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On the Trump-Russia Conspiracy, Follow the Laundered Money

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Americans might have been warned about how Russia would attempt to interfere in the 2016 election if we’d been able to document their role in the lead-up to the vote on Brexit in June of that year. To demonstrate one aspect of that, Anne Applebaum introduces us to Aaron Banks, who was a primary donor to several organizations that campaigned for Britain to leave the European Union.

The issue Applebaum identifies is that it is unclear where the money Banks donated came from, with some indications that “the Russian ambassador to Britain had offered him a tantalizing and peculiarly lucrative investment in Russian gold mines.” The problem is that “Britain has become a place where untransparent money, from unknown sources, is widely accepted with a complacent shrug.” That might be what Brexit was all about.

And here’s the final irony: If Brexit was the creation, in part, of this new world of offshore money and political influence campaigns, Brexit may well ensure that it continues unrestricted. The E.U. is probably the only power in Europe — maybe even the only one in the world — with the regulatory strength to change the culture of tax avoidance. And since 2016, it has been slowly enacting rules designed to do exactly that. Britain, once it leaves the E.U., may well be exempt.

British industry might suffer after Brexit, and British power will be reduced. But the gray zone — where politics meets money, where foreign money can become domestic, where assets can be hidden and connections concealed — will survive. Perhaps that was the point all along.

The reports about what triggered Brexit have focused on how it tapped into populism, which was primarily based on lies, to garner support. But if Applebaum is correct, the lies were designed to inflame nativist fears in order to protect a system of money laundering that kleptocrats have come to rely on. Does any of that sound familiar?

Franklin Foer documents how this all played out in Russia and the United States in a piece titled, “Russian-Style Kleptocracy Is Infiltrating America.” He notes how Western democracies were celebrating the victory of capitalism over socialism when the former Soviet Union broke up and failed to notice what Richard Palmer, a former CIA station chief in the United States’ Moscow embassy, was trying to warn us about.

During the Cold War, the KGB had developed an expert understanding of the banking byways of the West, and spymasters had become adept at dispensing cash to agents abroad. That proficiency facilitated the amassing of new fortunes. In the dying days of the U.S.S.R., Palmer had watched as his old adversaries in Soviet intelligence shoveled billions from the state treasury into private accounts across Europe and the U.S. It was one of history’s greatest heists.

Following 9/11, the Patriot Act imposed regulations on banks to monitor and report money laundering. But what is noteworthy is that one industry was exempted: real estate.

Much of the money that might have snuck into banks before the patriot Act became law was now used to purchase property. The New York Times described the phenomenon in a series of exposés, published in 2015, called “Towers of Secrecy.” Reporters discovered that condos in the ultra-luxe Time Warner Center at Columbus Circle in Manhattan were owned by a constellation of kleptocrats.

One real estate developer in particular tapped into the flow of cash from Russian kleptocrats.

In 2017, Reuters examined the sale of Trump Organization properties in Florida. It found that 77 of 2,044 units in the developments were owned by Russians. But that was likely an incomplete portrait. More than one-third of the units had been sold to corporate vehicles, which can readily hide the identity of the true owner. As Oliver Bullough remarks, “They might have belonged to Vladimir Putin, for all anyone else could know.” Around the time that Trump took up occupancy in the White House, the patriot Act’s “temporary” exemption for real estate entered its 15th year. Without anyone ever declaring it so, the ephemeral has been enshrined.

The Reuters report examined Trump-branded buildings in Florida because “determining the ownership of properties is easier there than in some other states.” But as Foer notes, “New York, Los Angeles, and Miami have joined London as the world’s most desired destinations for laundered money.” Another report from McClatchy found this:

Buyers connected to Russia or former Soviet republics made 86 all-cash sales — totaling nearly $109 million — at 10 Trump-branded properties in South Florida and New York City, according to a new analysis shared with McClatchy. Many of them made purchases using shell companies designed to obscure their identities.

As with the Reuters report, this analysis would only include those where the buyer was traceable, suggesting that the total is probably incomplete. But it is worth noting that these were “all-cash sales,” which turn illegally earned cash into a legitimate asset for the buyer.

The picture all of this paints is of a U.S. president who is knee-deep in laundered Russian money from a system that Putin and his kleptocratic friends would have a strong interest in protecting. Perhaps that is why, as Natasha Bertand explained, Donald Trump seems to be trying to rid the government of experts in Russian money laundering.

Bruce Ohr. Lisa Page. Andrew Weissmann. Andrew McCabe. President Donald Trump has relentlessly attacked these FBI and Justice Department officials as dishonest “Democrats” engaged in a partisan “witch hunt” led by the special counsel determined to tie his campaign to Russia. But Trump’s attacks have also served to highlight another thread among these officials and others who have investigated his campaign: their extensive experience in probing money laundering and organized crime, particularly as they pertain to Russia.

As the story goes, Deep Throat told Bob Woodward to “follow the money” when it came to unraveling the crimes of Watergate. To unpack the Trump-Russia conspiracy, it will be incumbent on investigators to “follow the laundered money.”

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Thanks for sharing this, you are awesome !