House of Trump, House of Putin2

by Craig Unger

  After many fruitless years of trying to develop a Trump Tower in Moscow, several real possibilities were now alive. Trump told Real Estate Weekly that he was in talks with Agalarov as well as three other groups. “There’s no rush as far as I’m concerned,” he said.101 “The Russian market is attracted to me. I have a great relationship with many Russians, and almost all of the oligarchs were in the room.”

  Agalarov was developing a fifty-seven-acre site near the Crocus complex where the pageant was being held and hoped to build thousands of New York–style condos.102 Trump’s approach, however, was slightly different—sort of Trump SoHo 2.0. To that end, Tamir Sapir’s son, Alex, and Rotem Rosen, both of whom had participated in the SoHo development, had flown in from New York to meet with Agalarov and Donald to discuss replicating Trump SoHo in Moscow. “The Trump Soho has a lot of very high profile Russian visitors and they have been telling us they wish there was something modern and hip like it in Moscow,” said Alex Sapir.103 “Over the last ten years, there have been no big new hotels built in Moscow. A lot of people from the oil and gas businesses have come to us asking to be partners in building a product like Trump Soho there.”

  Still, it was striking that Trump had had no success developing a project in Moscow after twenty-six years of trying, at a time when there were dozens of Trump-branded towers all over the world. Donald Trump Jr.’s explanation that trust, crime, and fear got in the way was persuasive—but only if you believed corruption had presented an insurmountable stumbling block for Trump projects in the past.

  A more convincing reason, the Atlantic reported, may have been that Felix Sater, in his various forays into Russia, had managed to alienate potential partners with his profligate conspicuous consumption—a substantial feat given the voracious appetite for extravagance among Russian oligarchs. “You really have to be very talented to do that,” a Russian real estate consultant told the Atlantic. “And most people didn’t take him seriously. He was ready to pay for a few bottles of Cristal in the club, but was not someone you want to make a serious deal with.”104

  Another factor—one that no one talked about—may have been the most relevant of all. In Moscow, Trump was unable to offer either his financiers or his condo buyers an amenity that had been vital to his comeback and to many of his business associates who came to his rescue after the Atlantic City fiasco. By this time, many hundreds of condo buyers had likely used shell companies and all-cash payments to purchase Trump-branded apartments. They were laundering money. Similarly, hundreds of millions of dollars in financing for various Trump-branded properties—in SoHo, Toronto, Panama, and more—had been repeatedly traced to Russians trying to get their money out of their country. And that is precisely what the Trump Moscow project could not offer. Laundering money for the wealthiest Russians meant getting their money out of Russia—not putting more in it.

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  Trump’s second day in Moscow was Saturday, November 9, and according to Facebook posts by various onlookers, he was at the Ritz-Carlton Moscow for part of the day and spent some time getting a tour of the city. At some point that day, Trump was interviewed by MSNBC’s Thomas Roberts, who was hosting the pageant that night, and asked Trump whether he had a relationship with Putin. “I do have a relationship with him,” Trump said. Then he added that Putin had “done a very brilliant job. . . . He’s done an amazing job—he’s put himself really at the forefront of the world as a leader in a short period of time.”105

  The Miss Universe pageant had become a valuable asset for Trump, but it also served another function for him. He loved beautiful women. And, as the owner of the pageant, Trump told shock jock Howard Stern, he was entitled to do as he pleased. “I’ll go backstage before a show, and everyone’s getting dressed and ready and everything else,” he said.106 “You know, no men are anywhere. And I’m allowed to go in because I’m the owner of the pageant. And therefore I’m inspecting it . . . Is everyone OK? You know, they’re standing there with no clothes. And you see these incredible-looking women. And so I sort of get away with things like that.”

  Not that the contestants approved. Tasha Dixon, a former Miss Arizona, told a CBS affiliate in Los Angeles that Trump barged into her dressing room in 2001 when she was a contestant. “He just came strolling right in. There was no second to put a robe on or any sort of clothing or anything. Some girls were topless. Other girls were naked,” Dixon said. “Our first introduction to him was when we were at the dress rehearsal and half-naked changing into our bikinis.”107 There were other such stories. (In 2016, the Trump campaign called them “totally false.”)

  And so, that night, for the first time in the pageant’s sixty-one-year history, with contestants from eighty-six countries on parade, the Miss Universe pageant was televised live all over the world from Moscow. Gabriela Isler of Venezuela was crowned as Miss Universe, and Emin performed two numbers.108 Trump had told the Agalarovs that one billion people usually watched the telecast, a selling point the pageant broadcast in its press releases,109 but in fact the audience was considerably smaller. (According to Deadline Hollywood, in 2013, about 3.8 million viewers in the US watched the show, down from 6.1 million the year before.)110

  Trump was not the only denizen of Trump Tower to attend. It had been seven months since the FBI raid on the tower’s fifty-first floor. Alimzhan Tokhtakhounov had fled the United States and was still on the lam. But here he was, a VIP guest on the red carpet near Donald Trump.111 “We never thought we’d have a presidential candidate who was caught up with that level of criminality and corruption,” said John Sipher, the former CIA agent in Moscow.112 “We in the government knew to stay the fuck away. The fact that the Trump people were actually attracted to that is really dangerous.”

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  Later on that night, the Daily Beast reported,113 the Agalarovs and Herman Gref, the head of the giant Sberbank of Russia, threw a huge dinner party for Trump. He was thrilled by all the attention he was getting. “I was with the top-level people, both oligarchs and generals, and top-of-the-government people,” he said later, on the Hugh Hewitt radio show.114 “I can’t go further than that, but I will tell you that I met the top people, and the relationship was extraordinary.”

  Exactly what happened next is unclear. Trump later told FBI director James Comey that he returned to New York and didn’t even stay overnight. “He said he arrived in the morning, did events, then showered and dressed for the pageant at the hotel,” Comey wrote in a memo. “Afterwards, he returned only to get his things because they departed for New York by plane that same night.”115

  But Trump’s account, as reported by Comey, does not ring true.116 The time of landing is unspecified in flight records, according to Bloomberg, but it was early enough to afford Trump much of Friday in Moscow during the day, all of Friday night, and all day Saturday before his flight left at 3:58 a.m. Sunday.

  The bottom line was that Trump claimed not to have even spent one night in Moscow, but according to records, he had one full overnight in Moscow, and another night that went into the early hours.

  That left some time, but not much, for fun. Answers to what exactly happened during that period may—or may not—be found in a report put together by former MI6 agent Christopher Steele that has become famously known as the Steele Dossier.

  Steele, who is fluent in Russian, was no naïf when it came to the Kremlin. Back in the early nineties, he had worked in Moscow under diplomatic cover out of the British embassy during the turbulent ascent of the oligarchs. But he returned to London, and in November 2006, Steele was put in charge of MI6’s investigation into the assassination of Alexander Litvinenko. When the official report of the Litvinenko Inquiry was released, it backed up Steele’s findings that the murder was an FSB hit that was “probably approved” by Vladimir Putin.117

  Steele soon left MI6 for the private sector and in 2009 started a small investigative-research firm called Orbis Business Intelligence. Among his clients
was the FBI, which hired him to help crack Tokhtakhounov’s gambling and money-laundering ring in Trump Tower. Steele became aware of Tokhtakhounov’s presence at the Miss Universe pageant and was agog at his proximity to Trump. “It was as if all criminal roads led to Trump Tower,” he told friends.118

  In the spring of 2016, Orbis agreed to become a subcontractor for Fusion GPS, a research firm in Washington that had been hired by the Perkins Coie law firm, which represented both Hillary Clinton’s presidential campaign and the Democratic National Committee.119 Steele’s job was to investigate Republican candidate Donald Trump.

  The Steele Dossier, much of which has not been corroborated, became a sensation when it was made public by BuzzFeed in 2017 for its astonishing allegations that Trump’s campaign “accepted a regular flow of intelligence from the Kremlin, including on his Democratic and other political rivals,” that Russian operatives had been cultivating Trump for years, and that they had obtained kompromat by recording videos of Trump engaging in “personal obsessions and sexual perversions.”120

  If there was kompromat on Trump, it seemed likely that the Mafia would know, so I posed that question to a knowledgeable source who had direct experience with the Russian underworld: Does Mogilevich have kompromat on Trump? I asked. Does the Mafia know?

  “Of course they do,” he told me. “Everyone talks about it, Seva [Mogilevich] and Mikhas [Mikhailov].”

  But my source cautioned that he had not seen any kompromat firsthand, only that he had heard about it. His allegations have not been corroborated.

  CHAPTER EIGHTEEN

  THE BATTLE IS JOINED

  In March 2014, Russia allegedly conducted a massive Internet disruption in Ukraine just as it was seizing and annexing the Crimea. As usual, Roger Stone, Paul Manafort’s sometime partner, seemed to know exactly what was going on and reveled in its venality, according to Politico, by sending out an email to a small group of friends.

  “Where is Paul Manafort?” Stone’s email asked. Among the multiple choices he suggested were the following: “Was seen chauffeuring Yanukovych around Moscow,” and “Was seen loading gold bullion on an Army Transport plane from a remote airstrip outside Kiev and taking off seconds before a mob arrived at the site.”

  The final option was: “Is playing Golf in Palm Beach.”1

  But Manafort was merely the tip of the iceberg.

  By this time, many of the leaders of the Republican Party were effectively on the payroll of the Kremlin, which had become as effective as Big Oil or Big Pharma at using K Street lobbyists to serve its agenda. The only difference was that they were essentially serving the interests of Vladimir Putin in the most heated geostrategic sector on the planet.

  Russian oligarch Oleg Deripaska, who had hired former senator and Republican presidential nominee Bob Dole as a lobbyist in 2005, later tried, unsuccessfully, to woo Senator John McCain, the GOP presidential nominee in 2008. Russian conglomerate Alfa paid nearly $2 million in lobbying fees to Barbour Griffith & Rogers, the lobbying firm cofounded by former Mississippi governor Haley Barbour.2

  Similarly, in 2014, former Senate majority leader Trent Lott (R-MS) and former senator John Breaux (D-LA) became the main lobbyists for Gazprombank, a subsidiary of Russia’s largest supplier of natural gas. More recently, in 2016, millions of dollars in Russian money was funneled to Senate majority leader Mitch McConnell3 and other high-profile Republicans to finance GOP senatorial candidates.

  Foreign nationals are prohibited from contributing to Senate races, but, according to the Dallas Morning News, during the 2015–16 election season, Ukrainian-born oligarch Leonard “Len” Blavatnik, who has British-American dual citizenship, put a small fraction of his $20 billion fortune into GOP Senate races. McConnell, who took $2.5 million for his GOP Senate Leadership Fund from two of Blavatnik’s companies, was the leading recipient. Others included political action committees for Senator Marco Rubio, Senator Lindsey Graham, Ohio governor John Kasich, and Arizona senator John McCain.

  When it came to getting legal representation, Russians went to the most connected lawyers in the land. The fourth-largest law firm in the United States,4 Jones Day, itself represented at least ten major corporations and organizations that were close to Putin’s heart, a group comprising both Russia’s most powerful corporations and several of the oligarchs who came to Trump’s rescue.

  Jones Day’s Russian clients included Oleg Deripaska’s Basic Element; the Alfa Group and Access-Renova Group, which jointly own billions of dollars in oil and gas assets; Alfa Bank, the largest private commercial bank in Russia and part of the Alfa Group; Letterone, a $30 billion holding company for assets in technology, oil, and gas; Rosneft, the world’s largest listed oil company; the Sapir Organization, which helped fund Bayrock’s Trump SoHo; the Eurasian Natural Resources Corporation, run by Alexander Mashkevich; the Russian Standard Group, whose holdings included the Miss Russia pageant; Sukhoi Civil Aircraft, a large military aircraft manufacturer in which Mogilevich had an interest; the Alfa-Access-Renova Group, a joint venture that helped make Leonard Blavatnik one of the wealthiest people in the world; and Viktor Vekselberg’s Renova Group.

  Another Jones Day client, the National Rifle Association, according to McClatchy, has been the subject of a multiagency investigation into whether “the Kremlin secretly helped fund efforts to boost Trump”5 by funneling money through the NRA.

  In July 2018, Maria Butina, an alleged Russian agent in the US, was indicted by special counsel Robert Mueller on charges of being a covert agent who had infiltrated the NRA and other conservative groups, including the organizers of the National Prayer Breakfast. Butina, who pleaded not guilty, allegedly reported to Alexander Torshin, the deputy head of the Russian central bank who had ties to Russian intelligence services.

  This, in effect, was the Putin lobby, putting its money into K Street and powerful white-shoe law firms to help legitimize and promote the agendas of Russian oligarchs whose billions effectively represented the theft of Russia’s patrimony.

  And when it came to fighting the growing power and reach of the Russian offensive, exactly how was America’s national security apparatus handling this mounting threat? As John Sipher told me, the CIA had issued operational directives to stay away from the Russian mob. These issues were not in their purview. As for the FBI, under director Robert Mueller, it had made Semion Mogilevich the target of a special new task force in Budapest in 2005, at a time when Mogilevich largely based his operations there.

  “As soon as the Task Force began investigating his activities, Mogilevich realized he could no longer use Budapest as his base of operations,” Mueller said in a 2005 speech.6 “He immediately fled the country, and is now hiding in Moscow. Working closely with Hungarian authorities, United States prosecutors obtained a 45-count indictment against Mogilevich and three other criminals, charging them with money laundering, securities fraud, and racketeering.”

  But in the end, Mogilevich eluded their grasp and settled in Moscow. The FBI closed down the Budapest outpost from which it had tracked Mogilevich. Meanwhile, the foreboding assortment of murderous gangsters and tattooed thugs known as the Russian Mafia had climbed the ladder of white-collar respectability, insinuated itself in multibillion-dollar global corporations, and taken on the protective coloring provided by K Street lobbyists and white-shoe law firms. They were now hard-wired into some of the most powerful Republican politicians in the country.

  Like a slow-motion train wreck that can’t be stopped, a national security catastrophe of historic proportions was in the works. And it was happening under the noses of the top figures in American law enforcement, whom the Russians were going to for criminal representation. It wasn’t enough that William S. Sessions had taken on Mogilevich, the most feared mobster in the world, as a client. Sessions’s successor as FBI director, Louis Freeh, was also working for the Russians.

  In Freeh’s case, the client in question was Denis Katsyv’s Cyprus-based Prevezon Holdings, a giant real estate firm
that hired Freeh to negotiate a settlement with the US government over an alleged money-laundering/tax-fraud scheme involving Kremlin officials.7 Katsyv is a Ukrainian businessman whose company appeared to be a beneficiary of the $230 million tax fraud.

  Prevezon won international attention in 2008 when its ties to the massive tax scam were uncovered by Russian tax lawyer Sergei Magnitsky, an anticorruption specialist who investigated the case on behalf of Hermitage Capital Management, an investment firm cofounded by Bill Browder. After he began investigating the case, Magnitsky was arrested and imprisoned for eleven months without trial.8 According to the official death certificate, Magnitsky died in prison of “closed cerebral cranial injury.”9 Instead of pursuing the real criminals, Russian authorities had gone after Magnitsky. According to his prison diary, investigators kept trying to persuade him to testify against Hermitage and drop his charges against the police and tax authorities. When Magnitsky refused, he was moved to worse and worse sections of the prison.10 During his imprisonment, he developed several serious medical conditions but was denied appropriate care, was physically assaulted, and died at the Matrosskaya Tishina Prison in 2009, at the age of thirty-seven.11

  Back in 1997, as FBI director, Louis Freeh had warned that Russian organized crime posed a threat to the US that far transcended mere criminality and that there was now a greater danger of nuclear attack by such criminal enterprises than there was by the Soviet Union at the height of the Cold War.12 But now he represented Prevezon, which had hired him to settle its dispute with the US government. Later, Freeh bought a $9.38 million mansion in Palm Beach, Florida, just a ten-minute drive from Mar-a-Lago.13