Con­tro­ver­sial busi­ness­man used Trump of­fice space, cards

Ex-stock­bro­ker says pair talked of­ten, but mogul says he barely knew him

The Washington Post - - CAM­PAIGN 2016 - ros­alind.hel­der­man@wash­post.com tom.ham­burger@wash­post.com Alice Crites and Wal­ter Fee con­trib­uted to this re­port.

On the 24th floor of Trump Tower, in an of­fice two floors be­low Don­ald Trump, Felix Sater wastry­ing to re­vive his ca­reer. The Rus­sian-born busi­ness­man had al­ready done a stint in prison for stab­bing a man in the face with the stem of a mar­garita glass, and he was now await­ing sen­tenc­ing for his role in a Mafia-or­ches­trated stock-fraud scheme — all the while serv­ing as a gov­ern­ment in­for­mant on the mob and mys­te­ri­ous mat­ters of na­tional se­cu­rity.

But Sater and his busi­ness part­ners had an idea: They would build Trump Tow­ers in U.S. cities and across the for­mer Soviet bloc. Sater pitched it to Trump, who gave Sater’s com­pany rights to ex­plore projects in Mos­cow as well as in Florida and New York.

“Any­body can come in and build a tower,” Sater told po­ten­tial in­vestors, ac­cord­ing to tes­ti­mony in a 2008 court case. “I can build a Trump Tower, be­cause ofmy re­la­tion­ship with Trump.”

Sater’s “Trump card,” as he called it, didn’t work ev­ery­where. The Mos­cow deal fell apart. But their re­la­tion­ship con­tin­ued — though just how close they were is now in dis­pute.

Trump has re­peat­edly said he

barely re­mem­bers Sater. In sworn tes­ti­mony in 2013, Trump said he wouldn’t rec­og­nize Sater if they were sit­ting in the same room. In an in­ter­view last year with the As­so­ci­ated Press, he said, “Felix Sater, boy, I have to even think about it.”

Sater, in pre­vi­ously un­re­ported sworn tes­ti­mony re­viewed by The Wash­ing­ton Post, de­scribed a closer re­la­tion­ship.

Sater said he popped into Trump’s of­fice fre­quently over a six-year pe­riod to talk busi­ness. He re­called fly­ing to Colorado with Trump and said that Trump once asked him to es­cort his chil­dren Don­ald Jr. and Ivanka around Mos­cow.

Sater’s ac­count, which came dur­ing a de­po­si­tion in a li­bel case Trump brought against a book au­thor, of­fers new in­sights into Trump’s re­la­tion­ship with a com­pli­cated fig­ure.

Sater has both been ac­cused by for­mer busi­ness as­so­ci­ates of threat­en­ing to kill them and praised by top gov­ern­ment of­fi­cials for in­for­ma­tion that has led to nu­mer­ous mob con­vic­tions and na­tional se­cu­rity gains.

His re­la­tion­ship with Trump has cre­ated un­wanted at­ten­tion for the real-es­tate-mogul-turned­pres­i­den­tial-can­di­date as Sater and his one­time com­pany have en­dured le­gal dis­putes with for­mer busi­ness as­so­ci­ates and in­vestors who lost money in failed Trump-branded projects.

Sater ar­rived in Trump’s or­bit as the mogul was shift­ing his busi­ness model. Seiz­ing on the suc­cess of his re­al­ity tele­vi­sion show, “The Ap­pren­tice,” he fo­cused on li­cens­ing his name to de­vel­op­ers con­struct­ing high-rise ho­tels and con­do­minium projects.

Trump and his lawyers have said that he was not aware of Sater’s crim­i­nal past when he first signed on to do busi­ness with Sater’s firm, Bay­rock Group. Sater’s in­volve­ment in the stock fraud was kept se­cret for years by fed­eral pros­e­cu­tors be­cause of his role as an in­for­mant.

But even af­ter ele­ments of Sater’s back­ground were dis­closed in a 2007 New York Times ar­ti­cle, he re­mained in close prox­im­ity to Trump — at one point us­ing Trump Or­ga­ni­za­tion of­fice space and busi­ness cards.

Alan Garten, a lawyer for the Trump Or­ga­ni­za­tion, did not dis­pute Sater’s ac­count of the two men’s re­la­tion­ship but said it dif­fered from Trump’s per­cep­tion of events. He said Trump holds hun­dreds of meet­ings a year with peo­ple for whom the in­ter­ac­tions are of­ten more mem­o­rable than for the celebrity ty­coon.

“I can see how the re­la­tion­ship may have been viewed dif­fer­ently from one per­son’s side of the re­la­tion­ship from the other,” he said, adding: “There was no re­la­tion­ship with Mr. Sater. The re­la­tion­ship was a busi­ness re­la­tion­ship with Bay­rock.”

Sater, through his at­tor­ney, de­clined to com­ment. He has ad­dressed his past con­duct on his web­site, writ­ing that he made “some poor and re­gret­table judg­ment calls in busi­ness” but that he had ad­mit­ted his wrong­do­ing and pleaded guilty be­fore as­sist­ing the gov­ern­ment with “nu­mer­ous is­sues of na­tional se­cu­rity, in­clud­ing thwart­ing ter­ror­ist at­tacks against our coun­try.”

The lawyer, Robert S. Wolf, did not ad­dress Sater’s re­la­tion­ship with Trump but stressed Sater’s work for the gov­ern­ment, say­ing he saved lives, in­clud­ing by pro­vid­ing “sig­nif­i­cant in­tel­li­gence with re­spect to nu­clear weapons in a ma­jor coun­try openly hos­tile to the United States.”

Guilty plea in stock scheme

Sater, 50, em­i­grated from the Soviet Union, ar­riv­ing in Brook­lyn when he was 8. He has said his fam­ily, which is Jewish, left to es­cape per­se­cu­tion.

Sater pur­sued a ca­reer as a stock­bro­ker. But he lost his trad­ing li­cense af­ter the mar­garita glass in­ci­dent, which oc­curred dur­ing a 1991 bar fight and led to a year in prison.

Broke and with a young wife and child to sup­port, Sater has said he hooked up with a boy­hood friend who was op­er­at­ing a Mafia linked bro­ker­age firm. He pleaded guilty in 1998 to one count of rack­e­teer­ing as part of a $40 mil­lion stock fraud in which Wall Street bro­kers ar­ti­fi­cially in­flated the price of stocks.

The scheme re­lied on mem­bers of the La Cosa Nos­tra crime fam­i­lies for ex­tor­tion and to re­solve dis­putes, fed­eral au­thor­i­ties al­leged, part of a con­certed ef­fort by or­ga­nized crime to make in­roads on Wall Street.

He was spared prison time in recog­ni­tion of what an FBI agent later called “ex­tra­or­di­nary” co­op­er­a­tion as a wit­ness in un­named na­tional se­cu­rity cases.

Dur­ing that pe­riod, Sater turned his at­ten­tion to real es­tate. Around 2001, he joined Bay­rock, which had its of­fices in Trump Tower. Sater has tes­ti­fied that he met Trump and started to pitch busi­ness ideas to him soon there­after.

The two de­vel­oped a rap­port, Sater tes­ti­fied.

He de­scribed the re­la­tion­ship as “friendly,” say­ing he had met one on one with Trump “nu­mer­ous times” in Trump’s of­fice to dis­cuss var­i­ous projects. In Phoenix, Sater tes­ti­fied, he met with lo­cal of­fi­cials along­side Trump’s son Don­ald Jr. In New York, Sater said he met with Trump and Trump’s staff “on a con­stant ba­sis” to dis­cuss pos­si­ble deals in places such as Los An­ge­les, Ukraine and China.

Doc­u­ments show that Trump in 2005 ex­tended Bay­rock a oneyear deal to de­velop a project in the Rus­sian cap­i­tal. Sater said he had lo­cated a group of in­ter­ested Rus­sian in­vestors, as well as a pos­si­ble site for a lux­ury high-rise — a shut­tered pen­cil fac­tory that had been named for Amer­i­can rad­i­cals Ni­cola Sacco and Bar­tolomeo Vanzetti, who were con­victed of mur­der and ex­e­cuted dur­ing the “red scare” that swept the United States af­ter World War I.

“I han­dled all of the ne­go­ti­a­tions,” Sater said of the Rus­sia deal, which did not come to fruition. Asked whether there was pa­per­work drawn up on the deal, he re­sponded: “It was more of ver­bal up­dates when I’d come back, pop my head into Mr. Trump’s of­fice and tell him, you know, ‘ Mov­ing for­ward on the Mos­cow deal.’ And he would say, ‘All right.’ ”

“I showed him pho­tos, I showed him the site, showed him the view from the site. It’s pretty spec­tac­u­lar,” Sater said.

When Trump’s chil­dren Don­ald Jr. and Ivanka were plan­ning a trip to Mos­cow in 2006, Sater said that Trump asked him to squire them around the city.

“They were on their way by them­selves, and he was all con­cerned,” Sater said. “He asked if I wouldn’t mind join­ing them and look­ing af­ter them while they were in Mos­cow.”

Garten, Trump’s lawyer, said that Trump’s adult chil­dren and Sater hap­pened to be there at the same time. “There was no ac­com­pa­ny­ing them to Mos­cow,” Garten said.

Sater said he also at­tended so­cial events where Trump had been present and had vis­ited Trump’s Mar-a-Lago es­tate in Palm Beach, Fla., though not at Trump’s in­vi­ta­tion.

Sater at­tended a glitzy launch party with Trump in 2007 cel- ebrat­ing Trump SoHo, a 46-story Man­hat­tan project that Bay­rock helped de­velop.

When the New York Times first linked Sater to the mob stock and money laun­der­ing scheme later that year, Trump ex­pressed sur­prise.

“We do as much of a back­ground check as we can on the prin­ci­pals. I didn’t re­ally know him very well,” Trump told the Times, adding that he dealt pri­mar­ily with other Bay­rock ex­ec­u­tives.

Garten told The Post that, prior to the 2007 ar­ti­cle, Trump’s com­pany knew “none” of Sater’s crim­i­nal past and “would have had no rea­son to in­quire.”

The dis­clo­sure led to prob­lems for Bay­rock and Trump.

When one of the firm’s most am­bi­tious projects, the ocean­front Trump In­ter­na­tional Ho­tel and Tower in Fort Laud­erdale, Fla., be­came em­broiled in dis­putes af­ter con­struc­tion stalled in 2009, ag­grieved condo buy­ers filed suit, claim­ing, among other things, that Trump and oth­ers had failed to tell them about the crim­i­nal past of a key mem­ber of the de­vel­op­ment team.

Trump walked away from the fail­ing project, say­ing he held no re­spon­si­bil­ity since he had merely li­censed his name to the ef­fort.

He claimed in sworn tes­ti­mony in 2013 as part of the dis­pute that he barely knew Sater.

“If he were sit­ting in the room right now, I re­ally wouldn’t know what he looked like,” Trump said, adding that he had spo­ken with Sater “not many” times.

Sater, how­ever, was mem­o­rable to oth­ers as­so­ci­ated with Bay­rock and its projects.

One for­mer Bay­rock em­ployee al­leged in a law­suit that Sater once told him dur­ing a dis­pute to “shut up or risk be­ing killed.” An­other law­suit filed in Ari­zona in 2007 al­leged that Sater had threat­ened a lo­cal project part­ner named Ernest Mennes. Ac­cord­ing to the law­suit, Sater called Mennes in 2006 and threat­ened that his cousin “would elec­tri­cally shock Mr. Mennes’ tes­ti­cles, cut off Mr. Mennes’ legs, and leave Mr. Mennes dead in the trunk of his car” if Mennes re­vealed his crim­i­nal past.

Mennes said he was barred by a le­gal set­tle­ment from dis­cussing the mat­ter. “I wish Mr. Sater well,” he said, adding that he is now sup­port­ing Trump for pres­i­dent.

Wolf, Sater’s at­tor­ney, said the claim that Sater had threat­ened vi­o­lence was “an out­right fab­ri­ca­tion” made in the course of law­suits that have in­cluded “base­less and highly defam­a­tory” ac­cu­sa­tions de­signed to win money from Bay­rock.

Tes­ti­fy­ing in a Trump law­suit

As Sater be­came a more con­tro­ver­sial fig­ure, Trump did not cut ties.

In 2008, Trump’s lawyers asked Sater to tes­tify in Trump’s li­bel suit against jour­nal­ist Tim O’Brien, ar­gu­ing that O’Brien’s book, “Trump Na­tion,” dam­aged his rep­u­ta­tion and cost him projects that Bay­rock and oth­ers had been pur­su­ing. The suit was dis­missed.

At the time, Sater tes­ti­fied he was in the process of leav­ing Bay­rock be­cause of the pub­lic­ity around his past.

Dur­ing his 2009 sen­tenc­ing, which had been de­layed be­cause of his work as a gov­ern­ment wit­ness, Sater be­moaned leav­ing Bay­rock, a com­pany he said he “had built with my own two hands.”

“Here I am try­ing to re­ha­bil­i­tate my­self and keep get­ting the rug pulled out from un­der me,” Sater told the judge.

Af­ter Sater left Bay­rock, he was given Trump Or­ga­ni­za­tion busi­ness cards and of­fice space so he could con­tinue search­ing for deals for the com­pany, Garten said. The cards, first re­ported by the As­so­ci­ated Press, iden­ti­fied Sater as a “se­nior ad­vi­sor to Don­ald Trump.”

Garten said Sater was never a Trump Or­ga­ni­za­tion em­ployee and was paid noth­ing dur­ing the brief 2010 ar­range­ment. “Noth­ing came of it, and they went their sep­a­rate ways,” Garten said.

Ac­cord­ing to his web­site, Sater has con­tin­ued to work in real es­tate and fi­nance for a num­ber of in­ter­na­tional com­pa­nies. His site touts his work on Trump projects and his ex­ten­sive phi­lan­thropy. He is an ac­tive mem­ber of Chabad, an Ortho­dox Jewish sect, and, in 2014, was named Man of the Year by Chabad of Port Wash­ing­ton, N.Y.

His back­ground emerged again last year dur­ing Loretta E. Lynch’s con­fir­ma­tion hear­ings to be­come at­tor­ney gen­eral. Lynch, who was U.S. at­tor­ney in the of­fice that pros­e­cuted the stock fraud, was asked to re­spond to al­le­ga­tions that Sater had been let off too eas­ily and the gov­ern­ment should not have hid­den his con­vic­tion from pub­lic view.

Lynch told se­na­tors that Sater had “pro­vided valu­able and sen­si­tive in­for­ma­tion” for more than 10 years and that his work had been “cru­cial to na­tional se­cu­rity and the con­vic­tion of over 20 in­di­vid­u­als, in­clud­ing those re­spon­si­ble for com­mit­ting mas­sive fi­nan­cial fraud and mem­bers of La Cosa Nos­tra.”

Sater has gen­er­ally de­clined to com­ment about his re­la­tion­ship with Trump. But ear­lier this month, he tweeted his sup­port for Trump’s pres­i­den­tial run, con­grat­u­lat­ing Trump on ap­pear­ing to clinch the GOP nom­i­na­tion. “He will make the great­est Pres­i­dent of our cen­tury,” Sater wrote.

MARK VON HOLDEN/WIREIM­AGE

From left, busi­ness­men Don­ald Trump, Tev­fik Arif and Felix Sater at­tend a launch party for Trump SoHo in 2007. Trump was un­aware of Sater’s crim­i­nal past when he be­gan work­ing with him.

CYRUS MC­CRIM­MON/DEN­VER POST

Don­ald Trump, cen­ter, walks out­side of a busi­ness con­ven­tion in Love­land, Colo., in 2005. Felix Sater is at right, wear­ing a red tie. In sworn tes­ti­mony in 2013, Trump said that if Sater “were sit­ting in the room right now, I re­ally wouldn’t know what he looked like.” Watch a video of Trump’s 2013 de­po­si­tion at wapo.st/TrumpSater.

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