The New York Times has broken the news that special counsel Robert S. Mueller III issued subpoenas to the Trump Organization for documents, the first confirmation that Mueller is examining the president’s business interests. This news came with few details, but it’s enormously significant for a couple of reasons.
First, it means that Mueller is looking right at President Trump, not just the people who worked for him or circled around him. And second, it gets to the heart of the president’s area of greatest potential legal liability: his money.
Trump may or may not have directly engaged in some kind of collusion with the Russian government in 2016. But if Mueller starts turning over rocks in his business, he’s going to find a lot of unsightly critters squirming around.
So what exactly is Mueller looking for? We don’t know, but it’s unlikely that he’s just fishing around. It’s obvious that Mueller’s investigation has been extremely systematic, and he has on his team a number of prosecutors with experience in areas such as money laundering. If he’s demanding documents from the Trump Organization, chances are he knows exactly what he’s after.
Mueller has a wide mandate. He’s charged with investigating not only Russian involvement in the 2016 election but also any other potential matters that arise from that investigation. So if he finds that, for instance, the Trump Organization was used as a conduit for money laundering from Russian mobsters, he’s going to pursue it even if it doesn’t have anything to do with 2016, and even if there’s no evidence Trump himself knew about it.
It’s important to note that the president has deep ties to Russia that go way beyond his unfulfilled desire to build a Trump Tower in Moscow or the Miss Universe pageant he held there. When Trump is asked about whether he has such ties, he tends to say things such as, “For the record, I have ZERO investments in Russia.” This is a clever sleight of hand, because the question isn’t whether Trump has put money into Russia, but whether Russians have put money into Trump. And they almost certainly have.
You can’t succeed in the real estate business without access to capital. But after a series of business bankruptcies in the 1990s, Trump found it impossible to borrow money, because banks refused to lend to him (the one exception was Deutsche Bank). So he had to find new sources of cash, and he went abroad, especially to the former Soviet Union.
A few years ago, a golf journalist asked Trump how he was able to get the money to continue to build golf courses after the financial crisis, and he replied that he had access to $100 million. The journalist later asked Eric Trump what his father was talking about, and according to him, Eric Trump replied, “Well, we don’t rely on American banks. We have all the funding we need out of Russia.” (Eric Trump has denied saying this.)
Donald Trump Jr. admitted this, too. “Russians make up a pretty disproportionate cross-section of a lot of our assets,” he said in 2008, “say in Dubai, and certainly with our project in SoHo and anywhere in New York. We see a lot of money pouring in from Russia.”
Trump has been making deals for a very long time, and there are many Trump projects that are full of shady characters and questionable transactions with money moving around the world, including that of the Trump Tower in Toronto, which also went bankrupt. The tale is detailed here. There are others; one is described here.
I spoke today with James Henry, an economist, attorney and journalist with affiliations at Yale and Columbia who has done extensive work on these issues, including investigating some of Trump’s finances. He argued that Trump might be vulnerable to a deep exploration of his finances, because our laws might make it harder for him to plead ignorance about sources of funding.
“We have fairly stiff money laundering statutes compared to other countries,” Henry told me. “They actually put a lot of responsibility on commercial real estate investors to know who they’re dealing with.” That’s true both of the source of funds Trump got to build these projects in the first place, and the people who eventually bought the units. If these Trump buildings were indeed used as a vehicle for large-scale money-laundering, Trump could well be legally vulnerable.
For decades, Trump acted as though rules and laws were for other people, allegedly stiffing contractors and workers, deceiving investors, running scams like Trump University and getting into bed with sketchy characters. There are so many stories of egregious behavior on his part that you’ve almost certainly not heard of them all. For instance, did you know Trump was once forced to pay a $750,000 fine by the Federal Trade Commission over questionable stock deals?
As I said, we don’t know exactly what Mueller is looking for. What we can say is that there are multiple Trump projects that were financed with money coming from sources that were questionable at best, and possibly criminal at worst. We know that the more you look into these projects, whether they’re in SoHo or Toronto or Panama, the more suspicious you get and the worse things look.
As Henry pointed out to me, while Mueller might not be able to indict a sitting president if illegal behavior is discovered, he could certainly go after all the people around him: “I think a prosecutor could look at this fact pattern and say, ‘Yeah, it’s indictable. A bunch of people should go to jail.'”
