Weird Money In, Weird Money Out

Trump received a suspiciously generous mortgage from Hong Kong investors in July of 1994 that saved his troubled Riverside South development from bank foreclosure. The exact same month, Trump’s brother Robert used companies that Donald partially owns, to invest millions of dollars in a family of overseas companies that would be defunct within three years. Was Trump paying overseas investors to lend him money?

Trump lived off one-time cash infusions

One of the strangest observations about Donald Trump’s cash flow comes from a 1995 analysis by New Jersey casino regulators.  The report noted that all Trump’s significant sources of cash flow “appear to be one-time occurrences and do not represent continuing sources of funds.” The report also noted that Trump’s cash flow problems were likely to grow in the future, because the end of a 1990 agreement with his lenders meant “debt service on the replacement debt must now be serviced with cash.” Despite finding Trump’s cash flow had underperformed projections, his major potential income streams were heavily leveraged, and his projected cash requirements were likely to only grow, regulators opined that he would be solvent enough to continue operating his casinos because he had “demonstrated an ability to adjust cash-flow requirements when necessary.”

Right there, in a nutshell, is the problem of Donald Trump’s finances. They don’t make sense. He’ll spend millions of dollars on enterprises that lose money, but somehow there’s always cash around when he needs it.

That explains why a growing number of observers have reached the conclusion that Trump is engaged in some kind of money laundering operation. It would appear that Trump controls some level of assets held entirely “off the books.” When he needs cash in America, he pays a foreign intermediary to loan it to him.

Trump bailed out by generous Hong Kong lenders

The starkest example of this can be seen in 1994. During this period, Donald Trump was still laboring under an Operating Agreement he had reached with his banks after bankrupting several companies he controlled and defaulting on billions of dollars in loans. Trump had maintained control over Riverside South, a large parcel of undeveloped rail yards that Trump and his father had been trying to develop since the early 70s. The property, which yielded no income, was also heavily mortgaged.

By summer 1994 it looked like Trump would be forced to default on the loans and surrender the property to his bankers. Suddenly, a mysterious group of Hong Kong investors swooped in to buy up Trump’s distressed $210 million mortgage at a steep discount of only $90 million. The new investors gave Trump generous terms, allowing him to keep 30% equity, operational control, and an open line of credit to finance development.

They seemed to come out of nowhere — a powerful group of Hong Kong billionaires who appeared in June to revive Donald J. Trump’s troubled Riverside South project with millions in cash and a promise to finance the multibillion-dollar development. […] The $2.5 billion project had been languishing until the arrival of the Hong Kong investors, who purchased Mr. Trump’s $250 million debt on the land for $90 million and made a commitment to finance the construction of Riverside South. (New York Times, August 29, 1994)

Trump’s Brother Sent Millions Abroad, No Return

Why would RAGEPATH think that this $90 million from Hong Kong was actually Trump’s money? Well our suspicions start with a publicly-traded company called Management Technologies that spent $12.8 million to buy four companies called “Winter Partners” based in New York, London, Singapore and Hong Kong from someone in Zurich.

 On July 14, 1994, the  Company acquired Winter Partners Limited, Winter  Partners,  Inc,  (subsequently renamed MTi Abraxsys Systems, Inc), Winter Partners Pte Limited (subsequently  renamed   MTi   Abraxsys   Systems   Pte Limited),   and    Winter    Partners    (HK)   Limited (subsequently  renamed   MTi   Abraxsys   Systems  (HK) Limited)  from  Winter   Partners  Holding   AG.    The companies, hereafter referred  to as  the WP companies, formed the international  banking software  division of Winter Partners, a Zurich, Switzerland based company. The Company  paid  a  total  of  $12,800  for  the WP companies. The Company financed the acquisition through a combination  of cash  from its  own  resources, short   term borrowings and proceeds from new share issuances. (Management Technologies, Annual Report, Fiscal Year 1995)
 Management Technologies was in turn closely tied to Donald Trump’s brother, Robert. According to the company’s public filings, the company had several insider transactions with Robert Trump, including hiring financial consultants designated by Robert Trump in July of 1994.
 Item 12.  Certain Relationships and Related Transactions [...] Robert S. Trump, Gerald Franz, Midland & Associates [...] the Company also agreed to place the sum of $100,000 in an escrow account with  its counsel for the specific purpose of repayment  of the $50,000 loan  made by Mr.  Franz and  for  payment by  the  Company under  a  joint marketing agreement with Financial Performance Corp., a software company of which  both Messrs. Franz  and Trump are  affiliates. The  funds  in  the  escrow  account  have  been   disbursed  as determined by Mr.  Franz, in  his sole  discretion, including  a $40,222.15 payment made to Mr. Franz. [...]  As a consequence  of a  transaction with  Midland Associates,  a general partnership in which Mr. Trump is a partner, in  July of 1994, the Company entered into a financial  consulting agreement with Mr. Gerald Franz to perform financial  consulting services, and agreed to pay Mr. Franz or his designee a fee in  the sum of $60,000. (Management Technologies, Annual Report, Fiscal Year 1995)
In the exact same month, another company called Midland Associates filed four UCC statements indicating that loans had been extended to each of the Winter Partner companies purchased by Management Technologies.  Each of those UCC statements, signed by Robert Trump, indicated that the loans were secured against all future accounts receivable earned by the companies. The size of the loans is not disclosed in the UCC financing statements (one, two, three, four).

We know from Donald Trump’s 2015 Financial Disclosure that he was a 25% owner of Midland Associates at the outset of his presidential campaign. The remainder of the company was owned by Trump’s family members.

We also know from Trump’s 2015 Financial Disclosure that he had been a partner in Midland Associates continuously from 1968. This would mean that Donald Trump owned at least 1/4 of the money that was pumped into Winter Partners through Midland Associates.

After the transaction, Winter Partners went on to lose slightly more than $13 million and was closed down as a total loss by Management Technologies in 1997, following its insolvency and liquidation.
 Winter Partners was acquired in July of 1994 in an acquisition transaction that included Abraxsys, Inc., Abraxsys Pte and Abraxsys HK. The Company paid a total of $12,800,000, and incurred certain additional costs of approximately $325,000.  [...] In the years ended April 30, 1995, 1996 and 1997, Winter Partners incurred losses of $5,038,147, $6,070,311 and $1,954,026, respectively. No dividend was paid to Management Technologies, Inc. in conjunction with the liquidation of Winter Partners.  Accordingly, at April 30, 1997, the Company's apportioned investment in, and advances to,  Winter Partners are valued at zero. (Management Technologies, Annual Report, Fiscal Year 1997)

So what’s the deal here? Is this a staggeringly stupid investment by Donald Trump’s brother, who purchased several foreign-controlled companies with one company, then loaned them an undisclosed sum secured against all their future earnings with another company, only to lose his entire investment?

Or is it a simple payment to someone overseas that may have financed the loan Donald Trump received in the exact same month these payments were made?

We admit it’s possible that these transactions were completely unrelated. We think there is enough evidence that these transactions were interrelated that the burden of skepticism should lie with those arguing they are not.  We’d welcome evidence that proves our conclusion wrong.

Russia’s Operation is Bigger than Trump

Our RAGEPATH project did not begin as a specific inquiry into Trump’s ties with the Russian regime. At the outset, we simply felt that Trump’s business record had not been carefully examined during the campaign. We believed that Trump had used a screen of self-generated scandals to shield himself from financial scrutiny. So we went back over his finances and we have dug deep.

In the course of our investigation, we found a lot of Russian associates in Trump’s business past. The exact scale and scope of Trump’s relationship with Russian operatives is still unclear, but it’s big and unmistakable. While Trump’s ties to former Soviet intelligence agents have been extensive since at least 1992, there is some evidence that suggests even his father may have been a Soviet asset.

We didn’t just find Russians associates, however. There are a lot of Italians with mob connections, too. The Trump family had substantial business ties with at least three mob families (the Genovese, Gambino and Scarfo families). There are some deeply troubling associations with Hong Kong triad figures. Trump even appears to have taken dirty money from Ferdinand and Imelda Marcos.

Sometimes it feels impossible to find a financial crime in New York that Trump didn’t wet his beak in. There is no grift so small that he won’t cash in on it. And, unfortunately, something fishy has been going on at the FBI too.

Why is that relevant with regards to Russia? Because our findings so far indicate that Trump collaborates with criminal conspiraciesWe don’t have much evidence that he’s the instigator of them.

What does that mean? Trump and the Russian regime is just the tip of a very dangerous iceberg. We do believe it is vital for this nation’s security to remove Trump from office as soon as feasible. But even if Trump were impeached tomorrow, there would still be a very important question left to answer – what has the Russian regime been up to, and how advanced is their plot?

The Russian regime is not a domestic political party. It is a hostile foreign power that has engaged in a sustained campaign of subversion. Look for a moment at the people and causes it is known to have supported:

  1. California and Texas separatists: In September of 2016, Putin’s regime sponsored a global conclave of separatist movements, including domestic movements that want to split apart the United States. These guys may seem like kooks to you and me, but to the Russian regime they are dissidents who can be co-opted to destabilize the United States.
  2. Green Party candidate Jill Stein:  In December of 2015, Jill Stein shared a table in Moscow with Michael Flynn and Vladimir Putin.
  3. The Trump Tower meeting where they appear to have stuffed a clown-car conference room full of Russians operatives.
  4. Apparently, Republican Representative Dana Rohrabacher’s allegiance to the Russian regime was so widely known in Washington that it was a subject of private jokes among elected officials.

And of course, we’ve learned from Michael Flynn that agents of foreign powers have been conducting undisclosed lobbying of Congress. We also have seen evidence that Russian operatives may have actually hacked voting systems in Florida.

What we see are the outlines of a sustained effort to cultivate political influence in the United States in the interests of subverting American democracy. Does it really seem plausible that no Democrats have been approached?

President Trump has tweeted in the past that Chuck Schumer’s ties to Putin should be investigated. While Trump spews a lot of bullshit, he also leaks a lot of secrets on Twitter. It’s not impossible that he leaks Russian secrets just as easily as he leaks the American ones.

I’m not an expert on Chuck Schumer’s biography, but I know he did team up with Putin to promote Russian gas stations in 2003, claiming it would break the monopoly of OPEC. More recently, Schumer has called into question the Democratic Party’s resolve on the question of what Russia’s regime has been trying to do to American democracy.

It gives me no pleasure to sound a McCarthyite warning. But Trump’s evil clown show of chaos may only be the sideshow spin-off of a larger operation by the Russian regime.

The Trump question is a vital one. The core mission here at RAGEPATH is figuring out “what is up with Trump?” But Americans should not let that very urgent question obscure the fact that whatever the Russian regime was up to, it predates Trump’s presidential candidacy.

Every incumbent elected official should be asked to identify and explain their interactions with Russian agents in recent years, if for no other reason than to help establish the extent and mechanisms of the Russian regime’s influence efforts.

I’ve heard a lot of people say that the question of Russian subversive influence isn’t relevant to “ordinary Americans” concerned with bread-and-butter issues. But, it really should be. The subversion of American democracy by a hostile power is bigger than either party and needs to be treated like the threat it is. To ignore such a threat while we tear our own society apart would truly be a tragedy.

 

How The Trump Dynasty Erased Its Founding Woman

Donald Trump likes to boast, falsely, that he made his own fortune in real estate. Donald Trump’s father also liked to boast, falsely, that he made his own fortune in real estate. In truth, both Donald and his father inherited a real estate fortune that was developed by a woman: Donald Trump’s grandmother, Elizabeth Trump. Their lies have nearly erased the woman who nurtured and expanded the real estate empire that both men later inherited.

Throughout his career, Fred Trump portrayed himself as a hard-working orphan who founded the family business as a child.  Fred Trump claimed (and reporters uncritically repeated) that “because of his age – he couldn’t sign checks until he was 21 – the business was in his mother’s name.” Fred Trump also told tales of working as a “horse’s helper,” hauling loads of lumber up rain-slicked hillsides that horse-drawn carts couldn’t manage, to provide for his deprived family:

“My father died when I was 11, and I took odd jobs to help with the family finances. […] Just after I graduated from high school, I got a job as a horse’s helper.”  (New York TimesJanuary 28, 1973)

It is true that Fred Trump got his start working for his mother, Elizabeth Trump. It is true that after Fred reached adulthood, she renamed her company “Elizabeth Trump & Son.” Fred Trump’s father,  Frederick, died in 1918, when Fred Trump was 13 years old. At the time of his death, Frederick Trump owned real estate and personal property worth $31,642 (which would be worth $512,837 in today’s money).

There is clear evidence that Elizabeth Trump carried on her husband’s business after he passed. The Brooklyn Daily Eagle reported that Elizabeth Trump had purchased mortgages on August 3, 1918 and on November 23, 1918. Elizabeth Trump listed a newly constructed house for sale on September 13, 1924. By September 4, 1927, Elizabeth Trump was listing houses under “E. Trump & Son.” Fred Trump was 22 in 1927, which was the same year that he was arrested at a Klan rally.

Did Elizabeth Trump fall into hard times before her son took over the business? There is no evidence that this happened. In fact, the local newspaper reported in 1928 that Elizabeth Trump was traveling in Paris with her son Fred and her daughter Elizabeth in tow. Fred Trump would have been 23 at the time of this “grand tour” with his mother.

Donald Trump’s finances were investigated extensively in 1981 by New Jersey casino officials. While much of Donald’s income came from his father, he was also the beneficiary of a trust that had been established by his grandmother in 1949. That trust paid Donald $11,000 in 1980. (which would be worth $32,670 in today’s money)

We have found records indicating that Donald’s niece and nephew (the children of Fred Trump Jr., who died in 1981) each received 5% interests in several Brooklyn buildings through their great-grandmother’s trust.  Donald’s niece and nephew later surrendered their property interests in the properties conveyed by Donald’s grandmother.

Donald Trump was one of five siblings. If each sibling received an equal 10% interest from their grandmother, that would mean that Elizabeth Trump was 50% owner of several buildings established by Donald’s father, Fred. This would suggest that she remained a significant player in Fred Trump’s businesses long after she took her adult son with her to Paris in 1928.

Why would Elizabeth Trump have been written out of the family history after playing such a crucial role?

Donald’s sister (also named Elizabeth) became a bank secretary and once told a reporter “It’s a man’s family.” Her sister Maryanne became a federal judge who publicly lamented the decline of sexual harassment in the workplace, asking an audience “where has the laughter gone?

Donald’s own daughter, Ivanka, has explained how Trump would physically yank his then-8-year-old daughter back on the ski slopes to prevent her from winning against him:

Ms. Trump was bred by her father and her mother, Ivana, who have since divorced, to show competitive mettle. She recalled racing down a ski slope, at age 8, during a family trip to Aspen, Colo. “At one point I remember thinking it was rather bizarre that I had started moving backwards up the hill,” Ms. Trump said. “It took me not too long to realize that my father had hooked his ski pole around the cuff of my unitard. Clearly he wanted to win.” (New York TimesDecember 27, 2007)

Donald Trump is the third generation scion of a New York real estate dynasty that owes much of its fortune to his grandmother. The Trump Family’s official story of “self-made men” inventing themselves each generation is false. The lies told by Donald and his father obscure the role of the woman who helped make them rich.

 

Art Provides Transcript of Trump Summit

Donald Trump met in secret with Vladimir Putin for two hours today. The only witnesses were men who have worked for Putin for years and an unknown American interpreter.

But we may have found the meeting’s transcript in the Collected Works of Samuel Beckett:

VLADIMIR: That’s all dead and buried.

ESTRAGON: My clothes dried in the sun.

VLADIMIR: There’s no good harking back on that. Come on.

He draws him after him. As before.

ESTRAGON: Wait!

VLADIMIR: I’m cold!

ESTRAGON:Wait! (He moves away from Vladimir.) I sometimes wonder if we wouldn’t have been better off alone, each one for himself. (He crosses the stage and sits down on the mound.) We weren’t made for the same road.

VLADIMIR:(without anger). It’s not certain.

ESTRAGON: No, nothing is certain.

Vladimir slowly crosses the stage and sits down beside Estragon. #

VLADIMIR: We can still part, if you think it would be better.

ESTRAGON: It’s not worthwhile now.

Silence.

VLADIMIR: No, it’s not worthwhile now.

Silence.

ESTRAGON: Well, shall we go?

VLADIMIR: Yes, let’s go.

They do not move.
 

(Waiting for Godot)