[Russian money saved Trump when his projects were on the verge of
collapse. Will it now be the cause of his political demise?]
[https://portside.org/] 

 TRUMP’S DIRTY MONEY  
[https://portside.org/2018-07-25/trumps-dirty-money] 

 

 John Feffer 
 July 25, 2018
Foreign Policy in Focus [https://fpif.org/trumps-dirty-money/] 

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 _ Russian money saved Trump when his projects were on the verge of
collapse. Will it now be the cause of his political demise? _ 

 , Shutterstock 

 

Marty Byrde has a problem. His partner at the financial services firm
has been skimming off the top of the money-laundering service
they’re providing a Mexican narcotrafficker. The drug dealer
responds by killing Marty’s partner.

He’s just about to put a bullet into Marty as well when, in
desperation, the financial planner comes up with a cockamamie idea to
move the money-laundering operation from Chicago down to the Ozarks.
Bemused by this last-ditch plea, the dealer agrees. But Marty must
first pass a test: he has to launder $8 million over the summer in
Missouri lake country.

This is the premise of the Netflix series _Ozark_
[https://www.netflix.com/title/80117552]. It’s the perfect series
for the Trump era.

Every administration offers the country a crash course in something.
The George W. Bush administration made terrorism experts of us all.
The Obama administration forced us to become knowledgeable about
economic recovery, sequestration, and economic recovery plans.

And now, to understand the rise and (inevitable) fall of Donald J.
Trump, it’s imperative to learn the ins and outs of money
laundering.

Sure, the TV show _Breaking Bad_ provided an introduction to the
subject, but money laundering was only ancillary to the main action of
producing and distributing methamphetamine. _Ozark_ goes into the
gory details of finding investments, cooking the books, churning the
loot, parking it overseas, and making the final product available from
ATMs the world over.

It’s a feat of alchemy, to turn bad money into good. It also mirrors
the functioning of the world of finance more generally. After all, who
really understands what takes place in the alembics of Wall Street? As
Marty Byrde points out, as he’s considering the pros and cons of
working for the narcotraffickers, he’s already been doing a form of
money laundering in his day job.

That money — perhaps from Big Tobacco or Big Pharma or underpaid
child laborers or land stolen from small farmers — may not have been
all that clean to begin with. And Wall Street is notorious for cooking
the books and finding tax dodges to shelter gains from the grasping
hands of government.

But, technically, money laundering has to be connected to a crime,
like the sales of narcotics or human trafficking. Illegal drugs alone
account for as much as $100 billion in sales a year
[https://www.wired.com/story/if-trump-is-laundering-russian-money-heres-how-it-works/] in
the United States. Physically, that’s 20 million pounds of currency.
Globally, that figure is $4 trillion — that’s _nearly a billion
pounds of currency_. Talk about off the scales!

The billion-dollar question is: How much of that filthy lucre has
circulated through Donald Trump’s business empire?

IS TRUMP A LAUNDERER?

Before he became president, Donald Trump was basically an unsuccessful
businessman who managed, time and again, to fail upward. He filed for
bankruptcy six times
[https://www.washingtonpost.com/politics/2016/live-updates/general-election/real-time-fact-checking-and-analysis-of-the-first-presidential-debate/fact-check-has-trump-declared-bankruptcy-four-or-six-times/?utm_term=.d0067985437b] —
five times for his casinos and once for the Plaza Hotel.

He’s been involved in several high-profile and very expensive
investments that ultimately didn’t go forward: the West Side Yards
[https://www.bloomberg.com/view/articles/2016-01-27/donald-trump-s-track-record-on-deals] in
New York City, the Trump International Hotel and Tower in
Dubai, Trump Towers Rio
[https://news.vice.com/en_ca/article/evaed4/trump-towers-rio-still-hasnt-been-built-and-the-residents-it-pushed-out-couldnt-be-happier], Trump
Ocean Resort
[http://www.latimes.com/politics/la-na-pol-trump-baja-snap-story.html] in
Baja, Mexico, and several shady real-estate deals
[https://www.politifact.com/florida/statements/2016/jul/28/tim-kaine/did-trump-bail-building-condos-florida/] in
Florida.

An astounding number of his other business ventures
[http://time.com/4343030/donald-trump-failures/] have gone belly up
too, including Trump Airlines, Trump University, and _Trump
Magazine_.

Trump’s business failures over the years and his unorthodox
financial behavior pushed him to the margins of the financial world.
Only one institution, Deutsche Bank, continued to supply him with
credit. Otherwise, Trump began to rely on some questionable characters
and networks. He created baroque financial arrangements involving
shell companies. He used pseudonyms on contracts. He became squirrely
about his tax returns.

And he started to use large amounts of cash. For instance, he
purchased huge properties — golf courses in the UK ($79 million), a
Scottish estate ($12 million), a Virginia winery ($16 million) — in
cash
[https://www.wired.com/story/if-trump-is-laundering-russian-money-heres-how-it-works/].
In all, since 2006, he paid for properties in cash to the tune of
$400 million
[https://www.washingtonpost.com/politics/as-the-king-of-debt-trump-borrowed-to-build-his-empire-then-he-began-spending-hundreds-of-millions-in-cash/2018/05/05/28fe54b4-44c4-11e8-8569-26fda6b404c7_story.html?utm_term=.4d64ec3233dd].

It just so happens that these are all telltale signs of money
laundering: the cash, the shell companies, the pseudonyms, the lack of
transparency and due diligence. But let’s dig a little deeper.

In 1984, a Russian émigré with an auspicious name — David Bogatin
(which roughly translates into “rich guy” in Russian) — bought
five condos for $6 million at Trump Tower in Manhattan. Trump was very
buddy-buddy with Bogatin at the time. But three years later, Craig
Unger writes
[https://newrepublic.com/article/143586/trumps-russian-laundromat-trump-tower-luxury-high-rises-dirty-money-international-crime-syndicate] in _The
New Republic_…

Bogatin pleaded guilty to taking part in a massive
gasoline-bootlegging scheme with Russian mobsters. After he fled the
country, the government seized his five condos at Trump Tower,
saying that he had purchased them to “launder money, to shelter and
hide assets.” A Senate investigation into organized crime
later revealed that Bogatin was a leading figure in the Russian mob
in New York.

A Buzzfeed investigation
[https://www.buzzfeednews.com/article/thomasfrank/secret-money-how-trump-made-millions-selling-condos-to] earlier
this year found that fully one-fifth of the condos in Trump’s
properties since the 1980s have been bought in cash, which allows the
purchasers to avoid the scrutiny required by mortgage companies. Many
of the purchasers were shell companies.

All-cash real-estate transactions are often a sign of money
laundering, according to the Treasury Department’s financial-crimes
unit. Indeed, the Treasury Department estimates that one-third of all
transactions
[https://www.cnbc.com/2017/08/24/a-third-of-luxe-real-estate-deals-involve-suspicious-activity.html] involving
high-end real estate involves potential money laundering.

Many of the purchasers of Trump properties are Russian. A Reuters
investigation last year discovered that Russian buyers purchased
nearly $100 million
[https://www.reuters.com/investigates/special-report/usa-trump-property/] in
condos in Florida from Trump. A Russian-Canadian billionaire poured
millions into a Trump property in Toronto, including a $100 million
“commission” [https://www.ft.com/trumptoronto] to a Moscow fixer
to attract other Russian investors. In 2008, a Russian oligarch paid
$95 million
[https://www.seattletimes.com/nation-world/why-did-a-russian-pay-95m-to-buy-trumps-palm-beach-mansion/] to
Trump for a Palm Beach mansion that the Russian never subsequently
occupied. It was an extraordinary mark-up for a property Trump had
bought four years before for $41 million.

Of course, Trump’s shady dealings aren’t exclusively with
Russians. He’s eclectic that way. He’s made deals with Kazakh
money launderers
[https://www.ft.com/content/33285dfa-9231-11e6-8df8-d3778b55a923],
with corrupt businesses in India
[https://newrepublic.com/article/147351/political-corruption-art-deal],
and with a shady casino operator
[https://www.propublica.org/article/trump-inc-podcast-vietnam-casino] hoping
to expand his operation in Vietnam.

Nor is real estate the only realm where Trump has been involved with
potential money laundering. In 2015, federal authorities fined the
already-bankrupt Trump Taj Mahal $10 million for violations
[https://www.fincen.gov/news/news-releases/fincen-fines-trump-taj-mahal-casino-resort-10-million-significant-and-long] of
anti-money-laundering laws.

It wasn’t even the first time that the casino attracted the
attention of federal regulators. In a 1998 settlement, which cost the
operation over $450,000, the Taj Mahal was cited for breaking
anti-money-laundering laws 106 times
[https://www.cnn.com/2017/05/22/politics/trump-taj-mahal/] in only
its first 18 months of operation.

Even here, at the Taj Mahal, the story circles around to Russia. As
CNN reports
[https://www.cnn.com/2017/05/22/politics/trump-taj-mahal/index.html],
“The violations date back to a time when the Taj Mahal was the
preferred gambling spot for Russian mobsters living in Brooklyn,
according to federal investigators who tracked organized crime in New
York City.”

Russian money saved Trump on several occasions when his projects were
on the verge of collapse. Now that Trump has improbably failed all the
way up to the White House, Russian money may well be the cause of his
political demise.

WHY RUSSIA?

Russia has been a money-laundering state for some time. During the
Yeltsin period, the state attracted billions of dollars in Western
aid, which it then laundered back overseas in Western bank accounts.
Worse, powerful institutions in the West like the International
Monetary Fund knew about the scam
[https://www.theguardian.com/world/1999/oct/17/russia.business]and
tolerated it because it wanted to keep Yeltsin in power. The bagmen
who transferred the $15 billion? Russian organized crime
[https://www.upi.com/Archives/1999/08/27/Billions-of-dollars-laundered-by-Russian-organized-crime-figures/8233935726400/].

Vladimir Putin didn’t create post-Soviet corruption or the oligarch
system that perpetuates it. Rather, he adapted the system to his own
purposes — and for the financial benefit of his circle of friends.

The Panama Papers — the leaked papers from Mossack Fonseca, an
offshore law firm — revealed the mechanisms
[https://www.theguardian.com/news/2016/apr/03/panama-papers-money-hidden-offshore] by
which Putin’s associates transferred enormous sums of money overseas
in an effort to conceal assets. Putin himself is reported to have at
least a $40 billion fortune
[http://time.com/money/4641093/vladimir-putin-net-worth/], but he has
also parked a lot of money in shell companies created by his
associates.

Other investigations reveal how Russian oligarchs and organized crime
figures (sometimes one and the same) used banks to launder their
money. Last year a Danish bank shut down
[https://www.theguardian.com/world/2018/feb/26/russian-millions-laundered-via-uk-firms-leaked-report-says] its
Russian accounts because of money laundering that even reached into
Putin’s own family. Between 2007 and 2015, the Estonian branch of
Danske Bank made over 43,000 transactions to launder 7 billion euros
[https://euobserver.com/foreign/142286] associated with various
Russian frauds.

Then there’s Deutsche Bank, the one financial institution that stuck
with Donald Trump when virtually all other banks wouldn’t touch him.
It even extended him credit after he refused to pay back the $330
million remaining on a Deutsche Bank loan because of the 2008
financial crisis (a global downturn that didn’t prevent him from
making other investments at exactly the same time). As Luke
Harding explains
[https://www.newsweek.com/2017/12/29/donald-trump-russia-secret-deutsche-bank-753780.html] in
his book _Collusion_, Trump…

paid back Deutsche with a massive lifeline — from Deutsche. Only
this time he eschewed its real estate team — which wanted nothing to
do with him — and got a loan from its private wealth division. This
group typically deals with high-net-worth individuals, not real estate
transactions, but in 2010 it not only lent him the money he owed its
real estate team but also reportedly gave Trump another $25 million
to $50 million in credit.

These facts might not be noteworthy if Deutsche Bank were also not
becoming thick with Russian money launderers. Last year, the bank was
fined over $600 million for its role in laundering $10 billion
[https://money.cnn.com/2017/01/31/investing/deutsche-bank-us-fine-russia-money-laundering/index.html] of
Russian currency.

The information that could bring down Trump — and that presumably
Robert Mueller is trying to obtain — may be somewhere in the
Deutsche Bank files. The relevant documents would link the bank’s
two most questionable financial activities — lending to Trump and
washing Russian money.

Compromising information about money laundering, not lurid details
about Trump’s sexual exploits, is what explains the president’s
extreme deference to Vladimir Putin. As Alena Ledeneva, an expert on
Russian business practices, explained to _The New Yorker_:

It is possible that there is kompromat in the hands of several
different business groups in the former Soviet Union. Each would have
bits and pieces of damaging information and might have found subtle
(or not so subtle) ways to communicate that fact to both Trump and
Putin. Putin would likely have gathered some of that material, but he
would have known that he couldn’t get everything.

Mueller has come close. He has charged Trump associate Paul Manafort,
who had his own illegal dealings with Russian partners, with money
laundering. He’s gone after other Trumpsters with connections to
Russia (Michael Flynn, Carter Page, George Papadopoulos).

Most critically, he’s got Trump lawyer Mitchell Cohen on the hook.
Forget about payments to Trump’s paramours. Sex sells, but it
won’t be what brings Trump down. The real reason the president is so
freaked out about his lawyer’s loyalties is that Cohen is at the
nexus of the Russia and finance network. Writes Jonathan Chait
[http://nymag.com/daily/intelligencer/2018/05/robert-mueller-probing-trump-money-laundering-collusion-russia.html] in _New
York_ Magazine:

Cohen has collected vast unreported sums, which were either
cash-for-access functioning as quasi-bribes or straight-out bribes.
Trump, frequently working through Cohen, has built inscrutable
ties to worldwide criminal sources who wash ill-gotten sums through
his real estate ventures.

The special counsel is not on a fishing expedition. He knows exactly
what he’s looking for. The sloppiness and ineptitude of the Trump
coterie — which make Nixon’s Watergate conspirators seem like
Oceans 11 — virtually ensure that some evidence of wrongdoing is
there. The problem is that many powerful and ruthless people are
involved in different parts of Russia’s money-laundering scheme.
Overcoming the pushback from those quarters may prove the most
challenging part of Mueller’s job.

By the end of season one of _Ozark_, Marty Byrde has survived any
number of near-death experiences. Netflix has renewed for a second
season of mayhem in Missouri. Donald Trump has also managed to weather
one scandal after another. With very low ratings and an investigation
closing in, however, Donald Trump will be lucky to survive his first
season in office.

_John Feffer is director of Foreign Policy In Focus at the Institute
for Policy Studies. He is the author of several books and numerous
articles. He has been an Open Society Foundation Fellow and a PanTech
fellow in Korean Studies at Stanford University. He is a former
associate editor of World Policy Journal. He has worked as an
international affairs representative in Eastern Europe and East Asia
for the American Friends Service Committee._

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