Trump, of course, wasn’t the only real estate developer in his immediate family. Jared Kushner, Trump’s son-in-law, ran Kushner Companies, which he took over in 2005 following his father’s conviction on charges of tax evasion and witness tampering. Fritsch and Simpson decided that company was also worth a look for labor violations and the financing behind his family’s projects. One afternoon, while watching soccer in the office and surfing the Net, two Fusion researchers stumbled onto some interesting marketing materials for a condo complex in Jersey City being developed by Trump and Kushner. The two men planned to finance construction of the project using a government program known as EB-5, which allows foreign citizens to obtain U.S. residency if they invest more than $500,000 in the United States. Kushner’s target market was China, the very country Trump was out hammering in his stump speeches, blaming Beijing for an industrial policy based on cheap labor and an undervalued currency that had harmed the economy of the industrial Midwest. The researchers found that Kushner had partnered with a company based in Shanghai to assist in the visa-selling operation. His sister was actively marketing the scheme, even though U.S. authorities have long suspected that China used the EB-5 program to place spies in the country.
Stories highlighting the arrangement ran in multiple outlets in early March 2016, some pointing out how Trump’s use of the program exposed his hypocrisy on the China front. Trump, as Bloomberg put it, “has called for a revamping, even a freezing, of the immigration system, but says he would make an exception for the highly skilled. Yet no skills are required of the wealthy Chinese being courted by a Chinese-subtitled video to help finance a huge Trump-branded tower in New Jersey.”
Immigration came up again and again during the GOP debates, with the candidates tussling over who had the tougher plan to crack down on undocumented workers. Trump reveled in the severity of his zero-tolerance policy. “People that have come into our country illegally, they have to go,” he said at the debate in Las Vegas in mid-December. But his challengers rarely blasted Trump directly for the rank hypocrisy embodied in his rhetoric on immigration and his long history of using illegal and low-wage immigrant labor—a vulnerability no other candidate had.
The glaring contradiction between his public rhetoric and his private use of foreign workers finally began hitting the major media in early 2016, with The New York Times weighing in on February 25: “Donald Trump to Foreign Workers for Florida Club: You’re Hired.” But by then it was too late for Republican primary voters in Iowa, New Hampshire, South Carolina, and Nevada, all of whom had already cast their votes—and put Donald Trump well on the path toward becoming president of the United States.
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Trump’s double standards when it came to immigrant labor and his offshore sourcing of apparel paled in comparison with the mass of information Fusion was simultaneously collecting on Trump’s ties to organized crime. Through the end of 2015 and into 2016, the Bangor team rounded up thousands of pages of law enforcement documents and court records testifying to Trump’s dealings with mobbed-up lawyers, dope dealers, and “labor consultants.” The various strands of the project were parceled out to subcontractors, one tasked with getting casino investigation records, another pulling Trump’s labor disputes, a third scanning court cases and old clips for allegations of criminal connections.
Among the most damning of the documents that turned up was a December 1992 investigative report by the New Jersey Casino Control Commission’s Division of Gaming Enforcement. The confidential thirty-six-page report, prompted by Wayne Barrett’s reporting, avoided drawing conclusions about many of the allegations it investigated on behalf of the commission, whose job it was to make the ultimate determination about whether Trump was fit to hold casino licenses. But in numerous areas, the report provided official confirmation of some of the most serious allegations Barrett and other journalists had made about Trump’s dealings with a rogues’ gallery of criminals.
One section of the report was devoted to Trump’s relationship to convicted narcotics trafficker Joseph Weichselbaum, who owned a helicopter company that worked for Trump’s casinos, ferrying high rollers from New York to Atlantic City. Among other things, Barrett had alleged that Trump wrote a letter to a federal judge in 1986 pleading for a lenient sentence for Weichselbaum after he was convicted of large-scale drug smuggling—a remarkable favor for a prominent businessman to provide, especially since it was Weichselbaum’s third major criminal conviction.
Gaming investigators had long probed Trump’s ties to Weichselbaum and already knew that Trump had personally leased one of his own apartments to him and his brother. They also had confirmed that an alleged girlfriend of Weichselbaum’s had bought two adjoining condo units in Trump Tower in 1988 for $2.25 million. When asked in a 1990 sworn interview with casino regulators whether he had indeed written a letter of support for Weichselbaum, Trump made the improbable claim that he could not remember doing so. Trump and his lawyers also claimed they had no copies of such a letter. When later shown a copy bearing his signature, Trump acknowledged it was his signature.
Another disturbing section of the report addressed Trump’s dealings with Philadelphia’s dominant Mafia family and a politically connected Atlantic City lawyer named Paddy McGahn. In 1982, Trump used McGahn to negotiate with the city and with several organized crime families that owned the plots he coveted for his boardwalk casino. Barrett, in his reporting, had described the Trump-McGahn relationship as “behind-the-scenes” and reported that McGahn had boasted that he “controlled the City Commission.”
According to gaming investigators, Trump instructed McGahn to broker an all-cash deal for a corner parcel in Atlantic City owned by members of a notorious Philadelphia mob family. McGahn reportedly had a paralegal from his firm purchase the plot from Philly gangster Salvatore Testa (later executed by some of his colleagues and dumped on the side of a dirt road). The property was then transferred to Trump, allowing Trump to maintain distance from the transaction in the eyes of casino regulators. The closing was handled in McGahn’s office and was attended by both Testa and Chris Scarfo, the son of top Philly mob boss Nicodemo “Little Nicky” Scarfo.
McGahn was already a mover and shaker in Atlantic City at the time, having led the effort to legalize gambling in New Jersey in 1979. McGahn, who also represented Trump during his casino bankruptcy proceedings in 1990, was once the subject of a state investigation into charges of influence peddling with his older brother, a state senator. McGahn’s nephew Donald F. McGahn II later became Trump’s campaign lawyer and first White House counsel.
Another mobbed-up figure close to Trump was Robert LiButti. In 1991, Trump was fined by casino regulators for giving millions in illegal gifts to LiButti, an Atlantic City high roller who claimed to have ties to the Mafia. Regulators determined that Trump had handed LiButti cash himself, and that the two were close. Casino regulators also charged Trump with discrimination after LiButti ordered him to remove all female and black dealers. LiButti was considered by regulators to have ties to mob boss John Gotti.
The Trump-LiButti relationship would be chronicled early in the presidential campaign, in searing detail, by Yahoo News, but once again Trump’s political opponents were largely mum. Without other candidates willing to give stories like this oxygen by bringing them up on the record in attacks on Trump, and without other news outlets amplifying them, the stories tended to sputter quickly.
Based on the New Jersey gaming report and piles of other government records, Fusion summarized its research on Trump’s criminal connections in stark terms: “During the entire span of his career, Donald Trump has done business with at least 25 individuals and companies with documented mob ties, including various powerful Italian and Russian syndicates. Casino regulators in at least three states have extensively investigated Trump for his dealings with organized crime. Two of those states, Missouri and Pennsylvania, refused to grant Trump a casino l
icense with little explanation.”
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As alarming as this history was, many in the press wrote it off as old news and the by-product of a career spent in New York real estate development. “I mean, who isn’t mobbed up in Manhattan who ever got anything built,” one television news producer told Fritsch. “Besides, wasn’t this all a long time ago?” True, Trump had been beset by allegations of mob connections for many years, but most of that coverage concerned the early years of his career and traditional Italian Mafia families. Changing tack a bit, the Fusion researchers began to focus on the myriad ways that Trump’s more recent business deals appeared to connect him with figures from the former Soviet Union suspected by U.S. federal authorities to have ties to organized crime.
Some of these connections had been dug out and reported in the press a decade earlier, when people like Felix Sater popped up in the Trump orbit, but in the intervening years, the media seemed to have lost interest. Despite the wide coverage of Trump and his business past in 2015, few of these reports concerned his organized crime ties.
At the center of these relationships was the Bayrock Group, which had invested in the Trump SoHo project in New York. The firm’s principals included Sater, who claimed to have co-founded Bayrock and was described as the company’s majority owner by its former chief financial officer. But his involvement in the company was not disclosed to other investors in several Bayrock-Trump projects.
Bayrock was awash in allegations of serious criminality. The former chief financial officer of the company alleged in court papers, first filed in 2010, that it was a criminal enterprise used for money laundering and tax evasion. While Trump was trying to distance himself from Bayrock, plenty of evidence showed that both he and two of his children had dealt directly with the firm, particularly during the building of the Trump SoHo project. Bayrock appeared to have potentially violated New York’s so-called Martin Act by not disclosing Sater’s criminal past to potential buyers of Trump SoHo condominiums.
Crime ran in the Sater family. His father was a convicted extortionist and allegedly involved with Russian organized crime. In 1991, Felix got into a bar fight and plunged the stem of a broken margarita glass into a fellow stockbroker’s neck. In 1998, he was charged with securities fraud and pleaded guilty to a one-count criminal charge for his involvement in a wide-ranging “pump and dump” scam that benefited from the assistance of the Italian Mafia. In return, mob families “received compensation in the form of securities and the proceeds of fraudulent sales of securities.”
Sater then extricated himself from these troubles by becoming a U.S. government informant, which delayed his sentencing until 2009. He had faced up to twenty years’ imprisonment and $60 million in restitution, according to his cooperation agreement. Sater’s criminal past had been concealed by federal prosecutors, with all relevant records sealed, apparently as a reward for his work as a cooperating witness in stock fraud cases. His cooperation was said to have included attempting to buy missiles on the black market and helping the U.S. government track Osama bin Laden. He never served any time for the stock fraud conviction.
Sater’s connections to Trump went well beyond Bayrock. He also claimed to have had an intimate role in the Trump Organization itself, including employment during 2010—more than two years after a December 2007 New York Times article revealed his criminal past. Checking his LinkedIn page, Fusion discovered that he had recently altered his profile to remove all references to Trump.
In that same 2007 Times article, Trump admitted to knowing and meeting Sater at Bayrock and acknowledged that Sater may have brought him the idea of embarking on an ambitious condominium project in Fort Lauderdale, which got under way in 2005. Trump took his name off the project four years later when it became embroiled in legal troubles. Trump told the Times that he conducts “very tough” due diligence, and he did not believe Sater was connected with organized crime.
To Fusion, that seemed like yet another flimsy claim. Sater’s organized crime links were a matter of public record.
Sater and Bayrock exemplified the emergence of the organized crime wave migrating west after the collapse of the former Soviet Union. In New York, Russian gangs began to compete and then merge with remnants of the Italian Mafia. Many who would end up in Trump’s world were not ethnic Russians but hailed from the outer reaches of the empire, particularly Central Asia.
Bayrock Group underscored this international shift. The company was founded by Tevfik Arif, a Central Asian émigré and former Soviet tourism minister in Kazakhstan. Arif was arrested in Turkey in 2010 for allegedly running an underage prostitution ring aboard his yacht, a charge for which he was later acquitted. Among the others arrested on Arif’s yacht were several high-ranking officials from the government of Kazakhstan. The court determined that none of the women were underage. According to federal court records in New York, Bayrock’s executives were allegedly linked to a company involved in a multibillion-dollar bank fraud in Kazakhstan that laundered money through the Trump SoHo project and other New York developments.
Simpson had written stories at The Wall Street Journal chronicling the corruption seeping into the West from Central Asia, particularly Kazakhstan. The Central Asia crime wave had also come up in a handful of cases Simpson and Fritsch had handled since founding Fusion, cases involving fraud and money laundering. So Simpson took note when Ivanka Trump, in her book The Trump Card, mentioned how she had traveled to Kazakhstan in the mid-2000s to “meet with business partners.” Kazakhstan is a famously corrupt autocratic state, and the Fusion team wondered whether illicit funds from the former Soviet Union might have ended up in some of Trump’s building projects. “What are the chances these guys are clean?” Simpson asked Fritsch rhetorically. “Yeah, seriously,” Fritsch replied.
One former Bayrock executive claimed in New York federal court filings that millions of dollars had flowed into Bayrock from Arif’s brother in Russia, “who had access to cash accounts at a chromium refinery in Kazakhstan, and that Bayrock was acting as a conduit hiding those funds.” Bayrock denied the allegations.
Court records from the libel case Trump filed against journalist Tim O’Brien in New Jersey shed additional light on Trump’s ties to Bayrock. In a deposition, Trump praised Arif’s “international connections” and detailed half a dozen “phenomenal” prospective tower deals with Arif, including ones in Moscow, Yalta, Warsaw, Istanbul, and Kiev.
This was the kind of world Fusion contractor Nellie Ohr knew well, and she dove in fully. Working from her home office in suburban Virginia, Ohr stumbled upon a nugget in the Russian publication Izvestia that gave color to the Trump-Arif relationship: a video that had Trump offering a remote toast for Arif’s birthday party, in which he says, “Tevfik is my friend! Let’s drink to Tevfik!”
Other connections between Trump and Sater came from two depositions the Fusion team had dug out of the case files. The suits were brought by condominium purchasers in Florida alleging deceptive sales practices. One of them, Taglieri v. SB Hotel Associates, directly alleged that condo buyers had been harmed by nondisclosure of Sater’s criminal record.
Trump told the Times in its 2007 story that he was surprised to learn the details of Sater’s past. “We never knew that,” he said of Sater. “We do as much of a background check as we can on the principals. I didn’t really know him very well.” Trump said that most of his dealings with Bayrock “had been with its founder, Tevfik Arif, and that his son Donald and his daughter Ivanka were playing active roles in managing the project.”
Trump’s evasions about Sater became the subject of a long quest by Fusion to find every instance in which Trump was asked about Sater under oath and lied about their work together. Figuring that out would involve a close review of thousands of pages of court records.
The excavation finally hit pay dirt in court papers filed in Florida. In November 2013, Trump had been d
eposed as part of a suit brought by a dissatisfied Florida condominium buyer named Matthew Abercrombie. When asked about Sater, Trump claimed to barely know him. “If he were sitting in the room right now, I really wouldn’t know what he looked like,” he testified. That was a lie, pure and simple. In late 2015, a Fusion researcher obtained a high-resolution video of the deposition from the lawyer who brought the case. The video eventually made its way to ABC News, where a story on Trump’s dubious denials ran on Good Morning America and was seen by millions of viewers.
In the early weeks and months of its Trump research, Fusion had cast an intentionally wide net to catch all aspects of Trump’s sordid business past. No matter what the subject, this was always the company’s methodology: Make no prior assumptions, and follow the evidence where it leads. But the Bayrock research served to reorient Fusion’s compass. It raised serious issues about Trump’s character, truthfulness, and business practices. It also hinted that a primary explanation for Trump’s surprising late-career comeback as a real estate developer was investment money coming from Russia and other parts of the former Soviet Union, a region renowned for its official corruption and hundreds of billions of dollars in new wealth seeking safe harbor—and cleaning—in investments abroad.
In the fall of 2015, Trump started to make a rapprochement with Putin’s Russia one of his main foreign policy talking points on the presidential campaign trail. By then, Putin had invaded two of Russia’s neighbors and ordered a state-sponsored murder in central London. No one in official Washington was talking anymore about making friends with Vladimir Putin.
Yet Trump talked as if none of that recent history had occurred. “I will get along—I think—with Putin,” Trump claimed during a televised Republican debate in September. “I think I would get along very well with him,” he told CNN twelve days later. Then, in a November 10 debate, Trump boasted that he and Putin were pals. “I got to know him very well because we were both on 60 Minutes. We were stablemates, and we did very well that night.” It was an odd statement—and also complete fiction. Trump and Putin were never on 60 Minutes together; the show merely carried interviews with both on the same Sunday broadcast.
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