WSJ CLAIM: Russian State-Run Bank Financed Deal Involving Trump Hotel Partner

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Another report has surfaced which could result in more trouble for President Trump when it comes to his alleged business dealings with Russia.

According to the Wall Street Journal (WSJ), VEB, a Russian state-run bank which has a history of business dealings that have triggered probes by U.S. investigators, funded a major real estate deal involving Donald Trump’s onetime partner in a Toronto hotel at a key moment for the project.  The WSJ cites sources as “people familiar with the transaction.”

Allegedly, Alexander Shnaider, a Russian-Canadian builder who built the Trump International Hotel and Tower, invested in the Toronto real estate deal (“project”) after receiving hundreds of millions of dollars from a separate asset sale that involved VEB.

Reportedly, Alexander Shnaider sold his company’s share in a Ukrainian steelmaker for about $850 million in 2010.  The WSJ states: “According to two people with knowledge of the deal, the buyer, which hasn’t been identified publicly, was an entity acting for the Russian government. VEB initiated the purchase and provided the money, these people say.”

FROM WSJ:
U.S. investigators are looking into any ties between Russian financial institutions, Mr. Trump and anyone in his orbit, according to a person familiar with the probe. As part of the investigation, they’re examining interactions between Mr. Trump, his associates and VEB, which is now subject to U.S. sanctions, said another person familiar with the matter. The Toronto deal adds a new element to the list of known connections between Mr. Trump’s associates and Russia.

After Mr. Shnaider and his partner sold their stake in the steelmaker, Mr. Shnaider injected more money into the Trump Toronto project, which was financially troubled. Mr. Shnaider’s lawyer, Symon Zucker, said in an April interview that about $15 million from the asset sale went into the Trump Toronto project. A day later, he wrote in an email: “I am not able to confirm that any funds” from the deal “went into the Toronto project.”

A spokesman for the Trump Organization, the family’s real-estate firm, said Mr. Trump had no involvement in any financial dealings with VEB and that the Trump company “merely licensed its brand and manages the hotel and residences.” VEB didn’t respond to requests for comment.

Mr. Trump has said he has no dealings with Russia. “To the best of my knowledge, no person that I deal with does,” he said in February. On Friday, Mr. Trump’s lawyers released a two-month-old letter stating that 10 years of his tax returns show little income, investments or debt from Russian sources beyond items already known to the public.

VEB has long been viewed by Russian analysts as a vehicle for the Russian government to fund politically important projects, including the 2014 Winter Olympics in Sochi. A VEB executive in New York was sentenced to prison last year after pleading guilty to conspiring to act in the U.S. as a Russian agent without notifying U.S. authorities.

Reportedly, when Mr. Shnaider’s steelmaker transaction went through, Vladimir Putin served on VEB’s supervisory board as chairman, and approved of the deal.

The WSJ points out a fact that should not be overlooked.  VEB was sanctioned by the U.S. in 2014, and American entities are barred from financial involvement with VEB.

Adding fuel to the fire, President Trump’s son-in-law, Jared Kushner met with a VEB top executive in December 2016.  White House press secretary Sean Spicer has said Kushner’s meeting was part of his role during the Trump transition.  Spicer says Kushner’s job was to meet with foreign government officials.

According to the WSJ, the Toronto deal was a 2007 joint venture between Trump and Shnaider, and it cost about 500 million Canadian dollars.  Trump’s end of the deal was to manage operations, while Shnaider planned to develop the tower through his company, Talon International Development Inc.

In November, the Toronto project entered insolvency proceedings, and in March it was approved for sale by a judge.

The Trump Organization claims it was not the owner, developer or seller of the project. While The Wall Street Journal and others reported in 2011 and 2012 that Mr. Trump had a minor ownership stake in it, Trump’s attorney now says Trump “did not hold” equity and had no involvement with the financing.

Financial-disclosure forms filed the 2016 show that the Trump Toronto Hotel Management Corp. has received $611,000 in fees from the project since 2015.  The forms don’t disclose the company’s total income from the transaction.

The WSJ offered the following flow chart:
P1-CA889_VEB_9U_20170515155419

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