In the past two weeks, we've heard a lot about efforts by President Donald Trump and his lawyer, Rudy Giuliani, to push officials in Ukraine to investigate Trump's opponents. As the news has unfolded, it has introduced us to a litany of unfamiliar characters in both Ukraine and the U.S., many of whom were working with Giuliani or, in some fashion, on behalf of the president.
Trump, Inc. co-host Ilya Marritz was in Kiev last week following the trail of Giuliani in an effort to understand more about these obscure figures who have suddenly become so important.
One thing that became clear during his travels: Giuliani's "anti-corruption" efforts involved working with men who have their own questionable histories.
We reached out to Giuliani as well as the White House. We have not heard back.
Here is a rundown of key players in Giuliani's efforts.The Former Prosecutor Fired for Not Going After Corruption…
Viktor Shokin was Ukraine's general prosecutor in 2015, a position akin to attorney general. He was responsible for investigating corruption. But according to U.S. officials, NGOs and the International Monetary Fund, he was not actually doing this.
Giuliani has claimed that then-Vice President Joe Biden improperly pushed for Shokin's removal to avoid an investigation into Biden's son Hunter, who was on the board of a Ukrainian energy company. There is no evidence that is true.
According to the now-famous whistleblower's report, Shokin spoke with Giuliani over Skype late last year in a call arranged by two Giuliani associates. (More on them in a moment.)
In response to our questions, Shokin declined comment, explaining that he’s out of the country.The Former Prosecutor Who Was Not a Lawyer…
Yuriy Lutsenko took over the job of prosecutor general from Shokin in 2016. He got the job after allies in Parliament changed the law to allow the position to be filled by someone without a law degree. Lutsenko has no legal training.
Lutsenko has said he's spoken with Giuliani "maybe 10 times." In the middle of one meeting in New York last January in which Giuliani and Lutsenko talked about investigating the Bidens, Giuliani reportedly called Trump to loop him in.
In the spring, Lutsenko told a reporter he "would be happy to have a conversation" about Hunter Biden with Attorney General William Barr. Then, last week, he told the Los Angeles Times that he hadn't found any evidence against the Bidens, and said he had told Giuliani that any investigation should be conducted "through prosecutors, not through presidents."
In response to our questions, Lutsenko denied any wrongdoing. He was fired earlier this year.The Current Prosecutor Caught on Tape…
Nazar Kholodnytsky is now Ukraine's top anti-corruption prosecutor. Audio tapes captured Kholodnytsky in unrelated cases coaching a witness to give false testimony and tipping off suspects to police raids. Kholodnytsky acknowledged the tapes were authentic, but said they were taken out of context.
Earlier this year, the U.S.’s then-ambassador to Ukraine called for Kholodnytsky’s firing. She explained, "Nobody who has been recorded coaching suspects on how to avoid corruption charges can be trusted to prosecute those very same cases." (The ambassador, Marie Yovanovitch, was removed from her position shortly after.)
Kholodnytsky and Giuliani met in Paris in May 2019. Kholodnytsky told The Washington Post the discussion was private, "prosecutor to a former prosecutor." Kholodnytsky told the Post that he had questions about the Bidens as well as the prosecution of former Trump campaign chair Paul Manafort.
When the Post asked Giuliani about the meeting, he said, "I'm not going to tell you about that."
Kholodnytsky told us he was too busy to answer our questions.Giuliani’s Special Envoys…
Lev Parnas and Igor Fruman are two Ukrainian-American businessmen who have worked with Giuliani and introduced him to the Ukrainian prosecutors. Giuliani has described them as his clients. They went to Ukraine after Giuliani canceled a trip in the wake of a New York Times article that revealed his travel plans.
In a detailed story about their work with Giuliani, Parnas told Buzzfeed they did nothing wrong. "All we were doing was passing along information," Parnas said. He added, "We’re American citizens, we love our country, we love our president."
Parnas was sued for allegedly defrauding investors in a movie he was involved with, "Anatomy of an Assassin."
"He conned us from day one," one of the investors told the Miami Herald, adding, "He financially ruined us." Parnas lost the case but has denied wrongdoing. "The truth is going to come out about that judgment," he has said.
Fruman is well-connected in Ukraine, where he owns a number of businesses, including Mafia Rave, a beach club in Odessa. Fruman and Parnas have been political contributors in the U.S. Last year, they set up a Delaware LLC that weeks later contributed $325,000 to a Trump-allied political group.
Giuliani was subpoenaed by Congress this week regarding his communications with Parnas and Fruman.
Parnas and Fruman did not respond to our requests for comment.
In August, at a campaign rally in Manchester, New Hampshire, a tall man with a Viking beard and an elegant gray suit walked out on a stage, carrying a stack of red Make America Great Again hats, tossing them to an adoring crowd, shouting "Four more years!"
The man is Trump's campaign manager, Brad Parscale, who vaulted from a mid-level web designer to digital strategist for the 2016 Trump campaign and now manages the 2020 incarnation, Donald J. Trump for President Inc., which he claims will be America's first billion-dollar campaign. And as he's been doing this, Parscale has figured out ways to enrich himself and his firms, at various times collecting a salary from the Trump campaign, payments from the Republican National Committee and money from a super PAC, America First Action.
Like Trump, Parscale is a man who's reinvented himself, from working for a family company that declared bankruptcy to being a middling businessman, to becoming a high-profile avatar for Donald Trump.
ProPublica's Peter Elkind joined Trump, Inc. to talk about his in-depth profile of Parscale in ProPublica and the political juggernaut Parscale is assembling to re-elect the President.
Here's what Elkind says about Parscale and the stories he tells about himself: "He changes dates. He rearranges facts. He omits conspicuous events. He basically rewrites his own life story to become a more romantic tale, to fit into the image that he's trying to convey. He is a promoter, he's a hustler, he's a marketer." In short, Brad Parscale is a lot like his boss. To find out more, listen to the episode.
The Trump, Inc. podcast from WNYC and ProPublica is back. And we'll be bringing you new episodes every two weeks.
When we started all the way back in early 2018, we laid out how we'd be digging into the mysteries around President Donald Trump's business. After all, by keeping ownership of that business, Trump has had dueling interests: the country and his pocketbook.
We've done dozens of episodes over the past 18 months, detailing how predatory lenders are paying the president, how Trump has profited from his own inauguration and how Trump's friends have sought to use their access in pursuit of profit.
We've noticed something along the way. It's not just that the president has mixed his business and governing. It's that the way Trump does business is spreading across the government.
Trump's company isn't like most big businesses. It is accountable to only one man, it has broken the rules, and those promoting it have long engaged in what Trump has dubbed, ahem, "truthful hyperbole."
Those traits are now popping up in the government. It may seem like the news from Washington is a cacophony of scandals. But they fit clear patterns — patterns that Trump has brought with him from his business.
Perhaps you’ve heard: Special counsel Robert Mueller testified on Wednesday. There’s plenty of analysis about who won and who didn’t. We’re skipping that part. Instead, on a special, speedy episode of Trump, Inc. we’re focusing on the few tidbits that were actually revealing and how it came to be that there weren’t more.
ProPublica’s Jesse Eisinger and Heather Vogell talk with WNYC’s Andrea Bernstein about the many things we didn’t learn and why. They discuss potential mistakes during the investigation, avenues Mueller didn’t explore and witnesses — like the president — he decided not to try to question in person.
Mueller’s testimony is over. His report is done. And his office is closed. But there are plenty of critical yet unanswered questions remaining. And we’re still digging. Listen to the episode to hear what we still want to know.
Over the past two years, the Trump administration has been grappling with how to handle the transition to the next generation of mobile broadband technology. With spending expected to run into hundreds of billions of dollars, the administration views it as an ultra-high-stakes competition between U.S. and Chinese companies, with enormous implications both for technology and for national security. Top officials from a raft of departments have been meeting to hash out the best approach.
But there’s been one person at some of the discussions who has a different background: He’s Donald Trump Jr.’s hunting buddy. Over the past two decades, the two have trained their sights on duck, pheasant and white-tailed deer on multiple continents. (An email from another Trump Jr. pal characterized one of their joint duck-hunting trips to Mexico years ago as “muy aggresivo.”)
Tommy Hicks Jr., 41, isn’t a government official; he’s a wealthy private investor. And he has been a part of discussions related to China and technology with top officials from the Treasury Department, National Security Council, Commerce Department and others, according to emails and documents obtained by ProPublica. In one email, Hicks refers to a meeting at “Langley,” an apparent reference to the CIA’s headquarters.
Hicks’ financial interests, if any, in the matters he has discussed aren’t clear. The interests are much more apparent when it comes to at least one of his associates. Hicks used his connections to arrange for a hedge fund manager friend, Kyle Bass — who has $143 million in investments that will pay off if China’s economy tanks — to present his views on the Chinese economy to high-level government officials at an interagency meeting at the Treasury Department, according to the documents.
Hicks is hardly the first private-sector power broker to emerge in a presidential administration, but he may represent a new subspecies: The Friend of the President’s Kid.
In fact, Hicks’ influence and career overwhelmingly hinge on two people: Trump Jr., his friend of about two decades, and, first and foremost, Hicks’ father. In a roughly 20-year career, Hicks has spent 17 of them working for investment funds and sports teams owned by his wealthy financier dad, Thomas Hicks Sr., and the other three working for a client of his father.
The generally privileged life of the younger Hicks has been speckled with occasional instances of misbehavior, one of them serious. At age 18, he pleaded no contest to misdemeanor assault, reduced from an original charge of felony aggravated assault, after he and two others were arrested in the beating of a fellow high school student at a party. (The victim was also kicked in the face during the assault, according to people familiar with the case. He told police that one of the three assailants — he didn’t say which — asked him, “What is your name, faggot?”) The criminal conviction did not prevent Hicks from being admitted to the University of Texas, where his father was an alumnus, a member of the Board of Regents and soon thereafter the first chairman of the University of Texas Investment Management Company, which manages the school’s endowment and other assets.
As an adult, friends say, Hicks’ carousing ways and occasional belligerent outbursts led some in his circle to bestow a heavily ironic nickname: “Senator Hicks.” His tenure as a director of the soccer team his father owned in Liverpool, England, a decade ago ended right after an email he sent to a heckling fan — “Blow me fuckface. Go to Hell. I’m sick of you.” — surfaced publicly.
Friends say Hicks has matured, particularly since he married and had three daughters. He has risen quickly in recent years. Hicks leveraged his Dallas financial network to become a top Trump campaign fundraiser in 2016 and a vice chairman of the inaugural finance committee; in January, he was named co-chairman of the Republican National Committee. His friends say he is motivated by patriotism.
Hicks also played a behind-the-scenes role, according to two people familiar with the matter and an account by a Turkish journalist, in the freeing last year of Andrew Brunson, an American pastor who was detained for two years by the Turkish government on what the U.S. government viewed as phony charges of spying and helping terrorists.
Even before becoming the second highest-ranking GOP official, Hicks was a frequent White House guest. He liked to have lunch in the White House mess with his half sister, who worked for a time in the communications operation. (The family is not related to Hope Hicks, the former White House communications director.) Hicks would then stroll the halls, according to a former senior administration official, dropping in to offices for impromptu chats with various officials, including Jared Kushner.
Those sorts of connections have given Hicks a convening power, the ability to call together multiple officials. “He basically opened the door for having a conversation with people who I didn’t know but needed to know,” said Robert Spalding, a former senior director for strategic planning at the National Security Council during the Trump administration.
The efforts, detailed in hundreds of pages of government emails and other documents obtained under the Freedom of Information Act, show that Hicks had access to the highest levels of government to influence policymaking in ways that could lead to painful economic outcomes for the Chinese — and a potentially lucrative result for Hicks’ hedge fund friend, Bass.
“When somebody comes in like this, a hedge fund manager who has an interest in the viability of China’s economy, you’re giving them an opportunity to influence policy,” said Virginia Canter, a former ethics lawyer at the Treasury Department who now serves as chief ethics counsel for Citizens for Responsibility and Ethics in Washington, a watchdog group. (CREW has sued Donald Trump for accepting emoluments from foreign governments.) “The question is why?”
Hicks’ unusual role as a nongovernment employee who opened doors on behalf of both industry and others, Canter said, put him in a gray zone of ethics and lobbying regulations. “He’s acting in a lobbyist role when he may fall outside the lobbyist disclosure rules, and it’s not clear how he benefits financially,” she said. “So the question is: What’s he getting out of it? What are his friends getting out of it? And is the government processing it in a way that ensures the public benefits?”
Bass presented his views on China’s banking system in the office of Heath Tarbert, an assistant secretary at Treasury in charge of international markets and investment policy and a powerful intergovernmental committee that reviews foreign investments in the U.S. for national security concerns. Among the officials at the meeting with Tarbert were Bill Hinman, the director of the division of corporation finance at the Securities and Exchange Commission, and Ray Washburne, a wealthy Dallas restaurant owner and family friend of Hicks’ who was nominated by Trump to head the Overseas Private Investment Corporation.
Hicks and Bass, both Dallas residents and longtime denizens of the financial community there, have invested together since at least 2011, according to securities filings and court records. They’ve owned shares of a publicly traded communications-technology manufacturer. And they were among the biggest creditors to the bankrupt law enforcement contracting company run by Chris Kyle, the ex-Navy SEAL portrayed by Bradley Cooper in “American Sniper.” The managing director of a new investment fund started by Hicks had previously advised Bass on the successful stock-shorting of a Texas real estate lender, according to corporate filings and court papers from a lawsuit in state court in Dallas.
But it’s not clear if Hicks or his family have an investment in Bass’ China-related funds. Reached twice on his cellphone, Hicks declined to be interviewed by ProPublica. In the second call, in June, Hicks didn’t dispute that he and his family have invested in Bass’ funds. But when asked to detail their business relationship, he cut the conversation short. “I’ve got to run. Let me see if I can get back to you,” Hicks said before hanging up. He didn’t call back.
Weeks later, after ProPublica followed up with questions to the RNC, a spokesman responded by emailing a “statement attributed to Tommy Hicks.” It read: “As a businessman, I passionately supported causes I believed in and, if appropriate, would sometimes meet with government officials to promote them. There is nothing wrong with that. I have taken every precaution during my time as Co-Chair of the RNC to ensure there is no conflict of interest between my job here and any personal businesses.” (The spokesperson also emailed a statement on behalf of the RNC: “Tommy has done an outstanding job working on behalf of President Trump and his agenda.”)
Bass, who made his name and fortune by betting against subprime mortgages before the crash and is known for large bets that economies or certain macro trends will turn downward, declined to comment. “I’m not interested in talking with you about my friends or any meetings I have or haven’t had privately with anyone,” he wrote in an email. In a subsequent message, Bass wrote that any suggestion “that we had corrupt intentions in meeting with Treasury officials... is categorically false and defamatory and could negatively affect our business.”
An administration official briefed on the Bass meeting at the Treasury downplayed it as “strictly a listening session.” He said Bass did not ask the attendees to take any actions, nor did the attendees divulge anything about U.S.-China policy. Government ethics officers vetted the federal employees for any conflicts and found none, the official said. He acknowledged that the review didn’t include an examination of any financial relationship between Hicks and Bass.
Spalding said the conversation centered primarily on Bass’ analysis of publicly available records on the Chinese financial system. “I think the thing that I’ve discovered over the past years is that the information in the private sector is better than anything we have in government,” Spalding said of Bass’ presentation. “You have to reach out to where the expertise is. In our country, that’s where the talent is.”
An SEC spokeswoman declined to comment. Washburne, now out of government, didn’t respond to emails seeking comment.
Bass has become a vocal advocate for an aggressive U.S. policy toward China. On Twitter and on cable business channels he’s denounced everything from the country’s Communist Party government to its business practices. Securities filings show Bass raised $143 million from about 81 investors in two funds — investments that would benefit if China’s currency were devalued or the country faced credit or banking crises. In April, in a letter to his investors, Bass wrote that his company, Hayman Capital Management, was positioned for coming problems in Hong Kong and was set up to “maintain a massive asymmetry to a negative outcome in Hong Kong and/or China.”
Hicks’ work on the 5G initiative was extensive.
Over just a few months in late 2017 and 2018, records show, he was part of an informal group led by then NSC official Spalding, that advocated for a strategy in which the federal government would plan out a national policy for 5G. One memo described their goal as the “equivalent of the Eisenhower National Highway System — a single, inherently protected, information transportation superhighway.”
The group conducted multiple meetings and briefings. For example, Hicks, Spalding and others traveled to Samsung Electronics’ Dallas-area offices for one meeting in January 2018.
That same month Hicks attended a 5G meeting that he’d arranged with Commerce Secretary Wilbur Ross. Commerce plays a key role in the future of 5G since a division within the agency manages government spectrum and another maintains a list of companies the government believes are, or will become, national security threats. Companies that end up on that list can be effectively shut out from global deal-making. The meeting with Ross focused heavily on the threat of China, said Ira Greenstein, who served as a White House aide and was part of Spalding’s 5G crew.
Hicks was one of a dozen nongovernment employees, including executives from Wells Fargo, Nokia, Ericsson and Google, that Spalding sent reading materials to ahead of a 5G discussion in the Eisenhower Executive Office Building. Copied on the email were top Commerce Department officials, a Booz Allen Hamilton contractor and a senior adviser for cybersecurity and IT modernization at the White House Office of Science and Technology. On the agenda? “Mid Band vs High Band” spectrum, “security,” “supply chain,” “financing” and other critical issues.
Hicks wasn’t just a passive observer. On Jan. 2, 2018, the managing director of OPIC, which provides financial backing to American companies expanding into foreign markets, emailed Spalding and others to say that the CEO of a satellite company called OneWeb had a plan to provide worldwide 5G coverage by 2027. Hicks fired back a note from his iPhone. “2027 is too late,” he wrote. “Let’s discuss as a smaller group tomorrow.”
Spalding was forced out of the West Wing in early 2018 after a draft 20-page briefing memo he authored proposing a government-organized national 5G network was leaked, then panned as an attempt to nationalize the wireless broadband industry. Trump has not pursued such an initiative, ultimately deferring to wireless carriers to bid on publicly maintained spectrum and develop their own networks as has traditionally been the case.
Still, the administration has made significant efforts to counter Chinese influence in 5G and related technologies, which are said to be critical for industries such as driverless cars, artificial intelligence, machine learning and much more. In May the Commerce Department barred Chinese telecom equipment manufacturer Huawei from doing business in the U.S. for national security reasons. And the top Department of Defense official in charge of acquisitions also recently announced the creation of a government-approved private marketplace to pair American private equity firms with U.S. technology companies producing products with national security applications to keep Chinese money out of 5G.
It isn’t clear what influence, if any, Hicks had in those decisions. But his profile is only rising. In April, he led a Republican delegation to Taiwan alongside a U.S. government delegation. Hicks met with the country’s president, Tsai Ing-wen, who has lately been positioning her country’s corporations as safer providers of 5G equipment than those in China. Tsai thanked the U.S. for selling arms to Taiwan. She asked Hicks to convey her regards to the Trumps.
Under a six-lane span of freeway leading into downtown Baltimore sits what may be the most valuable parking spaces in America.
Lying near a development project controlled by Under Armour’s billionaire CEO Kevin Plank, one of Maryland’s richest men, and Goldman Sachs, the little sliver of land will allow Plank and the other investors to claim what could amount to millions in tax breaks for the project, known as Port Covington.
They have President Donald Trump’s 2017 tax overhaul law to thank. The new law has a provision meant to spur investment into underdeveloped areas, called “opportunity zones.” The idea is to grant lucrative tax breaks to encourage new investment in poor areas around the country, carefully selected by each state’s governor.
But Port Covington, an ambitious development geared to millennials to feature offices, a hotel, apartments, and shopping, is not in a census tract that is poor. It’s not a new investment. And the census tract only became eligible to be an opportunity zone thanks to a mapping error.
As the selection process was underway, a deputy chief of staff to Maryland's governor wrote in an email that “Port Covington does not qualify” as an opportunity zone.
Maryland's governor chose the area for the program anyway — after his aides met with the lobbyists for Plank, who owns about 40% of the zone.
“This is a classic example of a windfall benefit,” said Robert Stoker, a George Washington University professor who has studied economic development in Baltimore for decades. “A major investment was already planned and now is in a zone where they are going to qualify for all kinds of beneficial tax treatment.”
In selecting Port Covington, the governor had to exclude another Maryland community from the opportunity zone program. In Baltimore, for example, the governor dropped part of a neighborhood that city officials recommended for the program — Brooklyn — with a median family income one-fifth that of Port Covington. Brooklyn sits just across the Patapsco river from Port Covington, in an area that suffers from one of the highest drug and alcohol death rates in Baltimore, which in turn has one of the highest drug fatality rates nationwide.
In a statement, Marc Weller, a developer who is Plank’s partner in the project, defended the opportunity zone designation. “Port Covington being part of an Opportunity Zone will attract more investors, foster more economic growth in a neglected area of the City, and directly benefit all of the surrounding communities for decades to come,” Weller said. Supporters say the Port Covington development could help several nearby struggling south Baltimore neighborhoods.
An official in the administration of Maryland’s Republican governor, Larry Hogan, said, “The success of that project is really going to go a long way to providing benefits for the whole city of Baltimore.” The official added: “The governor is a huge supporter of the development.”
A spokesperson for the state’s Department of Housing and Community Development, which was involved in the selection process, said that “due to the time limits of the federal tax incentive, the state of Maryland did purposefully select census tracts where projects were beginning to increase the odds of attracting additional private sector investment to Maryland's opportunity zones in the near term.”
The Birth of a New Tax Break
In December 2017, Trump signed the Tax Cuts and Jobs Act, his signature legislative achievement. Much criticized as a giveaway to the rich, the law includes one headline provision that backers promised would help the poor: opportunity zones.
Supporters of the program argued it would unleash economic development in otherwise overlooked communities. “Our goal is to rebuild homes, schools, businesses and communities that need it the most,“ Trump declared at a recent event, adding, “To revitalize these areas, we’ve lowered the capital gains tax for long-term investment in opportunity zones all the way down to a very big, fat, beautiful number of zero.”
The provision has bipartisan support. “These cities are gold mines,” New Jersey Sen. Cory Booker, a 2020 presidential hopeful and main Democratic architect of the program, told real estate investors in October. “They’re domestic emerging markets that are more exciting than anything you’ll see overseas.”
Here’s how the program works. Say you’re a hedge fund manager, you purchased Google stock years ago, and are sitting on $1 billion in gains. If you sell, you’d send the IRS about $240 million, a lot less than ordinary income tax but still annoying. To avoid paying that much, you can sell the shares and put the $1 billion into an opportunity zone. That comes with three generous breaks. The first is that you defer that $240 million in capital gains tax, allowing you to invest more money up front. But if that’s not enough for you, you can hold the investment for several years and you’ll get a significant reduction in those taxes. What’s more, any additional gains from the new investment are tax-free after 10 years.
It’s impossible to predict how much the tax break will be worth to individual investors because it depends on several variables, not least whether the underlying project gains in value. But one investment pitch projected 10-year returns would jump to 91% from 29% on a hypothetical $1 million investment. That includes $284,000 in tax breaks — money the federal government would have collected from taxpayers with capital gains but for the program.
The tax code already favored real estate developers like Trump, and his overhaul made it even friendlier. Investors can put money into a range of projects in opportunity zones, but so far most of the publicly announced deals are in real estate. The tax break has led to a marketing boom, with Wall Street pitching investors to raise funds to invest in the zones. Critics argue that the program is flawed, pointing out that there’s no guarantee that the capital investment will help community residents, that the selection process was vulnerable to outside influence, and that it could be a giveaway for projects that were going to happen anyway. In a case in Chicago uncovered by the Real Deal, two tracts already slated for a major development project were selected by the governor as opportunity zones even though city officials hadn’t initially recommended them.
Under the new law, areas of the country deemed to be “low-income communities” would be eligible to be named opportunity zones. The Treasury Department determined which census tracts qualified. Then governors of each state could select one quarter of those tracts to get the tax benefit.
That governor prerogative turned out to be very useful to Kevin Plank.
In 2012, Plank-connected entities quietly began buying up waterfront property on a largely vacant and isolated peninsula south of downtown Baltimore. Often using shell companies to shield the identity of the true buyer, they ultimately spent more than $100 million acquiring much of the peninsula. Plank’s privately held Sagamore Development now controls roughly 40% of the area that would later be named an opportunity zone.
In early 2015, more than two and a half years before Trump’s tax law passed, Plank revealed himself as the money behind the purchases. He planned a new development and headquarters for Under Armour, the sports apparel company he started after coming up with the idea as a University of Maryland football player. Today, Under Armour employs 15,000 people. Plank has a net worth of around $2 billion.
Though the Port Covington area was cut off from downtown by I-95, Plank said he likes the location because of the visibility. “When people drive through Baltimore [on I-95] I literally want them to drive through and go, 'There's Baltimore on the right. There's Under Armour on the left,’” he told The Baltimore Sun.
A year later, Plank’s firm took his vision to the general public, running TV and print ads touting the new project. One of the ads, reminiscent of the Democratic presidential primary spots airing at that time, was filled with a diverse cast sharing their dreams for a new city within a city.
“We will build it. Together,” $660 million in bonds to help build what the company has said would be a $5.5 billion development. Opponents contended Plank’s proposal amounted to corporate welfare that would exacerbate the city’s stark economic and racial divides. But the company agreed to provide millions of dollars to the city and a group of nearby low-income neighborhoods to gain support for the project, and the City Council passed the measure that fall.
As Under Armour’s stock plummeted in 2017 amid slowing sales growth and progress on the Port Covington project lagged. That September, Goldman Sachs stepped in to commit $233 million from its Urban Investment Group. Hogan, himself a real estate developer, personally spoke with the then-CEO of Goldman, Lloyd Blankfein, about the deal.
Meeting With the Governor’s Office
In the weeks after the 2017 federal tax overhaul passed, Plank’s team spotted an opportunity.
Nick Manis, a veteran Annapolis lobbyist who has also represented the Baltimore Ravens, reached out to Hogan’s chief of staff about Port Covington, according to emails obtained by ProPublica through a public records request. The developers and their lobbyists had given at least $15,000 to Hogan’s campaigns in recent years. A meeting was set for early February.
But the developers had a problem.
The Friday before the meeting, a deputy chief of staff to the governor wrote in an email that “Port Covington does not qualify” for the coveted tax breaks.
The Port Covington tract, which includes a gentrified corner of South Baltimore north of the largely empty peninsula, was too wealthy to be an opportunity zone. There is a second provision of the law for wealthier tracts: A tract can qualify if it is adjacent to a low-income area. But Port Covington failed that test, too. Its median family income — nearly 160% of Maryland’s — exceeded the income cap even for that provision.
Port Covington was out — unless the tract could somehow be considered low-income in its own right.
On Feb. 5, the Port Covington development team arrived at the second floor of the statehouse in the opulent governor’s reception room to meet with top Hogan aides. The agenda for the meeting included opportunity zones, as well as transit and infrastructure issues. The developer’s team requested that the Port Covington tract be made an opportunity zone. The state officials “acknowledged their interest in receiving that designation,” a Hogan administration official said.
Bank Error in Your Favor
Three days after that meeting, Plank and the Port Covington developers got bad news. The Treasury Department released a list of census tracts across the country that were sufficiently poor to be included in the program. Port Covington was not included in that list.
Three weeks later, however, things turned around. The Treasury Department issued a revised list. The agency said it had left out some tracts in error. The revised list included 168 new areas across the country defined by the agency as “low-income communities.”
This time, Port Covington made the cut.
It couldn’t have qualified because its residents were poor. It couldn’t qualify because it was next to some place that was poor. But the tract could qualify under yet another provision of the law. Some tracts could make the cut if they had fewer than 2,000 people and if they were “within” what’s known as an empowerment zone. That was a Clinton-era redevelopment initiative also aimed at low-income areas.
Port Covington wasn’t actually within an empowerment zone, but it is next to one. So how did it qualify? The area met the definition of “within” because the digital map files the Treasury Department used showed that Port Covington overlapped with a neighboring tract that was designated an empowerment zone, Treasury officials told ProPublica.
That overlap: the sliver of parking lot beneath I-395. That piece of the lot is about one one-thousandth of a square mile.(ProPublica)(ProPublica)
There are no regulations or guidance on how to interpret the tax law’s use of “within,” said a spokesman for the Treasury Department’s Community Development Financial Institutions Fund, which compiled the maps. The agency made what it called a “technical decision” that any partial overlap with an Empowerment Zone would count as being “within” that zone — no matter how small the area, or if anyone lived there.
Or, if the overlap was even real.
Turns out, no part of Port Covington actually overlapped with the empowerment zone.
Treasury’s decision ignored a well-known problem in geographic analysis known as misalignment, mapping experts said.
Misalignment happens when the lines on digital maps made by two sources differ slightly about where things like roads and buildings lie, according to Henry Luan, a professor of geography at the University of Oregon.
For example, if a tract ends at a highway, one file might show the border on the near side of the highway while another — when zoomed all the way in — might show it a few feet away on the far side. When laid on top of each other, the two files end up with minuscule differences that don’t mean anything in the real world.
Except in this case, it had big real world consequences for Port Covington. The mapping error allowed the entire tract to qualify as an opportunity zone.
“That area of overlap is a complete artifact of” the map files Treasury used, said David Van Riper, director of spatial analysis at the Minnesota Population Center. “It’s not an actual overlap.”
Sometime in the mid-2000s, the Census Bureau used GPS devices to make its map files more accurately represent the country’s roads. One of the maps used by Treasury appeared to be based on the older, less accurate Census maps, Van Riper said.
Even accepting Treasury’s misaligned maps, the entire Port Covington tract receives tax benefits, even though less than 0.3% of it overlaps with the neighboring tract.
“Only a minimal overlap, but you make the whole Census tract benefit from the policy?” Luan said. “That doesn’t make sense to me.”
Port Covington is one of just a handful of tracts in the country that ProPublica identified that qualified through similar flaws in Treasury’s process.
Taking the Break
There is no evidence that Plank or the Port Covington developers influenced the Treasury Department’s revision.
But the lobbying of the governor before the Treasury change appears to have paid off.
As they were lobbying, Baltimore officials were working out which parts of the city would benefit most from being opportunity zones. They petitioned the governor to pick 41 low-income city neighborhoods to get the tax break, all of them well below the program’s maximum income requirements.
The city’s list remained largely intact when the governor made his selections in April. Hogan made just four changes, three of which qualified under the main criteria without the benefit of the mapping error. But the fourth didn’t: Port Covington.
Plank’s team cheered the revision. The very thing that made Port Covington a poor candidate to be an opportunity zone — that it wasn’t a low-income area — could make it exceptionally attractive to investors. In January, they convened an opportunity zone conference at their Port Covington incubator called City Garage featuring state officials and executives from Goldman, Deloitte and other firms.
“Port Covington kind of fits all the needs,” said Marc Weller, Plank’s partner, at the conference. “It has all the entitlements, and it has a financial partner in place as well. It’s probably the most premier piece of land in the United States that’s in an opportunity zone.”
The opportunity zone program has restrictions intended to prevent already-planned developments from benefitting. But the Port Covington developers told Bloomberg that the firm will be able to reap the benefits of the tax break because it has found new investors. Among the potential new investors who might take advantage of the tax break are Plank’s own family, one of the developers told the Baltimore Business Journal. A Port Covington spokesman denied that Plank’s family members are potential investors.
To get the maximum benefit, investments need to be made in 2019, though investments made through 2026 can take advantage of growth tax-free. Only a portion of the Port Covington project is expected to be underway by then.
A Goldman spokesman said it is “likely” that the firm will take advantage of the opportunity zone benefits in Port Covington, adding that it has “made no firm decisions about how each component will be financed.”
Margaret Anadu, the head of Goldman’s Urban Investment Group and the lead on the Port Covington investment, recently said of the opportunity zone program: “These are the same neighborhoods that have been suffering since redline started decades and decades ago, pretty much eliminating private investment. … And so we simply have to reverse that. And the only way to reverse that is to start to bring that private capital back into these neighborhoods.”
The Port Covington tract is just 4% black. For it to be included in the program, another community somewhere in Maryland had to be excluded. The ones that the city suggested that were excluded by the governor, for example, are 68% black and have a poverty rate three times higher than Port Covington’s.
There is some evidence suggesting being named an opportunity zone has already been a boon for property owners. An analysis by Zillow found that sale price gains in opportunity zones significantly outpaced gains in eligible tracts that weren’t selected. Real Capital Analytics found that sales of developable sites in the zones rose 24% in the year after the law passed.
Under Armour has said it’s still committed to building its new headquarters on the peninsula, but it’s not clear when that will happen.
Still, other aspects of the once-stalled project finally started moving forward in recent months. After presenting plans for the first section inside the opportunity zone this winter, the project finally got underway on a rainy day in early May of this year.
"The project is real,” Weller said at the kickoff event, which included Anadu, the Goldman Sachs executive, and city and state officials. “The project is starting. We're open for business."
In mid-March, the payday lending industry held its annual convention at the Trump National Doral hotel outside Miami. Payday lenders offer loans on the order of a few hundred dollars, typically to low-income borrowers, who have to pay them back in a matter of weeks. The industry has been long been reviled by critics for charging stratospheric interest rates — typically 400% on an annual basis — that leave customers trapped in cycles of debt.
The industry had felt under siege during the Obama administration, as the federal government moved to clamp down. A government study found that a majority of payday loans are made to people who pay more in interest and fees than they initially borrow. Google and Facebook refuse to take the industry’s ads.
On the edge of the Doral’s grounds, as the payday convention began, a group of ministers held a protest “pray-in,” denouncing the lenders for having a “feast” while their borrowers “suffer and starve.”
But inside the hotel, in a wood-paneled bar under golden chandeliers, the mood was celebratory. Payday lenders, many dressed in golf shirts and khakis, enjoyed an open bar and mingled over bites of steak and coconut shrimp.
They had plenty to be elated about. A month earlier, Kathleen Kraninger, who had just finished her second month as director of the federal Consumer Financial Protection Bureau, had delivered what the lenders consider an epochal victory: Kraninger announced a proposal to gut a crucial rule that had been passed under her Obama-era predecessor.
Payday lenders viewed that rule as a potential death sentence for many in their industry. It would require payday lenders and others to make sure borrowers could afford to pay back their loans while also covering basic living expenses. Banks and mortgage lenders view such a step as a basic prerequisite. But the notion struck terror in the payday lenders. Their business model relies on customers — 12 million Americans take out payday loans every year, according to Pew Charitable Trusts — getting stuck in a long-term cycle of debt, experts say. A CFPB study found that three out of four payday loans go to borrowers who take out 10 or more loans a year.
Now, the industry was taking credit for the CFPB’s retreat. As salespeople, executives and vendors picked up lanyards and programs at the registration desk by the Doral’s lobby, they saw a message on the first page of the program from Dennis Shaul, CEO of the industry’s trade group, the Community Financial Services Association of America, which was hosting the convention. “We should not forget that we have had some good fortune through recent regulatory and legal developments,” Shaul wrote. “These events did not occur by accident, but rather are due in large part to the unity and participation of CFSA members and a commitment to fight back against regulatory overreach by the CFPB.”
This year was the second in a row that the CFSA held its convention at the Doral. In the eight years before 2018 (the extent for which records could be found), the organization never held an event at a Trump property.
Asked whether the choice of venue had anything to do with the fact that its owner is president of the United States and the man who appointed Kraninger as his organization’s chief regulator, Shaul assured ProPublica and WNYC that the answer was no. “We returned because the venue is popular with our members and meets our needs,” he said in a written statement. The statement noted that the CFSA held its first annual convention at the Doral hotel more than 16 years ago. Trump didn’t own the property at the time.
The CFSA and its members have poured a total of about $1 million into the Trump Organization’s coffers through the two annual conferences, according to detailed estimates prepared by a corporate event planner in Miami and an executive at a competing hotel that books similar events. Those estimates are consistent with the CFSA’s most recent available tax filing, which reveals that it spent $644,656 on its annual conference the year before the first gathering at the Trump property. (The Doral and the CFSA declined to comment.)
“It’s a way of keeping themselves on the list, reminding the president and the people close to him that they are among those who are generous to him with the profits that they earn from a business that’s in severe
danger of regulation unless the Trump administration acts,” said Lisa Donner, executive director of consumer group Americans for Financial Reform.
The money the CFSA spent at the Doral is only part of the ante to lobby during the Trump administration. The payday lenders also did a bevy of things that interest groups have always done: They contributed to the president’s inauguration and earned face time with the president after donating to a Trump ally.
But it’s the payment to the president’s business that is a stark reminder that the Trump administration is like none before it. If the industry had written a $1 million check directly to the president's campaign, both the CFSA and campaign could have faced fines or even criminal charges — and Trump couldn’t have used the money to enrich himself. But paying $1 million directly to the president’s business? That’s perfectly legal.
The inauguration of Donald Trump was a watershed for the payday lending industry. It had been feeling beleaguered since the launch of the CFPB in 2011. For the first time, the industry had come under federal supervision. Payday lending companies were suddenly subject to exams conducted by the bureau’s supervision division, which could, and sometimes did, lead to enforcement cases.
Before the bureau was created, payday lenders had been overseen mostly by state authorities. That left a patchwork: 15 states in which payday loans were banned outright, a handful of states with strong enforcement — and large swaths of the country in which payday lending was mostly unregulated.
Then, almost as suddenly as an aggressive CFPB emerged, the Trump administration arrived with an agenda of undoing regulations. “There was a resurgence of hope in the industry, which seems to be justified, at this point,” said Jeremy Rosenblum, a partner at law firm Ballard Spahr, who represents payday lenders. Rosenblum spoke to ProPublica and WNYC in a conference room at the Doral — filled with notepads, pens and little bowls of candy marked with the Trump name and family crest — where he had just led a session on compliance with federal and state laws. “There was a profound sense of relief, or hope, for the first time.” (Ballard Spahr occasionally represents ProPublica in legal matters.)
In Mick Mulvaney, who Trump appointed as interim chief of the CFPB in 2017, the industry got exactly the kind of person it had hoped for. As a congressman, Mulvaney had famously derided the agency as a “sad, sick” joke.
If anything, that phrase undersold Mulvaney’s attempts to hamstring the agency as its chief. He froze new investigations, dropped enforcement actions en masse, requested a budget of $0 and seemed to mock the agency by attempting to officially re-order the words in the organization’s name.
But Mulvaney’s rhetoric sometimes exceeded his impact. His budget request was ignored, for example; the CFPB’s name change was only fleeting. And besides, Mulvaney was always a part-timer, fitting in a few days a week at the CFPB while also heading the Office of Management and Budget, and then moving to the White House as acting chief of staff.
It’s Mulvaney’s successor, Kraninger, whom the financial industry is now counting on — and the early signs suggest she’ll deliver. In addition to easing rules on payday lenders, she has continued Mulvaney’s policy of ending supervisory exams on outfits that specialize in lending to the members of the military, claiming that the CFPB can do so only if Congress passes a new law granting those powers (which isn’t likely to happen anytime soon). She has also proposed a new regulation that will allow debt collectors to text and email debtors an unlimited number of times as long as there’s an option to unsubscribe.
Enforcement activity at the bureau has plunged under Trump. The amount of monetary relief going to consumers has fallen from $43 million per week under Richard Cordray, the director appointed by Barack Obama, to $6.4 million per week under Mulvaney and is now $464,039, according to an updated analysis conducted by the Consumer Federation of America’s Christopher Peterson, a former special adviser to the bureau.
Kraninger’s disposition seems almost the inverse of Mulvaney’s. If he’s the self-styled “right wing nutjob” willing to blow up the institution and everything near it, Kraninger offers positive rhetoric — she says she wants to “empower” consumers — and comes across as an amiable technocrat. At 44, she’s a former political science major — with degrees from Marquette University and Georgetown Law School — and has spent her career in the federal bureaucracy, with a series of jobs in the Transportation and Homeland Security departments and finally in OMB, where she worked under Mulvaney. (In an interview with her college alumni association, she hailed her Jesuit education and cited Pope Francis as her “dream dinner guest.”) In her previous jobs, Kraninger had extensive budgeting experience, but none in consumer finance. The CFPB declined multiple requests to make Kraninger available for an interview and directed ProPublica and WNYC to her public comments and speeches.
Kraninger is new to public testimony, but she already seems to have developed the politician’s skill of refusing to answer difficult questions. At a hearing in March just weeks before the Doral conference, Democratic Rep. Katie Porter repeatedly asked Kraninger to calculate the annual percentage rate on a hypothetical $200 two-week payday loan that costs $10 per $100 borrowed plus a $20 fee. The exchange went viral on Twitter. In a bit of congressional theater, Porter even had an aide deliver a calculator to Kraninger’s side to help her. But Kraninger would not engage. She emphasized that she wanted to conduct a policy discussion rather than a “math exercise.” The answer, by the way: That’s a 521% APR.
A while later, the session recessed and Kraninger and a handful of her aides repaired to the women’s room. A ProPublica reporter was there, too. The group lingered, seeming to relish what they considered a triumph in the hearing room. “I stole that calculator, Kathy,” one of the aides said. “It’s ours! It’s ours now!” Kraninger and her team laughed.
Triple-digit interest rates are no laughing matter for those who take out payday loans. A sum as little as $100, combined with such rates, can lead a borrower into long-term financial dependency.
That’s what happened to Maria Dichter. Now 73, retired from the insurance industry and living in Palm Beach County, Florida, Dichter first took out a payday loan in 2011. Both she and her husband had gotten knee replacements, and he was about to get a pacemaker. She needed $100 to cover the co-pay on their medication. As is required, Dichter brought identification and her Social Security number and gave the lender a postdated check to pay what she owed. (All of this is standard for payday loans; borrowers either postdate a check or grant the lender access to their bank account.) What nobody asked her to do was show that she had the means to repay the loan. Dichter got the $100 the same day.
The relief was only temporary. Dichter soon needed to pay for more doctors’ appointments and prescriptions. She went back and got a new loan for $300 to cover the first one and provide some more cash. A few months later, she paid that off with a new $500 loan.
Dichter collects a Social Security check each month, but she has never been able to catch up. For almost eight years now, she has renewed her $500 loan every month. Each time she is charged $54 in fees and interest. That means Dichter has paid about $5,000 in interest and fees since 2011 on what is effectively one loan for $500.
Today, Dichter said, she is “trapped.” She and her husband subsist on eggs and Special K cereal. “Now I’m worried,” Dichter said, “because if that pacemaker goes and he can’t replace the battery, he’s dead.”
Payday loans are marketed as a quick fix for people who are facing a financial emergency like a broken-down car or an unexpected medical bill. But studies show that most borrowers use the loans to cover everyday expenses. “We have a lot of clients who come regularly,” said Marco (he asked us to use only his first name), a clerk at one of Advance America’s 1,900 stores, this one in a suburban strip mall not far from the Doral hotel. “We have customers that come two times every month. We’ve had them consecutively for three years.”
These types of lenders rely on repeat borrowers. “The average store only has 500 unique customers a year, but they have the overhead of a conventional retail store,” said Alex Horowitz, a senior research officer at Pew Charitable Trusts, who has spent years studying payday lending. “If people just used one or two loans, then lenders wouldn’t be profitable.”
It was years of stories like Dichter’s that led the CFPB to draft a rule that would require that lenders ascertain the borrower’s ability to repay their loans. “We determined that these loans were very problematic for a large number of consumers who got stuck in what was supposed to be a short-term loan,” said Cordray, the first director of the CFPB, in an interview with ProPublica and WNYC. Finishing the ability-to-pay rule was one of the reasons he stayed on even after the Trump administration began. (Cordray left in November 2017 for what became an unsuccessful run for governor of Ohio.)
The ability-to-pay rule was announced in October 2017. The industry erupted in outrage. Here’s how CFSA’s chief, Shaul, described it in his statement to us: “The CFPB’s original rule, as written by unelected Washington bureaucrats, was motivated by a deeply paternalistic view that small-dollar loan customers cannot be trusted with the freedom to make their own financial decisions. The original rule stood to remove access to legal, licensed small-dollar loans for millions of Americans.” The statement cited an analysis that “found that the rule would push a staggering 82 percent of small storefront lenders to close.” The CFPB estimated that payday and auto title lenders — the latter allow people to borrow for short periods at ultra-high annual rates using their cars as collateral — would lose around $7.5 billion as a result of the rule.
The industry fought back. The charge was led by Advance America, the biggest brick-and-mortar payday lender in the United States. Its CEO until December, Patrick O’Shaughnessy, was the chairman of the CFSA’s board of directors and head of its federal affairs committee. The company had already been wooing the administration, starting with a $250,000 donation to the Trump inaugural committee. (Advance America contributes to both Democratic and Republican candidates, according to spokesperson Jamie Fulmer. He points out that, at the time of the $250,000 donation, the CFPB was still headed by Cordray, the Obama appointee.)
Payday and auto title lenders collectively donated $1.3 million to the inauguration. Rod and Leslie Aycox from Select Management Resources, a Georgia-based title lending company, attended the Chairman’s Global Dinner, an exclusive inauguration week event organized by Tom Barrack, the inaugural chairman, according to documents obtained by “Trump, Inc.” President-elect Trump spoke at the dinner.
In October 2017, Rod Aycox and O’Shaughnessy met with Trump when he traveled to Greenville, South Carolina, to speak at a fundraiser for the state’s governor, Henry McMaster. They were among 30 people who were invited to discuss economic development after donating to the campaign, according to the The Post and Courier. (“This event was only about 20 minutes long,” said the spokesperson for O’Shaughnessy’s company, and the group was large. “Any interaction with the President would have been brief.” The Aycoxes did not respond to requests for comment.)
In 2017, the CFSA spent $4.3 million advocating for its agenda at the federal and state level, according to its IRS filing. That included developing “strategies and policies,” providing a “link between the industry and regulatory decision makers” and efforts to “educate various state policy makers” and “support legislative efforts which are beneficial to the industry and the public.”
The ability-to-pay rule technically went into effect in January 2018, but the more meaningful date was August 2019. That’s when payday lenders could be penalized if they hadn’t implemented key parts of the rule
Payday lenders looked to Mulvaney for help. He had historically been sympathetic to the industry and open to lobbyists who contribute money. (Jaws dropped in Washington, not about Mulvaney’s practices in this regard, but about his candor. “We had a hierarchy in my office in Congress,” he told bankers in 2018. “If you were a lobbyist who never gave us money, I didn’t talk to you. If you’re a lobbyist who gave us money, I might talk to you.”)
But Mulvaney couldn’t overturn the ability-to-pay rule. Since it had been finalized, he didn’t have the legal authority to reverse it on his own. Mulvaney announced that the bureau would begin reconsidering the rule, a complicated and potentially lengthy process. The CFPB, under Cordray, had spent five years researching and preparing it.
Meanwhile, the payday lenders turned to Congress. Under the Congressional Review Act, lawmakers can nix federal rules during their first 60 days in effect. In the House, a bipartisan group of representatives filed a joint resolution to abolish the ability-to-pay rule. Lindsey Graham, R-S.C., led the charge in the Senate. But supporters couldn’t muster a decisive vote in time, in part because opposition to payday lenders crosses party lines.
By April 2018, the CFSA members were growing impatient. But the Trump administration was willing to listen. The CFSA’s Shaul was granted access to a top Mulvaney lieutenant, according to “Mick Mulvaney’s Master Class in Destroying a Bureaucracy From Within” in The New York Times Magazine, which offers a detailed description of the behind-the scenes maneuvering. Shaul told the lieutenant that the CFSA had been preparing to sue the CFPB to stop the ability-to-pay rule “but now believed that it would be better to work with the bureau to write a new one.” Cautious about appearing to coordinate with industry, according to the article, the CFPB was non-committal.
Days later, the CFSA sued the bureau. The organization’s lawyers argued in court filings that the bureau’s rules “defied common sense and basic economic analysis.” The suit claimed the bureau was unconstitutional and lacked the authority to impose rules.
A month later, Mulvaney took a rare step, at least, for most administrations: He sided with the plaintiffs suing his agency. Mulvaney filed a joint motion asking the judge to delay the ability-to-pay rule until the lawsuit is resolved.
By February of this year, Kraninger had taken charge of the CFPB and proposed to rescind the ability-to-pay rule. Her official announcement asserted that there was “insufficient evidence and legal support” for the rule and expressed concern that it “would reduce access to credit and competition.”
Kraninger’s announcement sparked euphoria in the industry. One industry blog proclaimed, “It’s party time, baby!” with a GIF of President Trump bobbing his head.
Kraninger’s decision made the lawsuit largely moot. But the suit, which has been stayed, has still served a purpose: This spring, a federal judge agreed to freeze another provision of the regulation, one that limits the number of times a lender can debit a borrower’s bank account, until the fate of the overall rule is determined.
As the wrangling over the federal regulation plays out, payday lenders have continued to lobby statehouses across the country. For example, a company called Amscot pushed for a new state law in Florida last year. Amscot courted African American pastors and leaders located in the districts of dozens of Democratic lawmakers and chartered private jets to fly them to Florida’s capital to testify, according to the Tampa Bay Times. The lawmakers subsequently passed legislation creating a new type of payday loan, one that can be paid in installments, that lets consumers borrow a maximum $1,000 loan versus the $500 maximum for regular payday loans. Amscot CEO Ian MacKechnie asserts that the new loans reduce fees (consumer advocates disagree). He added, in an email to ProPublica and WNYC: “We have always worked with leaders in the communities that we serve: both to understand the experiences of their constituents with regard to financial products; and to be a resource to make sure everyone understands the law and consumer protections. Educated consumers are in everyone’s interest.” For their part, the leaders denied that Amscot’s contributions affected their opinions. As one of them told the Tampa Bay Times, the company is a “great community partner.”
Kraninger spent her first three months in office embarking on a “listening tour.” She traveled the country and met with more than 400 consumer groups, government officials and financial institutions. Finally, in mid-April, she gave her first public speech at the Bipartisan Policy Center in Washington, D.C. The CFPB billed it as the moment she would lay out her vision for the agency.
Kraninger said she hoped to use the CFPB’s enforcement powers “less often.” She alluded to a report by the Federal Reserve that 40% of Americans would not be able to cover an emergency expense of $400. Her suggestion for addressing that: educational videos and a booklet. “To promote effective approaches to savings and particularly emergency savings,” Kraninger explained, “the Bureau recently launched our Start Small, Save Up initiative. It offers tips, tools and information to help consumers build a basic savings cushion and develop a savings habit. Later this year, we will be launching a savings ‘boot camp,’ a series of videos, and a very readable, informative booklet that serves as a roadmap to a savings plan.”
Having laid out what sounded like a plan to hand out self-help brochures at an agency invented to pursue predatory financial institutions, she then said, “Let me be clear, however, the ultimate goal for the bureau is not to produce booklets and great content on our website. The ultimate goal is to move the needle on the number of Americans in this country who can cover a financial shock, like a $400 emergency.”
Back at the Doral the month before her speech, $400 might not have seemed like much of an emergency to the payday lenders. Some attendees seemed most upset by a torrential downpour on the second day that caused the cancellation of the conference’s golf tournament.
Inside the Donald J. Trump Ballroom, the conference buzzed with activity. The Bush-era political adviser Karl Rove was the celebrity speaker after the breakfast buffet. And the practical sessions continued apace. One was called “The Power of the Pen.” It was aimed at helping attendees submit comments on the ability-to-pay rule to the government. It was clearly a matter of importance to the CFSA. In his statement to ProPublica and WNYC, Shaul noted that “more than one million customers submitted comments opposing the CFPB’s original small-dollar loan rule — hundreds of thousands of whom sent handwritten letters telling personal stories of how small-dollar loans helped them and their families.”
A couple of months after the Doral conference, Allied Progress, a consumer advocacy group, analyzed the new round of comments that were submitted to the CFPB in response to Kraninger’s plans. Because, the group said, the industry had been accused of submitting “duplicative comments” in the past, it searched for such repetitions in the latest round. In one sample of 26,000 comments, the group discovered that 27% of the statements submitted by purportedly independent individuals contained duplicative passages, all of which supported the industry’s position, and also included identical personal anecdotes. (Payday opponents have encouraged people to submit preprinted comments to the CFPB, but there’s no indication that they include matching personal details.) For example, Allied Progress reported that 221 of the comments stated that “I have a long commute to work and it’s better for me financially to borrow from Cash Connection so that I can still make it to work than to not take care of my car and lose my job because of absences.” There were 201 asserting that “I now take care of my parents and my children” and I “want to be able to enjoy life and not feel burdened by the additional expenses that are piling up.” Allied Progress said it doesn’t know “if these are fake people, fake stories, or form letters intentionally designed to read as personal anecdotes.” (Cash Connection couldn’t be reached for comment.)
Taking account of public comments is the final task before Kraninger officially determines whether to put the ability-to-pay rule to death. Whatever she decides, it’s a likely bet that decision will be challenged in court, the CFSA will weigh in and the payday lenders will still be talking about it at next year’s annual conference. A spokesperson for the CFSA declined to say whether the event will be held at a Trump hotel.
Clarification: This article has been updated to clarify the methodology Allied Progress used in searching for duplicative comments to the CFPB and to explain how duplicative pro-payday-lender comments differed from efforts by anti-payday-loan advocates to encourage people to submit prewritten comments.
Before he became infamous for working on the investigation of Hillary Clinton’s emails and the Trump Russia investigation, former acting FBI chief Andrew McCabe investigated the Russian mob in Brighton Beach, Brooklyn. McCabe has been asking some of the questions we at Trump, Inc. have asked ourselves about Trump’s business. So today, we compare notes.
In this conversation with Andrea Bernstein and Heather Vogell, of Trump, Inc., McCabe talks about why it makes sense that some of the people he investigated in the 1990s have resurfaced in special counsel Robert Mueller’s investigation, what questions he still has after the Mueller report and why he and former FBI director Jim Comey have said Trump’s management style reminds them of the mob.
Trump has long denied any wrongdoing, and he has said he was simply acting as an ordinary businessman in his Russia dealings.
(This interview has been edited and condensed for clarity.)
WNYC’s Andrea Bernstein: I want to start by asking you about your FBI training. You write about being at Quantico and you say, “I embraced every bit of this culture, even the most arbitrary aspects of the discipline.” You say that you loved “wearing the same style of polo shirt every day for weeks on end, loved the fact that everybody around me wore the same polo shirt too.” Why was it important to you, to dress the part?
Andrew McCabe: You know, I think each of those little details, though not significant individually, were a way of communicating to us that we had joined an organization that was much bigger and more significant than our individual preferences or our lives before that point.
Bernstein: I have to say, you definitely look like a G-man.
McCabe: I'm going to say thank you.
Bernstein: Early on in your career, you were assigned to investigate the Russian mob at a specific point in history in New York, and Brighton Beach was a big place where a lot of this activity was based. I'm wondering if you could paint a picture for listeners of what Brighton Beach was like then, and what the Russian mob was like then and how it all came to you?
McCabe: So the FBI field office in New York City had experience with developing new programs in what we called nontraditional organized crime. The folks who ran the organized crime program recognized the situation that we had with a very large Russian-speaking population in New York — one with a deep historical connection to organized crime activity in Russia — and so they made the decision to start a Russian organized crime squad.
So when I got there in ’96, it was really still in its infant stages. Pretty much everybody on the squad were very young, new agents. “First office agents,” as we call them in the Bureau. And so we found Brighton Beach to be just a fascinating, chaotic, confusing place filled with opportunity to identify and investigate criminal activity.
Brighton in those days was a thriving, bustling, Russian-speaking community. You’d drive down Brighton Beach Avenue and all of the signs for all the stores were written in both English and Russian. It was not uncommon to walk down Brighton Beach Avenue and just not hear anyone speaking anything other than Russian. Places like Tatiana’s, Rasputin, the Odessa. All these very fancy restaurants that also operated as night clubs. And there was a thriving kind of social scene around those nightclubs, which often led to criminal activity and became the kind of focus of the organized crime community in New York at that time.
ProPublica’s Heather Vogell: You wrote about how the Russian mob started turning more toward financial crimes and business to pursue its goals. Could you talk a little bit about that transformation?
McCabe: Sure. This was one of the fascinating things about working on that squad. You could be working an extortion or kidnapping case one day, and then a really esoteric financial fraud the next. The thing that set the Russians apart from their Italian counterparts in the organized crime community was their creativity. They very quickly became the originators of the new scams.
So they did things like the tax cheating scams on gasoline and diesel fuel that were very common in the New York-New Jersey area in those days. They really professionalized the auto insurance scams around false accidents and medical mills and clinics where people would go and get processed to increase the billings against auto insurance companies. We did a lot of that work. And then, of course, we spent a lot of time on what became known as the Bank of New York money laundering scandal. So a few enterprising employees of the Bank of New York essentially took their private banking and internal computer software, which they had access to because one of them had a position in, I believe, the private banking section of Bank of New York, and began operating their own financial institution with individuals for the purpose of transferring money from Russia first to New York and then to many other places around the world.
Bernstein: We have spent the last year thinking about whether there is a line from some of the small-time crooks in Brighton Beach to Russian interference in the 2016 election. The list of people who seem to matter now were in some way connected to this scene. There's Felix Sater, who is connected to the Trump Tower Moscow deal; there was Michael Cohen. They later show up trying to build a Trump Tower Moscow. And then there's Yevgeny Dvoskin, who was convicted in the gasoline scam that you were just talking about in Brighton Beach and is now a banker in Russia.
McCabe: That's right.
Bernstein: So they were all connected to Brighton Beach years ago, and then they show up in negotiations and 2015 and 2016. What do you make of that?
McCabe: Well, it is at first blush curious, and then when you think about it a little bit longer, it makes perfect sense. Brighton Beach — we thought of it as kind of the Normandy landing in America for Russian organized crime folks.
So there were many people who had experience with organized crime in Russia who came to the United States and settled in Brighton Beach just because they thought it was the new frontier. And this is a place you can make a lot of money.
And then there were some who we believe were actually sent by organized crime criminal organizations in Russia for the purpose of organizing and developing business and things like that. So if you are someone, or you are an organization, that is not opposed to dealing with people with that sort of background, with those sorts of connections, with that sort of history, then you're gonna find yourself negotiating with and being represented by people who had experience in those early ’90s heydays of Russian organized crime and Brighton Beach.
That doesn't really surprise me that much that you see connections like that back to the Trump Organization.
Bernstein: OK, so let's talk about that a little more, because to us we're like, wow! That is crazy that these characters keep re-emerging in the story, and a generation later. So when you say it doesn't seem strange to you when you think about it, can you unpack that a little more? I mean, why is it that they're coming to work with the Trump Organization and the man who is now the president of the United States?
McCabe: Well, as I said, it makes sense to me as an investigator. I don't mean to say that it's a good thing. But these are the same folks in many cases — guys like Felix Sater and others people — who we investigated back in the early and mid-’90s. If you are an organization that doesn't have a problem with dealing with someone who has a known organized crime past and has actually been convicted of federal crimes for that same sort of activity, then you know you're going to find yourself making deals with and being represented by Felix Sater.
Bernstein: So how does that make you feel? Here's the president of the United States, who is in a business deal or talking about a business deal with somebody that you investigated when you started, and when the United States started, investigating the Russian mob.
McCabe: It is to my recollection and experience absolutely unprecedented and deeply concerning. From a strictly counterintelligence perspective, these are the exact sort of connections and historical overlaps that you look for when you're trying to determine whether or not a person or an organization could be subject to foreign influence.
If you think about it just in the context of a standard background check for access to classified information, one of the things that can slow down an unbelievably complicated background check for any individual is if they have a relative in a foreign country. That requires all kinds of other degrees of investigation because you have to understand who is that person and what position are they in and that sort of thing.
Now think of that in terms of someone who is taking extraordinary steps to develop a potentially billion-dollar real estate investment not in any foreign country, but in Russia. I mean, that is incredibly concerning to any counterintelligence professional who is trying to make an assessment as to when, how and where will that foreign government attempt to influence this person.
Vogell: So we have all these characters re-emerging from Brighton Beach. Can you talk about the significance of that in light of what we now understand in terms of the interplay between organized crime and the state security services and the top levels of the Russian government?
McCabe: Yeah. So there's a lot there. But I would start, I think, by saying it is very hard to desegregate organized crime from the government in Russia. I mean, we learned from the Mueller report that Vladimir Putin met quarterly with the oligarchs. The oligarchs are the modern-day masters of organized crime in Russia. They are the folks who, by one way or another, rose to the top of that pile and now control massive assets as a result. Huge fortunes.
Vogell: So how, in your understanding, did this tie back to the Russian government?
McCabe: The place where those two things come together — the organized crime figures and the government — is through the intelligence services. So there's always been this kind of synchronicity between the arm of the government that understands organized crime, knows who the players are, understands the businesses and the things that different individuals are engaged in, and has the kind of boots on the ground, if you will, to make those sorts of connections. Those are the intelligence services in Russia.
Bernstein: There is a mountain of evidence suggesting a Trump-Russia thing. But so far no one — not not us, not you, not Robert Mueller — has been able to say what that thing is.
And as you have puzzled over this relationship, does it seem possible that there in fact isn't a thing?
McCabe: I think that mountain of evidence that you referred to makes it strongly likely that there is a thing. Does that mean we'll ever figure out what it is? No. But it certainly means we should keep looking.
If you look at even just the Trumps’ history with Deutsche Bank: It's almost impossible to look at those series of relationships and transactions and defaults and failures followed by more and more loans. There has to be a thing at the core of that relationship between the Trump Organization and Deutsche Bank. Do we know what it is just yet? No. Will we ever? I'm not sure, but we certainly should keep looking.
Bernstein: So after the Mueller report was released, we locked ourselves in the big conference room and read it for hours.
McCabe: I did the same thing.
Bernstein: And then when we read it, we were like, well, we still have so many questions about Trump and his business dealings in Russia and how that might have linked to foreign influence in the election. If I'm hearing you correctly, I'm hearing you say that you still have a lot of questions, too.
McCabe: Well, I think anybody who follows these issues can't help but have a lot of questions. And I don't think that Director Mueller and his team went about their work assuming that they would answer every question about Donald Trump and about the Trump business enterprises and about his historical business entanglements with Russians or anyone else. They tried to be as narrowly tailored in their remit as they could possibly be. But sure, I still have many questions about the president and his associates’ connections with Russia. I think you can't help but but walk away from the report with a lot of things that you'd like to see more information about.
Bernstein: So you just switched to the second person you said “you can't help.” But we're not you. We didn't actually start this investigation; we didn't work on this investigation; we weren't investigating the Russian mob two decades ago. So I'm wondering what we are to conclude from that.
McCabe: What we are to conclude from the fact that I still have questions?
McCabe: Well, I think you see it the same way that I do.
I mean, I think that the issues that you address in the podcast are the best indication of that. I think even such basic things as, why is this president fighting tooth and nail to continue to withhold and conceal his own personal financial records in a way that no other president — Republican or Democrat — has ever endeavored to conceal? Those are the sorts of questions that, if you are an investigator, and you know this as well as I do, give rise to the curiosity that leads you to investigate.
Like why is it that there are so many representatives, so many people, even if it's just a handful, people who have official connections to sanctioned entities or banks in Russia who are interacting with the president, with his associates, with his family members? Have we ever seen that before by any president or really any high-level government official? I haven't, in the years that I've been doing this. So those are questions that I think were outside the scope of what Director Mueller was doing to some extent, but certainly questions I'd love to see answered.
Bernstein: Trump says in his Russia dealings he was acting like an ordinary businessman. So let's talk about the Trump administration for a moment. You know we are big students of the history of President Trump. And before he was President Trump, he was a businessman here in our city. And one of the tactics that he honed very well was to try to kill off investigations about him or that might potentially involve him before they started.
And just observing from the outside seeing these sustained attacks by the president on you, on Peter Strzok, both of you, forced out, forced off the Russia beat, makes me feel like there's this incredible brain drain going on. Are you alarmed by that?
McCabe: Well, I think that there's no question that this president, that's his approach to perceived adversity. He attacks people personally. He will stop at nothing to undermine reputations and employment and everything else. That's certainly what I've experienced. And Peter and others I think have been on the sharp end of that as well.
Am I concerned that there's no one left in the FBI to investigate these sorts of things? No. The investigative experience in that organization is deep and significant and done, hopefully, by people whose names you and the president don't know, so they can continue doing that work carefully and quietly in the way that it needs to be done.
Bernstein: In your book you write a lot about your private thoughts in the years that you were working in the Trump administration, and as you were having these strange and sometimes alarming conversations with the president. One of the strangest interactions at that time that you wrote about was a meeting with President Trump and the White House counsel Don McGahn when you were being pressured to say it was a good idea for the president to come and address the FBI. You were writing that your permission would somehow give him cover to do something he was planning to do. In the end, he didn't make the trip but you wrote, “The president and his men were trying to work me the way a criminal brigade would operate.” What did you mean by that?
McCabe: You know, it's a method of operation that I'd seen many times before in my own investigative history working in Russian organized crime. The leader of the crew, the leader of an organized criminal enterprise doesn't come out and tell someone what to do. They throw it out as an option that they want that other person to select. And so that way after the fact they can say: “Oh, I was just doing what they asked me to do. I wasn't forcing them to pay me $100 a week to protect their furniture store. I simply gave him the option to do that, and he selected it for himself.”
So it's a kind of a subtle, passive-aggressive kind of bullying that comes with an unspoken threat. That's very effective. I mean, organized criminal enterprises have been doing that for as long as organized crime enterprises have existed. And so that's what it felt like in the Oval Office that day as I was being kind of progressively backed into the corner to state the words that they wanted to hear me state.
Bernstein: Just to follow up with that, Jim Comey in his book references La Cosa Nostra. He also says the way that the president operated reminded him of the way the mob operated. But what are you guys saying here?
McCabe: It's impossible to interact with the president and the administration without drawing that comparison. If you're somebody who comes from an investigative background, somebody like Jim Comey or myself or anybody else who's had experience with organized crime, the parallels are undeniable. The parallels in the way business is conducted, the way conversations proceed, the way you are asked for personal loyalty rather than loyalty to the oath that you've taken, the way that everything is analyzed on this kind of black-and-white paradox: you're either with us or you're against us, you’re either on our team and a part of this effort or you are somebody that we need to destroy. It's just such an obvious comparison. I’m not try not trying to undermine Jim Comey or myself, but it is an undeniable parallel between the way this president conducts himself and those around him support him and conduct themselves and the things that we have seen from organized crime groups.
Bernstein: So is there an inference to be made from that or is that just an observation.
McCabe: That's just an observation. It certainly leads to another round of questions as to why somebody would conduct themselves that way. But until you see that entity actually conducting crimes, you're not really in a position to call it an organized crime enterprise, right? And I think that effort is ongoing.
Vogell: So we wanted to talk a little bit more about Robert Mueller, who you worked very closely with when he was FBI director.
Vogell: You had some wonderful and revealing personal details about his work habits and his general demeanor in the book. Especially, the one I liked, was about how on charts that showed different networks of criminal connections, he hated it when there were too many bold colors on those. Tell us a little bit more about that and what that taught you about his personality and how that was important at the time.
McCabe: You know, through your interactions with the director you would pick up those little gems like, oh my gosh, you can't use a diagonal line on your chart. They have to be straight lines and perpendicular lines. You can't use bold colors, as you've mentioned. He hated some case names, the code names that were used for major cases. And so you're constantly kind of navigating your work with an eye on like, oh you can't do this because the director wouldn’t like it, or you should do that because he’ll like it better.
So it was hard to do at the time and it could be a cause of great stress, but it was also a very effective way of completely transforming the way that we approached our work at least in the terrorism area.
Vogell: It was a level of discipline, is what you're saying?
McCabe: That's right. A level of discipline and accountability.
Vogell: There was at one point more recently when you were sort of pining for the old Bob Mueller “say nothing” FBI, right in the middle of all of these political firestorms that were going on.
Vogell: Did you feel that you had gotten a long way from where you were just a few years earlier with him? And not entirely necessarily because of the directors themselves, but the whole climate and environment had changed, and did you feel the whole organization struggling to adjust to that?
McCabe: You know, I did. It was a little bit of a nostalgic look back. There were many days I was in the Hoover Building wishing I was back in Brighton Beach. Those were simpler and in many ways more satisfying times. But we changed significantly as an organization, particularly in terms of the way that we approached our responsibilities to informing the public and informing Congress of what we were doing after Director Mueller left. And that's because those things had changed around us. In the age of 24-hour news cycles and social media and constant reporting and everything that we were doing, there was certainly a need for the Bureau to evolve in its approach to public relations and things of that nature.
And Jim Comey was the perfect guy to do it, because he had such significant abilities as a communicator and brought a great understanding of the impact of social media and media in general to the Bureau. But it did get us to a place where, you know, once you invite that guest over you're kind of stuck entertaining that guest for as long as they stay, which in this case was forever.
Bernstein: Forever is a long night.
McCabe: It is. It is.
Bernstein: So you have been through an awful lot in the last four years. How are you feeling now about the future of our country and national security?
McCabe: You know, like many people, I am still surprised day in and day out by the things, the developments that I see in the news each day. This latest constitutional crisis that we seem to be stumbling our way towards causes me great concern. Understanding that maybe we're at a point in history now where the executive branch not only doesn't cooperate with the legislative branch, but completely denies and ignores their constitutional responsibilities to conduct oversight. That's not someplace I ever thought we'd end up. Seeing things like that is tough. And I think it reinforces for us the incredible challenges that we face with this current administration.
However, I try to step back and take the long view. I try to remind myself that we as a nation have been through really infinitely tougher challenges before. We have made mistakes in the past, and we've gotten past those mistakes by owning up to them and acknowledging them transparently and honestly and having leadership with the courage and the moral backbone to do that and to guide us to a better place. And I think that that will happen for us this time as well. I've no reason to believe it won't. And so I am still confident and optimistic about the future. I don't know how long this kind of period of chaos will last, but it won't last forever. And I think at the end of the day we will navigate this in the same way we have every other challenge that's faced this country.
Bernstein: Thank you very much, Andrew McCabe.
McCabe: Sure. Thank you for having me. It's been really fun.
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Whispers of money laundering have swirled around Donald Trump’s businesses for years. One of his casinos, for example, was fined $10 million for not trying hard enough to prevent such machinations. Investors with shady financial histories sometimes popped up in his foreign ventures. And on Sunday, The New York Times reported that anti-money-laundering specialists at Deutsche Bank internally flagged multiple transactions by Trump companies as suspicious. (A spokesperson for the Trump Organization called the article “absolute nonsense.”)
The remarkably troubled recent history of Deutsche Bank, its past money-laundering woes — and the bank’s striking relationship with Trump — are the subjects of this week’s episode. The German bank loaned a cumulative total of around $2.5 billion to Trump projects over the past two decades, and the bank continued writing him nine-figure checks even after he defaulted on a $640 million obligation and sued the bank, blaming it for his failure to pay back the debt.
Trump, Inc. isn’t the only one examining the president’s relationship with the bank. Congressional investigators have gone to court seeking the kind of detailed — and usually secret — banking records that could reveal potential misdeeds related to the president’s businesses, according to recent filings by two congressional committees. The filings were made in response to a highly unusual move by lawyers for Trump, his family and his company seeking to quash congressional subpoenas issued to Deutsche Bank and Capital One, a second institution he banked with. Trump’s lawyers have contended that the congressional subpoenas “were issued to harass” Trump and damage him politically.
Earlier today, a federal judge in New York declined to issue a preliminary injunction to block the subpoenas. During the hearing in which he delivered that ruling, U.S. District Judge Edgardo Ramos said Congress is within its rights to require the banks to turn over Trump’s financial information, even if the disclosure is harmful to him.
For their part, the filings for the House Financial Services and Intelligence committees say they are “investigating serious and urgent questions concerning the safety of banking practices, money laundering in the financial sector, foreign influence in the U.S. political process, and the threat of foreign financial leverage, including over the President.” The inquiry includes investigating whether Trump’s accounts were involved in two large schemes involving Deutsche Bank and Russian clients.
The committees want to determine “the volume of illicit funds that may have flowed through the bank, and whether any touched the accounts held there by Mr. Trump, his family, or business.” Links to Russia will get a particularly close look. “The Committee is examining whether Mr. Trump’s foreign business deals and financial ties were part of the Russian government’s efforts to entangle business and political leaders in corrupt activity or otherwise obtain leverage over them,” the filing stated.
The episode explores some of the Trump-related moves by the bank:
➧ Deutsche Bank’s private wealth unit loaned Trump $48 million — after he had defaulted on his $640 million loan and the bank’s commercial unit didn’t want to lend him any further funds — so that Trump could pay back another unit of Deutsche Bank. “No one has ever seen anything like it,” said David Enrich, finance editor of The New York Times, who is writing a book about the bank and spoke to Trump, Inc.
➧ Deutsche Bank loaned Trump’s company $125 million as part of the overall $150 million purchase of the ailing Doral golf resort in Miami in 2012. The loans’ primary collateral was land and buildings that he paid only $105 million for, county land records show. The apparent favorable terms raise questions about whether the bank’s loan was unusually risky.
➧ To widespread alarm, and at least one protest that Trump would not be able to pay his lease obligations, Deutsche Bank’s private wealth group loaned the Trump Organization an additional $175 million to renovate the Old Post Office Building in Washington and turn it into a luxury hotel.
Like Trump, Deutsche Bank has been scrutinized for its dealings in Russia. The bank paid more than $600 million to regulators in 2017 and agreed to a consent order that cited “serious compliance deficiencies” that “spanned Deutsche Bank’s global empire.” The case focused on “mirror trades,” which Deutsche Bank facilitated between 2011 and 2015. The trades were sham transactions whose sole purpose appeared to be to illicitly convert rubles into pounds and dollars — some $10 billion worth.
A spokesperson said Deutsche Bank has increased its anti-financial-crime staff in recent years and is “committed to cooperating with authorized investigations.” The bank said it has policies in place to address the potential for conflicts of interest, including “special measures with respect to clients that hold public office or perform public functions in the U.S.”
The bank was “laundering money for wealthy Russians and people connected to Putin and the Kremlin in a variety of ways for almost the exact time period that they were doing business with Donald Trump,” Enrich said. “And all of that money through Deutsche Bank was being channeled through the same exact legal entity in the U.S. that was handling the Donald Trump relationship in the U.S. And so there are a lot of coincidences here.”
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President Donald Trump has refused to release his tax returns. He has sued his former accountants and Deutsche Bank to keep them from releasing his returns after they were subpoenaed to do so. And his treasury secretary has refused to provide the returns to Congress.
But bit by bit, The New York Times’ Susanne Craig and Russ Buettner have been gathering returns and tax data from Trump’s earlier years. In the latest installment, they show how Trump claimed over a billion dollars in business losses from 1985 to 1994. In some years, he lost more than any other taxpayer.
In this Trump, Inc. podcast extra, we speak to Craig about how she got the story, what she found and what to look for if and when the president’s tax returns are released. “You don’t lose this much money unless you’re a really bad businessman,” Craig told us.
When the Times asked for comment from Trump officials, a spokesperson initially said, "You can make a large income and not have to pay large amount of taxes.” Later, Trump's lawyer Charles Harder, wrote that the tax information was “demonstrably false.” He cited no specific errors.
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Find “Trump, Inc.” wherever you get your podcasts. This week’s episode examines the intersection of money, presidential access and security, and the push and pull between government spending and private profits at Mar-a-Lago.
In April 2017, Chinese President Xi Jinping visited Mar-a-Lago, President Donald Trump’s Palm Beach, Florida, estate and club, for a two-day summit. While Xi and his delegation stayed at a nearby hotel, Trump and his advisers stayed at the peach-colored, waterfront resort.
That evening, Trump and a dozen of his closest advisers hosted Xi and the Chinese delegation in an ornate dining room where they ate Dover sole and New York strip steak. Those sorts of lavish, formal gatherings are expected for a major bilateral summit.
But then there are less formal events. At some point later that evening, a group repaired to Mar-a-Lago’s Library Bar, a wood-paneled study with a portrait of Trump in tennis whites (titled “The Visionary”) hanging nearby. The group asked the bartender to leave the room so it “could speak confidentially,” according to an email written by Mar-a-Lago’s catering director, Brooke Watson.// View note
The Secret Service guarded the door, according to the email. The bartender wasn’t allowed to return. And members of the group began pouring themselves drinks. No one paid.
Six days later, on April 13, Mar-a-Lago created a bill for those drinks, tallying $838 worth of alcohol plus a 20% service charge. It covered 54 drinks (making for an average price of $18.62 each) of premium liquor: Chopin vodka, Patron and Don Julio Blanco tequilas and Woodford Reserve bourbon. Watson’s email did not specify how many people consumed the alcohol or who the participants were. (It stated that she “was told” the participants included then-strategist Steve Bannon and then-deputy chief of staff Joe Hagin. Bannon, who has said he stopped drinking years ago, said he didn’t drink at Mar-a-Lago and didn’t recall the episode. Hagin did not respond to requests for comment.)// View note
The bill was sent to the State Department, which objected to covering it. It was then forwarded to the White House, which paid the tab.
The unusual cocktail hour underscores a unique push and pull in the current administration: Donald Trump’s White House pays a bill and Donald Trump’s club reaps the revenue. (It’s unclear if the White House asked any of those drinking to reimburse the government; the White House declined to comment.)
The premium liquor costs are only the beginning of government spending at Mar-a-Lago that emerges in hundreds of pages of receipts and email correspondence between Trump Organization employees and staffers for the State Department, which oversees presidential diplomatic travel and works with the Secret Service and White House. The emails show that the president’s company refused to agree to what was essentially a bulk-purchase agreement with the federal government, and that it charged the maximum allowable federal rate for hotel rooms. The Trump Organization could be obstinate when it came to rates for, say, function rooms at Mar-a-Lago, a problem that was eased when the president signed a law lifting the maximum “micro-purchase” the government can make.
The emails have been released as part of an ongoing lawsuit between the nonprofit Property of the People, a Washington-based transparency group, and the federal government. Property of the People provided the emails and receipts to ProPublica and we, in turn, have added them to our tracker of government spending at Trump-owned properties for our interactive graphic Paying the President. (The State Department is expected to release an additional 1,800 pages of records as part of the lawsuit, which was filed under the Freedom of Information Act.)
In response to questions from ProPublica, the State Department asked for and received the documents described in this article. State Department officials promised a detailed response, but then declined comment.
The documents reveal the intersection between Trump’s conflicting interests. The emails show that “Mar-a-Lago wanted to have the government money without the government rules,” said Charles Tiefer, a law professor at the University of Baltimore who served on the congressionally chartered Commission on Wartime Contracting in Iraq and Afghanistan.
A few months after Trump’s inauguration, the State Department proposed a contract that would pay $200,000 for all room costs for federal employees who stay at Mar-a-Lago over the first term of his presidency. But Mar-a-Lago rejected the government's proposal. Instead, Trump’s resort bills the government the maximum permitted by federal rules: 300% of the government’s per diem rate, which works out to $546 per night.
Mar-a-Lago rejected the proposed flat-fee arrangement, according to the emails, because of concerns the club’s lawyers had about the Federal Acquisition Regulation, or FAR, which governs federal purchases and is overseen by contracting officers. FAR seeks to promote competition and maintain “the public’s trust.”
The emails suggest the Trump Organization was worried that the lack of competitive bidding could run afoul of federal rules, among other concerns. A State Department staffer wrote in May 2017 that Mar-a-Lago’s attorneys brought up federal “small business set-aside” requirements, which set strict rules for sole-source government bids for small businesses. The State Department staffer wrote that Mar-a-Lago’s “concerns are based on their general lack of knowledge on the applicability of the FAR regulations.”// View note
Mar-a-Lago and the Trump Organization did not respond to ProPublica’s requests for comment.
Since Mar-a-Lago wouldn’t agree to a bulk contract, the State Department had to go to Plan B. When it came to the meeting with China’s president, for example, the agency had to go into some contortions to make Mar-a-Lago’s $546 nightly room rate square with its rules on competitive bidding, given that there are other less expensive hotels nearby. At least 16 staffers stayed at the Hampton Inn in West Palm Beach; at least eight stayed at the nearby Hilton Garden Inn; and four others stayed at the Tideline Ocean Resort & Spa, where the press pool also stayed, according to a hotel manifest obtained through the FOIA lawsuit. The government-negotiated rates at those establishments ranged from $195 to $305 per night.// View note
(At least 24 White House and federal staffers stayed at Mar-a-Lago during the Xi visit. They included then-Secretary of State Rex Tillerson; then-chief of staff Reince Priebus; then-Secretary of Defense Jim Mattis; Treasury Secretary Steven Mnuchin; then-National Economic Council adviser Gary Cohn; and other advisers, past and present, such as Bannon, Hope Hicks, Stephen Miller and Sean Spicer.)// View note
The State Department also broke with protocol regarding taxpayer-funded travel and applied for a Citibank travel card just for Mar-a-Lago visits.
Meanwhile, other problems emerged:
• Mar-a-Lago can’t process charges over $10,000, which led to problems when the club split bills and charged the government card for multiple transactions, emails show.// View note
• Mar-a-Lago refused government requests to waive the costs of its "function room” for press and other official meetings in April 2017, leading to a near-violation of a $3,500 government spending cap. Last year, Trump signed a law that lifted that cap, known as the “micro-purchase threshold,” from $3,500 to $10,000. The law does not appear to have been aimed at facilitating spending at Mar-a-Lago, but it allows the club to avoid additional government contracting rules when charging sums below $10,000.
• In one instance, after the government was charged more than $3,500 for conference space at Mar-a-Lago, it asked the Trump Organization for a 10% discount so that it wouldn’t violate the micro-purchase threshold. Mar-a-Lago relented, but only after months of haggling.// View note
In the emails, the director of presidential travel support, Michael Dobbs, frequently described the creation of a charge card unique to Mar-a-Lago as a “headache.”// View note
As Steve Schooner, a professor of government contracting law at George Washington University, put it, “The fact that we have a State Department contracting officer saying this is a headache is a reminder that, but for the relationship with President Trump, this would not be a contract the government would be having. That's a problem."
Many of the expenses incurred by White House staff are arranged and paid for by the White House’s Office of Administration. These expenses are not required to be made public. The same goes for Secret Service spending to protect the president on such visits. (The Government Accountability Office released a report last month evaluating spending at Mar-a-Lago in February and March 2017 and found that a total of $60,000 was spent at the hotel during four trips; the figure ran to $13.6 million when costs for plane travel, secret service, security and other logistics were included.)
The State Department payments, and its work on behalf of the White House and other traveling staff, are considered public records.
Between 2015 and June of 2018, at least $16.1 million has poured into Trump Organization-managed and branded hotels, golf courses and restaurants from his campaign, Republican organizations and government agencies. Because Trump’s business empire is overseen by a trust of which he is the sole beneficiary, he profits from these hotel stays, banquet hall rentals and meals.
Federal spending rules don't specifically address agency-level spending on alcohol that is directly invoiced to the government, as occurred with the $1,000 bar tab at Mar-a-Lago. The State Department and the White House have had exemptions included in their appropriations legislation to allow for alcohol purchases.
Individual government employees are not permitted to use charge cards for "improper" purposes, such as alcohol, and federal per diem rules allow for charges for breakfast, lunch, dinner and related tips and taxes but specifically exclude alcoholic drinks.
Six government contracting experts said Mar-a-Lago may be violating rules requiring competitive bids. They argue that Mar-a-Lago’s practice of invoicing meeting spaces, hotel stays and meals separately is a way to get around federal spending rules.
“Mar-a-Lago didn’t want to compete, they wanted to sneak around the requirements, and charge much higher prices than the competition,” said Tiefer, who served as deputy general counsel with the House of Representatives for 11 years. “It’s not the first time in history that vendors have tried to get around the rules by charging individual components. This is familiar to every contracting officer. And it’s wrong. It’s not just a technicality. It’s not a game. The only safeguard the public has against the Trumps swallowing up all the government business is at least minimal competition.”
Several experts contend the State Department is exploiting loopholes in government spending rules to facilitate official gatherings at Mar-a-Lago. “It’s one of the biggest fears coming true, that they are bending over backwards to help the Trump Organization,” said Scott Amey, general counsel of the Project On Government Oversight. “I'm frustrated the State Department would exploit the system to bill Uncle Sam and the taxpayers. To have the government bicker to get a 10% discount shows the Trump Organization isn't putting the American public first. It's a worst-case scenario when it comes to conflicts of interest, with the president and his children putting themselves and profits ahead of the public."
“Trump, Inc.” is exploring whether the federal Consumer Financial Protection Bureau is still enforcing consumer financial laws and holding companies accountable. We want to hear from people who work at the agency or left recently (particularly those familiar with enforcement actions, supervisory exams and areas such as payday lending and debt collection). We’re also hoping to hear from consumers and companies who have interacted with the bureau in recent years. To find out more, click here.
On Thursday, the “Trump, Inc.” team gathered with laptops, pizza and Post-its to disconnect — and to read special counsel Robert Mueller’s report.
What we found was page after page of jaw-dropping details about the inner workings of the administration of President Donald Trump, meetings with foreign officials and plots to affect our elections. But we also found rich details on how Trump ran his business dealings in Russia, itself the subject of our recent episode on his Moscow business partners.
It backed up a lot of our earlier reporting: The deal with Andrey Rozov, a relatively unknown developer whose claim to international prominence was the purchase of a building in Manhattan’s garment district, did go further than agreements with other developers. The type of development they were hoping for would need signoff from Russia’s powers that be — namely, President Vladimir Putin — potentially putting Trump in the position of owing favors to a hostile foreign power. And the deal went on longer than the Trump campaign wanted the public to know, with the then-candidate rebuffing Michael Cohen’s concerns about the accuracy of his portrayal of his relationships with Russia.
Here are a few of our takeaways:
The deal was bigger…
The Mueller report puts the terms of Trump’s most infamous Trump Tower deal side by side with a failed prior deal with the family of Russian pop star Emin Agalarov. In doing so, it proposes an answer to why Trump chose to move forward with Rozov: he offered Trump a much better deal.
In fact, Cohen said the tower overall "was potentially a $1 billion deal.” Under the terms of the agreement, the Trump Organization would get an upfront fee, a share of sales and rental revenue, and an additional 20% of the operating profit. The deal offered by the well-known Agalarov developers, in contrast, would have brought in a flat 3.5%. We’d tried to reach Rozov to talk about the deal for our earlier reporting. He never responded.
For Trump, this agreement promised to be the deal of a lifetime.
There were more Russian contacts…
The report says Cohen and Felix Sater, a fixer who brought the Trump Organization together with the potential developer for the Moscow deal, both believed securing Putin’s endorsement was key. There was also plenty of outreach from Russians, many of them offering to make that very connection.
But even as the two were figuring out how to pitch the tower plan to Putin, at least three intermediaries who claimed to have connections to the Russian president were reaching out to Trump and his associates. They promised help with Trump’s business interests and his campaign, the report says.
One was Dmitry Klokov, whom Cohen looked up online and mistakenly identified as a former Olympic weightlifter. Klokov, in fact, worked for a government-owned electric company and was a former aide to Russia’s energy minister. He told Cohen he could facilitate a meeting with a “person of interest” — that is, Putin — and also offered help creating “synergy on a government level.” But Klokov’s overtures for talks on matters beyond mere business interests were rebuffed by Cohen.
The report also clarified that it was Sater who approached the Russian developer with the idea of a Trump Tower Moscow — and later brought his pitch to the Trump Organization. This sequence of events raises new questions about whether the tower deal, which Trump had wanted for decades, was part of the Russian government’s multiple intelligence approaches to Trump and his advisers at the time.
One other figure in our previous Trump Moscow episode surfaced again in the Mueller report: Yevgeny Dvoskin, a Russian national with a U.S. criminal record and alleged ties to organized crime. Dvoskin is now a part-owner of Genbank, a small Russian bank sanctioned by the U.S. Treasury. He grew up in Brighton Beach at the same time as Sater, who, in 2016, called on Dvoskin to invite Trump and Cohen to Russia for an exploratory visit. To arrange the invitation, Dvoskin asked for copies of Cohen’s and Trump’s passports, which Cohen was happy to provide. The Mueller report says that Trump’s personal assistant even brought Trump’s passport to Cohen’s office, but that it is not clear whether it was ever passed on to Sater.
Sater declined to comment for the podcast. Genbank and Dvoskin did not respond to earlier requests for comment.
And there was more cover-up…
Mueller describes continued efforts to mislead investigators and the public about the Trump Moscow deal and associates’ contacts with Russian officials. Many of the details are gleaned from Cohen’s cooperation.
Cohen confronted Trump after he denied having business ties to Russia in July 2016 and pointed out that Trump Tower Moscow was still in play. “Trump told Cohen that Trump Tower Moscow was not a deal yet and said, ‘Why mention it if it is not a deal?’” according to the Mueller report.
To maintain Cohen’s loyalty during the investigation, multiple Trump staff members and friends told him the “boss” “loves you,” according to the Mueller report. “You are loved,” another associate told him in an email. Cohen also said the president’s lawyer told him he’d be protected as long as he didn’t go “rogue.”
The report concludes that active negotiations in Moscow continued into the summer of 2016. Cohen told Mueller’s team that the project wasn’t officially dead until January 2017, when it was listed with other deals that needed to be “closed out” ahead of the inauguration.
After admitting to lying to Congress about when the Moscow deal fizzled, Cohen told Mueller about the “script,” or talking points he’d developed with Trump to downplay his ties to Russia. He also said he believed lawyers associated with his joint defense agreement — including attorneys for the president — edited out a key line about communications with Russia from his congressional testimony. The offending line: “The building project led me to make limited contacts with Russian government officials.”
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In this Trump, Inc. podcast extra, we talk about what we know, what we don’t know and what we still want to know after Attorney General William Barr gave his summary of special counsel Robert Mueller’s report. Trump, Inc co-hosts Andrea Bernstein and Ilya Marritz joined Maya Wiley, professor at the New School and MSNBC Legal Analyst on WNYC’s Brian Lehrer show to review the on-going investigations.
Collusion was never the only thing. For the last year and a half, we have been looking at the conflicts of interest that pervade President Donald Trump’s administration. That trail has led us from Brighton Beach, Brooklyn, to Panama, India and, yes, Russia, where we reported on how Trump’s associates appealed to the Kremlin for help at the same time the Kremlin was preparing an attack on the 2016 elections.
And Andrea Bernstein also talks with Eric Umansky, Trump, Inc. Editor and Deputy Managing Editor at ProPublica, about how to interpret what we know (and don't know) about the special counsel's report.
This week, we’re exploring President Donald Trump’s efforts to do business in Moscow. Our team — Heather Vogell, Andrea Bernstein, Meg Cramer and Katie Zavadski — dug into just who Trump was working with and just what Trump needed from Russia to get a deal done. (Listen to the podcast episode here.)
First, the big picture. We already knew that Trump had business interests involving Russia during the 2016 presidential campaign — which he denied — that could have been influencing his policy positions. As the world has discovered, Trump was negotiating to develop a tower in Moscow while running for president. Former Trump lawyer Michael Cohen has admitted to lying to Congress about being in contact with the Kremlin about the project during the campaign.
All of that explains why congressional investigators are scrutinizing Trump’s Moscow efforts. And we’ve found more:
• Trump’s partner on the project didn't appear to be in a position to get the project approved and built. On Oct. 28, 2015 — the same day as a Republican primary debate — Trump signed a letter of intent with the partner, a developer named Andrey Rozov, to build a 400-unit condominium and hotel tower in Moscow.
In a letter Rozov wrote to Cohen pitching his role, he cited his work on a suburban development outside of Moscow, a 12-story office building in Manhattan’s Garment District (which he bought rather than constructed) and two projects in Williston, North Dakota, a town of around 30,000.We looked into each of them.
Rozov’s Moscow project has faced lawsuits from homeowners, some of which have settled and some of which are ongoing, and the company developing it filed for bankruptcy. It remains unfinished.
Property records show that Rozov owned his New York building for just over a year. He bought it for about $35 million in cash, took out an almost $13 million loan several months later, made no significant improvements and then sold it for a 23 percent profit. Trump’s former business associate, Felix Sater, who once pleaded guilty to financial fraud and reportedly later became an asset for U.S. intelligence agencies, is listed on the sale as an “authorized signatory.”
We did find a developer with a workforce housing project in Williston, as well as approved plans for a mall/hotel/water-park. (The town attracted interest from developers as the center of North Dakota’s oil boom earlier in the decade.) Rozov’s name doesn’t appear on materials relating to the company, but a person familiar with the project confirmed that this is what Rozov was bragging about in his letter. Oil prices cratered and the mega-mall was never built.
Rozov did not respond to an email seeking comment.
Here is a rendering of the plan:Plans for "Williston Crossing," a 218 acre site in Williams County, North Dakota.(Williston Crossing Major Comprehensive Plan Amendment Presentation/Gensler)
• An owner of a sanctioned Russian bank that vouched for the Trump Organization in Moscow had a criminal history that included involvement in a Russian mafia gas-bootlegging scheme in the U.S.
Making a business trip to Russia requires an official invitation. According to correspondence published by BuzzFeed, Sater arranged for an invitation from Genbank, a small Russian bank that expanded significantly in Crimea after Russia invaded in 2014.
One of Genbank’s co-owners is Yevgeny Dvoskin, a Russian-born financier who grew up in Brighton Beach at the same time as Sater. Dvoskin pleaded guilty to tax evasion in federal court in Ohio for the bootlegging scheme and spent time in prison. He was later deported to Russia, according to press accounts. In Russia, he remained tied to criminal networks, according to the Organized Crime and Corruption Reporting Project. (We were unable to reach Dvoskin for comment.)
• We also get a hint about why Trump may have needed the Kremlin to get his deal done. Some of the sites under consideration for a potential Trump Tower Moscow were in historic areas with strict height restrictions. Just a few years before the 2015 letter of intent that Trump signed, Moscow Mayor Sergey Sobyanin pledged to do all he could to prevent the city from being overrun by skyscrapers.
If Trump’s deal was to move forward in some place like the Red October Chocolate Factory, one of the spots that was considered, getting around zoning restrictions would need help from the very top.
Sater and Cohen were also kicking around a plan to offer Putin the building’s $50 million penthouse, according to BuzzFeed. That need for special help, combined with the potential offer of a valuable asset, raises questions about whether the plan ran afoul of the Foreign Corrupt Practices Act, according to Alexandra Wrage, the president and founder of Trace International, an organization that helps companies comply with anti-bribery laws. “What you describe is certainly worrying,” she said.
The Trump Organization, the White House, and Michael Cohen did not respond to requests for comment.
For his part, Sater is scheduled to testify before the House Intelligence Committee on March 27. The committee members will undoubtedly have plenty of questions.
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Being investigative journalists means we’re constantly asking questions. But these days, it also means people are asking us questions. One we hear a lot nowadays: “When is the Mueller report coming — and what will it say?”
Our answer: We don’t know. But we’ve realized that perhaps we can be more helpful than that. We don’t have insider information on special counsel Robert Mueller’s office. (Sorry!) But we have spent lots of time investigating the president and his businesses. And we thought we’d share some of the perspectives we’ve gained.
Here are six things to keep in mind.
We don’t know what Mueller will report, when he will report it or even whether we’ll be able to read it. That’s because Congress changed the law after special prosecutor Kenneth Starr’s salacious tell-all on President Bill Clinton. When Mueller is done, he has to give a report to Attorney General William Barr. But Barr can choose to keep the report confidential. Barr only has to give a summary to Congress. If Barr doesn’t make Mueller’s actual report public, Democrats will almost surely subpoena it. Then get ready for a fight.
Stop focusing on “collusion.”
“Collusion” has come to be a kind of shorthand for ... basically doing something bad with Russia. But the term is both too vague and too narrow. For one thing, “collusion” is not itself a clearly defined crime. It is a crime to commit a conspiracy against the United States — for which there is a high bar: proving an intent to undermine the government.
Remember: We already know a lot.
We already know Trump had a hidden conflict of interest involving Russia during the campaign. Despite publicly denying it, Trump was negotiating to develop a tower in Moscow while he was running for president. That means Trump had interests involving Russia — which voters didn’t know about — that could have been influencing his policy positions. That’s all problematic on its own.
We also know that Russian government interests hacked the emails of the Democratic National Committee, handed them to Wikileaks, and that at least one Trump ally, Roger Stone, was in touch with Wikileaks.
Don’t expect answers to everything, or even most things.
That’s not Mueller’s job. He is a prosecutor. His job is first and foremost to look for crimes. And while he can, and has, looked beyond Russian interference in the election, he’s unlikely to dig into everything. And, of course, there are lots of areas worthy of scrutiny beyond Russia: Trump’s businesses, his inauguration, his hush money payments and more.
Mueller is not alone.
There are lots of active investigations looking into all these issues. A partial rundown of just the ones we know about: Federal prosecutors in Manhattan are investigating the inauguration and other matters, the New York attorney general is investigating the Trump Foundation, and the District of Columbia’s attorney general and the state of Virginia are suing Trump over emoluments. There are also a whole host of coming congressional investigations.
The final judgments on Trump’s actions will be political, not legal. (Caveats apply.)
Whatever Mueller ultimately files, he is very unlikely to charge the president with a crime. Since Watergate, the Department of Justice has had a policy that a sitting president should not be indicted. And Mueller is a stickler for the rules.
So: Stay tuned. Stay patient. And while you wait for the report, check out our conversation with On The Media – they’ve created a handy “Breaking News Consumers’ Handbook Mueller Edition.”
For a year now, Trump, Inc. has been digging into the president’s business. We’ve reached out repeatedly to the Trump Organization with questions. Mostly, we haven’t gotten answers.
Yesterday was different.
Michael Cohen worked for a decade as the president’s in-house attorney and fixer. In his testimony before the House Oversight Committee, he offered a detailed, insider account of alleged fraud, secrecy and cover-ups.
In many cases, what he described connected to the very stories we’ve been digging into:
-- How Cohen came to work for Trump.
-- How Trump often changed the value of his assets, sometimes to seem richer, sometimes to lower his taxes, like at his golf courses.
Trump, Inc. hosts Andrea Bernstein and Ilya Marritz sat down to review what we’ve learned and what it means for ongoing investigations into the president and his business. Dan Alexander from Forbes joined them.
This week, Trump, Inc. goes inside the Trump International Hotel in Washington, D.C. Located in the Old Post Office, the hotel is at the center of three lawsuits alleging President Donald Trump is violating the Constitution’s Emoluments Clause barring the president from taking gifts from foreign governments.
We stayed the night.
Among the many prominent guests we saw: Nigerian presidential candidate Atiku Abubakar and his entourage. Nigeria’s elections were last weekend, and Abubakar was the main challenger to the incumbent president out of a crowded field of candidates. After a tightly contested race, he came in second.
Abubakar’s visit is surprising for several reasons. He had been reportedly barred from the U.S. for nearly 10 years for his alleged involvement in corruption while he was Nigeria’s vice president. Perhaps you remember the $90,000 in cash that was found in Louisiana Congressman William Jefferson’s freezer back in 2005? That was allegedly a bribe for Abubakar.
A 2010 Senate report on foreign corruption dedicated an entire chapter to Abubakar and his wife. The report detailed their efforts to transfer $40 million in “suspect funds” into the U.S. through offshore accounts while Abubakar served as vice president.
Abubakar has never been arrested or charged, either in the U.S. or Nigeria, and says he has never taken bribes. He has also called the reports of his immigration ban “misinformation.”
Last year, Abubakar hired a lobbyist, Scott Mason, who was a former Trump campaign adviser. Disclosures filed by Mason show he lobbied Congress, the State Department and the National Security Council on “visa issues.”House of Representative lobbying disclosure for Scott Mason from Holland & Knight for Atiku Abubakar.(WNYC)
Mason and his lobbying firm did not respond to requests for comment.
Abubakar’s party also hired another firm close to Trump: Ballard Partners, run by Brian Ballard, former finance co-chairman for Trump’s campaign in Florida and a top Trump fundraiser. Years ago, he was Donald Trump’s lobbyist when he wanted to establish a casino in the Sunshine State. Now, he’s what Politico called “The Most Powerful Lobbyist in Trump’s Washington.” Filings by the firm say only that it was working on “advocacy services relative to US-Nigeria bilateral relations.”
James Rubin, a partner at the firm, said they were hired to work on “promoting free and fair elections” in Nigeria.
The visa status of individuals is confidential, but Reuters has reported that the U.S. government temporarily suspended Abubakar’s visa ban after a push by the lobbyists.
A spokesperson from the State Department declined to comment on Abubakar’s case. But the spokesperson said, “In cases where the secretary of state has credible information that officials of foreign governments have been involved in significant corruption … those individuals and their immediate family members are ineligible for entry into the United States.”
Abubakar isn’t the only foreign political figure to patronize the Trump International Hotel in Washington since the 2016 election; there’s a long list of others. Dignitaries from Saudi Arabia, Kuwait, Bahrain, Malaysia and Azerbaijan have all lodged at the Old Post Office. And this past year, the Trump Organization reported an increase in foreign profits to their hotels.
For a year, “Trump, Inc.” has been digging into the 2017 inauguration. That reporting led us to look closely at the man Donald Trump picked to run the event, Tom Barrack, a wealthy businessman who’s been friends with Trump for decades.
As we were finishing our Barrack episode — just out this week — the House Oversight Committee released a report detailing how the Trump administration pursued a plan to export nuclear technology to Saudi Arabia.
The plan had been championed by then-national security adviser Michael Flynn, who could have profited from it. The efforts continued despite warnings from ethics officials and staff at the National Security Council.
And who was in talks to lead the initiative? Tom Barrack.
The House investigation confirmed some reporting by one of our ProPublica colleagues, Isaac Arnsdorf, that goes back to late 2017. So we decided to bring Isaac in for this podcast extra to help us understand who was behind the plan and what they wanted.
Barrack has declined our requests for an interview, and Flynn’s lawyer and the White House have not responded.
Last year, our Trump, Inc. podcast with WNYC explored the mystery of how Donald Trump’s inaugural managed to raise and spend $107 million. A lot has happened since then.
We now know the inaugural committee is the subject of a wide-ranging criminal investigation. And we at Trump, Inc. broke the news that some of the inaugural money went to Trump’s own business – and that Ivanka Trump played a role in the negotiations. That could violate tax law. (A spokesman for Ivanka said she simply wanted a “fair market rate.”)
In our latest episode, we take a deep dive into the many roles of Tom Barrack: Trump’s old friend; wealthy investor with decades-long ties to the Middle East; and the man who chaired the now-under-investigation inaugural committee.
Before the inauguration, Barrack described the role as “the worst job in the world.” So why’d he take it?
One possible clue comes from an eight-page strategic plan dated one month after the inauguration on the letterhead of the company he founded. Another reason could be a plan he supported to export U.S. nuclear technology to Saudi Arabia.
Barrack has spent his career cultivating the powerful. He lives by twenty “Rules for Success,” including: “Punctuality is the courtesy of kings” and “The jungle is a safer place with professionals than a paved road with amateurs.”
Barrack did not agree to an interview. His spokesman, and the inaugural committee, did not respond to our questions. A committee spokeswoman previously said its finances “were fully audited internally and independently and are fully accounted.” WNYC
Elsewhere in the podcast, we report that the inaugural committee was so eager to book space at Trump’s hotel in Washington that it encouraged hotel management to cancel another event -- a prayer breakfast -- so space would be clear for the inaugural celebration, according to a lawsuit against the committee filed by the reverend who organized the breakfast.
The hotel did briefly cancel the breakfast, invoking “force majeure,” or an act of god. In this case, they predicted civil unrest over the inauguration week.
Court filings by prosecutors last week shined a light on the business lives of two men who worked get Donald Trump elected president: former Trump personal attorney Michael Cohen and former Trump campaign chairman Paul Manafort.
Trump, Inc co-hosts Ilya Marritz and Andrea Bernstein talk with Franklin Foer of The Atlantic about what the documents show -- and the further questions they raise.
Among those questions:
- What exactly was Manafort’s connection to a business partner who some in the intelligence committee believe to be a Russian intelligence asset?
- Why did Russian officials approach the Trump campaign about potential “political synergy”?
- How much did Trump know about Cohen’s coordination of hush money payments to two women who alleged they had affairs with the now-president?