I really miss the days when there wasn’t a whole month’s worth of news crammed into a week. Last week, the first details of Michael Cohen’s essential(?) consulting business have been leaked into the public. I don’t think there’s anything intrinsically illegal about selling information you have into the mindset of the most powerful person in the world; Cohen’s allowed to shop his thoughts on President Trump to whomever he likes. If your old boss became the President, you could charge AT&T a million dollars to answer their questions about your boss’s favorite model of phone, and what you know about his thoughts on 5G. But it seems some of those shoppers “hired” Cohen awfully soon after Trump tweeted vague threats to upend their industries, which looks a little shady.
More interesting than Cohen’s naked profiteering on the margins is what he probably knows about the heart of the Trump Organization. There were two stories published, by Buzzfeed and USA Today, in January that I think will ultimately result in more indictments than Cohen’s consulting business. The first is by Thomas Frank in Buzzfeed, titled Secret Money: How Trump Made Millions Selling Condos To Unknown Buyers:
In 2008, as the Great Recession cooled real-estate markets, Trump could not make a payment on a bank loan that he had guaranteed personally for $40 million. Trump Entertainment Resorts, which owned the Trump Taj Mahal casino in Atlantic City, faced a $53 million payment to bondholders. Trump forestalled the bank payment by suing the lender, Deutsche Bank. The casino filed for bankruptcy in 2009.
At the same time, Trump became financially entwined with Russians. In March 2008, a Russian billionaire paid Trump $95 million for a Palm Beach, Florida, estate that Trump had bought four years earlier for $41 million. Donald Trump Jr. told a Moscow real-estate conference in June 2008 that his father’s company, the Trump Organization, was planning to build condos and hotels in Russia. And he told a New York conference in September 2008, “We see a lot of money pouring in from Russia.”
Got that? Trump flipped a property for $54m in profit the same year he owed a $53m payment to bondholders, which is also the same year as the Don Jr. quote above. One does wonder.
But it’s not just the fact that there was “money pouring in.” It’s that shell companies hide the identifies of the buyers. Anyone can set up a company like this in an afternoon, and there are no laws requiring transparency into the real owners of the shell company. And there are tens of millions of dollars of transactions with shell companies during the years when Trump Jr. liked to brag about Russian money. Frank continues:
Trump Jr. was executive vice president of development and acquisitions at the Trump Organization, which opened two major condo towers in early 2008 after a four-year lull. By the time Trump Jr. made his now-famous comment in September 2008, cash-paying shell companies had bought $43 million worth of condos at the Trump International Hotel and Tower Chicago and at the Trump International Hotel Las Vegas.
At a Trump-licensed condo building in Miami-Dade, cash-paying shell companies had bought $32 million worth of condos.
During this time, the future president and his children also were heavily promoting the Trump SoHo, a lower Manhattan high-rise that has been mired in controversy. In his September 2008 remarks, Donald Jr. cited the project: “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.”
And Nick Penzenstadler in USA Today reported earlier this year that most folks buying real estate from the President’s company are using shell companies to hide their identity:
The trend toward Trump’s real estate buyers buyers obscuring their identities began around the time he won the Republican nomination, midway through 2016, according to USA TODAY’s analysis of every domestic real estate sale by one of his companies.
In the two years before the nomination, 4% of Trump buyers utilized the tactic. In the year after, the rate skyrocketed to about 70%. USA TODAY’s tracking of sales shows the trend held firm through Trump’s first year in office.
Profits from sales of those properties flow through a trust run by Trump’s sons. The president is the sole beneficiary of the trust and he can withdraw cash at any time.
I understand some of the uproar about the not-hush-money portions of Cohen’s “consulting” business, but if I were looking to launder money or just bribe the President, I wouldn’t funnel the money through Cohen to do it. It seems much easier to set up a shell company and simply buy a $2 million condo for $10 million.