As Trump spent the late 1990s and early 2000s struggling financially he turned to the Bayrock Group for much-needed funding. The company—which was run by Russian immigrants with ties to the Russian mafia and was headquartered in Trump Tower, New York — began a partnership with The Trump Organization, and helped develop properties in Florida, Arizona, and New York, including Trump SoHo.
Trump SoHo, which broke ground in 2007, typifies how the Trump Organization benefited from financing coming out of Russia and the former Soviet Union. Much of the project’s financing came from the Bayrock Group, founded by the Kazakhstan-born former Soviet official Tevfik Arif. Several funders of the project, including Arif, Tamir Sapir, and Alexander Mashkevich, hail from the former Soviet Union and have reported ties to the current Kremlin; many have also faced allegations of corrupt and criminal behavior, ranging from money laundering to smuggling to involvement in a prostitution ring. The same can be said for some of the property’s clientele; for example, Viktor Khrapunov, who formerly served as mayor of Almaty, Kazakhstan, and as that country’s energy minister, allegedly purchased condominiums in the building using money stolen from state coffers and laundered through a network of offshore shell companies.
Trump SoHo brought with it a series of controversies. In April 2010, some Trump SoHo buyers sued the Trump Organization over an “ongoing pattern of fraudulent misrepresentations and deceptive sales practices.” The plaintiffs alleged that Donald Trump Jr. and Ivanka Trump made misleading statements as to what percentage of the units had been sold (the case was settled in 2011, and the defendants did not admit wrongdoing.) The Major Economics Crimes Bureau of the New York District Attorney’s office also began investigating Ivanka Trump and Donald Trump Jr. over allegations that they had misled buyers when advertising units in the Trump SoHo development in 2010. Two years later, Trump’s personal lawyer Marc Kasowitz donated to the reelection campaign for the Manhattan District Attorney and asked him to cease the investigation into the Trump children. Although the D.A. returned the donation, the case was dropped three months later (Kasowitz has stated that the donation was unrelated to the case.) In November 2017, the Trump Organization agreed to “remove the Trump name from its hotel in Lower Manhattan and give up management of the property.”
One notable figure who featured prominently in the Trump SoHo development was the Russian-American real-estate developer Felix Sater, who formerly served as the managing director of the Bayrock Group. Sater, who served a year in jail in the 1990s for stabbing a man in the face with a margarita glass, became an FBI informant in Moscow after pleading guilty to involvement in a $40-million stock-fraud scheme orchestrated by the Russian Mafia (the records for the conviction have since been sealed). Sater joined the Bayrock Group in 2001 and helped secure financing for the Trump SoHo, leaning heavily on sources linked to Russia. After leaving Bayrock in 2009, he retained an office in Trump Tower and received Trump-branded business cards identifying him as a “senior adviser to Donald Trump;” Sater has said he had a “friendly” relationship with Trump and met with him “numerous times,” although the Trump Organization has disputed his account.
Sater and the Bayrock Group have been involved in at least two attempts to develop a Trump Tower Moscow. In 2005, Trump signed a one-year deal to explore building a Trump Tower in Moscow. Bayrock Group found a site—an old pencil factory—but the effort fizzled. More notably, Sater was involved in an effort to establish Trump Tower Moscow during the early stages of the 2016 presidential campaign, eliciting a signed letter of intent from the Trump Organization in October 2015. In November 2015, Sater reportedly emailed Michael Cohen, his longtime friend and the Trump Organization’s lawyer, about the project, writing, “I will get Putin on this program and we will get Donald elected … our boy can become president of the USA and we can engineer it.” The deal ultimately fell through in January 2016. In March 2018, Sater told MSNBC host Chis Hayes that a developer in Russia had worked to secure funding for Trump Tower Moscow from VTB Bank. VTB is Russia’s second largest bank, and has been sanctioned by the US.
Sater also provides an example of a business connection attempting to transition into the political realm. Along with the email to Cohen, which seems to suggest that Sater sees developing Trump Tower Moscow as part of a broader strategy to ensure Trump’s election, Sater was involved in an attempt during the transition to influence the administration’s policy on Russia. In January 2017, Sater and Cohen reportedly worked with the Ukrainian politician Andriy Artemenko to deliver a policy proposal rolling back sanctions against Russia to the incoming National Security Advisor Michael Flynn. Under the plan, Russia would withdraw its troops from Eastern Ukraine, while Ukraine would hold a referendum on whether to “lease” Crimea to Russia; in return, the U.S. would lift the sanctions it placed on Russia after the 2014 invasion of Crimea. Sater has repeatedly declined to comment on the matter, and there is no indication that the administration considered or acted upon the proposal.
In March 2018, Buzzfeed published their interviews with Sater. In them, he revealed that he had worked as an intelligence asset for the CIA, DIA and FBI, most notably working to track down Osama bin Laden before 9/11, handling a source in Russia’s foreign military intelligence with information on North Korean operatives, and posing as a money launderer in Cyprus and Turkey to catch Russian and Ukrainian cybercriminals.