RUSSIA INQUIRY COULD EXPOSE TRUMP SECRETS
Mueller’s investigators could delve deeply into president’s million-dollar real estate transactions
Since Election Day, President Trump’s businesses have sold at least 30 luxury condos and oceanfront lots for about $33 million. That includes millions of dollars in properties to secretive shell companies, which can hide the identities of buyers or partners involved in the deals, a USA TODAY investigation found.
Details of some of those deals and other transactions by Trump’s family business could be unmasked as special counsel Robert Mueller expands his inquiry into alleged election-meddling by Russia and whether Trump’s campaign colluded.
Federal investigators are likely to delve into records revealing some of the president’s most closely guarded secrets, including how much money he makes, whom he does business with and how reliant he is on wealthy, politically connected foreigners.
A half-dozen experts contacted by USA TODAY said they expect Mueller and his team to pursue everything from Trump’s income tax returns to the bank records underlying his companies’ real estate transactions in a quest to identify people who have financial relationships with the president and his business and political associates.
Mueller’s sweeping mandate means his investigators can get, or may already have, the Trump Organization’s phone records, e-mail and contracts, exposing sensitive records and long-secret details to eventual release as part of the public record of the investigation.
Trump’s real estate business in particular has relied on wealthy Russians and other foreigners, sometimes as buyers of condos in the company’s towers around the world and as investors or partners in the projects. “Russians make up a pretty disproportionate cross-section of a lot of our assets,” Trump’s son Donald Jr. said in 2008 at a real estate conference. “We see a lot of money pouring in from Russia.”
Experts said Mueller’s move to follow the money has the potential to expose Trump, his family and his associates to legal troubles beyond the scope of the Russian allegations.
The investigation could shine
“What you have to do is lay all this stuff out — lay out all the transactions — and then figure out, ‘Why did people do certain things?’ ” Jack Blum, Washington attorney
renewed light on eyebrow-raising deals from Trump’s past, such as his sale in 2008 of a South Florida mansion to Russian tycoon Dmitry Rybolovlev for $95 million or the international financing behind a condo-hotel he developed with foreign partners in New York’s SoHo neighborhood.
The inquiry could pierce the increasing secrecy around who buys real estate from Trump. A USA TODAY investigation revealed last month that 70% of Trump real estate sales since he won the GOP nomination were to secretive shell companies, compared with 4% in the two years before that.
The clear shift to those kinds of purchases, which help obscure the identities of the buyers, raise questions about the source of profits that ultimately flow to the president because he has not fully divested from his companies.
With increasing intensity and frequency, Trump has fumed on Twitter and elsewhere as he learned more about the kinds of legal questions and exposure he and his family could face.
Last week, aides said Trump was especially disturbed to learn that Mueller is probably able to get several years’ worth of his income tax returns. This week, Trump launched daily public attacks against Attorney General Jeff Sessions, Justice Department leaders and Mueller’s investigators, calling their work a “witch hunt.”
Mueller’s office declined to answer questions about the scope of its investigation and what elements of Trump’s businesses might be under scrutiny.
Jack Blum, a Washington attorney specializing in white collar crime and former staff lawyer for two U.S. Senate committees, said efforts by Mueller’s office to investigate all manner of financial transactions are necessary for the special counsel to answer questions of Russian connections to Trump or his associates.
“What you have to do is lay all this stuff out — lay out all the transactions — and then figure out, ‘ Why did people do certain things?’ ” Blum said. “If I see a flow of money to somebody, I want to figure out, ‘ Why is that money flowing?’ ”
Blum said real estate records and corporation records are likely to be of special interest to investigators and probably would be more revealing than tax returns.
“If you have property and you sell the property and you sell the property, that’s a taxable event,” Blum said. “On the other hand, who lent you money to buy the property, how you got it, who set it up for you — that’s a whole different matter. And that’s not anything that will show up on a tax return.”
“You can’t really tackle the broader problems of corruption or crime without also being able to follow the money and get at the financing of those activities,” said Mark Hays, who investigates international corruption cases with the non-profit watchdog group Global Witness, based in London and Washington.
It is unclear what the Justice Department would do if it found questionable business practices unrelated to Russian activities. The bar to bring charges might be lower.
For example, Mueller would not necessarily have to prove that Trump’s companies or associates actively conspired to break laws in some instances, experts said. Trump has said it would be “a violation” for Mueller to venture beyond Russia’s alleged meddling to examine his companies’ or his associates’ business dealings.
John Tobon, a deputy special agent for the Department of Homeland Security in Miami, said luxury real estate sellers who don’t screen their buyers closely enough can be charged in conspiracy cases.
“The law of conspiracy reaches pretty far, and every person in the conspiracy doesn’t necessarily have to be clued in to all the details,” Tobon said, speaking about money-laundering in general and not specific transactions involving any specific companies. “So legally, you’re exposed in these transactions if you don’t take that extra step of asking who is the person behind 123 LLC.”
Trump’s Atlantic City casino had similar troubles in the 1990s, when the Treasury Department fined the company for not reporting gamblers who cashed out more than $10,000 in a single day. The reporting requirement is designed to prevent money laundering.
The luxury real estate market where Trump’s companies have done business for decades is particularly ripe, according to law enforcement experts, for foreigners looking to hide assets from tax authorities or launder illicit funds.
That includes wealthy Russians and oligarchs from the former Soviet republics.
Real estate professionals in New York and Miami told USA TODAY that Trump has sold dozens of condos in both cities to wealthy Russians.
The scope of Mueller’s inquiry was established in a one-page order signed May 17 by acting At- torney General Rod Rosenstein. The order gives Mueller purview to investigate “any links and/or coordination between the Russian government and individuals associated with the campaign of Donald Trump” and “any matters that arose or may arise directly from the investigation” and other matters covered by Justice Department regulations.
U.S. anti-laundering laws require financial institutions, title insurance companies and others involved in real estate and other transactions to file reports with the U.S. Treasury Department and other financial regulators that will probably be of interest to investigators, said Hays of Global Witness.
The records — called “suspicious activity reports” and “currency transaction reports” — can be used to flag suspect financial activity by identifying patterns in withdrawals or deposits and unusual changes in asset ownership over time.
The Treasury Department keeps a database of those reports available for federal law enforcement, meaning that if any reports have been submitted that are related to business deals involving Trump’s companies or his associates, Mueller’s team would have access without a warrant or court order.
“You’re looking not only just for data but for patterns within the data and associations,” Hays said. “So you need to see the whole picture.”
One question is whether Mueller has, or will, pursue Trump’s income tax returns — a flash point for the president throughout the campaign since he has resisted calls to release them publicly as modern-day presidential candidates have done for about four decades.
Mueller would need to show probable cause to obtain the tax documents with a judge’s approval before the IRS would turn them over — but Trump and the public may never know, said Matthew Miller, a former Department of Justice spokesman under the Obama administration. “The request to a judge is done in secret, so the president wouldn’t even know if Mueller had asked for them,” he said.
The same is true for some of the other kinds of internal business records, such as email, Miller said.
Investigators would need to show probable cause that those kinds of business records were essential to determining whether there was collusion with the Russians, Miller said. He said recent emails released by Donald Trump Jr. himself could help provide that probable cause because they show he set up a meeting with a Russian lawyer, himself and two top campaign officials based on the premise that the Trump team would be provided damaging information on Hillary Clinton. Trump Jr. said the meeting yielded nothing useful.
“You’re looking not only just for data but for patterns within the data and associations. So you need to see the whole picture.” Mark Hays, Global Witness