Bribery, Corruption, Money Laundering: The Many Investigations Into Trump Business Partners

Trump's Indonesian business partner is just the latest to come under investigation.
LOADINGERROR LOADING

WASHINGTON ― Hary Tanoesoedibjo, a wealthy Indonesian businessman who had partnered with President Donald Trump to build two luxury resorts in Bali and who attended Trump’s inauguration in January, was banned from leaving his country on Monday after becoming the subject of a national police investigation.

Tanoesoedibjo is accused of threatening an investigator in Indonesia’s attorney general’s office in a series of text messages sent in 2016.

The Tanoesoedibjo investigation is just the latest of many involving both current and former Trump business partners for crimes such as bribery, corruption and, most commonly, money laundering.

In India, Trump has partnered with two different companies that are currently or have recently been under investigation by local authorities. According to The Washington Post, IREO, the Indian investment firm that Trump has licensed his name to for a tower in the city of Gurgaon, was under investigation for alleged money laundering and illegal land purchases. M3M, another Indian firm licensing Trump’s name for a different tower in Gurgaon, has routinely been targeted for failing to pay taxes and now faces a criminal complaint alleging bribery. The head of IREO, Lalit Goyal, told The Washington Post that his firm is no longer under investigation.

In December, after Trump won the U.S. presidential election but before he officially announced he would maintain ownership of the Trump Organization, he canceled deals to license his name to real estate ventures in Azerbaijan, Brazil and Georgia. There were concerns about corruption and money laundering in the Azerbaijan and Brazil deals, though apparently none directly related to the Georgia deal.

A hotel and an office tower complex that were supposed to bear Trump’s name in Rio de Janeiro have been under scrutiny for the alleged behavior of pension fund managers whose funds backed the properties and other real estate. The funds formally came under investigation by the Brazilian federal prosecutor’s office in October 2016 as part of a broad corruption investigation.

The Brazilian investigators are also looking into whether the Trump Organization benefited in any way from corruption or bribery, according to Bloomberg, although the president’s company itself is not a target of the investigation. Trump canceled the deal for the Rio de Janeiro projects in December 2016. The Trump Organization has previously claimed it was only licensing the Trump name to the buildings and had no other involvement in the investments.

The Trump Organization spent a lot of time promoting the future Trump Tower in Baku, Azerbaijan before canceling the deal in December 2016. The deal involved licensing the president’s name to an Azerbaijani development company run by Anar Mammadov, whose father was then the country’s transportation minister. A 2017 report in the New Yorker revealed suspicions that the tower benefited from investment that appeared to be part of an Iranian Revolutionary Guard money laundering scheme. Mammadov has not publicly commented on the deal.

The deals in Azerbaijan and Brazil apparently only became untenable once Trump faced the added scrutiny that comes with being the president of the United States.

But Trump is no stranger to the same kind of investigations, lawsuits and accusations of money laundering or other wrongdoing that his former and current business partners face. Trump’s businesses have paid large fines and settlements for fraud and money laundering, although he has rarely admitted guilt.

The Trump Organization did not respond to a request for comment on the investigations.

Trump paid $477,000 to the Treasury Department as part of a 1998 settlement agreement for the Trump Taj Mahal casino’s 106 violations of anti-money laundering laws. In 2015, Trump Taj Mahal paid a $10 million fine to the Treasury Department’s Financial Crimes Enforcement Network for further violations of anti-money laundering laws. Trump no longer owned the casino at that time, but the settlement stated that violations stretched back to 2003, when he was the owner.

In 1991, Trump was also forced to pay a rather small fine of $30,000 after his father, Fred Trump, purchased $3.5 million worth of chips at the Trump Castle casino (now under new ownership with the name Golden Nugget Atlantic City) in Atlantic City to help prevent it from declaring bankruptcy. New Jersey casino regulators determined this was an illegal loan.

Then there is Trump SoHo, the hotel and condo building in downtown Manhattan that the Trump Organization and the Bayrock Group, an investment firm, completed in 2008. Bayrock Group management included Felix Sater, a former FBI informant with ties to Russian and American organized crime who managed the Trump SoHo deal, and Tevfik Arif, who was arrested in Turkey in 2010 for allegedly running a prostitution ring (those charges were eventually dropped).

Trump also partnered with Bayrock Group on a condo property in Fort Lauderdale, Florida, which eventually went into default after Trump pulled his name from it. He also gave Bayrock a temporary, one-year exclusive right to construct a Trump Tower in Moscow that was never built.

Bayrock Group’s ex-finance director, Jody Kriss, has filed multiple lawsuits against his former employer, alleging that the company and the Trump Soho project were conduits for money laundering. Separate court filings in the U.S. and Switzerland allege that Kazakh billionaire Viktor Khrapunov and his son, Ilyas Khrapunov, laundered illicit funds stolen from a Kazakh city’s treasury through luxury condo purchases at Trump SoHo and the Fort Lauderdale Trump property. The Khrapunovs claim the charges brought by the Kazakhstan government are politically motivated.

A number of countries where the Trump Organization conducts business rank high on the Corruption Perception Index put out by the international anti-corruption group Transparency International, said Shruti Shah, a due diligence expert at the anti-corruption nonprofit Coalition for Integrity.

Shah told HuffPost that these deals were “troubling not just because of the CPI score of the countries mentioned, but also because, in some cases like Azerbaijan, the business partners are closely associated with government officials.”

The involvement of foreign government officials in the Azerbaijan deal is noteworthy because the Foreign Corrupt Practices Act forbids U.S. firms from providing benefit to a foreign government official as part of a business deal, even if they claim they were unaware they provided such a benefit.

“Doing adequate due-diligence would have revealed these issues,” Shah said.

Since taking office, the Trump Organization has hired a compliance officer and attempted to apply greater scrutiny to its deals. This greater level of due diligence played a role in the company’s decision to turn down a partnership with Mukemmel Sarimsakci, a Dallas-based developer known as the “Turkish Trump,” to license the Trump Organization’s new Scion brand name to hotels in Dallas and St. Louis.

CORRECTION: A previous version of this story referred to Anar Mammadov as the son of Azerbaijan's president. In fact, he is the son of the country's former transportation minister.

Popular in the Community

Close

What's Hot