Saturday, April 21, 2018

The Business Deals That Could Imperil Trump

By Peter Fritsch and Glenn R. Simpson

Mr. Fritsch and Mr. Simpson are the founders of the research firm Fusion GPS.

A Russian émigré with a checkered past helped develop what was known as Trump SoHo until last December.CreditTodd Heisler/The New York Times

Put aside Russian collusion for a moment. Press pause on possible presidential obstruction of justice. Forget Stormy Daniels. The most significant recent development involving the president may be that the special counsel, Robert Mueller, has subpoenaed Trump Organization business records as part of his inquiry into Russian interference in the presidential election.

Those documents — and records recently seized by the F.B.I. from the president’s personal lawyer Michael Cohen — might answer a question raised by the president’s critics: Have certain real estate investors used Trump-branded properties to launder the proceeds of criminal activity around the world?

We pored over Donald Trump’s business records for well over a year, at least those records you can get without a badge or a subpoena. We also hired a former British intelligence official, Christopher Steele, to look into Mr. Trump’s possible ties to Russia. In that 2015-2016 investigation, sponsored first by a Republican client and then by Democrats, we found strong indications that companies affiliated with Mr. Trump, then a presidential candidate, might have been entangled in foreign corruption.

Donald Trump, Tevfik Arif, center, and Felix Sater at the 2007 launch party for Trump SoHo, which they developed together.CreditMark Von Holden/WireImage, via Getty Images

A string of bankruptcies in the 1990s and 2000s may have left Mr. Trump’s companies largely unable to tap traditional sources of financing. That could have forced him to look elsewhere for financing and partners at a time when money was pouring out of the former Soviet Union.

Indeed, from New York to Florida, Panama to Azerbaijan, we found that Trump projects have relied heavily on foreign cash — including from wealthy individuals from Russia and elsewhere with questionable, and even criminal, backgrounds. We saw money traveling through offshore shell companies, entities often used to obscure ownership. Many news organizations have since dug deeply into the Trump Organization’s projects and come away with similar findings.

This reporting has not uncovered conclusive evidence that the Trump Organization or its principals knowingly abetted criminal activity. And it’s not reasonable to expect the company to keep track of every condo buyer in a Trump-branded building. But Mr. Trump’s company routinely teamed up with individuals whose backgrounds should have raised red flags.

The Trump Royale, Trump Palace and Trump International Beach Resort in Sunny Isles Beach, Fla.CreditMichele Eve Sandberg/Agence France-Presse — Getty Images

Consider the Bayrock Group, a developer that once had lavish offices in Trump Tower. The firm worked with Mr. Trump in the mid-2000s to build the Trump SoHo in Lower Manhattan, among other troubled projects. One of its principals was a Russian émigré, Felix Sater, linked to organized crime who served time for felony assault and who later pleaded guilty to racketeering involving a $40 million stock fraud scheme.

Belgian authorities accused a Kazakh financier recruited by Bayrock of carrying out a $55 million money-laundering scheme (that case was settled without an admission of guilt). Civil suits filed in Los Angeles and New York allege that a former mayor of the largest city in Kazakhstan and several of his family members laundered millions in stolen public funds, investing some of it in real estate, including units in Trump SoHo. (The family has denied wrongdoing and says it is the victim of political persecution.)

Then there is Sunny Isles Beach, where over 60 individuals with Russian passports or addresses bought nearly $100 million worth of units in Trump-branded condominium towers in a part of South Florida known as Little Moscow. Among them were Russian government officials who made million-dollar investments and a Ukrainian owner of two units who pleaded guilty to one count of receipt of stolen property in a money-laundering scheme involving a former Ukrainian prime minister.

Alexandre Ventura Nogueira handled much of the sale of condominiums at the Trump Ocean Club International Hotel and Tower in Panama. He said he sold about half of his Trump condos to Russians, including some connected to the Russian mafia.CreditStephen Grey/Reuters

In 2006, the sale of condos in the first international hotel venture under the Trump brand, the former Trump Ocean Club International Hotel and Tower in Panama, fell, in large part, to a Brazilian named Alexandre Ventura Nogueira. He worked with a Colombian who was later convicted of money laundering. Mr. Nogueira told NBC News last year that he sold about half of his Trump condos to Russians, including some connected to the Russian mafia, and that some of his clients had “questionable backgrounds.”

Three years later, as Reuters has reported, Panamanian authorities arrested Mr. Nogueira on charges of fraud and forgery unrelated to the Trump project. After getting out on bail, he fled to Brazil, where he faces a separate money-laundering investigation. In 2014, he fled Brazil, too.

The Trumps typically claim to be passive partners in projects like Trump Ocean Club and that they had minimal dealings with the likes of Mr. Nogueira. (The chief legal officer for the Trump Organization, Alan Garten, has said that no one in the Trump family remembers meeting or speaking to Mr. Nogueira. But there are photos of Mr. Trump and his daughter Ivanka with Mr. Nogueira.) Yet Mr. Trump’s limited public disclosures reveal his company has earned millions from licensing fees, a percentage of property sales and management fees in foreign projects. And the Trump family was sometimes personally involved in everything from a project’s design to its décor.

That appears to have been the case with the Trump International Hotel & Tower in Baku, the capital of Azerbaijan, a high-end residence and hotel that has yet to open. In 2012, the Trumps signed a licensing agreement with the local developer, Anar Mammadov — the son of the country’s billionaire transportation minister, Ziya Mammadov, who an American diplomat once described in cables published by WikiLeaks as “notoriously corrupt even for Azerbaijan.”

The Trump Organization has said that it conducted an extensive due-diligence review of Anar Mammadov and that questions about the source of his wealth surfaced after they signed the deal. Presumably, Mr. Mueller will want to see evidence of that.

In Vancouver, the Trump Organization partnered with the son of Tony Tiah Thee Kian, a Malaysian oligarch who was convicted of providing a false report to the Kuala Lumpur stock exchange. That project, which was guided by Ivanka Trump and is one of the few Trump-branded properties to open since Mr. Trump took office, is now the subject of an F.B.I. counterintelligence inquiry, according to CNN. Mr. Garten, the Trump chief legal officer, told CNN: “The company’s role was and is limited to licensing its brand and managing the hotel. Accordingly, the company would have had no involvement in the financing of the project or the sale of units.”

It remains unclear whether Mr. Mueller will investigate these deals, or already is. But a comprehensive investigation could raise questions about the Trump Organization’s compliance with anti-money-laundering laws and the Foreign Corrupt Practices Act, which — according to the Securities and Exchange Commission and the Department of Justice — makes it a crime for a United States company to act with willful blindness toward the corrupt activities of a foreign business partner.

The former Donald Trump insider Steve Bannon has hinted darkly about the Trump family’s exposure to money laundering. And Mr. Mueller has already secured the indictment of Paul Manafort, Mr. Trump’s former campaign chairman, on charges of money laundering related to his work in Ukraine. Federal prosecutors are reported to be looking into Jared Kushner’s family firm over its use of a federal program that offered wealthy Chinese investors visas in return for investments. Kushner Companies has denied any wrongdoing.

The Trump family’s business entanglements are of more than historical significance. Americans need to be sure that major foreign policy decisions are made in the national interest — not because of foreign ties forged by the president’s business ventures.

Peter Fritsch and Glenn R. Simpson, former journalists, are the founders of the research firm Fusion GPS.

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A version of this article appears in print on , on Page SR3 of the New York edition with the headline: The Business Deals That Could Imperil Trump. Order Reprints | Today’s Paper | Subscribe


Friday, April 20, 2018

Michael Cohen Has Said He Would Take a Bullet for Trump. Maybe Not Anymore.

For years, a joke among Trump Tower employees was that the boss was like Manhattan’s First Avenue, where the traffic goes only one way.

That one-sidedness has always been at the heart of President Trump’s relationship with his longtime lawyer and fixer, Michael D. Cohen, who has said he would “take a bullet” for Mr. Trump. For years Mr. Trump treated Mr. Cohen poorly, with gratuitous insults, dismissive statements and, at least twice, threats of being fired, according to interviews with a half-dozen people familiar with their relationship.

“Donald goes out of his way to treat him like garbage,” said Roger J. Stone Jr., Mr. Trump’s informal and longest-serving political adviser, who, along with Mr. Cohen, was one of five people originally surrounding the president when he was considering a presidential campaign before 2016.

Now, for the first time, the traffic may be going Mr. Cohen’s way. Mr. Trump’s lawyers and advisers have become resigned to the strong possibility that Mr. Cohen, who has a wife and two children and faces the prospect of devastating legal fees, if not criminal charges, could end up cooperating with federal officials who are investigating him for activity that could relate, at least in part, to work he did for Mr. Trump.
Last week federal agents raided Mr. Cohen’s office and hotel room and seized business records, emails and other material as part of what Mr. Trump has called a “witch hunt” by his own Justice Department. The trove included documents dating back decades, as well as more recent ones related to a payment in 2016 to a pornographic film actress who has said she had a sexual encounter with Mr. Trump, which Mr. Trump denies.

Although Mr. Trump called Mr. Cohen last Friday, four days after the raid, to “check in,’’ according to people familiar with the call, he and Mr. Cohen have spoken little since Mr. Trump entered the White House. The two men did have dinner together at Mar-a-Lago, Mr. Trump’s private club in Florida, a few weeks ago, but since the raid Mr. Cohen has told associates he feels isolated.

Mr. Trump has long felt he had leverage over Mr. Cohen, but people who have worked for the president said the raid has changed all that.

“Ironically, Michael now holds the leverage over Trump,” said Sam Nunberg, a former aide to Mr. Trump who worked with Mr. Cohen and Mr. Stone. Mr. Nunberg said that Mr. Cohen “should maximize” that leverage.

“The softer side of the president genuinely has an affection for Michael,” Mr. Nunberg said. “However, the president has also taken Michael for granted.” Mr. Nunberg added that “whenever anyone complains to me about Trump screwing them over, my reflective response is that person has nothing to complain about compared to Michael.”

Mr. Trump and Mr. Cohen, far right in New Hampshire in 2011. Credit Jim Cole/Associated Press

Mr. Stone recalled Mr. Trump saying of Mr. Cohen, “He owns some of the finest Trump real estate in the country — paid top dollar for it, too.” In Mr. Trump’s worldview, there are few insults more devastating than saying someone overpaid.

For years, Mr. Cohen has described himself as unflinchingly devoted to Mr. Trump, whom he has admired since high school. He has told interviewers that he has never heard Mr. Trump utter an inaccuracy or break a promise. He has tweeted about Mr. Trump nearly 3,000 times.

In a Fox News interview last year, Mr. Cohen declared: “I will do anything to protect Mr. Trump.’’ He told Vanity Fair in September that “I’m the guy who would take a bullet for the president,” adding, “I’d never walk away.”
At a Republican fundraiser at Mar-a-Lago earlier this year, Mr. Cohen went so far as to approach the first lady, Melania Trump, to try to apologize for the pain he caused her with the payment to Stephanie Clifford, known as Stormy Daniels, the adult film actress who has claimed to have had the sexual encounter with Mr. Trump.

Over the years, Mr. Trump threatened to fire Mr. Cohen over deals that didn’t work out, or snafus with business projects, people who were present for the discussions said. He was aware that Mr. Cohen benefited in other business projects as being seen as affiliated with the Trump Organization, and it irked him.

“He clearly doesn’t think that Michael Cohen is his Roy Cohn,” said Tim O’Brien, a Trump biographer, referring to Mr. Trump’s former mentor and the president’s ideal for a pit bull-like defender. “I think his abusive behavior to Michael is animated by his feeling that Michael is inadequate.”

Prosecutors have argued that Mr. Cohen did little actual legal work for Mr. Trump and instead focused on extensive political, media and real-estate dealings for the president.

Michael D’Antonio, another Trump biographer, recalled Mr. Cohen calling him soon before the book was published.

“He wanted to know if I was going to call Trump a racist and he wanted to know” if it would include an old allegation from Mr. Trump’s wife, Ivana Trump, that he had committed marital rape, Mr. D’Antonio said.

Mr. Cohen also wanted the title of the book, which was originally “Never Enough,” changed, Mr. D’Antonio said. He recalled saying to Mr. Cohen, “When has it ever been enough for Donald?”

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How Michael Cohen and President Trump Are Connected

How Donald J. Trump’s longtime lawyer may be related to payments made to two women who claim they had affairs with Mr. Trump.
OPEN Interactive Graphic

“And Cohen started laughing, and he said, ‘I don’t have a problem with the title personally,’” Mr. D’Antonio recalled. Nonetheless, he said, Mr. Cohen said he would call the publisher to get the title changed, and then threatened a lawsuit when he couldn’t.

In 2007, Mr. Cohen was dispatched, along with Ivanka Trump, to scout a golf course development project in Fresno, Calif., that didn’t materialize. The next year, he served as chief operating officer of Affliction Entertainment, a Trump mixed-martial arts venture of boxing, wrestling and karate that featured a Russian Army veteran named Fedor Emelianenko. (“His thing is inflicting death on people,” Mr. Trump said at the time.)
He has also scouted business opportunities for Mr. Trump in the former Soviet bloc, including a 2010 trip to Georgia on Mr. Trump’s behalf.

Mr. Cohen has been active in Mr. Trump’s political ventures. When Mr. Trump pondered running for president in 2012, it was Mr. Cohen who went on an early trip to Iowa to meet with Republican operatives and who set up a website called He even initially sought to pay some of the costs for the site with money raised for his own abortive run for New York State Senate.

Mr. Trump never ran in 2012, but Mr. Cohen raised $500,000 in four hours for the Mitt Romney presidential campaign that year during one of their “national call days” — and had campaign officials credit it as money that his boss had raised, one former Romney official recalled. When Mr. Trump ran for president in 2016, Mr. Cohen was given no official role on the campaign.

He fought with the initial campaign manager, Corey Lewandowski. Paul Manafort, the campaign chairman, later blocked him from coming on board. Mr. Trump never ordered his aides to make a place for Mr. Cohen.

Some of Mr. Cohen’s efforts to help only led to embarrassing rebuffs in front of those in charge. A month before the election, Mr. Cohen approached Mr. Trump outside his Trump Tower office with photographs of Bill Clinton and a mixed-race man alleged — without any evidence — to be the former president’s illegitimate son. Mr. Trump knocked the papers away, angrily telling Mr. Cohen to “get that out of my face,” said one former campaign official who witnessed the incident.

Particularly hurtful to Mr. Cohen was the way Mr. Trump lavished approval on Mr. Lewandowski in a way he never did for Mr. Cohen. When Mr. Cohen told Mr. Trump that he believed that Mr. Lewandowski had been behind a negative story about Mr. Trump’s son-in-law, Jared Kushner, Mr. Trump dismissed the comments as simple jealousy, and didn’t pay attention, according to two people familiar with the incident.

Mr. Cohen raised millions of dollars for Mr. Trump in the campaign, at a time when the candidate was struggling to attract support. Mr. Cohen tried to soften the edges as Mr. Trump faced a torrent of criticism for decades of racially divisive remarks, forming a “diversity coalition” to give Mr. Trump cover comprised of African-Americans, Muslims and other groups.

“Nobody else around Donald Trump would have thought to do that for him,” said Darrell Scott, an African-American pastor from Ohio and a friend of Mr. Cohen who helped created the coalition.


Thursday, April 19, 2018

Justice Department Gives Congress Comey’s Memos on Trump

WASHINGTON — The Justice Department sent to Capitol Hill on Thursday redacted copies of a set of closely kept memos written by James B. Comey, the former F.B.I. director, about his interactions with President Trump.

The memos, running 15 pages in total, detail a series of phone calls and encounters between the two men in the months leading up to Mr. Comey’s firing and offer an intimate look at interactions among the highest levels of government.

[Read the memos here.]

On one such occasion, memorialized in copies of the memos obtained by The New York Times, Mr. Trump told Mr. Comey that he had serious reservations about Michael T. Flynn, his national security adviser. Mr. Trump shared an anecdote about how, shortly after his election victory, Mr. Flynn did not promptly tell him that a foreign leader had called to congratulate him.

Mr. Comey said that Mr. Trump, in retelling the story, had pointed his fingers at his head, saying, “The guy has serious judgment issues.”

Michael T. Flynn, right, the former national security adviser, with Mr. Trump in January 2017. In one memo, Mr. Comey said Mr. Trump had questioned Mr. Flynn’s judgment. Credit Doug Mills/The New York Times

The name of the foreign leader was redacted by the Justice Department.

“I did not comment at any point during this topic and there was no mention or acknowledgment of any F.B.I. interest in or contact with General Flynn,” Mr. Comey wrote.
Mr. Flynn was fired days later for misleading Vice President Mike Pence and others about the details of his conversation with a Russian ambassador.

The broad outlines of the memos have already been reported by The Times, and were relayed by Mr. Comey in testimony before the Senate and in his recent memoir, “A Higher Loyalty.” But they are believed to be key evidence in a possible obstruction of justice case against Mr. Trump being pursued by the special counsel, Robert S. Mueller III. Mr. Mueller was appointed after Mr. Comey was dismissed in May.

Select lawmakers have been allowed to view redacted versions of the memos at the Justice Department. But three House Republican committee chairmen requested Friday that they be sent to Congress, and made clear this week that they were willing to issue a subpoena to compel Deputy Attorney General Rod J. Rosenstein to do so.


The Great Snake Oil Slump

Opinion | The Great Snake Oil Slump - The New York Times


The Great Snake Oil Slump

President Trump may try to sell his tax cuts, but much of the public’s not buying.CreditDoug Mills/The New York Times

Stop me if you’ve heard this before. A G.O.P. presidential candidate loses the popular vote, but somehow ends up in the White House anyway. Despite his dubious legitimacy, his allies in Congress take advantage of his election to ram through a huge tax cut that blows up the budget deficit while disproportionately benefiting the wealthy. While the big bucks go to the big incomes, however, the tax bill does throw some crumbs at the middle class, and Republicans try to sell the bill as a boon to working families.

So far this account applies equally to George W. Bush and Donald Trump. But then the story takes a turn. The Bush sales job was effective: While the 2001 tax cut wasn’t overwhelmingly popular, more people approved than disapproved, and it provided the G.O.P. with at least a modest political boost. But the Trump tax cut was unpopular from the start — in fact, less popular than past tax hikes.

And this tax cut doesn’t seem to be winning more support over time. Most Americans say they don’t see any positive effect on their paychecks. Public approval of the tax cut seems, if anything, to be falling rather than rising. And Republicans have pretty much stopped even mentioning the bill on the campaign trail.

Which raises the question: Why doesn’t snake oil sell like it used to?

In the past, deficit hypocrisy was an important weapon in the G.O.P. political arsenal. Both parties talked about fiscal responsibility, but only Democrats practiced it, actually paying for policy initiatives like Obamacare. Yet Democrats were punished for doing the right thing — remember “they’re taking $500 billion from Medicare”? — while Republicans seemingly paid no price for their cynicism. Voters focused on the extra money in their pockets, ignoring the long-run consequences of big tax cuts for the rich.

So why is this time different?

I don’t think it’s the specifics of tax policy. Bush and Trump both pushed through big tax cuts for the rich with what amounted to loss-leader cuts for some middle-class families. If you look at estimates of the distribution of their tax cuts by family income, Bush and Trump’s look fairly similar.

The political background is, however, quite different. For one thing, in 2000 the U.S. had a budget surplus, and debt had been falling relative to G.D.P., making concerns about long-run fiscal impacts seem remote. In fact, Alan Greenspan infamously argued that a tax cut was needed to keep America from paying off its debt too fast.

By contrast, the U.S. ran large deficits in the aftermath of the financial crisis, and the people who yelled loudest about an imminent debt crisis were the same people who pushed through a $1.5 trillion tax cut. And at least some voters seem to have noticed, and even made the connection between tax cuts and Republican attempts to undermine Medicare and Medicaid.

There are also, I suspect, a couple of Trump-specific issues involved.

Bush, you may remember, ran on his tax cuts from the beginning. Trump, on the other hand, pretended to be a populist — he even claimed that he would raise taxes on the rich — and waited until taking office to reveal himself as just another reverse-Robin Hood Republican. This has to be creating some credibility problems.

Also, while the Bush administration was systematically deceptive in the way it made its case for tax cuts (and the Iraq war, and environmental policy, and. …), its deceptions generally involved selective and misleading presentations of the facts rather than flat-out lies. Trump and his officials can’t be bothered with such subtlety; they just lie, blatantly, about everything. Again, some voters seem to have noticed.

One thing in particular I suspect is registering with voters at some level, even if they don’t know much about the specifics, is the ludicrous optimism of Trump economic promises. Republican claims about the benefits of tax cuts aren’t just out of line with independent estimates; they’re so far out of the ballpark as to be in a different universe.

Anyway, the bottom line is that tax cuts just don’t sell like they used to. Which leaves you wondering what, exactly, Republicans have left to run on.

True, tax cuts probably had less to do with past G.O.P. successes than many party activists seem to imagine. Other factors were often much more important. But those other factors also aren’t what they used to be.

I mean, claims to be the defenders of family values have lost their punch partly because the public has become far more socially tolerant — Americans now support same-sex marriage by a two-to-one majority! — and partly because the current resident of the White House may be the worst family man in America. Flag-waving claims to be more patriotic than Democrats worked well for Reagan and Bush, but are much more problematic for a G.O.P. that looks more and more like the party of Putin.

Still, Republicans needn’t despair. After all, they’ll always have racism to fall back on. And with the tax cut fizzling, I predict that we’ll be seeing a lot of implicit — even explicit — appeals to racism in the months ahead.

David Brooks is off today.

Follow me on Twitter (@PaulKrugman) and Facebook.

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A version of this article appears in print on , on Page A26 of the New York edition with the headline: The Great Snake Oil Slump. Order Reprints | Today’s Paper | Subscribe


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