The Apprentice: Trump, Russia and the Subversion of American Democracy

In the ensuing decades, the deals got bigger and Trump got richer, but six times his companies entered bankruptcy, including after his misguided acquisitions of Atlantic City casinos, a luxury airline, and the legendary Plaza hotel. Debts and real estate reversals cost him access to conventional capital, as leading financial institutions increasingly refused to lend to him. In the late 1990s Trump was forced to turn to less discriminating sources of funds, most prominently Deutsche Bank. The German firm—Europe’s largest investment bank—had embarked on a major expansion into real estate lending and faced mounting suspicion that it was allowing itself to serve as a conduit of illicit cash for Russian oligarchs. Trump’s financial disclosures during the election showed he owed $360 million to Deutsche Bank, which by then was under multiple investigations for money-laundering schemes and massive mortgage-related fraud. Three days before Trump was sworn in as president, Deutsche Bank reached a $7.2 billion settlement with the Justice Department.4

Trump had always borrowed heavily in building his empire, calling himself the “King of Debt.” It was a common strategy in real estate development, using others’ money to reduce risk and multiply buying power, launching more and larger projects in the hope of collecting commensurate rewards. “He always used other people’s money, not cash,” said Barbara Res, who was a senior executive for Trump in the 1980s. “He always got somebody to put up funds for him. To put up the money. And he put up the brilliance.”5

Then in the mid-2000s, he abruptly changed course. The Trump Organization went from being a builder of high-end real estate, one that acquired properties and oversaw construction, to a licensing operation that took hefty fees from other developers for permission to affix the Trump logo on their hotels and condos. The king of debt also went on an inexplicable cash-spending binge, buying instead of building. In the nine years before running for president, he spent more than $400 million in cash on an assortment of properties, including a $12.6 million estate in Scotland, several homes in Beverly Hills, and $79.7 million for golf courses in Scotland and Ireland.6 He then plowed more millions into renovating and maintaining these properties, often, curiously, at a substantial loss.

A private company, the Trump Organization provided no explanation for how it had emerged from such financial peril in position to spend such sums. Trump “had incredible cash flow and built incredible wealth,” his son Eric said. “He didn’t need to think about borrowing for every transaction … It’s a very nice luxury to have.”

The shift toward licensing revenue was propelled by an unexpected break. In 2002, Trump was approached by the producer of the Survivor series on CBS to take part in a new reality show dubbed The Apprentice. Trump saw the tremendous promotional potential. (“My jet’s going to be in every episode,” he said.7) Trump began slapping his brand on a motley array of products, including menswear, steaks, vodka, and get-rich-quick classes at Trump University that would end in yet another class action lawsuit.

Even as his business evolved, Trump still saw himself as a real estate tycoon. His search for partners willing to pay millions merely for the use of the Trump brand—while shielding the American mogul from virtually all the financial risk—led him far from Manhattan into murky overseas terrain. Trump-branded projects in Azerbaijan, the Republic of Georgia, Brazil, and Indonesia put the future president in business with multiple individuals and companies suspected of money laundering, political corruption, and other categories of fraud.8

Russia had drawn Trump’s attention for decades. He pursued numerous deals to build a skyscraper in Moscow, starting in 1987 when he traveled to Russia to survey potential sites as part of a proposed partnership with the Soviet government.9 He tried again in 1996, announcing plans for a $250 million “Trump International” complex, and several times more in the ensuing decade.

None of those projects materialized. But while Trump could never gain a foothold in Moscow, Russian money began flowing out of the country and finding him. Endemic corruption under Putin had created an entire class of kleptocrats, loyalists enriched by the diversion of money extracted from the country’s oil and mineral wealth as well as other formerly state-owned assets. Many sought to move their mounds of currency overseas in case the Kremlin sought to grab them back, and money began surging into Trump’s portfolio.

In the United States, Trump-branded properties were increasingly sustained by an influx of cash from questionable foreign sources. His children Donald Jr. and Ivanka came under investigation for their promotional claims and the financing surrounding a forty-six-story condo hotel in Manhattan’s SoHo neighborhood built with substantial backing from investors from the former Soviet Union. Hundreds of condos at Trump-branded beachfront towers in South Florida were purchased by limited liability corporations—entities that mask the true owners’ identities, a perfectly legal arrangement but one that can conveniently be used to hide the conversion of illicit cash into Western assets. Among the buyers who did disclose their identities, at least five dozen had Russian addresses or passports. All told, they spent a combined $98.4 million on sixty-three condos.10 In 2008, the future president sold a Palm Beach estate to a Russian oligarch for $95 million, just four years after buying it for $41 million. His son Donald Trump Jr. said that same year that “Russians make up a pretty disproportionate cross section of a lot of our assets.”

These dim corners of Trump’s empire mostly escaped the attention of a public captivated by the blinding glare of his brand. His rambling announcement speech was widely ridiculed by political experts as proof that his campaign was just another vanity project, that Trump wasn’t even making any pretense to be a serious candidate. But away from Manhattan and the Beltway, voters saw a Midas who might be able to transform a troubled American landscape. With their budding adulation, Trump began planning to take possession of a more prestigious piece of real estate: the White House.

Trump made only passing reference to Russia in his 2015 announcement speech, though months later he was secretly pursuing yet another potential deal to build “Trump Tower Moscow.” The project was spearheaded by Trump’s lawyer, Michael Cohen, and a Russian-born associate, Felix Sater, who had an office in Trump Tower and carried Trump-branded business cards. (Sater had spent time in prison for stabbing a man and had separately been convicted of fraud. Aiming to reduce his sentence, he became an FBI informant.)

“Our boy can become president of the USA and we can engineer it,” Sater wrote to Cohen in an email touting the project.

ALMOST EXACTLY A YEAR LATER, TRUMP TOWER WAS THE SETTING for a far smaller gathering kept secret from the public.

On June 6, 2016, music promoter Rob Goldstone circled back to Trump Jr. by email, asking when he might be free to speak with Emin Agalarov, whose father had helped bankroll the Miss Universe pageant in Moscow, “about this Hillary info.” Trump Jr. then engaged in a flurry of messages and calls with both Goldstone and Agalarov. Phone records obtained by congressional investigators show two calls between Trump Jr. and Agalarov, one at 4:04 P.M. and another at 4:38 P.M., though it was unclear whether they spoke or exchanged voice mails.11

Within that thirty-four-minute time frame, Trump Jr. made or received another call, though with whom remains a mystery. (Phone records showed the number as “blocked.”) Democrats in Congress would wonder whether Trump Jr. had conferred with his father—whose Trump Tower residence had a blocked number—over how to proceed. In testimony before congressional committees, Trump Jr. professed not to remember whom he’d spoken with.

Trump Jr. and Agalarov—whose developer father was sometimes referred to as the “Trump of Russia”—connected by phone again on June 7. That afternoon, Trump Jr. spoke with both Manafort and his brother-in-law, Jared Kushner, another scion of a wealthy real estate family who had married into the Trump clan and become part of the candidate’s inner circle. Trump Jr. wanted Manafort and Kushner to attend the meeting. He then emailed Goldstone to set a time and place: “How about three at our offices?”

In later testimony, Trump Jr. would claim that he did not know the names or backgrounds of those being ushered into a suite of offices on the twenty-fifth floor of Trump Tower on June 9. The event was marked on his calendar only as “Meeting: Don Jr./Jared Kushner.” Trump Jr. said Kushner and Manafort knew even less about the guests or their purpose, and had been asked merely to “drop in.” But the fact that Trump Jr. coordinated schedules with them and insisted on their attendance suggests that he saw the meeting as important enough to convene his father’s top aides.

The meeting occurred as planned on June 9, though the time was bumped to four P.M. Trump Jr., Kushner, and Manafort found themselves sitting across a large conference table from Goldstone and four Russian-speaking associates. Among them was a lawyer, Natalia Veselnitskaya, with ties to senior officials in the Kremlin; Rinat Akhmetshin, a Russian-American lobbyist; Ike Kaveladze, a U.S.-based executive in the Agalarov company; and an interpreter.12

Veselnitskaya’s ties to the Kremlin are unquestioned if hard to accurately assess. She had earned a law degree in Moscow, worked in the office of a Russian prosecutor, and represented a roster of influential oligarchs—including a railway magnate who faced money-laundering charges in New York. “I am a lawyer and I am an informant,” she would later say in a television interview.13

But Veselnitskaya was best known in the United States for her campaign to overturn a set of banking and travel restrictions imposed on senior Russian officials suspected of human rights abuses. The sanctions were imposed as part of a congressional act named for a Russian lawyer, Sergei Magnitsky, who died in prison in 2009. Magnitsky was incarcerated by the Russian government while working for a U.S.-born businessman, William Browder, who claimed that he had been cheated out of hundreds of millions of dollars in an elaborate Russian tax fraud.

After Magnitsky’s death, Browder led a years-long crusade that culminated in the 2012 sanctions. Veselnitskaya became the point person in a Kremlin-orchestrated counter-campaign that involved lobbying members of Congress and orchestrating efforts to damage the reputations of Browder and Magnitsky. (Putin also retaliated by banning American adoptions of Russian children, a move that underscored how few levers are available to Moscow in sanctions showdowns.)

“I believe you have some information for us,” Trump Jr. said, getting straight to the point.14

Veselnitskaya launched into a meandering discussion about “individuals connected to Russia supporting or funding Democratic presidential candidate Hillary Clinton,” Trump Jr. testified later. “It was quite difficult for me to understand what she was saying or why.” It eventually became clear that she was referring to a trio of male heirs to the Ziff Davis publishing empire and one of their companies, a firm that had invested with Browder in Russia and come under investigation by Russian authorities.