The Politex Report #1258

Azerbaijan: Trump Caught Up In Another Money Laundering Scheme

The U.S. Foreign Corrupt Practices Act (FCPA) says it's illegal to make deals with foreigners who are working illegally. That's what Trump appears to have done in Azerbaijan, although his lawyers will claim due diligance. But there's a clear trail of corruption in Azerbaijan, and what did Trump's lawyers actually do, other than making sure the cash wasn't counterfeit? --JP

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"Investigative reporter Adam Davidson published an incredible piece in The New Yorker called “Donald Trump’s Worst Deal,” and we will try to summarize it briefly, then tell you to go read your damn self. (Also, if you don’t like Reading, scroll to the bottom of this post, because Rachel Maddow did a lovely segment on her TV program Monday night about it. She even makes a vagina joke!)

Here is Wonkette’s third grade book report version of the story:

The Trump Organization did a project, with Ivanka at the helm, in Baku, Azerbaijan, which is a foreign place between Russia and Iran. It is a very corrupt place, Azerbaijan! But what started out as a licensing deal for a big weird vagina-shaped luxury hotel tower in Baku turned into something more. According to Davidson, the Trump Organization was very hands-on, dictating design elements, and visiting all the time.

Davidson explains that, on paper, everything about the project looked weird. It was in a screwy neighborhood for a luxury hotel, nowhere near the other fancy schmancy hotels on the Caspian Sea. It was way more expensive than it should have been. And considering the state of things in Azerbaijan, it didn’t even seem like there would be much of a clientele for the hotel. Doy doy doy! Makes no sense, unless, as Rachel Maddow notes below, the point wasn’t actually do do a GOOD DEAL, but just to launder money into some sketchy fat cats’ pockets, some of whom might be RADICAL ‘SLAMIC TERRORISTS. Did we mention Azerbaijan is corrupt?

The Trumps partnered with relatives of a guy named Ziya Mammadov, the Azerbaijani transportation minister who makes $12 grand a year, and is also a billionaire. Totally normal Suze Orman story! As Davidson reports, WikiLeaks has released cables from a U.S. diplomat who called Mammadov “notoriously corrupt even for Azerbaijan,” and Foreign Policy has previously nicknamed the family the “Corleones of the Caspian.” They seem nice! Anyway, the company the Trump Organization contracted with is led by Mammadov’s son, Anar, and Elton Mammadov, Ziya’s brother and a member of parliament, was the one who signed all the documents for the Trump deal. Also too, Davidson reports that pretty much everybody in Azerbaijan knows that Ziya Mammadov is the one who really runs the company.

Now, if these people are “notoriously corrupt” and full of extremely shady money, what does that matter for the Trump Organization? Well!

The sustained back-and-forth between the Trump Organization and the Mammadovs has legal significance. If parties involved in the Trump Tower Baku project participated in any illegal financial conduct, and if the Trump Organization exerted a degree of control over the project, the company could be vulnerable to criminal prosecution. Tom Fox, a Houston lawyer who specializes in anti-corruption compliance, said, “It’s a problem if you’re making a profit off of someone else’s corrupt conduct.”

So, as Davidson explains, companies do risk assessments, in an effort to keep their noses clean, because they very MUCH can be prosecuted if they profit off other people’s bribe-y, laundered money. Alan Garten, chief legal officer for the Trump Organization, told Davidson they did that risk assessment, but wouldn’t give him any other information. But it was all fine, we bet! Davidson wonders, though, whether they REALLY did their due diligence, since the Mammadovs have VERY WEIRD FINANCIAL TIES to the Iranian Revolutionary Guard. Yes, the same Iranian Revolutionary Guard that’s one of the world’s biggest state sponsors of RADICAL ‘SLAMIC TERRORISM! Remember how Azerbaijan touches two countries, and one of them is Iran?

Anyway, as Maddow explains below, the Iranian Revolutionary Guard is heavily sanctioned by the U.S. government, so if the Trumps profited off, in a roundabout way, doing business with them, they could end up in deep shit.

Also too, remember how Elton and Ziya Mammadov are part of the Azerbaijani government?

The Foreign Corrupt Practices Act, passed in 1977, forbade American companies from participating in a scheme to reward a foreign government official in exchange for material benefit or preferential treatment. The law even made it a crime for an American company to unknowingly benefit from a partner’s corruption if it could have discovered illicit activity but avoided doing so. This closed what was known as the “head in the sand” loophole.

Huh, the plot thickens! Will this make the whole Trump family GO TO JAIL?"

--Trump Tied To Creepy Crimers In Whole New Country, And It Is Azerbaijan! - Wonkette https://t.co/MgKSBo8Ek1

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Maddow: Corrupt Practices Act: Trump Azrabaijan hotel deal with corruption king eyed for potential corruption. | MSNBC https://t.co/ZHII60yw6t

Maddow Interview: Trump risks corruption prosecution for questionable Azrabaijan hotel deal | MSNBC https://t.co/MOEvGB9pG2

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Long Read: Trump’s Worst Deal "appears to be a corrupt operation engineered by oligarchs" in Iran. NY https://t.co/UpyKpO8a4u

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Sen. Brown Asks Treasury to Assess if Trump's Global Business Ties Could Violate Sanctions, Anti-Terrorism Laws | SB https://t.co/TUKsgsphPL

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Trump hotel project tied to front for Iran's Revolutionary Guard: Not 1st time Trump has money-laundering trouble. Vox https://t.co/h7VODe2F6d

Trump Hotel in Baku Partnered With ‘Notoriously Corrupt’ Oligarch Family With Ties to Iranian Revolutionary Guard. FP https://t.co/yYiUyYLFQD

Amazing dive into Trump's role in a shady hotel deal, w/partners tied to Iran's Revoluntionary Guard. NY https://t.co/tWBovNkVhQ

According to the Associated Press, Trump Partnered Up With The Son Of An Iranian General's "Silent Partner" AB PAC https://t.co/xrYbcT1Mc8

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If you heard about Trump's Azerbaijani ties, you should read why the Caspian country sought a Trump hotel to begin: https://t.co/yXmpXOYo1H

Embassy of Azerbaijan (where Trump made $3 million on a hotel deal) to co-host event at Trump's D.C. hotel https://t.co/N7x3Fvw4nS

Dec. 2016: Trump moves to cancel deals in Azerbaijan, Georgia. AP https://t.co/3JWT8BOtrZ

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The Corleones of the Caspian: Azerbaijan's dictator woos the United States and Europe. FP https://t.co/EuZ0fHY2bV

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