14 July 2017

The Real Trump-Russia Connection

Like pretty much every major player in the real estate market in New York City, Trump aggressively aided the Russian mob in laundering their proceeds through property purchases:
In 1984, a Russian √©migr√© named David Bogatin went shopping for apartments in New York City. The 38-year-old had arrived in America seven years before, with just $3 in his pocket. But for a former pilot in the Soviet Army—his specialty had been shooting down Americans over North Vietnam—he had clearly done quite well for himself. Bogatin wasn’t hunting for a place in Brighton Beach, the Brooklyn enclave known as “Little Odessa” for its large population of immigrants from the Soviet Union. Instead, he was fixated on the glitziest apartment building on Fifth Avenue, a gaudy, 58-story edifice with gold-plated fixtures and a pink-marble atrium: Trump Tower.

A monument to celebrity and conspicuous consumption, the tower was home to the likes of Johnny Carson, Steven Spielberg, and Sophia Loren. Its brash, 38-year-old developer was something of a tabloid celebrity himself. Donald Trump was just coming into his own as a serious player in Manhattan real estate, and Trump Tower was the crown jewel of his growing empire. From the day it opened, the building was a hit—all but a few dozen of its 263 units had sold in the first few months. But Bogatin wasn’t deterred by the limited availability or the sky-high prices. The Russian plunked down $6 million to buy not one or two, but five luxury condos. The big check apparently caught the attention of the owner. According to Wayne Barrett, who investigated the deal for the Village Voice, Trump personally attended the closing, along with Bogatin.

If the transaction seemed suspicious—multiple apartments for a single buyer who appeared to have no legitimate way to put his hands on that much money—there may have been a reason. At the time, Russian mobsters were beginning to invest in high-end real estate, which offered an ideal vehicle to launder money from their criminal enterprises. “During the ’80s and ’90s, we in the U.S. government repeatedly saw a pattern by which criminals would use condos and high-rises to launder money,” says Jonathan Winer, a deputy assistant secretary of state for international law enforcement in the Clinton administration. “It didn’t matter that you paid too much, because the real estate values would rise, and it was a way of turning dirty money into clean money. It was done very systematically, and it explained why there are so many high-rises where the units were sold but no one is living in them.” When Trump Tower was built, as David Cay Johnston reports in The Making of Donald Trump, it was only the second high-rise in New York that accepted anonymous buyers.

In 1987, just three years after he attended the closing with Trump, 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. His family ties, in fact, led straight to the top: His brother ran a $150 million stock scam with none other than Semion Mogilevich, whom the FBI considers the “boss of bosses” of the Russian mafia. At the time, Mogilevich—feared even by his fellow gangsters as “the most powerful mobster in the world”—was expanding his multibillion-dollar international criminal syndicate into America.

………

The very nature of Trump’s businesses—all of which are privately held, with few reporting requirements—makes it difficult to root out the truth about his financial deals. And the world of Russian oligarchs and organized crime, by design, is shadowy and labyrinthine. For the past three decades, state and federal investigators, as well as some of America’s best investigative journalists, have sifted through mountains of real estate records, tax filings, civil lawsuits, criminal cases, and FBI and Interpol reports, unearthing ties between Trump and Russian mobsters like Mogilevich. To date, no one has documented that Trump was even aware of any suspicious entanglements in his far-flung businesses, let alone that he was directly compromised by the Russian mafia or the corrupt oligarchs who are closely allied with the Kremlin. So far, when it comes to Trump’s ties to Russia, there is no smoking gun. 

But even without an investigation by Congress or a special prosecutor, there is much we already know about the president’s debt to Russia. A review of the public record reveals a clear and disturbing pattern: Trump owes much of his business success, and by extension his presidency, to a flow of highly suspicious money from Russia. Over the past three decades, at least 13 people with known or alleged links to Russian mobsters or oligarchs have owned, lived in, and even run criminal activities out of Trump Tower and other Trump properties. Many used his apartments and casinos to launder untold millions in dirty money. Some ran a worldwide high-stakes gambling ring out of Trump Tower—in a unit directly below one owned by Trump. Others provided Trump with lucrative branding deals that required no investment on his part. Taken together, the flow of money from Russia provided Trump with a crucial infusion of financing that helped rescue his empire from ruin, burnish his image, and launch his career in television and politics. “They saved his bacon,” says Kenneth McCallion, a former assistant U.S. attorney in the Reagan administration who investigated ties between organized crime and Trump’s developments in the 1980s.
(emphasis mine)
Some observations:
  • You cannot be a major real estate developer in New York City and not have made some sort of  accommodation to the mob.
  • Much of the appreciation of real estate in NYC (and London and Miami) has occurred only because of money laundering operations.
  • Trump has deliberately structured his real estate operations ("anonymous buyers") to benefit as much as possible from dirty money.
  • There is a f%$# load of dirty money in Russia looking for a safe home.
This is something that an enterprising reporter could have covered during the election, but they were all to busy covering Trump's latest tweets.

Seriously, This ain't rocket science,* this is just decent shoe leather reporting.

I get that everyone goes to J-School imagines themselves meeting with Mark Felt (Deep Throat) in a parking garage, but most good reporting is an artifact of hard work, connecting the dots, and understanding the institutions that you are investigating.

*Full Disclosure, in 1999-2000 and 1996-1998, I worked as a mechanical engineer for what is now Lockheed Martin Missiles and Fire Control, and I have some claim to actually having been a rocket scientist.

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