[Pete F.]

THE RUSSIAN-FUELED COMEBACK

So how, then, did 15 Trump-branded projects break ground between 1998 and 2012?

Given that Trump has defied decades of political tradition by assiduously refusing to release his tax returns, it’s difficult to truly get to the bottom of his finances. But the public record is more than enough to demonstrate that the answer, in part, lies with Russia.

With the collapse of the Russian economy in 1998, Russian oligarchs who had made their fortunes buying up formerly state-held assets now sought to stash their money in international real estate. The Trump Organization offered an appealing haven for several reasons, ranging from its ostentatious gold-plated aesthetic to its reputation for lax reporting standards. As a result, several Trump-branded projects from 1998 onward received significant financing from sources with ties to Russia, most notably the Bayrock Group, a real estate company headquartered in Trump Tower and founded by the Kazakhstan-born former Soviet official Tevfik Arif, and Deutsche Bank, one of the few major financial institutions to still lend to Trump and which paid $630 million in penalties in 2017 for involvement in a $10 billion Russian money laundering scheme.

Russia also provided many of the buyers for Trump-branded real estate. According to a Bloomberg investigation into Trump World Tower, which broke ground in 1998, “a third of units sold on floors 76 through 83 by 2004 involved people or limited liability companies connected to Russia and neighboring states.” Reuters, meanwhile, has reported that “at least 63 individuals with Russian passports or addresses have bought at least $98.4 million worth of property in seven Trump-branded luxury towers in southern Florida.”

And the Trump Organization reportedly welcomed the clientele. For example, a 2013 article in The Nation about the influx of Russian money in Miami real estate noted that Elena Baronoff, a Russian American socialite once described on the cover of a Russian magazine as “the Russian Hand of Donald Trump,” operated a real estate company out of the lobby of the city’s Trump International Beach Resort that catered to Eastern European buyers. The New Republic has also extensively documented how the Trump Organization actively sought Russian buyers, so much so that the area around Trump Sunny Isles in Florida became known as “Little Moscow.” Though these transactions are not inherently suspect, they demonstrate that the Trump Organization was sufficiently aware of its reliance on Russian money to actively cultivate relationships with Russian clients.

Some of the individual deals have attracted attention, most notably the Russian fertilizer magnate Dmitry Rybolovlev’s 2008 purchase of one of Trump’s mansions in Palm Beach. He paid a reported $95 million for it—$53 million more than Trump paid for it four years earlier. The transaction has received scrutiny from investigators, particularly because, though Trump justified the price increase by claiming he had “gutted the house” and spent $25 million on renovations, there were few apparent alterations. Such rapid and unexplained increases in price are frequently cited as red flags for money laundering through real estate. According to Sen. Ron Wyden (D-OR), the transaction is one of several special counsel Robert Mueller and his team are investigating for “potential money laundering or other illicit financial dealings between the president, his associates, and Russia.” Rybolovlev drew additional attention for his behavior during the final months of the 2016 election, during which his private plane was spotted on separate days in Las Vegas and Charlotte within hours of Trump’s arrival in each city. A spokesman for Rybolovlev dismissed the incidents as a coincidence, and Trump has denied meeting Rybolovlev; a White House official described questions about their relationship as a conspiracy theory. In November 2018, Rybolovlev was arrested in Monaco on apparently unrelated charges of corruption, to which he pleaded not guilty.

Trump SoHo, which broke ground in 2007, typifies how the Trump Organization benefited from financing coming out of Russia and the former Soviet Union. Much of the project’s financing came from the Bayrock Group. Several reported funders of the project, including Arif, Tamir Sapir, and Alexander Mashkevich, hail from the former Soviet Union and have reported ties to the current Kremlin. Some have also faced allegations of corrupt and criminal behavior, ranging from money laundering to smuggling to involvement in a prostitution ring. For example, in 2009, Sapir pleaded guilty to illegally importing animal parts. Mashkevich has been repeatedly accused of bribery and money laundering on projects in Kazakhstan, and settled a case in 1996 without admitting guilt. The same can be said for some of the property’s clientele. For example, Viktor Khrapunov, who formerly served as mayor of Almaty, Kazakhstan, went on trial in July 2018 for allegedly purchasing condominiums in the building using money stolen from state coffers and laundered through a network of offshore shell companies while serving as the country’s energy minister. As of this writing, the case is ongoing, and Khrapunov has denied any wrongdoing.
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