another of Putin’s top men in Ukraine, Viktor Medvedchuk; including how Rudy Giuliani’s longstanding ties with Mogilevich-connected Sam Kislin are also of interest, as is the history of Kislin’s old partner Tamir Sapir in Trumpworld; including interesting background on Felix Sater; including Alexander Shnaider’s ties to Russia and Ukraine, as well as those of his father-in-law, Boris Birshtein and his company Seabeco, as well as oligarch Alexander Mashkevich’s ties to all that—see my articles How Cohen’s and Manafort’s Ukraine Ties Tell the Deeper Story of Trump-Russia and the Mueller Probe and Think You Know How Deep Trump-Russia Goes? Think Again: This Chart/Info Will Blow Your Mind, which link to some more detailed work of mine on some of these individual subjects. You can see all my Trump-Russia coverage here.
UPDATE: Sept 29: The new New York Times second bombshell report on Trump’s finances, this one about The Apprentice TV show being a screen onto which to project Trump’s “success” amidst a reality of failure behind it, discusses a dynamic that I already noted here close to a year ago and beginning in 2016. In other words, Trump’s “success” amounted to his obtaining shady Russian-/former Soviet-linked financing, letting others take the fall in disastrous deal after disastrous deal, outlitigating anyone trying to hold him accountable, and self-promotion on The Apprentice that helped to obscure his many scandals.
Now, let’s jump into my eBook chapter and Trumpworld in the mid-2000s…
VIII. Russian and Former Soviet Money Rife with Putin Ties Came to America and Trumpworld when Trump was Hurting for Cash
Around this time, key figures in these operations in Ukraine began reaching out to U.S. lobbyists and political consultants for assistance (noted in a 2007 Wall Street Journal article by none other than Glenn Simpson, who, as mentioned earlier, testified to congressional committee staff years later on Trump’s ties to Russia). Among the interactions he and a colleague catalogued:
- Semion Mogilevich himself enlisted the services of William Sessions, a Republican who was the only FBI director to be fired… at least until Trump fired James Comey for investigating Trump and his people’s ties to Russia. Mogilevich retained Sessions’s services at least during 2007 in an unsuccessful effort to get his criminal charges cleared with the U.S. Government and his name removed from the FBI’s Ten Most Wanted list. The middleman for that particular effort was consultant Neil Livingstone, whose firm GlobalOptions employed many Russians and people from former Soviet republics (Livingstone eventually ran unsuccessfully in 2012 for the Republican nomination for the Montana governor’s race with Ryan Zinke—the Trump Administration’s disgraced and former Secretary of the Interior who resigned mired in scandal in December, 2018—as his running mate).
- Furthermore, two-time Mississippi governor and major Republican operative Haley Barbour founded a consulting firm that in 2004 introduced Livingstone’s GlobalOptions to Firtash’s Highrock, which engaged GlobalOptions in at least two contracts, one of which was mysteriously referenced in a lawsuit involving an unnamed member of Ukraine’s government. Notice here how Mogilevich and Firtash are working hand-in-hand, just a bit removed from each other: their modus operandi.
- Beginning in 2003, Deripaska engaged 1996 Republican presidential nominee Bob Dole to lobby for the visa to the U.S. he was being denied because of his organized crime ties. Manafort worked on Dole’s presidential campaign and was working with Deripaska on Putin’s agenda when Dole’s efforts were successful, briefly getting Deripaska a visa before the FBI had it revoked shortly after.
Beyond these acts, there were plenty of interesting moves made by Russians and Russian-linked characters in the 2000s that directly involved Trump and his family.
In understanding why and how the moves below were made, it is crucial to understand that by the mid-2000s, Donald Trump had been abandoned by every major Wall Street bank as an unreliable and difficult partner. The one exception to the Wall Street bank Trump boycott was Deutsche Bank, which has loaned Trump some $2 billion and in recent years has been caught in massive scandals, including two major Russian money laundering scandals. One such scam involved Deutsche orchestrating some $10 billion in illegal fake trades from 2011-2015 that seem to have been part of an enormous Russian money laundering scheme. New York State and UK officials levied $630 million in massive fines (the UK’s Financial Conduct Authority portion of the fine is the largest that body has ever assessed) against Deutsche at the end of January, 2017, separate from a Department of Justice investigation that has stalled under Trump but is still ongoing. It was also revealed back in March, 2017, that Deutsche was involved in another major laundering scam of Russian money for some $24 million, including the specific division that Trump owes $300 million, part of a massive global Russian “Laundromat” laundering scheme with many banks involving $20-$80 billion from 2010-2014, the very years of Yanukovych’s presidency in Ukraine. Among those involved in the scheme include Russian oligarchs and the F.S.B., with some of the money in the scheme apparently being used to further Putin’s and Russia’s interests.
So, back to Trump, who was hurting for money, especially after he had to declare a bankruptcy for one of his businesses in 2004, his fifth such bankruptcy up to that point (with another still to come) and with Deutsche as one of his only sources of money. But another other major source? Russian and former-Soviet-republic-connected money.
Just a mere four years after the 2004 bankruptcy, Trump’s son, Donald Trump Jr., publicly remarked that “Russians make up a pretty disproportionate cross-section of a lot of our assets” and that “we [the Trump Organization] see a lot of money pouring in from Russia.”
In other words, the 2000s were years when Donald Trump Sr. was aggressively and desperately courting Russian business and investment with few other significant options.
And that “business” and “investment” that would be done would be quite astounding: a series of spectacularly scandalous, high-profile development deals detailed below that would roughly total $1.5 billion and that would involve people, structures, and results ripe for, and attractively (perhaps best), explained by money laundering.
They would end in failure, scandal, and lawsuits.
Nearly all of these deals exploited lax regulations in the U.S., Canada, or other real estate markets. And there are so many other crooked deals and Russians involved—over the years and continuing into his presidency, at least 3,500 lawsuits have been filed against Trump and/or his companies, by far unprecedented for any U.S. presidential nominee of a major party—that it can be overwhelming. Just one report from Reuters noted nearly $100 million was invested by Russians (including some “politically connected” elites but not including Russian-Americans who did not purchase units using a Russian address or passport) in seven Trump properties in South Florida, and that over a third all of the units in the seven properties were owned by shell company LLCs often designed to mask their owners’ identities. But here, we will stay focused on those players who have or will play prominent roles in our Ukraine-focused saga.
In Manhattan, Ukrainian Vasily Salygin—who would later become an official in Ukraine’s Party of Regions at the same time Manafort was advising it—would buy an apartment in Trump World Tower, among the first to do so after the skyscraper opened in 2001. This purchase would be brokered by fellow-Ukrainian Sam Kislin, who, as mentioned before, had done business with Trump decades earlier, had become particularly close to Rudy Giuliani, and was considered part of a Mogilevich Russian mafia organization by the U.S. law enforcement officials.
The Bayrock/Sater Deals: Russian-Linked, Shady Money and Colossal Failure Become Trump’s Style
Meanwhile, Kislin’s old business partner selling Trump televisions, Tamir Sapir, can be seen as a major catalyst for some of the wildest, most scandalous series of Trumpdeals covered in this entire exploration. Living in Trump Tower, Sapir had easy access to Trump and the families of the two men became friends. In the early 2000s, Sapir would introduce Trump to Bayrock, ostensibly a real-estate firm led by Tevfik Arif, an ex-Soviet government official from Kazakhstan whose rise to fortune is at least somewhat questionable. None other than our Felix Sater was then Chief Operating Officer (and eventually the dominant force) within Bayrock, the office of which was even in Trump Tower itself. Saterdirectly partnered with Trump repeatedly throughout this period, trying to help him land real estate deals in Moscow, even showing Ivanka Trump and Donald Trump Jr. around the Russian capital in 2006 (in which capacity, he let Ivanka spin around in Putin’s chair in the Russian president’s Kremlin office) and introducing the Trumps to influential Russians. None of these potential Moscow deals ever went through, but other massively scandalous deals with Bayrock did go further in America.
One of Bayrock’s partnerships with Trump in the U.S. in Fort Lauderdale was originally conceived of as the Trump International Beach Club. According to a lawsuit—spearheaded by a pair of former Bayrock employees, Jody Kriss and Michael Ejekam, who were seeking damages against Bayrock, Arif, and Sater, and assisted by the aforementioned attorneys Oberlander and later Lerner—Arif put up an initial $2 million in capital. Then, the lawsuit alleges, Arif and Sater conned Elizabeth Thieriot—a friend of Arif’s who was also Sater’s landlord—by lying about the value of the club, hiding their own investment in the project and convincing her to provide a $1 million investment for a mere 4% of the Club. That lawsuit claims her investment was 12 times the value of that percentage, allowing Sater and Arif to make a 1,125% profit on her investment, and that the pair committed tax and financial fraud and defrauded Thieriot of her rightful share. Others may have been victims, too, but after she took the pair to court in 2006, it is unclear how or if the case was resolved. The project was apparently eventually reconceived of as the Trump Las Olas Beach Resort, but was suspended in a declining market by Trump himself in October, 2007.
Bayrock’s most prolific partnership with Trump, however, was an infamous deal to develop a SoHo property in Manhattan. The deal was concocted in 2006 by Trump, Sater, Arif, and Sapir. In an arrangement specifically approved by Trump, the SoHo deal had a significant portion of its Sater/Arif facilitated financing—some $50 million for it and three additional projects—flow from Icelandic firm FL Group.
FL Group was later linked to the Panama Papers revelations and was widely known as a hub for the money of wealthy Russians, apparently those “in favor with Putin,” according to the Kriss v. Bayrock lawsuit. In addition, cumulonimbus-size clouds of well-founded suspicion of involvement with big-time Russian money-laundering then surrounded the incredibly deeply interconnected Icelandic financial system of which FL Group was a key part. Financing for these four projects was also secured from Mashkevich, formerly of Mogilevich-summit host Birshtein’s Seabeco and a major business partner with Deripaska concurrent with Deripaska’s work with Manafort on behalf of Putin. This FL Group financing happened to come at a time both when Mogilevich and his network (including Manafort) were laundering money for the massive Ukraine scheme and Deripaska seems to have been engaged in money laundering with Manafort and Gates.
The Trump SoHo deal itself was deliberately structured to cheat authorities out of tens of millions in revenue, as the investments were illegally restructured as loans to avoid paying hefty taxes on them, “loans” that would also give FL Group a big chunk of theoretical future profits over time. Furthermore, some of the transactions involving the Trump SoHo were clearly carried out by shell corporations for the virtually certain purpose of laundering money, transactions from which Trump profited. Specifically, there was investment for the purpose of alleged money laundering linked to Mashkevich—who, as noted, has his own separate history of alleged money laundering—involving the family of prominent Kazakh politician Viktor Khrapunov, once the mayor of Almaty. Sater has been helping federal authorities investigate Khrapunov’s alleged money laundering for years, but Sater himself was recently sued by a Kazakh Bank and the city of Almaty, Kazakhstan, alleging he worked with Khrapunov’s son, Ilyas Khraphunov, to launder millions in part to help build a potential (an infamous) Trump Tower Moscow (to be discussed later). A similar U.S. suit from the same parties targeting Viktor Khrapunov that had added information about Sater to its filings just recently had all its claims against Viktor dismissed because of the terms of a previous legal settlement.
The bottom line is that, given all the general shadiness surrounding Trump, the Khrapunovs, Sater, Sapir, Arif, Mashkevich, and FL Group, there are plenty of reasons to be extremely suspicious of Trump SoHo’s various funding streams.
In the end, the Trump SoHo project went terribly awry for Trump, who was sued for fraud along with his children Ivanka and Eric Trump, both of whom had inflated the level of interest in order to attract buyers. In a 2011 settlement, Trump refunded 90% of the deposits for the building’s condos and the property went into foreclosure in 2014. The Manhattan District Attorney’s office had even been building a serious criminal case against Ivanka and Eric for some two years, but, mere months after longtime-Trump lawyer Marc Kasowitz discussed the matter with the Manhattan District Attorney—one of whose top donors before and after was Kasowitz himself—the D.A., Cyrus Vance, rather incriminatingly dropped the case in 2012, overruling his own prosecutors in the process and saving the Trump kids from serious legal trouble (Vance would also give Harvey Weinstein a free pass with a sexual groping allegation in 2015). As a denouement, in November, 2017, the Trump Organization was paid by the SoHo’s corporate owner—weary of the scandals and the negative attention brought on by Trump’s political career—to terminate their contract early, with the Trump Organization ending its management role and fully disassociating itself from the building by the end of the month.
Even as construction on Trump SoHo began in 2007, a second of the Trump/Bayrock projects with the FL Group financing was rising in Fort Lauderdale, Florida. This second Trump/Bayrock project there, the Trump International Hotel & Tower, would also result in disaster and lead to over a dozen lawsuits, with over 100 condo buyers suing for $7.8 million. The project was supposed to have been completed by the end of 2007 but fell way behind schedule, and Sater and his Bayrock partners may have secretly cashed out their stakes in this project and the three FL Group–linked other projects in an arrangement made with FL Group equal to the initial $50 million “investment” loan. Trump eventually pulled his name from the project, and when its buyers learned this in May, 2009, this only increased their outrage and added to lawsuits already in motion accusing both Trump and Bayrock of fraud.
As in the SoHo deal, confidential settlements, this time with dozens of buyers, ensued, with Trump refusing to accept any responsibility and blaming the problems on the housing bubble bursting and the Great Recession. Florida courts declined to rule that Trump or his partners had committed fraud, including a state appeals court in 2016, but most of the lawsuits against Trump and his partners resulted in undisclosed settlements. The project finished years late, cost some $200 million, and was eventually sold for a relatively mere $115 million at a foreclosure auction.
A third deal among the four which received FL Group financing was a failure that never even got a concrete start. When Trump began eyeing the Phoenix, Arizona, area’s Camelback location for a luxury residential tower back in late 2003, Trump’s team, and later Trump himself, met with the mayor, who was not impressed with Trump nor the proposal. At a January 2005 meeting, when plans were unveiled, local residents even showed up to argue against the development. Still, by September, the appropriate city bodies had approved the plans. It seems Sater’s people organized intimidation, bribery, and deception as tactics to deter residents from gathering enough petition signatures to force a public referendum that could have overridden the city bodies’ approvals, but under this public pressure, the city council voted to reverse its decision anyway and pressed the developers and the neighborhood association to reach a compromise. At that point, Trump himself abandoned the project for at leas the stated reason of not wanting to be part of anything that would be scaled down any further in scope and ambition.
Ernie Mennes, the owner of the Camelback property who had gone into a partnership with the Bayrock/Trump developers, sued Bayrock in 2007 in federal court, accusing Sater of both threatening to “cut off his legs and leave him ‘dead in the trunk of his car’” as well as of stealing money from the project. The judge oversaw a settlement and the case was sealed, likely because of Sater’s special relationship with the federal government. By June of 2009, Bayrock was relieved of the property, which it had left $36 million in debt, when it was “sold out from under” the company at a trustee auction for a mere $10 million.
The final in the group of four projects of Bayrock tied to the faux $50 million “investment” by FL Group was Queens, New York, property called Waterpointe. Bayrock bought the property in 2008 for $25 million, but its soil was contaminated and had to be replaced, which Bayrock did with other soil that was even more contaminated and, thus, Bayrock was fined $150,000; when Bayrock defaulted on a loan in 2011, the lender took over Waterpointe, then sold it for roughly $11 million, less than half the amount Bayrock had paid for it.
Unsurprisingly, Bayrock would later find itself facing heavy legal problems. Emerging out of a process that began in 2008 in Delaware was a lawsuit filed with the New York State Supreme Court in May of 2013 by aforementioned former business partners of Sater’s at Bayrock—Kriss and Ejekam—against Bayrock, Sater, Arif, and their associates. The plaintiffs sued for damages and nonpayment related to Sater’s hiding of his criminal past and what their lawsuit, moved to federal court, says was his use of Bayrock primarily as a criminal organization for criminal activities, especially alleged money laundering and fraud. In this suit, Donald Trump, Ivanka Trump, and the Trump Organization are named as defendants.
The state court process removed the Trumps and their Organization from the suit in a way that left unresolved their guilt, responsibility, or innocence. The case dragged on and on, over years, but was finally settled in February, 2018, after a number of the accusations against Sater were withdrawn, but the details of the settlement have not been revealed.
Confusing? Of course. That likely by design. What we do know overall is that these deals were going down at a time when Mogilevich, Manafort, Firtash, and others were involved in the Ukraine gas plot and were eager to move and allegedly launder billions of dollars out of Ukraine as part of that scheme. Starting in late 2007, they were facing increased scrutiny from the new Ukrainian Prime Minister, Yulia Tymoshenko—Yushchenko’s right-hand woman during the Orange Revolution—and her allies in the Ukrainian government. If Sater’s father really was part of Mogilevich’s crew, as the U.S. Supreme Court writ of certiorari asserts without evidence, or if Sater was himself connected to Mogilevich, as Simpson with his legal counsel present asserted to U.S. Senate Judiciary Committee staffers and after being reminded that lying to Congress is a prosecutable federal offense that can land someone up to five years in prison, then it seems highly likely that Mogilevich would have been running Ukraine gas scam money through these Bayrock deals. If these claims of ties between Mogilevich and Sater are unfounded, Mogilevich still has some entry points—most likely Mashkevich and FL Group, but also others—into these deals besides Trump himself that could have been on his radar, too, that should also be looked into for possible money laundering related to the giant Ukraine gas scam.
It was also clear from these deals and others that Trump and the people around him were hardly rigorous vetters, let alone eager to turn down deals coming in from people with suspicious business practices and questionable, even criminal pasts tied to organized crime or to hostile foreign governments and even those governments’ intelligence agencies. Thus, selecting Trump as either an unwitting or willing conduit for money that needed to be moved stealthily, even laundered, was pretty much a no-brainer, especially since his playboy celebrity status made it much easier to attract additional “partners” to further distract and normalize, lending an air of respectability to these murky deals. And in all of these details, it is those additional folks who paid the biggest prices by far.
When Sater left Bayrock in 2008, none of those disastrous deals stopped him from being brought into the Trump Organization in 2010 as a “Senior Advisor to Donald Trump” even after Trump was made aware of Sater’s criminal past. For his part, Trump has issued his typically contradictory and slippery statements—more aptly called lies—in regards to these dealings and, in particular, his relationship with Sater, as Trump lied repeatedly in sworn testimony about it and his ties to Bayrock in an attempt to falsely minimize them. And there is no distancing Trump from Bayrock: one of Bayrock’s flagship presentations from as late as 2008 lists three of the Trump-named projects discussed above before all others, lists the Trump Organization as its first “strategic partner” (followed by FL Group), and lists Donald Trump as its first “reference” and “Trump Tower” in New York as its address.
On top of all that, it was revealed in March of 2017 that Sater owned several shell corporations tied to Don Jr., the Trump Organization, and/or another executive with shady ties, shell companies that had sold no products, had no customers, and were ideal for money laundering. More on Sater later…
As for Arif, Sater’s main partner at Bayrock, he was arrested in Turkey in September 2010 when he was at a sex party with, of all people, Mashkevich and apparently underage girls on board a yacht (which had been once belonged to none other than Atatürk, founder of modern Turkey) under suspicion of running a complex prostitution and human trafficking ring of which it seems Mashkevich was also a part. Arif was later acquitted under mysterious circumstances and Mashkevich was never charged.
Trump Tower Toronto: Connecting Putin, Mogilevich, and Ukraine Even More with Donald Trump
Another scandal-ridden Trump deal would involve a major property development in Toronto.
To understand this deal, we must go back again to Ukraine, where we left the Zaporizhstal steel mill—Ukraine’s fourth largest—in the possession of Alexander Shnaider, former Seabeco employee and son-in-law of Boris Birshtein, Seabeco’s owner and the Mogilevich-summit-host from back in 1995. By 2006, Shnaider was turning down a $1.2 billion offer for the mill.
But in 2007, Shnaider and Trump began building the Trump International Hotel and Tower, Toronto. It was partly funded by Raiffeisen Zentralbank (RZB) of Austria, which, according to Glenn Simpson, is “the go-to bank for top-level Russian dirty stuff.” And in 2008, FL Group conspicuously loaned Shnaider €45.8 million ostensibly for a yacht at the same time Shnaider’s former Seabeco colleague Mashkevich was also working closely with FL Group and Trump on the Bayrock projects. After investors were slammed during the ensuing global financial crises that exploded that same year, Shnaider sought to sell his company’s near-total stake in Zaporizhstal to help finance his Trump project, which he did in 2010 for some $850 million passed through five shell companies. The Zaporizhstal buyer was an unknown Russian acting on behalf of the Russian government and who, in turn, was funded by the Russian state-run bank VEB (Vnesheconombank), which had as the chairman of its board at that time none other than Vladimir Putin himself and which has been sanctioned because of Russia’s 2014 invasion of Ukraine. Then-Ukrainian President Yushchenko saw much of VEB’s activity in Ukraine at the time as infringing on his nation’s sovereignty and said that he tried looking into the transactions for Zaporizhstal and other privatizations of national assets, but was blocked by pro-Russian lawmakers.
Furthermore, selling Zaporizhstal to a Russian fit well into Putin’s scheme of trying to extend Russian influence over Ukraine’s industry and natural resources using Russia state-owned assets, such as Kremlin-run banks and energy companies, in tandem with the likes of oligarchs such as Dmitry Firtash and Rinat Akhmetov. Shnaider had carried out a similar operation in Armenia with a company that ran the electrical grid there in 2002, handing it off to a Kremlin-run company and giving Russia further leverage in another former Soviet Republic. 2003 saw him pick up a steel mill in Russia, then sell it to a Russian state military subsidiary company, but was given a quarter-stake in return, making him a business partner with Putin’s government. The pattern is clear: Shnaider was expanding Putin’s power.
It was reported by the Financial Times in mid-2018 that Shnaider was able to attract the VEB-funded Russian buyer because he had secretly agreed he would pay $100 million “commission” to “introducers” speaking for the Kremlin. Legal filings in a dispute between Shnaider and his then-main business partner, Shifrin with whom he had bought up Zaporizhstal to begin with, suggest that some of that $100 million ended in the hands of officials in the Russian government. The $100 million seems to have been a bribe and would make the whole Trump Tower project one huge money laundering machine. Shifrin claims Russian officials made clear threats that his Russian holdings would be in trouble if he did not sell Zaporizhstal to them. After the sale, VEB seems to have operated in such a way as to ensure Kremlin control over the steel mill, too.
Akhmetov had seemingly narrowly missed out on acquiring Zaporizhstal from Shnaiderback in 2010, and the $850 million price was $160 million more than Akhmetov had offered. But in a stellar example of the amount of cross-collusion going on, of that difference, $50 million went to Akhmetov (all while Akhmetov was backing the parties to the gas scheme), $10 million to Shnaider and Shifrin’s company, and $100 million, as noted, to the “introducers.” This deal was set up by the Ukrainian Igor Bakai, who had served in Kuchma’s government and in Naftogaz before fleeing Ukraine to Russia during the Orange Revolution. Though the succeeding Yushchenko government wanted him for financial crimes, Moscow declined to hand him over and clearly found him useful in 2010. A lawyer of Birshtein’s indicated in 2017 that $15 million from the Zaporizhstal sale went into the Trump Tower Toronto project, but the newer Financial Times report suggests this figure was $40 million. After that further investment from Shnaider, Trump would earn millions through the deal. In July, 2011, just a year after Shnaider and Shifrin sold Zaporizhstal, Akhmetov was able to gain majority ownership of it, when he was a sitting member of Ukraine’s parliament with the Party of Regions. Incidentally (or not), with just days until Trump’s 2016 electoral win, Shifrin was granted Russian citizenship.
Like the other deals discussed above, the Toronto deal fell into the same pattern of coming apart amid scandal and lawsuits from dozens of investors saying they were lied to and who are apparently still suing both Trump and Shnaider. Late in 2016, the property was placed into bankruptcy receivership, and in the summer of 2017 Trump’s stake in the project was completely bought out, his name removed from the building that July.
Rinse, Repeat for Panama
Still another massive scandal-ridden deal from this period was just exposed by an NBC News/Reuters/Global Witness joint series of exposés on the Trump Ocean Club International Hotel and Tower in Panama City, Panama. Ivanka Trump was particularly involved in this project, and Eric Trump was also involved substantively, though there is, as of yet, no evidence that shows any of the Trumps were aware of the criminality swarming their project; as usual, their best defense is that they are just incredibly stupid. This project, which began in 2005 and opened in 2011, became a massive hub for organized crime—including the Russian mafia—to use for money laundering, as demonstrated by the overwhelming evidence presented in the reports.
Notably, in 2007, Bear Stearns “underwrote a $220 million bond issue” that would help finance the project’s construction, less than a year before Bear Stearns’s meltdown initiated the Great Recession.
In 2011, the Trump Ocean Club’s Board of Directors voted to end Trump’s management of the building, claiming TRUMP was engaged in financial wrongdoings. His response was to sue them and a bitter fight ensued, ending in a confidential settlement that still left Trump managing the building. By 2013, the company Trump had partnered with to make the whole Trump Ocean Club happen was filing for bankruptcy. The Club’s majority owners kept trying to remove Trump’s name and end his involvement entirely, which they were finally able to do in 2018—including taking physical control of the property away from Trump’s security staff with actions of a Panamanian judge and the assistance of armed police on the site—and court rulings soon after this in New York and Panama affirmed that result, paving the way for Marriott to take over management of the property later that year. Legal filings made in June, 2019, by the majority owners who pushed out Trump even argue the Trump Organization evaded paying Panamanian taxes while running the property and claim both to have the financial records to prove evasion and that auditing by Panamanian authorities has demonstrated such tax evasion.
But the shady Trump Panama deal also has a link to our Ukraine drama. A Ukrainian businessman named Igor Anopolskiy was involved in several companies dealing with Trump Ocean Club units and in marketing the Club’s units to Ukraine. In 2014, he was convicted in Ukraine for forging travel documents, but had his three-year prison sentence strangely first suspended and then, in 2017, purged from his record. Even more suspiciously, he has since 2005 been a shareholder in a Ukrainian travel agency that once had among its other shareholders one Oxana Marchenko, who, according to Global Witness, “is believed to be the wife” of Viktor Medvedchuk.
While Oxana (or Oksana) is a major Ukrainian TV personality who dabbles in Russian oil drilling through a Cyprus-based company, Medvedchuk is an even more connected individual. He was one of Ukraine’s first post-Soviet oligarchs and in none other than the natural gas business, and by 1999 he was a close ally of then-Ukrainian President Leonid Kuchma, supporting him in tandem with Oleksandr Volkov, who at the time was funneling money from Birshtein to Kuchma and was the latter’s campaign manager, as discussed previously. Medvedchuk later became Kuchma’s chief of staff from 2002-2005, yet also became very close with Putin’s number-two, then-Russian Prime Minister and later-President Dmitry Medvedev. But Medvedchuk is even closer with Putin himself, who is the godfather to Medvedchuk’s and Marchenko’s daughter (Medvedev’s wife is the godmother) and has pushed for, and seen, Medvedchuk take leading roles in Ukraine’s politics. In such roles Medvedchuk backed Yanukovych, has worked to steer Ukraine away from the West and closer to Russia, and has played a major role as a negotiating representative “for” Ukraine in major disputes with Russia on everything from gas deals to the current war.
Clearly, there is a distinct possibility of some sort of cash flow from Ukraine into the Trump Ocean Club in Panama, and this possibility should be of keen interest to American, Ukrainian, and Panamanian officials, among others.
The Manafort, Firtash, and Mogilevich Manhattan Money Laundering Moves
As Tymoshenko moved to fight the overall Kremlin-serving gas scheme, laundering the gas-generated proceeds became even more important to the people involved.
To this end, Manafort may have engaged in money laundering, possibly including his 2006 cash purchase of a $3.675 million Manhattan Trump Tower apartment using one of the shell companies cited in Special Counsel Mueller’s October, 2017, indictment. If that property was involved, it means a direct link between alleged money laundering that was part of Putin’s Ukraine gas plot and Trump himself. In 2008, Manafort and Gates were personally involved in moving money—alleged laundering—to the U.S. through multiple deals involving Manhattan properties, according to court documents. Those documents detail how Manafort ran a shell corporation that was part of the machinery that pushed money into real estate deals on behalf of Firtash and their mutual allies, with Firtash in one case allegedly laundering some $25 million in an $895 million deal involving the Drake Hotel. But that deal never came fruition, resulting a number of parties that felt cheated and defrauded.
Another major money laundering case involved the arrest of Mogilevich-linked Russian mobsters in Trump Tower itself. A Mogilevich-outfit Russian mafia boss, Alimzhan Tokhtakhounov (somewhat famous for allegedly rigging figure skating in the 2002 Winter Olympics in Utah to get Russians gold medals), and his lieutenants Vadim Trincher and Anatoly Golubchik were allegedly overseeing an illegal high-stakes international gambling ring. The scheme drew rich participants and was, in part, operated out of the Trump Tower. The whole caper ended up being the subject of the recent Jessica Chastain movie Molly’s Game. Important for our story, the gambling ring was popular with Russian and Ukrainian oligarchs in both Russia and Ukraine and its ringleaders engaged in some $100 million in money laundering. In 2009, Trincher purchased a Trump Tower unit just below one owned by Donald Trump himself. In his own apartment, Trincher almost held a fundraiser two years later for future-Trump-ally and bigwig Republican Newt Gingrich. A mold problem ended up derailing the plans for the fundraiser, with a water leak being detected. Other mobsters in this overall Mogilevich cell also owned Trump properties. Many of these folks did not escape justice in 2013 raids orchestrated by U.S. Attorney for the Southern District of New York (SDNY) Preet Bharara, a noted foiler of Kremlin plots but who was later fired by Trump soon after Trump became president. Tokhtakhounov did manage to get away, though, and was soon after a red-carpet VIP guest at Trump’s very own 2013 Miss Universe Pageant in Moscow. The two men arrived within minutes of each other, and it is certainly possible they interacted there. Tokhtakhounov is regularly spotted at trendy public places in the Russian capital, easily still evading justice.
How does one make sense of so much scandal? Just the Trump deals involving Bayrock, Toronto, and Panama alone amounted to some $1.5 billion, and there was a clear pattern with each: money connected one way or another to the Kremlin or the Russian mafia, failure, scandal, lawsuits, an overwhelming stench of money laundering, and the Trump name being removed by Trump backing out or Trump being forced out. Taken together, it is pretty improbable that so much disaster could surround one person without a greater, deliberate purpose behind such losses, that people would risk so much money without money laundering being the real reason behind these deals. And those deals certainly match the model of the Manafort, Gates, Firtash, and Mogilevich Manhattan money moves for Yanukovych, the Party of Regions, and Putin that were clearly money laundering, even if a court case has not yet produced a guilty verdict regarding those deals. These were the big deals he was doing while he was rebuilding himself and using his TV show The Apprentice to build a huge national fanbase
Let us also pause here to note Trump’s direct involvement with two major financial firms—Bear Stearns and FL Group—just before they failed and were the two major catalysts for the worst global economic crises since the Great Depression. FL Group failed spectacularly in 2008, along with Iceland’s other major banks and funds. The firm’s failure was a major factor in the collapse of Iceland’s financial sector, a collapse that served as a catalyst for the 2008 global financial crisis and America’s Great Recession. Furthermore, since FL Group was a stupendously bad performer even by the standards of the 2008 financial crisis, and given its close (direct and/or indirect) ties to Kremlin-connected Russian money, one could also be forgiven for thinking that they were acting more out of Kremlin interests than business ones. In the case of Bear Stearns, its collapse would be the first big domino on the U.S. side of the global financial crises and the catalyst for the U.S. Great Recession. The Trump deals were not insignificant and were important factors in both firms’ collapses, so, it would not be without accuracy to say that Donald Trump played an important role in causing the economic crises that erupted in 2008.
In the interest of full disclosure, Brian interned for Joe Biden from September-December, 2006.
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