I picked a bad week to get sick again. Lots of crazy stuff coming out of Washington this week.
I don’t have time to get into the unconfirmed “Donald Trump dossier” and his allegedly being compromised by the Russians which blew up his press conference earlier this week. How Russian ‘kompromat’ destroys political opponents, no facts required:
Short for “compromising material” in Russian, kompromat is all about the intersection of news and blackmail. It’s the ability to sully the reputations of political opponents through hints, images, videos, promises of disclosures, perhaps even some high-quality faked documentation. Sex or pornography often figures prominently. The beauty of kompromat is that it has to create only a sense of doubt, not prove its case conclusively. This sounds a bit like “fake news,” but in a classic kompromat operation, real Russian state media organizations work in tandem with the Kremlin to find appealing and effective ways to discredit the target. Often, that means in the most visceral and personal ways possible.
Now kompromat may have come to the United States.
Arizona’s angry old man, Senator John McCain, managed to get himself entangled in this “Donald Trump dossier” scandal as well, so bonus! John McCain intrigue grows in Donald Trump dossier affair:
McCain this week confirmed he received the “sensitive information,” which originally was compiled as anti-Trump opposition research during the 2016 GOP primaries and general election, and gave the explosive file to the FBI.
“I did what any citizen should do: I received sensitive information, and then I handed it over to the proper agency of government and had nothing else to do with the issue,” McCain told reporters Wednesday.
The FBI apparently was already aware of the memos, or at least most of them. The memos became news this week when CNN reported that intelligence officials had given Trump a summary of the allegations. The website BuzzFeed subsequently published the memos.
A hint of this scandal was actually first reported by David Corn at Mother Jones before the election but went unreported by American media outlets, which were also in possession of the “Trump dossier.” A Veteran Spy Has Given the FBI Information Alleging a Russian Operation to Cultivate Donald Trump.
I’ll focus on the reporting of what we actually do know about Donald Trump’s business ties to Russia.
Twitter troll Trump tweeted before his Russian circus tent fire of a press conference that:
This is a blatant lie. His own son has flatly contradicted him. Here’s what we know about Donald Trump and his ties to Russia:
Q: What about investments from Russia in Trump’s businesses?
A. There is strong evidence that Trump’s businesses have received significant funding from Russian investors. Most notably, Trump’s son Donald Trump Jr. made that very claim at a real estate conference in New York in 2008, saying “Russians make up a pretty disproportionate cross-section of a lot of our assets.” Donald Trump Jr. added, “we see a lot of money pouring in from Russia.”
Trump also made millions when he agreed to bring the Miss Universe pageant to Moscow in 2013, a deal financed in part by the development company of a Russian billionaire Aras Agalarov. Agalarov is a Putin ally who is sometimes called the “Trump of Russia” because of his tendency to put his own name on his buildings. At the time, Trump mingled with the Russian business
elite oligarchy at a swanky after-party. “Almost all of the oligarchs were in the room,” Trump bragged on returning home.
As a sign of the importance of Russian investors, partners of one of Trump’s projects then under construction in Panama visited Moscow to sell condos at the building in 2006.
Trump also made significant money from one Russian oligarch in 2008, when he sold a mansion in Palm Beach for $95 million to Russian billionaire Dmitry Rybolovlev. Trump had bought the home at a bankruptcy auction less than four years earlier for $41.4 million.
In a series of reports by the Financial Times largely ignored by the lazy American media but summarized in a post by Mark Sumner at Daily Kos, we learn a good deal more about Trump’s Russian business ties. Donald Trump was bailed out of bankruptcy by Russia crime bosses:
Human rights lawyer Scott Horton, whose work in the region goes back to defending Andrei Sakharov and other Soviet dissidents, has gone through a series of studies by the Financial Times (paid subscription) to show how funds from Russian crime lords bailed Trump out after yet anther bankruptcy. The conclusions are stark.
Among the powerful facts that DNI missed were a series of very deep studies published in the [Financial Times] that examined the structure and history of several major Trump real estate projects from the last decade—the period after his seventh bankruptcy and the cancellation of all his bank lines of credit. …
The money to build these projects flowed almost entirely from Russian sources. In other words, after his business crashed, Trump was floated and made to appear to operate a successful business enterprise through the infusion of hundreds in millions of cash from dark Russian sources.
He was their man.
Yes, even that much seems fantastic, and the details include business agencies acting as a front for the GRU, billionaire mobsters, a vast network of propaganda sources, and an American candidate completely under the thumb of the Kremlin.
* * *
Horton’s analysis comes from piecing together information in three Financial Times “deep reports.” One of these focused on Sergei Millian, the head of the Russian American Chamber of Commerce in the US at the time of Trump Jr.’s “money pouring in from Russia” claim.
Mr Millian insists his Russian American Chamber of Commerce (RACC) has nothing to do with the Russian government. He says it is funded by payments from its commercial members alone.
Most of the board members are obscure entities and nearly half of their telephone numbers went unanswered when called by the Financial Times. An FT reporter found no trace of the Chamber of Commerce at the Wall Street address listed on its website.
Why was RACC’s background filled with so many holes? The Financial Times quotes former Russian MP Konstantin Borovoi in tagging the chamber as a front for intelligence operations that dates back to Soviet times.
“The chamber of commerce institutions are the visible part of the agent network . . . Russia has spent huge amounts of money on this.”
Millian helped arrange for Trump to visit Moscow in 2007, and had other outings with Trump in the states, including a visit to horse races in Miami. Millian claims that he had the right to market Trump properties in Russia.
“You could say I was their exclusive broker,” he told Ria. “Then, in 2007-2008, dozens of Russians bought apartments in Trump properties in the US.” He later told ABC television that the Trump Organisation had received “hundreds of millions of dollars” through deals with Russian businessmen.
Despite documents and photos showing Trump with Millian, Trump denied their association during the campaign.
Hope Hicks, Mr Trump’s campaign spokeswoman, said Mr Trump had “met and spoke” with Mr Millian only “on one occasion almost a decade ago at a hotel opening.”
The second Financial Times article puts Trump at the middle of a money laundering scheme, in which his real estate deals were used to hide not just an infusion of capital from Russia and former Soviet states, but to launder hundreds of millions looted by oligarchs. All Trump had to do was close his eyes to the source of the money, and suddenly empty apartments were going for top dollar.
Among the dozens of companies the Almaty lawyers say the Khrapunov laundering network used were three called Soho 3310, Soho 3311 and Soho 3203. Each was a limited liability company, meaning their ownership could easily be concealed.
The companies were created in April 2013 in New York. A week later, property records show, they paid a total of $3.1m to buy the apartments that corresponded with their names in the Trump Soho, a 46-storey luxury hotel-condominium completed in 2010 in a chic corner of Manhattan.
Why would Trump’s organization make such a good means of laundering funds? Because real estate has an arbitrary value. Is that apartment worth $1 million? Two million? Why not $3 million for a buyer who really wants it? When the whole transaction is just one LLC with undisclosed ownership paying another LLC with undisclosed ownership, it’s even neater than hiding the money in an offshore account. And while some businesses require due diligence in looking at the source of funds, real estate is a bit more … flexible.
The laws regulating US real estate deals are scant, experts say. Provisions against terrorism financing in the Patriot Act, passed in the aftermath of the September 11 2001 attacks, obliged mortgage lenders to conduct “know your customer” research. But money launderers pay in cash. Sales such as those of the Trump Soho apartments have passed through this loophole, which was partially closed only this year.
Converting funds stolen overseas into property in the US and cash in the account of an LLC represented a win for both the oligarchs and Trump. Best of all, Trump’s sole requirement was that he pay scant attention to the deal—something at which he was already a proven master. For example, the actual owners of the Trump Soho were another limited liability company, Bayrock. Trump was a partner in the LLC and Bayrock cut the checks Trump received when those apartments were sold. And yet …
In a 2011 deposition, given in a dispute over the Fort Lauderdale project, Mr. Trump said he had “never really understood who owned Bayrock.” Jody Kriss, a former Bayrock finance director, has claimed in racketeering lawsuits against his former employer that Bayrock’s backers included “hidden interests in Russia and Kazakhstan.” Bayrock has denied Mr. Kriss’s allegations but declined to answer questions about the source of its funds and its relationship with the Khrapunovs.
The third article digs more deeply into the origins of Bayrock and its connection with Trump. That connection … was very close.
The Republican presidential nominee and Bayrock were both based in Trump Tower and they joined forces to pursue deals around the world — from New York, Florida, Arizona and Colorado in the US to Turkey, Poland, Russia and Ukraine. Their best-known collaboration — Trump SoHo, a 46-storey hotel-condominium completed in 2010 — was featured in Mr Trump’s NBC television show The Apprentice.
This is the same group about which Trump said he “never really understood” the ownership.
“I don’t know who owns Bayrock,” Mr Trump said. “I never really understood who owned Bayrock. I know they’re a developer that’s done quite a bit of work. But I don’t know how they have their ownership broken down.”
At the very least, Trump confessed to partnering with, taking money from, and acting as a representative for a corporation whose ownership he didn’t know, in deals that totaled hundreds of millions in countries around the world. However, it seems far more likely that Trump knowingly worked with oligarchs, groups associated with the Russian government, and plain old mobsters. Why? Because he was desperate.
By the 2000s, the property developer and casino owner with ready access to the capital markets and the biggest New York banks was no more. A series of corporate bankruptcies had limited his financing options. Mr Trump had become an entertainer who portrayed a tycoon on television and licensed his name to businesses looking for a brand, leading to fee-making opportunities as disparate as Trump University and Trump Vodka.
The Trump Organization was a hollow shell and Trump was bankrupt, but Donald Trump the public figure was a “successful businessman,” a screen behind which criminal activity could be carried out on a massive scale. Throwing his name at every scheme in existence wasn’t a strategy, it was a fire sale on Trump’s respectability. Steaks? Water? Vodka? Fake real estate school? You pony up the cash, and Trump will slap his name on it. Because by the early 2000s, Trump wasn’t just broke, he had nothing left to pawn. He wasn’t a successful businessman, but he still played one on TV. His image had more value than his real estate portfolio.
But the apartments and buildings where Trump held some degree of ownership could be turned into value again. All it took was partnering with foreign crime bosses looking for a place to stash their cash. To inflate the value of his portfolio, Trump had to do nothing other than look away as the dirty money poured in from one LLC to the next. Citizens in Russia, Kazakhstan, and other former Soviet states lost hundreds of millions, but Trump got a cut as looted funds flowed through offices and apartments in buildings that carried those critical gold letters.
Horton’s evaluation of this material in coordination with the declassified DNI report is that Trump actively worked with and for Russian interests.
What these exposes showed, is that Trump pursued the projects hand in glove with Russian mobsters who worked closely with Putin’s Kremlin …
But based on the information in the Financial Times report, it appears that there are actually two possible answers. Trump may have been actively involved with and working for Russian sources. He might also have simply played the role of useful idiot, displaying his readiness to feign ignorance about any deal … so long as it generated some funds to float his sinking boat.
In the end, there’s not a lot of difference in the outcome. Trump got money. Oligarchs cleaned their cash. Russia got their man.
Daily Kos has a follow-up report today on the Trump SoHo and Bayrock Russian connections. Trump SoHo and the Russian Mafia: Follow the Money:
From Ruth Sherlock, of The Telegraph of London, reporting on a conversation she had with a former US intelligence source:
The former agent also urged me to follow the money. Not just the election, but Mr. Trump’s whole career, he claimed, is wrapped up in questionable financing from Russia.”It’s like every part of his business is somehow tied up in it” he said.
Much has been written, including in this newspaper, about Bayrock, the property development firm that was building Trump SoHo, his towering building in New York and other projects.
A key principle in Bayrock was Felix Sater, a Russian convicted of helping to lead a massive mafia-linked Wall Street stock fraud scheme. (Mr. Sater also attacked a man at a New York bar by stabbing him in the face with the broken stem of a Martini glass).
Two lawyers, Frederic Oberlander and Richard Lerner, who have spent much of their careers tracking Bayrock’s dealings, allege in court documents that Bayrock “for most of its existence it was substantially and covertly mob-owned and operated”.
In a petition to the US Supreme Court they write that Mr Sater’s father, Michael Sheferofsky, worked for Semion Mogilevich, the Russian mafia boss allegedly described by the FBI as “the most dangerous mobster in the world”.
The company was based in Trump Tower, and, despite Mr. Trump’s claims that he barely knows Mr Sater, there is much reporting to show the opposite.
David Cay Johnston, an American journalist who has spent years looking into connections between Mr Trump and the mafia wrote in Politico during the election that no other candidate for the White House “has anything close to Trump’s record of repeated social and business dealings with mobsters, swindlers, and other crooks”.
Not every detail in the “Trump dossier” need prove to be true. Some of the sourcing may prove false, but other sourcing may prove true. The intelligence agencies considered the dossier credible enough to brief the President and president-elect about it. The reason for this that Christopher Steele, the former British MI6 intelligence officer and his sources are considered “very credible.” Donald Trump dossier: intelligence sources vouch for author’s credibility.
As in Watergate, the media should “follow the money” — something most of the lazy American media has failed to do up until now.