Tefvik Arif was the chairman of Bayrock Group, the murky company that partnered with Donald Trump to build Trump SoHo in lower Manhattan.
Figuring out who he is was not an easy task.
Tevfik Arif (Тевфик Ариф) was born Toifik Arifov (Тофик Арифов) on May 15, 1953 in the Soviet Socialist Republic of Kazakhstan. He was one of four brothers born to a Turkish family in the Jambyl Region in northern Kazakhstan.
That’s about the only thing we know about his early life with any certainty.
What he did for the next 38 years is unclear. The oft-repeated facts of his background come from a short profile on Arif published in Real Estate Weekly in 2007, just as Trump was preparing to kick off sales of Trump SoHo.
Real Estate Weekly reported that Arif had received a degree from Moscow Institute of Trade and Economics and then worked in the Soviet Ministry of Commerce and Trade in the former Soviet Union for 17 years, where he served as the chief economist and deputy director of the Ministry’s Department of Hotel Management.
Many journalists have repeated this story. It may be true, but no one seems to have bothered to check. It’s worth noting that this is the only reference to a Soviet Ministry of Commerce and Trade that I found on the Internet. There is a Russian ministry that has this name, but I could find nothing from the Soviet era. (Arif did not speak English very well, so it’s possible this is a mistranslation.)
There was, however, something called the USSR Chamber of Commerce and Industry, which was run by the KGB and spied on the West. A third of the chamber’s staff were KGB, according to a US State Department report that cited CIA information. And the USS Chamber of Commerce and Industry did have a hotel division, V/0 Sovintsentr, which ran a trade center and various Moscow hotels.
In the Russian press, Arif is affiliated with the Soviet Ministry of Foreign Trade (which did exist). Or maybe he was just a Soviet hotel bureaucrat, as he claims. Whatever Arif did for the first 40 odd years of his life, he hasn’t been very open about it.
Trans World Group
After the collapse of the Soviet Union in 1991, Arif left the government and made a career leap. A huge leap.
In a court proceeding in Turkey, the former Soviet hotel bureaucrat testified that he “worked in energy sector, chemical sector and metallurgy sector. I was producing coal in Russia and copper in Kazakhstan. Due to lack of coal, it was not possible to make production. I started to organize them.” He started a private company called the Speciality Chemicals Trading Co., trading in “chrome, rare metals and raw materials.”
And then he went to work for Trans World Group. TWG was a British company headed by two brothers, David and Simon Reuben. After the Soviet Union collapsed, the Reubens moved aggressively into metals production, buying up smelters and refineries.
As foreigners, however, the Reubens needed locals to build their business. Enter Arif. He became an “agent on the ground” — a fixer, in other words — for TWG in Kazakhstan, according to internal company documents reviewed by theblacksea.eu, an online investigative Website.
Arif apparently did his job well. Very well. In a few years, TWG’s holdings of steel, iron, chrome and alumina refineries in Kazakhstan generated one fifth of the entire country’s gross revenues.
Maybe Arif was just a Soviet hotel bureaucrat who seized a once-in-a-lifetime opportunity to get into the post-Soviet metals sector. But his hotel background would have been of little use to TWG. What TWG needed was someone with deep connections in the country’s political and business circles. The kind of people who had those connections in the Russia of the 1990s were either ex-KGB, or mobsters.
Consider another pair of fixers the Reubens brought into TWG in 1992. They were the Cherney brothers, Lev and Michael, and they formed a 50-50 partnership with TWG. It was a successful partnership. With the Cherneys help, TWG grew by leaps and bounds. The problem for the Reubens was that Michael Cherney’s name soon became publicly linked to Russian organized crime groups. The Reubens quickly bought out Cherney’s share of TWG for $410 million.
Swiss authorities in 1996 accused Michael Cherney of “drug trafficking, money laundering, fraud and sponsoring murder” on behalf of a Russian organized crime group run by “V Ivankov.” This was the infamous Russian mob boss nicknamed “Yaponchik” who had settled in New York, where the FBI found him hiding out in Trump Tower and Trump’s New Jersey casino.
Michael Cherney has repeatedly denied these allegations, which he blames on his archenemy and former partner Oleg Deripaska, one of the wealthiest men in Russia. In 2008, the federal Swiss court exonerated him of the charges, but two years later, Spain issued an international arrest warrant for Michael Cherney’s arrest on money laundering charges.
Did Arif have links to the Russian Mafia? Felix Sater, who worked under Arif at Bayrock, seems to think so.
The Wall Street Journal reported that Sater and his attorney threatened to expose Arif’s past unless he paid Sater’s attorney fees. Sater warned of a possible lawsuit that would include details of Arif’s wrongdoing “in the post-Soviet metals business in Kazakhstan.”
In a personal memo, Sater was even more blunt: “The headlines will be, ‘The Kazakh Gangster and President Trump.'”
A High-Net Worth Individual
“The head of the family is my uncle Roustam Arif [sic],” Tevfik’s son Arif writes in 2013 in correspondence obtained by theblacksea.eu. “In our culture, the patriarch is usually the oldest member of the family. Roustam is my father’s oldest brother. Even though my father is a successful entrepreneur in his own right (hotels, construction and real estate), his younger brother Refik Arif is the principal figure in the main family business (commodities).”
In the mid-90s, Refik reportedly acquired control of the Aktyubinsk Chromium Chemicals Plant (ACCP) in Aktobe, in north-western Kazakhstan, near the border with Russia. Refik also established a highly profitable chemicals trading business. And this is an important piece of the story, because the money for Bayrock, at least part of it, came through Kazakhstan.
Consider that for a moment. The Arifs managed to pool enough capital and influence to buy what turned out to be a highly lucrative chemical plant. How was this possible? What really happened in Kazakhstan in 1990s?
Around 1999, Refik Arif’s chemical trading business was generating so much cash that the family retained Hamels, a UK tax consultancy, to help structure their investments. On its website, Hamels describes its typical clients as “high net worth individuals seeking to minimize their respective tax burdens on current income or investment streams…”
In a 2011 memo, Hamels partner Zig Wilamowski wrote, “Mr. Refik Arif is one of four brothers who have over many years built up a substantial and profitable international business from the sale of chrome-based chemicals.” Williamowski said he was in a position to verify the “good origin” of the Arif family’s wealth. You can read the document here.
With the help of Hamels, the Arifs set up a network of shell companies, many of which were established in the Caribbean tax haven of the British Virgin Islands. These companies included Bennington Trade Assets Ltd., which owns property in the center of London and Merlin Trading Assets Ltd., which owns an executive jet. There are too many companies to name them all. Many are found in the Panama Papers leak of offshore companies founded by the Panamanian law firm Mossack Fonseca.
The real moneymaker for the family was Castello Global Ltd., which handled the profits from the chrome trading business. Here is a breakdown of Castello Global’s profits:
So much money was pouring out of Kazakhstan that Tevfik Arif decided it was time to try something big. Really big.
He moved to New York and set out to do a real estate deal with the biggest and the best. So he set up offices of his new company Bayrock Group in Trump Tower, one floor below Trump’s own offices.
To be continued…
Call me skeptical.
I don’t believe that Facebook won the election for Donald Trump. That’s the claim put forth in this hagiographic profile of Jared Kushner in Forbes and in many other media outlets.
The traditional campaign is dead, another victim of the unfiltered democracy of the Web–and Kushner, more than anyone not named Donald Trump, killed it.
We see these stories every time a new president is elected. A while back it was Obama’s “data crunchers.” This time, the key to Trump’s victory, Kushner would like us to believe, were computer algorithms that targeted potential Trump supporters with social media to stunning effect.
The secret weapon was Cambridge Analytica’s computer algorithms that figure out who you are based and what motivates you based on all the times you click Like on Facebook, as Cambridge Analytica’s Jack Hansom explains in this video:
These algorithms turned up some surprising findings. Liking the New Orleans Saints mean you’re less likely to be “conscientious,” i.e. do the right thing. And liking the Energizer Bunny means you’re more likely to be neurotic.
So what? Well, one or two of these things don’t tell you much, but the average person has hundreds of Facebook Likes which allows Hansom and his colleagues to build a surprisingly accurate picture of your personality. You can test this on yourself here.
Facebook allows you to drill down to the kind of person in the kind of place you want. (You can even reach “Jew haters” in Idaho if you wish.) Here’s Cambridge Analytica’s CEO Alexander Nix showing how his company’s model could be used to drill down to find every “persuadable” gun rights advocate in Iowa:
It’s very impressive (and very creepy), and it makes for a good story, one that Silicon Valley loves in an everybody-is-stupid-except-for-me way.
But the problem with the claim that Kushner and his machine learning wizardry won the election for Trump is that everybody was doing it. Hillary Clinton had a team of mathematicians and analysts crunching data. Ted Cruz had hired Cambridge Analytica as well, but then he ran into the Trump train.
I may be wrong, but I’d wager the $1.8 billion worth of free airtime that TV networks gave Trump every time he opened his trap probably had a lot more to do with him winning the election than Cambridge Analytica.
Trump knows how to get on TV: He is a promotional genius. What will he say next? He’s a modern day PT Barnum and Jeff Zucker‘s CNN couldn’t get enough.
Setting that aside, the Facebook/Jared Kushner story is still pretty important. And what’s important about it is that Special Counsel Robert Mueller thinks it’s pretty important. Facebook may not have won Trump the election, but it may seriously damage his presidency.
CNN reported Sunday that Mueller, who’s investigating Trump’s links to Russia, had served Facebook with a search warrant. Mueller was interested in the $100,000 worth of ads purchased by bogus accounts that Facebook on Sept. 6 acknowledged had “likely operated out of Russia.”
Mueller’s search warrant for Facebook is a big deal, a former federal prosecutor explains:
Mueller would have had to show the judge that there was reason to believe that one or more foreign individuals committed a crime and the evidence of the crime could be found on Facebook’s servers.
The crime is that foreign nationals are prohibited from contributing money “or other thing of value” (like $100,000 worth of Facebook ads) in connection with an election. It’s also against the law to solicit, accept, or receive such a contribution. (Here is the statute.) And if someone on the Trump campaign knew about the Russian Facebook ads and did nothing to stop it, that is also a crime — aiding and abetting.
Did someone on the Trump campaign know about the Russian Facebook ads. We don’t know yet, but the answer lies in targeting. To put it in Watergate terms: Who targeted whom and when?
Were the Russian Facebook ads and the Trump campaign targeting the same people? And if so, how did a bunch of Russian trolls in St. Petersburg or Vladivostok or where ever know to target, say, black women in Milwaukee or rural voters in Michigan’s Upper Peninsula, for example?
I tried to ask Alex Stamos, Facebook’s chief security officer, but didn’t get a reply.
This question intrigues Sen. Mark Warner, the leading Democrat on the Senate intelligence committee, as he said on the Pod Save America podcast:
Warner: When you see some of the explanation and some of the fact that it appears that, for example, women and African Americans were targeted in places like Wisconsin and Michigan, where the Democrats were too brain dead to realize those states were even in play … It was interesting that those states seem to be targeted where the bots — where they could could create a lot of these fake Twitter and Facebook accounts, could in fact overwhelm the targeted search engines that would end up saying on your news feed, you suddenly got stuff that “Hillary Clinton’s sick” or “Hillary Clinton’s stealing money from the State Department.”
I get the fact that the Russian intel services could figure out how to manipulate and use the bots. Whether they could know how to target states and levels of voters that the Democrats weren’t even aware really raises some questions. I think that’s a worthwhile area of inquiry.
How did they know to go to that level of detail in those kinds of jurisdictions?
Vietor : I wonder if they just asked Jared [Kushner] like Trump does with all of his questions. We’ll find out.
Warner : We’ll find out. More to come on that.
Sen. Warner thinks it’s a worthwhile line of inquiry, and it’s a good bet Mueller does too. The information Facebook handed over to Mueller included the targeting criteria the bogus Russian accounts used, The Wall Street Journal reported.
An unnamed Trump campaign staffer told CNN that the key to the whole inquiry may be found on Facebook’s servers.
Only Facebook can answer three critical questions: were the same databases used by the Trump campaign and Russian operatives to coordinate targeting of voters; was money used to promote pro-Trump posts, and, if so, how much was spent and by whom; and will Facebook reveal if bots were successfully used to push fake news posts?
Hopefully, Robert Mueller knows the answers.
I just finished reading The Scorpion and the Frog, the book by Felix Sater’s Wall Street pal, Salvatore Lauria.
It’s an interesting read about Sater’s time on Wall Street and his dealings with Mobsters.
Even more interesting are the details about his cooperation with the CIA in Russia against al Qaida that helped keep him out of prison for racketeering.
A lot of these details were new to me, so I thought I would post a little summary of what’s in the book.
Sater’s lawyer, Robert S. Wolf, has called some of the CIA-related portions of the book “fabricated.” However, The Scorpion and the Frog was the subject of a 2002 legal proceeding in federal court in Los Angeles. Lauria sought to stop publication of his own book. Not because it was fiction, but because it told the truth.
According to Lauria, he had agreed to write the book on the condition that his real name not be used. His publisher, however, went ahead and used his real name, and Lauria was worried that he could be physically harmed by the people named in the book. A bench trial was held and in the end a federal judge cleared the way for the book’s publication.
With that said, here’s my abridged version of what the book says:
Felix Sater walked away from his Mob-linked Wall Street business in 1996 and headed for Russia. He would spend the next two years there before returning to the United States to surrender to the FBI in 1998 and plead guilty to racketeering.
Sater had two jobs in Russia. The first was a deal to bring AT&T bulk long distance service and pre-paid phone charge cards to the country. The second was to find a deal that could get him out of jail.
Sater began to develop contacts at secret Russian military installations known as closed cities, which held “some of the great secrets of the Soviet Union,” Lauria wrote.
The closed cities were opening up. Their representatives were contacting “various countries and rogue organizations interested in buying everything from missiles to assault rifles to millions of rounds of ammunition,” Lauria wrote. They also would make munitions and missiles “to order.”
“We ran into guys selling shiploads of arms to Arabs and other Muslims — Libya, Iraq — countries that were hostile to the United States,” Lauria wrote.
At some point, according to the book, Sater made an initial contact with “someone connected to the CIA.”
Sater gave this version of events to New York magazine.
One night, Sater told me, he went to dinner with a contact that he assumes was affiliated with the GRU, the Russian military-intelligence agency, where he was introduced to another American doing business in Moscow, Milton Blane. “There’s like eight people there,” Sater said, “and he’s sizing me up all dinner long. As I went to take a piss, he followed me into the bathroom and said, ‘Can I have your phone number? I’d like to get together and talk to you.’ ” Blane, who died last year, was an arms dealer. According to a government disclosure made 13 years ago in response to a Freedom of Information Act query, Blane had a contract with the Defense Department to procure “foreign military material for U.S. intelligence purposes.” Sater says the U.S. wanted “a peek” at a high-tech Soviet radar system. “Blane sat down with me and said, ‘The country needs you,’ ” Sater said.
Back to the book. Sater’s unofficial contact in the CIA came to see him and told him the agency wanted a radar tracking system that the Russians had developed before the fall of the Soviet Union. The radar tracking system had never been deployed, and the CIA worried that the system could fall into the hands of our enemies.
“We looked around through Lex’s contacts and found we could definitely get the radar system. For once, this was a deal we were doing with no interest in the money. We were doing it to enhance our own position regarding the legal charges, and also as something that might benefit the country. Money or profit was not an issue. We just wanted the credit for doing it. With a direct line to the radar system, we contacted our lawyer in New York, who went to Washington DC to talk to the CIA”
The CIA was interested. The agency sent a man to Russia, and Sater located the radar tracking system. (In other parts of the book, Lauria calls it a “missile guidance system.”)
With that success, Sater was approached about acquiring a dozen Stinger missiles. The Stinger was the portable, shoulder-fired missile that used a heat-seeking sensor to home in on an aircraft’s engine. They could be fired from as far away as 5 miles away and could easily bring down a passenger airliner.
The CIA was desperate to get hold of them. Lauria states that at least 12 Stinger missiles were obtained by Osama bin Laden.
As he had with the radar tracking/missile guidance system, Sater found that he could get the Stingers, albeit in a round-about way.
Sater could not buy the Stingers directly from al Qaida. “Instead, he used his contact with a KGB general who claimed he had strong ties with Ahmad Shah Massed, leader of the Northern Alliance,” Lauria wrote. Sater alaso used “connections he thought he had with both sides in the Afghan War.” This is interesting. Was Sater dealing with the Taliban?
According to Lauria, Sater obtained photographs of the Stinger missiles as well as the the serial numbers of three of them to verify their authenticity. Sater also obtained what he thought was an active cell phone number for bin Laden. His attorney supplied it all to the CIA.
The CIA offered to pay Sater $300,000 per missile. Lauria insists there was no profit built into the deal. However, one of their partners, Gennady “Gene” Klotsman went behind their backs and demanded $3 million per Stinger. The CIA was furious and called off the deal.
A few days after the attacks of Sept. 11, 2001, Lauria got a phone call from Sater. The information they had provided about Osama bin Laden was now being actively pursued.
“Our situation had improved,” Lauria wrote.
Somehow I missed this. Buried deep in this excellent New York magazine piece on Felix Sater is this tidbit:
Cohen, one of Trump’s personal attorneys, had known Sater since they were teenagers.
I’m curious how these two met. Sater was born in Russia and grew up in the Russian enclave of Brighton Beach as a Mobster’s son. Cohen grew up on Long Island as a doctor’s son. About the only thing the two seem to have in common is that they are both Jewish and roughly the same age.
Update: Sater told Talking Points Memo he knew Cohen through Cohen’s wife, Laura Shusterman:
Sater said he most clearly remembers the beginning of his relationship with Cohen from the time the former Trump Organization attorney began dating his now-wife, whom Sater describes as a girl from his neighborhood of Jewish Soviet expatriates. Cohen told TPM the pair had known each other before then, in their teenage years, and that he hadn’t yet begun dating his wife, reportedly a Ukrainian émigré, when he was in his teens.
Their friendship puts a different light of the chummy emails between the two men in 2015, after Trump announced he was running for president. In the emails, obtained by The New York Times, Sater promised to use his contacts in Russia to help Trump win.
“Our boy can become president of the USA and we can engineer it,” Sater wrote in an email. “I will get all of Putins team to buy in on this, I will manage this process.”
Cohen had been in negotiations with Sater and foreign investors to build a Trump Tower in Moscow from September 2015 through the end of January 2016. Trump announced he was running for president in June 2015.
In January 2016, when negotiations stalled, Cohen wrote to Putin’s spokesman, Dmitri S. asking for help. But Mr. Cohen did not appear to have Peskov’s direct email.
That’s really strange. Why would he do this? As an attorney, he knows how important records are. It’s almost as if Cohen didn’t really expect a reply, but wanted to leave a trail.
And the White House has been referring questions about this whole matter to Cohen’s attorney, suggesting that this was Cohen’s deal, not the Trump Organization’s.
The port of Yalta on the Black Sea has long been a source of controversy.
Churchill, Roosevelt and Stalin met there in 1945 to discuss what to do with Germany when World War II ended. The Big Three agreed to demand Germany’s unconventional surrender. They also left with a promise form Stalin to allow free elections in Poland and to grant Eastern Europe the right of political self-determination. Stalin, however, wasn’t a man of the word and the result was a divided Europe and decades of Cold War.
On the 50th anniversary of the Yalta Conference, Donald Trump was considering whether to put his mark on the the Black Sea port.
In September of 2005, a Ukrainian cabinet minister announced that Trump was considering a major investment in his country.
Evhen Chervonenko, Ukraine’s minister of transport, announced on Sept. 12th that Trump planned to put $500 million into construction of an exclusive yacht and hotel complex in the Black Sea resort of Yalta. In order to boost tourism, the Yalta yacht club would replace the unsightly Yalta freight port.
The plan called for what Chervonenko called for a “huge condominium” with restaurants and a hotel.
The Yalta deal never happened, but it’s a chapter of the Trump-Russia story that has not gotten the attention it deserves for it weaves together two critical parts of the saga: Felix Sater and Deutsche Bank.
For Chervonenko had not met with Trump, but rather with one of his representatives, Felix Sater.
Sater was a violent twice-convicted felon who had gone to prison for stabbing a commodities trader in an ugly bar fight. Born in Russia and raised in the Russian enclave of Brighton Beach, Sater was the son of a Russian mobster convicted of extorting businesses in Brooklyn.
Despite his past, or perhaps because of it, Sater had gotten a job at Bayrock Group LLC, a New York development firm run by Tevfik Arif, a Kazah-born businessman. Bayrock joined forces with Trump to develop Trump SoHo, in lower Manhattan.
Construction on Trump SoHo had not yet begun when Trump granted Sater and Bayrock exclusive rights for one year to develop a Trump International Hotel and Tower in Kiev and Yalta and the rest of the Commonwealth of Independent States, which included Russia, and the former satellite republics in the Soviet Union. So this career criminal journeyed to Ukraine to negotiate a deal for Trump.
Yalta, although rich in history, is not the first place one thinks of for international tourism. Its location in the Russian-speaking Crimean Peninsula made it part of the ongoing tension between Russia and Ukraine that would culminate in Russia’s invasion of Crimea in 2014.
But Sater was obviously deeply connected in Crimea and the Ukraine. He arrived in the Ukraine in September 2005 bearing a letter from Trump that declared that Ukraine was developing rapidly, and was an ideal location for the signature development of Donald J. Trump. Somehow, Sater got Bayrock Group in a 2005 meeting of the executive council of investors of Crimea chaired by the Prime Minister of Crimea, Anatoliy Matviyenko, according to a Sept. 1 press government release.
Much later, Sater would use his Ukrainian connections to help a Ukrainian lawmaker Andrii V. Artemenko deliver a peace proposal for Russian and Ukraine to the White House in February 2017. Michael Cohen, Trump’s consigliere, had met with the two men in New York and delivered the proposal to the office of Michael Flynn, the National Security Adviser. (Interestingly, Cohen had his own business dealings in Ukraine around the time that Sater was pitching developments in Yalta.)
Several other multinational firms were considering massive investments in Ukraine along with the Trump Organization in 2005. These included the National Container Company of Russia, the Ofer Group of Israel, and the Toepfer Group of Germany. The Toepfer Group would later be caught paying millions of dollars in bribes to Ukrainian officials. Russia’s Sberbank and Vneshtorgbank (now VTB) were considering an additional $2 billion in Ukraine for “re-equipment of railways and ports.” Both of these banks were sanctioned by the United States in 2014 following Russia’s invasion of Crimea.
Trump, who called himself a billionaire and regularly inflated his estimates of his net worth (see TrumpNation by Timothy O’Brien), did not have $500 million to invest in Ukraine or anywhere else for that matter.
On Sept. 9th, three days before the announcement of Trump’s “investment” in Yalta, Ukrainian Transport Minister Chervonenko announced that Trump’s favorite lender, Deutsche Bank, had agreed to loan $2 billion to finance improvements to the country’s railways, postal service, and seaports.
Deutsche Bank’s London office is an attractive target for investigators looking into Trump ties to Russia because of the bank’s own sordid ties to Russia.
From 2011 to 2015, Deutsche Bank laundered rubles into dollars (without any reporting requirements) through a practice known as “mirror trades.” The bank allowed its Russian customers to buy Russian blue-chip stocks in Moscow and then quickly execute a sale of the same stocks in London. Deutsche Bank helped Russians transfer an estimated $10 billion out of the country via these mirror trades. US and UK regulators fined the bank a combined $629 million.
Trump’s business in the Ukraine was not yet finished. In February 2006, Donald Trump Jr. and Ivanka Trump paid a visit to the Ukraine. The Trump children met with Viktor Tkachuk, an adviser to the newly elected, West-leaning president of Ukraine, Viktor Yushchenko. They also met with Andrey Zaika head of a newly-formed Ukrainian construction consortium. The meeting with the Trump children, held in Kiev, was not reported in the Ukrainian press until after the Trumps had left the country.
The Yalta deal fizzled, but it’s a remarkable moment in the Trump-Russia story.
The Baltschug Hotel is one of Moscow’s most venerable hotels. Overlooking the Moskva River, across from the Kremlin, the Baltschug dates back to the reign of Czar Nicholas II. After the Russian Revolution, it became a dormitory, but the collapse of the Soviet Union saw the Baltschug restored to its former glory as a five-star hotel
And it was here on a Tuesday evening in September 2002, that Donald Trump arrived to sell apartments in New York to newly-wealthy Russians.
Trump wanted to make it easy for Russians to buy one of his New York apartments without even leaving the country. His real estate agent, Sotheby’s International Realty, had partnered with Kirsanova Realty to open an office in Moscow to sell his condos and apartments to Russians who were interested in buying abroad.
Trump is such a spectacle that we often forget to ask the interesting questions. What was interesting about the Baltschug event was not Trump himself. The interesting question to ask was who was buying. And the answer to that question is, well, we don’t know.
Guests at this event did not want to give their names, a reporter from the respected Russian business newspaper Vedemosti found:
However, potential customers present at yesterday’s presentation of New York real estate not only refused to reveal themselves, but also did not admit that they were interested in this real estate, insisting that they simply went in for “pies to eat”.
The Moscow Times, an English-language newspaper, also sent a reporter and noted the same thing:
When asked about the prospect of acquiring property through Sotheby’s and Kirsanova Realty, guests at Tuesday’s reception shied away from saying directly whether they were interested in the super expensive apartments. One guest said most were there to see “how the other side lives.”
Why would a Russian be embarrassed to admit they were interested in buying Trump property? That’s the interesting question.
The reason why the buyers at the event were embarrassed to give their names is because they didn’t want anybody doing exactly what these reporters from Vedemosti and The Moscow Times were doing: Asking questions.
Phllip Bogdanov of Kirsanova Realty said he didn’t consider his potential clients oligarchs, but rather owners of sustainable businesses. But that’s nonsense.
One of the few who wasn’t afraid to introduce himself to Vedemosti’s reporter was Pavel Syutkin, then the head of the investment department of the Presidential Administration of the Russian Federation. Today, Pavel Skyutkin is a food historian and author of an English-language cookbook about Russian cuisine.
The Russians who could afford a million-dollar apartment in New York were a special class of people who owed their wealth to their political connections, not their business skills. People get outrageously rich in Russia because the Kremlin allows it. The Kremlin lets them get rich; the Kremlin could take everything away. If you’re wealthy in Russia, your money is never secure. Your money was only safe if and when it moved out of the country, beyond the reach of the Kremlin.
Trump had spent a lot of time trying to put his name on something in Moscow in the 1990s. We’ve looked at his efforts to build a tower in Moscow and develop a pair of run-down Moscow hotels. At some point, Trump realized that building a tower in Moscow was the wrong way to go about it.
The Russians didn’t want to keep their money in Russia. The wealthiest of Russians weren’t interested in a Trump Tower in Moscow, but a tower in New York, now, that was something that interested them. Why not build luxury towers that served as deposit boxes for wealthy Russians and other foreigners who wanted to stash their money away? What if Trump could build right here in New York for Russian money?
This was Trump’s sales pitch. Come to New York. You can enjoy your money, no questions asked.
“Now, Russian connoisseurs of high-class housing will have the opportunity to become neighbors of well-known politicians, businessmen and Hollywood stars,” said SIR vice-president Mika Sakamoto.
Trump’s towers in New York were really safe deposit boxes for foreign money. Trump World Tower (pictured above), the 72-story skyscraper that opened in 2001, was a giant deposit box of Russian money.
Bloomberg found that Sam Kislin, a Ukrainian immigrant, issued mortgages to buyers of multimillion-dollar apartments in World Tower. An individual issuing mortgages for luxury homes is highly unusual.
One of the people Kislin provided mortgages to was Vasily Salygin, a future official of the Ukrainian Party of Regions. The Party of Regions is the Putin-linked party whose best known member is Viktor Yanykovych, the man who former Trump campaign manager Paul Manafort helped win the presidency of the Ukraine before he fled to Russia.
Kislin was business partners with Tamir Sapir, who would later partner with Trump to build the scandal-plagued Trump SoHo condo hotel.
Bloomberg also turned up another person who bought in Trump World Tower. It was Eduard Nektalov, an Uzbekistan-born diamond dealer, who purchased a $1.6 million apartment in July 2003. He was being investigated by federal agents for a money-laundering scheme. Nektalov sold his unit a month after he bought it for a $500,000 profit. He was gunned down on Manhattan’s Sixth Avenue in 2004.
Kellyanne Conway and Michael Cohen, Trump’s consigliere, bought units in Trump World Tower. Cohen also persuaded his Ukrainian in-laws and a business partner to buy in the tower as well. Cohen also helped Trump take back control of the tower’s board from a group of apartment owners upset over the way the building was being run.
What began in 2002 was the steady influx of Russian money into the Trump Organization. The same Russian money that kept him afloat during the financial crisis and the same money that is now the subject of an investigation by Special Counsel Robert Mueller.
Eric Trump told the Russian publication Home Overseas that the “bulk of buyers” in Trump SoHo were “foreigners, among whom there are a lot of Russians.”
He also added that the Trump Organization was expecting Russian buyers in its planned tower on Palm Jumeirah in Dubai. “We very much count on good demand from the Russians,” he said.
I haven’t seen these comments reported anywhere else before.
The comments from Eric Trump come in an article titled, “Luxury is Beyond Time,” on the website of the Russian publication. Although undated, it appears that he made the remarks around 2007-2008. Construction on the Dubai tower was halted at the end of 2008 as the financial crisis put the squeeze on the heavily-indebted Arab emirate.
Eric Trump’s comments in Home Overseas underscores what his brother Don Jr told eTurboNews in 2008: “Russians make up a pretty disproportionate cross-section of a lot of our assets; say in Dubai, and certainly with our project in SoHo and anywhere in New York.”
Here is the full quote from Eric Trump:
In your projects, do you focus on domestic demand or are you looking for foreign investors?
It depends on the particular project. So, in the New York hotel-condominium Trump SoHo the bulk of buyers are foreigners, among whom there are a lot of Russians. The fact is that New York is one of the centers of international business and tourism, many foreigners often come here and want to have real estate. Quite a different situation in Chicago, where most buyers are from America.
Another example – a golf resort in Scotland is interesting both to local golf lovers, and to Americans who want to play in European fields. Also in the case of the Dubai project, our Palm Jumeirah tower will certainly attract not only investors from the Gulf countries, but also Europeans, Americans, and representatives of developed Asian states. We very much count on good demand from the Russians.
The Trump Organization’s connections with Russia in the scandal-plagued Trump SoHo project have been exhaustively covered.
I’ve written before about how Dubai was a favorite destination for Russian criminals and international money lauderers here.
I’ve pointed out the useful idiots of the American right before like David Keene of The Washington Times and others. But Putin uses people who are useful to him, regardless of political ideology, and there are useful idiots on the American left as well.
Two that come to mind are Katrina vanden Heuvel, editor of The Nation magazine, and her husband, Stephen F. Cohen, a professor emeritus of Russian studies at Princeton and NYU and a contributing editor to the magazine his wife edits.
On Aug. 9, The Nation published a lengthy “expose” that concluded that the Democratic National Committee wasn’t hacked by Russia or anyone else, as our intelligence communities tell us. The article, titled “A New Report Raises Big Questions About Last Year’s DNC Hack,” is dense, impenetrable, and ill-informed. It takes author Patrick Lawrence 4,000 words to say that the DNC emails were downloaded at speeds faster than the internet could handle. Before that we are doused with Lawrence’s rhetorical sewage:
Lost in a year that often appeared to veer into our peculiarly American kind of hysteria is the absence of any credible evidence of what happened last year and who was responsible for it. It is tiresome to note, but none has been made available.
“Absence of any credible evidence” — File that one away for later.
This article was quickly debunked. And it was ridiculed by Sam Biddle of the Intercept who found something interesting in Lawrence’s Twitter timeline:
Editor Katrina vanden Heuvel ordered a review of this article, which is the latest in a string of Russia-related embarrassments for The Nation, a still highly-regarded left-leaning publication that is in danger of disappearing into the loony fringe. Things have gotten so bad that journalists at the magazine complained about the magazine’s Russia coverage in a letter to vanden Heuvel in June. Here’s an excerpt from a longer version quoted in this column in The Washington Post:
As longtime associates of The Nation, we are deeply concerned that by making these editorial emphases and by likening calls for investigations into the Russia connection to “red baiting,” the magazine is not only playing into the hands of the Trump administration, but doing a dishonor to its best traditions. We have noted, too, with dismay, that Tucker Carlson, Ann Coulter and other far-right adversaries have taken comfort in the writings of other Nation writers on the current crisis.
Ouch. The Nation being cited by Ann Coulter. Other Nation articles suggest that leaks pose a greater danger to U.S. national security than Trump himself. Odd choice for a magazine that exhorts its readers to the barricades with slogans like “Resist. Organize. Defend Freedom.”
[Update: Here is the Nation’s DNC article being used as Russian propaganda]
I don’t know how it happened but somewhere along the way Vandel Heuvel and her husband Stephen F. Cohen became Putin’s useful idiots. And I mean that in the same sense as Lenin did when he used it to describe liberals and Social Democrats who helped advance the Communist cause outside the Soviet Union.
Recall that “absence of any credible evidence” phrase in the article I noted above? It’s is a frequent refrain of Stephen F. Cohen, who uses it to shoot down all criticism of Putin.
The U.S. community’s findings that Russian President Vladimir Putin ordered an influence campaign into the 2016 election aimed at undermining Hillary Clinton and helping Trump’s chances of winning? No evidence.
Cohen called the declassified summary released by the U.S intelligence community on Jan. 6 “embarrassing” and “worse than amateurish” on a podcast five days after the report’s release. The report contains “zero” evidence and Cohen says not incorrectly that U.S. intelligence has been dead wrong before. A summary of his podcast describes the report as “utterly bogus.”
You probably won’t be surprised to learn that this mirrors the Kremlin’s response to the intelligence summary as well. Russian Foreign Ministry spokesman Maria Zakharova, said Jan. 12, “Accusations are usually based on facts, dates and figures. This report is based on claims. There is nothing new in it for anyone, nothing but yet another compilation of absurd stereotypes.”
Echoing Donald Trump, Cohen also says there’s no evidence that Putin is “a killer.” This ignores the chairman of a UK panel who concluded that Putin “probably” gave the order to kill Alexander Litvinenko, the former FSB agent poisoned with radioactive Polonium-210 in 2006 in a London hotel.
Similarly, Cohen argues there is no evidence that Putin kills journalists such as Anna Politkovskaya of Novaya Gazeta — gunned down on Putin’s birthday — or the 33 others killed since he took office in 2000. Once again, Donald Trump makes the same claim.
“Trump [like Cohen] is technically right but wrong in spirit,” says Mark Galeotti, a New York University professor who studies the Russian security state. “There is indeed no proof Putin has journalists killed. But he presides over a regime in which journalists are beaten, harassed and murdered, often with impunity.”
Cohen is arguing a legal technicality. Sure, there’s no evidence Putin ordered anyone’s death. But someone did order the murders Litvinenko, Politkovskaya, or Boris Nemtsov. Those killers aren’t punished in Putin’s Russia, even though Putin probably knows who they are.
Follow his line of thinking and one could make the logically-sound but completely absurd argument that there is no evidence that smoking causes lung cancer.
It goes like this: Not all smokers develop lung cancer, and not all lung cancer patients are smokers. And the link between cancer and smoking is purely statistical. No double-blind study has ever been conducted to prove that smoking and lung cancer. So, how do we know that smoking — and not, say, air pollution — causes lung cancer?
Silly, yes, but it’s the same argument employed used by tobacco makers in court. It’s also the logic of climate-change skeptics (“scientific consensus is not evidence”), and people who think the Earth is 5,000 years old (“Evolution is a theory, not proof.”)
No evidence. No proof.
It is the desperate logic of those unable to reevaluate a long held, but increasingly ridiculous position so as to avoid looking like a fool.
Semion Mogilevich remains a subject of fascination in the Trump-Russia story.
I’ve written before about Mogilevich’s ties to Trump Tower and how the man called the most powerful Mobster in the world may be a subject of interest to Special Counsel Robert Mueller.
I thought it would be worthwhile to take a deeper dive into the world of Semion Mogilevich to understand who he is and what it means for Trump to be connected to him.
If you want cut to the chase, here you go: Having a relationship with Mogilevich was in some ways like having a relationship with Putin himself.
Semion Mogilevich and Donald Trump both were born in June of 1946, only two weeks apart, in vastly different circumstances. Trump, as we know, was the son of a wealthy New York developer. Mogilevich was born to a Jewish family in Kiev and before he began his life of crime he earned an economics degree.
Calling Mogilevich a Mobster is a bit misleading. He is a Mobster, but he’s much more than a Russian version of Tony Soprano.
Mogilevich is better described as a secret billionaire who made his fortune in the murky gas trade between Russia and Ukraine. US Attorney Michael Mukasey said in 2008 that Mogilevich “exerts influence over large portions of the natural gas industry in parts of what used to be the Soviet Union.”
The man called “the Brainy Don” also ran a publicly-traded company that defrauded investors in the United States and Canada out of $150 million. He sells weapons and drugs, arranges contract killings, runs prostitutes — all on an international scale. He has connections and influence at the very top of the Russian oligarchy. But the biggest sign of his power and influence is that he today lives free in Russia.
How is this possible? How can an international criminal live openly in Moscow?
To understand this, consider this secretly recorded conversation between then Ukrainian President Leonid Kuchma and Ihor Smeshko, who was then head of Ukraine’s military intelligence:
Smeshko: “So, this is why [the American FBI] thinks that Mogilevich’s organization, it is working completely under the cover of SBU [Ukraine’s secret service.] This is why there is this kind of cooperation there!”
Kuchma: “He [Mogilevich] has bought a dacha in Moscow, he keeps coming.
Smeshko: “He has received a passport already. By the way, the passport in Moscow is in a different name. And what is level in Moscow is … Korzhakov [the head of Boris Yeltsin’s personal security] sent two colonels to Mogilevich in Budapest in order to receive damaging information on a person … He himself did not meet them. His organization’s lieutenant, [Igor] Korol, met these colonels and gave them the documents relating to ‘Nordex’. Mogilevich has the most powerful analytical intelligence service. But Mogilevich himself is an extremely valuable agent of KGB, PGU … When they wanted to … Mogilevich … When the Soviet Union collapsed UKGB ‘K’ command did not exist yet. When one colonel wanted to he is retired, he lives there when he tried to arrest him, he got his pennyworth, they told him ‘Stop meddling! This is PGU [SVR, Russian foreign intelligence service] elite’. He has connections with [Russian businessman and former Deputy Prime Minister Anatoly] Chubais.”
This conversation, which was secretly recorded by a Kuchma bodyguard, is difficult to follow, but it gives you a sense of Mogilevich’s power and reach. First, he ran his own powerful intelligence service that was useful to a Russian president. He was an agent of the KGB in the days of the Soviet Union and remains a source to modern Russian intelligence. And he is protected by powerful interests in Russia.
These tapes were of great interest to Alexander Litvinenko, a former Russian FSB officer who was poisoned in a London hotel in 2006 with radioactive Polonium-210. Litvinenko, who hated Putin, had a role in transcribing them and publicizing them.
The British inquiry into his death went into considerable detail of the conversations on these tapes and his writings, which contain a few other fascinating bits of information on Mogilevich. In an email, Litvinenko revealed that Mogilevich had sold arms to al Qaida:
“I know beyond the doubt that Mogilevich is FSB’s long-standing agent and all his actions including the contact with al Qaida are controlled by FSB — the Russian special services. For this very reason, the FSB is hiding Mogilevich from the FBI.”
In Russia, criminals and intelligence services aren’t adversaries. They are birds of a feather. They share information. The Mob helps the state, and in return, Russian criminals like Mogilevich get to share in the riches and remain free.
As Mark Galeotti, an expert on Russian history and security issues, writes,
“The Russian state is highly criminalized, and the interpenetration of the criminal ‘underworld’ and the political ‘upperworld’ has led the regime to use criminals from time to time as instruments of its rule.”
Mogilevich’s ties to the Russian political “upperworld” go deep. Very deep.
In another secretly recorded conversation in 2000, Ukrainian PM Kuchma discusses Mogilevich with Leonid Derkach, the former head of the Ukrainian security services.
Kuchma: “Have you found Mogilevich?”
Derkach: “I found him.”
Kuchma: “So, are you two working now?”
Derkach: “We’re working. We have another meeting tomorrow. He arrives incognito.
Later in the discussion Derkach revealed a few details about Mogilevich.
Derkach: “He’s on good terms with Putin. He and Putin have been in contact since Putin was still in Leningrad.”
Kuchma: “I hope we won’t have any problems because of this.”
Derkach: “They have their own affairs”
According to Litvinenko, the poisoned ex-FSB agent, Putin was Mogilevich’s “krisha” or protector in Russian underworld slang.
And this was a relationship that dated back to the early 1990s when the future Russian president was a deputy mayor in St. Petersburg.
“Mogilevich have good relationship with Putin since 1994 or 1993,” Litvinenko says in broken English on a tape made before his death.
Back in 1993 and 1994, Putin was deputy mayor of St. Petersburg. He was known in St. Petersburg as the man who could get things done. His approach to the criminal world was a practical one, Karen Dawisha writes in Putin’s Kleptocracy.
The mafia and the KGB had always had points of intersection and conflict — the 1990s were no different, and the mafia had its uses. It was global, it could move money, it could hide money, and in any case, some of the money would come back to St. Petersburg for investment. So how did Putin operate? First and foremost, he made illegal activity legal.
Most countries, even corrupt ones, go after their biggest criminals. But in Russia, criminals have their uses.
One of these points where the interests of Mogilevich and Putin merge is in the natural gas trade. RosUkrEngero (RUE), a murky Swiss company that acts as an intermediary in gas sales between Russia and Ukraine is seen as a joint venture of sorts between the two men.
RUE is half owned by Gazprom, the Russian gas giant that is run by Putin’s cronies. The other half is nominally owned by two Ukrainian businessmen: Dmitry Firtash and a minority partner. But the U.S. government suspects that Mogilevich (see here) is the man behind the curtain at RUE.
The world was closely watching in 2008 when Russian police arrested Mogilevich on a tax evasion scheme. He posted bail and was released a year later. Charges were dropped in 2011.
Mogilevich is part of the story, the tragedy really, of modern Russia.
Russia is a country rich in natural resources. It has great wealth below the ground. Above ground the wealth is shared by a small number of individuals who were close to Russian President Vladimir Putin.
Putin allowed this select few to enrich themselves by siphoning billions out of the country’s natural gas and oil fields, its steel and nickel mills, its fertilizer plants, the state railroads, and many more industries. In return for unimaginable wealth, these oligarchs pledged absolute fealty to Putin.
This is an operation that Mogilevich knew very well. Enriching yourself and your friends in exchange for loyalty — that’s the job of a Mafia Don. Which is exactly what Putin is.
As Sen. John McCain told late night host Seth Meyers, Russia is a “a gas station run by a mafia that is masquerading as a country.”
As the cameras flashed, Donald Trump welcomed Demi Moore and Naomi Watts, Heidi Klum as they joined him at his party the Park Avenue Plaza in New York.
It was the summer of 2008 and Trump was launching his company’s newest hotel, The Trump International Hotel & Tower in Dubai.
This stunning 62-floor stainless steel and glass structure in the shape of a tulip would have sat in the center of Palm Jumeirah, Dubai’s iconic man-made archipelago in the shape of a palm.
I say would have because Trump’s Dubai tower was never built. It was a castle in the air, a fever dream built on the belief that good times would never stop rolling. Which they did not long after the New York party.
As Trump officially kicked off sales of apartments at his party in New York, the Dubai tower was attracting a lot of interest halfway around the world. Donald Trump Jr. famously said in September 2008, “In terms of high-end product influx into the US, Russians make up a pretty disproportionate cross-section of a lot of our assets; say in Dubai, and certainly with our project in SoHo and anywhere in New York. ” (emphasis added)
And these Russian buyers, whoever they were, were loaded. At the time of the New York party, pre-sales of the Dubai tower had fetched an average of $2,450 per square foot, with some units receiving bids as high as $3,270 per square foot.
After learning a little about Dubai, I’m not surprised that Russian money was attracted to Trump’s $1.1 billion project, his first venture in the Middle East.
Dubai is known for its sun-splashed towers and its man-made archipelagos but it also has a darker side. Sitting at the junction of Europe, Africa and Asia, Dubai was a crossroads for international criminals. When the emirate opened its property market to foreign buyers in 2002, Dubai quickly became a place where dirty money could be washed clean, particularly through property sales.
“During the boom, Dubai was a good place for money laundering, through property, land sales and the big projects,” Hamdan Abdullah al-Sayyah, a managing partner at Al Sayyah Advocates and Legal Consultants in Dubai, told The New York Times (for a 2010 story headlined “Dubai Labors Under Money-Laundering Image.”)
Dubai was and is a bright place for shady people. The emirate’s laissez-faire attitude allowed the vice president of Afghanistan to arrive in Dubai with $57 million in cash and continue on his way. The chairman of Kabul Bank owned 39 properties on Palm Jumeirah.
Russian criminals, too, could relax in Dubai. At least they could until 2006 when Zahar Kalashov, a top Russian Mafia boss, was arrested after leaving a party attended by members of the Georgian and Russia Mafia.
Another Russian criminal exposed in Dubai was Olga Stepanova, who, together with her now ex-husband, acquired three properties in Palm Jumeirah, the site of Trump’s tower, worth a combined $7 million. Quite a feat considering the couple reported an official joint income of $38,000.
It turns out Stepanova was a Russian tax official who had authorized $230 million in fraudulent tax rebates for organized crime groups. The scam was uncovered by Sergei Magnitsky, a lawyer working for financier turned human-rights campaigner Bill Browder.
Magnitsky was murdered in a Russian prison in 2009 and Browder has never forgotten him. The Magnitsky Act, signed into law by President Obama three years later, seeks to punish those responsible for his death. (For details and photos of the Dubai properties, see the Website Russian Untouchables.)
Russians were well known for buying luxury properties that then sat empty. “Russians are still coming with suitcases of cash to buy flats which they never live in,” a UK financier working in Dubai told The Guardian of London in 2010 . “It’s easy to get resident permits. These sort of stories are rife. Russia is the biggest source. A lot of it is mafia.” Today one in five Dubai luxury properties sits empty, with many owned by Russians.
Hamdan Abdullah al-Sayyah, the attorney quoted earlier by the Times, cited a case he dealt with, where a person claiming to be a businessman filtered $10 million from Russia into a Dubai land deal. “The money arrived in small transactions, so the bank wouldn’t be suspicious, and he had a sales contract to show the bank,” Mr. Sayyah said. “At that time, nobody was looking into it because the country needed investors to come in.”
Given this background, it’s not surprising then that Trump’s Dubai tower was getting a lot of interest from Russian buyers.
Trump’s partner in the deal was effectively Dubai itself. The developer on the project was Nakheel, a subsidiary of Dubai World, a giant conglomerate owned ultimately by Dubai’s ruler, Sheikh Mohammed bin Rashid Al Maktoum. The terms of the deal made it a partial licensing deal and a partial partnership, Trump said during a 2010 deposition.
Trump and Nakheel were riding high in the summer of 2008. There was another party for Trump’s Dubai tower. This time it was at an even more star-studded affair in Bel Air, California. Christina Aguilera sang for the crowd of 1,000 guests at Tar’s home, which is known as the Cheateau d’Or , which included Pete Wentz, Orlando Bloom, Omarosa, P. Diddy, Hilary Swank, and Aaron Eckhart. The event was held at the estate of Yousuf Tar, a Pakistani who owns Bernini clothing company.
“The battle of the towers” was underway between Trump’s Dubai tower and the Burj Dubai, the world’s tallest building, to see which one could sell the emirate’s most expensive apartment. (“Dubai high rises reach record prices as battle of the towers hots up,” Financial Trump was hoping to sell a penthouse in his tower for more than $30 million, which would smash the record.
No one seemed to notice danger signs. Nakheel itself had fueled its incredible expansion on debt and the credit markets were flashing red. Although sign that things were spinning out of control came in August 2008, just before the Bel Air gala, when two Nakheel executives, including the top sales manager, were arrested on suspicion of bribery. (Details on the case were not made public and Trump was never implicated.)
The end came quickly.
Within a few months of the Bel Air party, work on the project came to an abrupt halt, as Nakheel groaned under the weight of its massive debts. Trump’s Dubai tower, just one of the many mega-projects Nakheel had going. Planned and underway projects exceeded $310 billion (!) in 2008. All were predicated on the availability of cheap finance.
The collapse of Lehman Brothers and the ensuing credit crunch forced Dubai to face reality and its massive debts. Its parent company, Dubai World, in 2009 ceased payment on its $59 billion in debts and had to be bailed out by neighboring Abu Dhabi.
In 2011, Nakheel revealed what everyone already knew. Trump’s Dubai tower would not be built.
But Trump’s Dubai dream never died.
Today in 2017, his company is selling the Trump Estates Park Residences in Dubai. He has a new partner, Hussain Sajwani of DAMAC Properties in Dubai, and a new site on the outskirts of the city.
The prices are lower: $800,000 will buy you a 4-bedroom villa with a complimentary 3-year family membership at Trump’s nearby golf course. DAMAC is also building a second Trump-branded golf course, designed by Tiger Woods, in Dubai.
I wonder who the buyers are.