'The New Yorker' Uncovers Trump Hotel's Ties To Corrupt Oligarch Family
ARI SHAPIRO, HOST:
The Trump Organization's overseas properties have raised questions about conflicts of interest. In the latest issue of The New Yorker, Adam Davidson writes about one that he calls Donald Trump's worst deal.
ROBERT SIEGEL, HOST:
It's a hotel in Azerbaijan, one of the most corrupt countries in the world. And the deal links a chain of people from Ivanka Trump to shady officials in Azerbaijan and possibly to members of Iran's Revolutionary Guard, which has been accused of sponsoring terrorism.
SHAPIRO: The property is in Baku, Azerbaijan's capital. New Yorker writer Adam Davidson went to visit.
ADAM DAVIDSON: There's about a 2-mile-by-half-a-mile stretch along the Caspian Sea that's about as luxurious as any city in the world, just the most beautiful shops and hotels. There's luxury restaurants, etc.
SHAPIRO: But that's not the site of the Trump property.
DAVIDSON: There's this neighborhood quite far away that's more like strip malls and kind of down-on-your-luck hookah bars, and that is where that luxury Trump Hotel and residence was supposed to be.
SHAPIRO: The hotel has never opened, but the name at the top is still there, Trump. The Trump Organization says that branding was the only involvement they had. In other words, they were just a licensor. Adam Davidson of The New Yorker says that's not entirely accurate.
DAVIDSON: They were intimately involved in this building. They had a profit share. They weren't owners, but Trump staff were flying over for quite a while every month to oversee every aspect of the building...
SHAPIRO: Including Trump's daughter Ivanka.
DAVIDSON: Ivanka, she went once, but from New York, I'm told she was involved in every decision. She was - she was intimately involved. And that's really important for legal reasons that they were so involved.
SHAPIRO: This Azerbaijani official you write about who is at the center of this project, Ziya Mammadov, seems like a shady character. What did you learn about him?
DAVIDSON: So Ziya Mammadov is the transportation - was, until a couple of weeks ago, the transportation minister of Azerbaijan. And he's been called by American officials notoriously corrupt, even for Azerbaijan.
He is a man whose salary was something around $12,000 a year, yet he became a billionaire with the most ridiculous, luxurious homes. There's a bunch of companies - one is technically owned by his son; the other is technically owned by his brother; another is technically owned by his former driver - but everyone believes are front companies for Ziya Mammadov, this very corrupt official. And it was this group of companies that the Trump Organization signed their deal with.
SHAPIRO: And then what is Mammadov's possible connection to the Iranian Revolutionary Guard?
DAVIDSON: We believe, American officials believe, that Ziya Mammadov has a close business relationship with a company called Azarpassillo. And the more I learned about Azarpassillo, the clearer it seemed to be that they are likely a front company for the Iranian Revolutionary Guard Corps. Many believe - the president himself has made it clear he believes - that the Revolutionary Guard funds terrorism around the world and does a lot of other nefarious things through front companies, front companies that technically have no relationship but work for the Revolutionary Guard.
SHAPIRO: So you've got this thread from the Trumps to the Azerbaijanis to the Iranians. And the question is, did the Trump Organization break a law? And it boils down to something called the Foreign Corrupt Practices Act, which basically prohibits American companies from doing business with corrupt officials overseas. You talked to a lot of lawyers who said even a passing glance at this deal would have raised a lot of red flags. What evidence is there that the Trump Organization may have violated this law?
DAVIDSON: The way these rules work is you need to follow red flags. So if you are buying some office furniture from Norway, you probably don't see a lot of red flags. You're not too worried. But once you are doing business in Azerbaijan at all, because it's such a corrupt country, that's a red flag. When you're doing business with a government official of any country, that's a red flag. When you're doing business with a government official who is known to be perhaps the most corrupt man in one of the most corrupt countries in the world, that's considered a huge red flag.
SHAPIRO: Adam, we should note that the Trump Organization canceled this deal after the election in December.
SHAPIRO: This law, the Foreign Corrupt Practices Act, is clearest when an American bribes a foreign official. And the Trump Organization told you the money is going the other way, that they're actually profiting from this. So what could actually be illegal here?
DAVIDSON: So this is actually a debate. I'd say nearly every expert in the FCPA said it's very possible there was a violation here. But several said it would be tricky to prove it because you would need to show that the Trump Organization profited through the corruption that they enabled through giving something of value to a foreign corrupt official.
That's a mouthful. But the Trump Organization's assertion is, hey, we didn't give them anything of value. It doesn't have to be money, just anything of value. And they gave their name, their reputation, their brand value. And as we know, the president values his - the brand value of his name very highly. And - and that put a sheen, a kind of American-safe sheen to an otherwise corrupt operation.
SHAPIRO: So it sounds like a tough case.
DAVIDSON: I think it's a very tough case. And, you know, the Department of Justice tends to like home runs. They like - they tend to like 100 percent cases, 98 percent cases. They don't like tough cases. But I think when it's the president of the United States, it's very different than if it's a case against, you know, just some generic real estate developer.
And we, the American people, need to know, is our president in business with really shady people? Do really shady people have information about him? That's a different kind of need than the decision-making process that normally goes into one of these prosecutions.
SHAPIRO: Adam Davidson's article in The New Yorker is called "Donald Trump's Worst Deal." Great to talk to you, Adam.
DAVIDSON: Ari, such a pleasure.
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