Did Russian Oligarch Rybolovlev Bailout Trump in 2008?
Trump’s connections should be less understood as a conspiracy and more representative of a potential willness to turn a blind eye to organized crime, says economist James Henry
SHARMINI PERIES: It’s The Real News Network. I’m Sharmini Peries, coming to you from Baltimore.
Since the 2016 presidential election here in the United States, when Donald Trump so unexpectedly won, the Trump camp has been inundated with coverage of their connections to Russia. Like that of the National Security Advisor, Michael Flynn, who was forced to resign. Jeff Sessions, who lied about meeting with Russian ambassadors and envoys, and Rex Tillerson, with extensive business dealings in Russia.
And we have also covered here on The Real News, Secretary of Commerce Wilbur Ross’s extensive business ties with Russian capitalists. But flare surrounding Trump’s actual financial connections to Russia seems to have died down a bit in terms of media coverage.
But today, our guest, James S. Henry, has another revelation linking President Donald Trump to Russian oligarch Dmitry Rybolovlev, who may have saved Trump from financial ruin back in 2008. James Henry’s article, titled “The Oligarch Files: Did a Billionaire Fertilizer Baron Bail Out Trump by Paying Millions Over the Odds for This Gaudy Pleasure Palace?” And Is This the Russian Connection That Could Return to Haunt The Presidency?”
In his report, James Henry reveals that fascinating connection exists between Dmitry Rybolovlev and Donald Trump. James S. Henry, as you know, is a leading economist, attorney and investigative journalist who has done lead research on issues such as the price of offshore … revisited.
Thanks for joining us today, James.
JAMES HENRY: Good to be with you.
SHARMINI PERIES: James, let’s start off with the state and this mansion, and what the connection between this Russian oligarch and Donald Trump is.
JAMES HENRY: Well, in 2008, as you remember, I mean, most people who went through that period remember 2008 as the financial crisis, when real estate prices had been dropping in double-digit figures over 2007, especially in places like Florida. And mortgage companies, banks, were basically contracting their loan exposures. So, this is a period in which everyone but this Russian billionaire, Rybolovlev, who was a potash czar, was basically disinvesting in the U.S. market, and especially in Florida.
But along comes Rybolovlev in June of 2008 and plunks down $95 million – plus probably a commission – for a property that Donald Trump had paid just $41 million for back in 2004. That was really convenient for Trump, because precisely at that time all of his properties, projects, were in trouble, and one in Chicago in particular was.
He was facing a $40 million personal loan guarantee that he had made with Deutsche Bank. And he ended up suing Deutsche Bank, charging them with responsibility for the financial crisis, and trying to get out of paying that loan in September of 2008. So, this $40 million profit he makes on his Florida property is just perfect timing from his standpoint. And it’s really strange because at that time everyone else was withdrawing.
Subsequently, the property continued to decline in value. The Palm Beach County appraised it at about $60 million in 2013. And Rybolovlev recently sold off a third of the property at a pro rata sale at a substantial discount from what he paid for it back in 2008.
So, it’s one of these curious deals. Nothing illegal about it, let’s make that clear. But Rybolovlev is also a partner of Wilbur Ross and the Bank of Cyprus. As of 2010 he had 10% of the bank and he still owns, we think, as much as 3.3% of it. And he was also the guy who was basically bird-dogging Trump’s campaign jet all over the United States, multiple stops where his Airbus A319 criss-crossed with Trump’s campaign jet.
Now, he denies having any contact with Trump, says he’s never met Trump. He says that the plane trips were just coincidental. But, you know, these three kinds of facts are there staring us in the face. And we’re just highlighting here, I think, the need for this accumulated pile of unexplained facts related to Russia’s connections with Trump — just the need for a real solid Congressional investigation of this.
SHARMINI PERIES: James, why would Rybolovlev agree to pay above-market price to bail out Trump? Or buy this mansion off of him? How does this kind of dealing work?
JAMES HENRY: Well, it’s possible that he was just eager to divest his investments in Russia, and was willing to pay – overpay, in fact – in the U.S. market just to move money abroad. That’s certainly one interpretation. But this is a fairly astute guy. I mean, he was worth, according to Forbes, up to $8 billion based on his very astute investments in his artful dealings in the 1990s in the fertilizer market. His company at one point controlled 30% of worldwide fertilizer sales. So, this isn’t a fellow who ordinarily loses money on investments, and this kind of stands out in that regard.
Recently, we’ve also seen some other revelations come to light about Trump’s other projects around the planet that benefited from Russian investors. One, this we week, we found out a great article in Fast Company Magazine about his big Panama tower, a $400 million property in Panama, that was developed around the same time from 2006 to 2011. In which basically Russian condo-buyers came in and spent a whole lot of upfront money to purchase condos. Now, why would Russian condo buyers want to be buying condos in Panama? It’s a good question. One of his key supporters in that project, a fellow named Martinelli, was the president of Panama, and Martinelli is now in Miami.
Trump’s going to have an interesting decision to make about whether to extradite him back to Panama because former President Martinelli has recently been indicted for having diverted $45 million from a school lunch fund in Panama. And the Panamanians want him back.
SHARMINI PERIES: And this was a revelation from where?
JAMES HENRY: That article is in Fast Company Magazine. It’s just this week. It’s an article that you can Google online about the Panama Ocean Club that Trump developed with partners.
SHARMINI PERIES: And this had something to do with the Panama Papers that was released?
JAMES HENRY: Well, the Panama Papers highlighted the role of a Panamanian law firm, Mossack Fonseca, and setting up offshore companies and trusts for all kinds of capital flight all over the planet. And in this case, in the case of the Trump Ocean Club, apparently quite a few condo buyers, including quite a few Russians, took advantage of MossFan’s services in buying their condos in the name of offshore companies.
SHARMINI PERIES: Right. James, the link you make between the private planes of Rybolovlev and President Trump, you’re getting this information from, I guess, the flight logs and so forth. Yet each party claims that they have never met each other. Now, is that possible?
JAMES HENRY: I have to take them at their word. I’d love to have an interview with Rybolovlev to take his assertions apart. It’s a little bit hard to account for the fact that the planes are landing in strange places like Concord, North Carolina, which is not ordinarily on anyone’s stop. Except for presidential candidates, like Trump. And Charlotte and Miami and Las Vegas at the same dates.
SHARMINI PERIES: And do we have evidence that they were in the same city at the same time?
JAMES HENRY: They were definitely there. Rybolovlev has said he was on the plane. He won’t say what he was doing there. Was he meeting with the Trump organization? Was he carrying, you know, caviar as presents for the campaign? I mean, you know, was he just a Trump groupie? We’re not sure. We really don’t know.
But I’m sure that this is the kind of a think that an investigation could certainly get to the bottom of. And it’s just an accumulating pile of indications that there is more to this story than meets the eye.
SHARMINI PERIES: Right. And then you’ve unraveled another interesting connection with the Deutsche Bank and a German bank with the world’s largest where Josef Ackermann, who has been the only banker who agreed to loan money to Trump after his repeated bankruptcies. What is the entire connection here?
JAMES HENRY: Well, Ackermann’s been appointed to be President of the Bank of Cyprus, which is what Wilbur Ross, the new Secretary of Commerce, took over. That’s an odd choice, given the fact that Ackermann’s track record during his ten-year reign at Deutsche Bank was not unblemished. I mean, this bank, during that period, was found to be involved in all kinds of financial improprieties — from insider trading and illegal trading, rigging energy markets, labor markets, mortgage fraud.
And most recently a $650 million fine just in January for laundering $10 billion of Russian dirty money. He was using banks in Moscow, New York, and Cyprus to do that. So, Ackermann we know had a very strong relationship with President Putin. He also was involved in this bank, and he was Donald Trump’s one remaining global bank creditor. To this day, Trump still owes Deutsche Bank at least $300 million. That’s more than half of his corporate loans outstanding at this point, so it is an unusual relationship.
In the House situation, he actually sued Deutsche Bank, his one creditor, in 2008. And the fact that he thought that he could get away with suing Deutsche Bank, in order to delay this loan repayment, is an indication that he had some fairly strong relationships at the top of that bank.
SHARMINI PERIES: Right. James, finally, returning to the heart of the problem here, Trump said that there was nothing wrong with doing business relations or having good relations with Russia. But all of these are really compromising, and the real issue here is how vulnerable he is to blackmail given this kind of history and shenanigans.
You write in your report that it’s not just the alleged sex tapes, but the financial favors make Trump indebted in some way to people like Dmitry Rybolovlev. Explain this a bit more and if there is a debt of this sort, how can it be collected?
JAMES HENRY: I don’t think it’s a simple kind of conspiracy where Trump owes these people favors. I think that it’s more a question of the kind of milieu that he was willing to be associated with. I mean, over and over again you find people running gambling rings out of Trump Towers. You see the Bogolavich gang kind of involved in business deals with Donald Trump. It’s really a question of, you know, as Cervantes says somewhere, you know, “You are who you walk with.” And that’s the issue here. That’s the issue that we have here, I think is most salient here.
I mean, is Trump going to change his ways and associate with new kinds of people? Ordinarily we would take a look at the kind of business associates that one develops as an indication of their behavior and their propensities to do good work, but we’ve seen recently the dismissal, outright, by his administration of all of the U.S. attorneys in the United States. Including one of the most outstanding attorneys in New York City. And, you know, that, I think, is consistent with this pattern of turning a blind eye to organized crime.
SHARMINI PERIES: All right. James, I thank you so much for joining us today, and I look forward to your further revelations.
JAMES HENRY: Great. Good to be with you.
SHARMINI PERIES: And thank you for joining us here on The Real News Network.