House of Trump, House of Putin2

by Craig Unger

  Natalia said her father “never saw anything like [Trump Tower], that he was so impressed that he decided he had to meet the building’s owner at once.” And so, Soviet ambassador Yuri Dubinin and his daughter Natalia, in a highly unusual breach of protocol, went into Trump Tower, took the elevator up to Trump’s office, and paid him a visit.

  It is unclear whether prior arrangements were made to set up this extremely irregular meeting between a highly placed Soviet diplomat and Trump. But a few months later, at a luncheon given by cosmetics magnate Leonard Lauder, Trump happened to be seated next to Yuri Dubinin,* who proceeded to flatter the young real estate mogul shamelessly.

  Trump later rhapsodized about the conversation in The Art of the Deal. “[O]ne thing led to another,” he wrote, “and now I’m talking about building a large luxury hotel across the street from the Kremlin, in partnership with the Soviet government.”31

  For the KGB, Kalugin told me, recruiting a new asset “always starts with innocent conversation” like this.32

  As Natalia Dubinina explained, the Russians were off to an auspicious start. “Trump melted at once,” she said. “He is an emotional person, somewhat impulsive. He needs recognition. And, of course, when he gets it he likes it. My father’s visit worked on him [Trump] like honey on a bee.”33

  As to what Trump was really after in his quest to reinvent himself as a statesman/politician, he may have revealed part of the answer when he told the Washington Post that the man who was egging him on was none other than the mentor he so looked up to, a man for whom motives were simple. Primal. There was always money. There was always a deal. There was always an angle, and a fix.

  “You know who really wants me to do this?” Trump asked rhetorically. “Roy [Cohn].”34

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  In the meantime, Trump was wheeling and dealing much closer to home. In New York, he was in the midst of an ongoing war over special zoning and tax benefits for his massive West Side project with New York mayor Ed Koch, with Koch calling Trump “piggy, piggy, piggy” and Trump calling Koch “a moron.”35 And in New Jersey, he was moving ahead with his third casino in Atlantic City, the $1 billion plus Trump Taj Mahal, the largest casino in the world, with more than 2,000 rooms and 67,000 square feet of gaming space.*

  Putting the Taj together was no simple matter. For roughly thirty years, from the 1910s until 1941, Atlantic City had been at the mercy of the Republican political machine formerly run by Enoch “Nucky” Johnson, the apparent inspiration for the character Nucky Thompson, played by Steve Buscemi in HBO’s Boardwalk Empire. This was a world peopled by major criminal figures such as Charles “Lucky” Luciano; Meyer Lansky; Arnold “the Brain” Rothstein, who famously fixed the 1919 World Series; and Al Capone.

  By the eighties, however, attorney Patrick “Paddy” McGahn* had become the new boss of Atlantic City, and, with his brother, state legislator Joseph McGahn, brought legalized gambling and Donald Trump to New Jersey. Trump, it turned out, was lucky to have them on his side.

  One of the first problems Trump encountered was that part of the land he wanted was owned by Salvatore “Salvie” Testa and Frank Narducci Jr., two Mafia hit men* who worked for Atlantic City mob boss Nicodemo “Little Nicky” Scarfo and were known as the Young Executioners.36

  If Testa and Narducci found out that their prospective buyer was named Donald Trump, it went without saying that they would demand top dollar. So instead the title was temporarily put in the name of Paddy McGahn’s secretary so the Executioners wouldn’t know they were selling to Trump.37 Later, Trump showed his appreciation by naming the bar at the Taj Mahal “Paddy’s Saloon.”

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  The more Trump expanded his business and saw the spotlight, the more he sought a bigger stage. In January 1987, Trump received a letter from Ambassador Dubinin that began, “It is a pleasure for me to relay some good news from Moscow.” The letter added that Intourist, the leading Soviet tourist agency, “had expressed interest in pursuing a joint venture to construct and manage a hotel in Moscow.”38 Vitaly Churkin, who later became ambassador to the UN, helped Yuri Dubinin set up Trump’s trip.39

  On July 4, Trump flew to Moscow with Ivana and two assistants. He checked out various potential sites for a hotel, including several near Red Square.40

  He stayed in a suite in the National Hotel where Vladimir Lenin and his wife had stayed in 1917. According to Viktor Suvorov, an agent for the GRU, Soviet military intelligence, “Everything is free. There are good parties with nice girls. It could be a sauna and girls and who knows what else.”

  All of which sounded great, except for one thing: Everything was subject to twenty-four-hour surveillance by the KGB.41

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  After the trip, the New York Times reported that while Trump was in Moscow, “he met with the Soviet leader, Mikhail S. Gorbachev. The ostensible subject of their meeting was the possible development of luxury hotels in the Soviet Union by Mr. Trump. But Mr. Trump’s calls for nuclear disarmament were also well-known to the Russians.”42

  But in fact, Trump’s meeting with Gorbachev never really took place.43 The report, apparently, was merely Trumpian self-promotion. Moreover, there are many unanswered questions about exactly what transpired during Trump’s visit. It is not clear whether Trump understood that Intourist was essentially a branch of the KGB whose job was to spy on high-profile tourists visiting Moscow. “In my time [Intourist] was KGB,” said Viktor Suvorov.44 “They gave permission for people to visit.”

  Nor is it clear if Trump was aware that Intourist routinely sent lists of prospective visitors to the first and second directorates of the KGB based on their visa applications, and that he was almost certainly being bugged.

  As to what activities the KGB may have captured in its surveillance, Oleg Kalugin, as the former head of counterterrorism for the KGB, is well versed in the use of video to produce kompromat, particularly of a sexual nature. At the time, it was a widespread practice for the KGB to hire young women and deploy them as prostitutes to entrap visiting politicians and businessmen, and to use Intourist to monitor foreigners in the Soviet Union and to facilitate such “honey traps.”45

  “In your world, many times, you ask your young men to stand up and proudly serve their country,” Kalugin once told a reporter. “In Russia, sometimes we ask our women just to lie down.”46

  Which, according to Kalugin, is what probably happened during Trump’s 1987 trip to Moscow, during which he would have “had many young ladies at his disposal.”47

  To be clear, Kalugin did not claim to have seen such material or have evidence of its existence but was speaking as the former head of counterintelligence for the KGB, someone more than familiar with its tradecraft and practices. “I would not be surprised if the Russians have, and Trump knows about them, files on him during his trip to Russia and his involvement with meeting young ladies that were controlled [by Soviet intelligence],” he said.

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  On July 24, 1987, almost immediately after Trump’s return from Moscow, an article appeared in a highly unlikely venue, the Executive Intelligence Review,* that strongly suggested something mysterious was going on between him and the Kremlin. “The Soviets are reportedly looking a lot more kindly on a possible presidential bid by Donald Trump, the New York builder who has amassed a fortune through real-estate speculation and owns a controlling interest in the notorious, organized-crime linked Resorts International,” the article said. “Trump took an all-expenses-paid jaunt to the Soviet Union in July to discuss building the Russians some luxury hotels.”48

  Were the Soviets really supporting a Trump run for the presidency? Was Trump seriously considering it? Answers to the second question began to materialize less than two months after his return from Russia, when Trump turned to Roger Stone, a Nixon-era dirty trickster then with the firm of Black, Manafort & Stone, for political advice. Trump had met Stone and his colleague Paul Ma
nafort through Roy Cohn. Although they worked in somewhat different spheres—Cohn was a hardball fixer, Stone a political strategist and lobbyist—to a large extent, they were cut from the same ethically challenged cloth.

  Under Stone’s tutelage, on September 1, 1987, just seven weeks after his return from Moscow, Trump suddenly went full steam ahead promoting his newly acquired foreign policy expertise, by paying nearly $100,000 for full-page ads in the Boston Globe, Washington Post, and New York Times calling for the United States to stop spending money to defend Japan and the Persian Gulf, “an area of only marginal significance to the U.S. for its oil supplies, but one upon which Japan and others are almost totally dependent.”49

  The ads, which ran under the headline “There’s nothing wrong with America’s Foreign Defense Policy that a little backbone can’t cure,” marked Trump’s first foray into a foreign policy that was overtly pro-Russian in the sense that it called for the dismantling of the postwar Western Alliance and was very much a precursor of the “America First” policies Trump promoted during his 2016 campaign.

  “The world is laughing at America’s politicians as we protect ships we don’t own, carrying oil we don’t need, destined for allies who won’t help,” he wrote.50 “. . . It’s time for us to end our vast deficits by making Japan and others who can afford it, pay. Our world protection is worth hundreds of billions of dollars to these countries and their stake in their protection is far greater than ours.”

  Given the extraordinary success of the Western Alliance as the underpinning of American foreign policy since World War II, one can only wonder who, if anyone, helped Trump come up with policies that were so favorable to the Soviets. Even more startling, an article published the next day in the Times suggested that Trump might enter the 1988 Republican presidential primaries against George H. W. Bush, then the incumbent vice president. ‘‘There is absolutely no plan [for Trump] to run for mayor, governor or United States senator,” said a Trump spokesman. “He will not comment about the Presidency.”51

  That tease—a refusal to comment on a question that no one had asked—did not take place in a complete vacuum, however. Earlier that summer, a Republican activist named Mike Dunbar from Portsmouth, New Hampshire, had approached Trump with a proposal to speak before the Portsmouth Rotary Club, an obligatory stop for presidential candidates in the first presidential primary state.* 52 After proclaiming that Vice President George H. W. Bush, the odds-on favorite to be the GOP nominee, and Senator Bob Dole, another contender, were “duds,”53 Dunbar said that he raised money and collected one thousand signatures to put Trump on the 1988 primary ballot.

  Trump’s top casino executive, Steve Hyde, later told Wayne Barrett that going to New Hampshire, far from being a stunt, represented “a serious test of the political waters.”54

  “If things shake out,” Hyde added, “I wouldn’t be the least bit surprised if he decided to do it.” New York GOP leaders had tried unsuccessfully to draft Trump to run against Mayor Ed Koch or Governor Mario Cuomo.55

  But on October 22, 1987, Donald Trump’s chopper set down in Portsmouth, New Hampshire, so he could deliver a luncheon address sponsored by the Portsmouth Rotary Club, at Yoken’s restaurant, an obligatory rite of passage for candidates running in the New Hampshire primary.

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  In many ways, the event eerily prefigured those of more recent years. Wearing a scarlet “power” tie, and flanked by a surly personal bodyguard, Trump spoke before a crowd of five hundred, more than that of other candidates who had appeared, and served up the same kind of red meat he has delivered in recent years to those who became his base.

  “[Our allies] are ripping us off left and right,” he said. “They knock the hell out of the United States. Do they say, thank you? No. Do they like us? Not particularly.”56

  A tax increase should not be the answer to the federal budget deficit, he said. Instead, Trump said, “We should have these countries that are ripping us off pay off the $200 billion deficit.” That’s why, he explained, we needed “a tough, smart cookie” running the United States so it would not be pushed around.57 The crowd loved it.

  Trump’s promising reception notwithstanding, Vice President George Bush had a commanding lead in the race for the Republican nomination, and Trump himself had another issue he needed to deal with. Trump had felt Ivana’s awkward English and heavy Czech accent would be liabilities on the campaign trail.58 It was not a happy relationship and in fact his marriage was an issue he wanted to resolve before making a serious presidential run. Nevertheless, Donald Trump’s presidential quest was under way.

  Trump’s White House ambitions did not make an especially deep impression on American voters in the 1980s, but foreign agencies took notice. Several months after Trump’s visit to New Hampshire, Ivana returned to her homeland, where the Czech StB continued to keep a close eye on her. StB agents suggested Ivana was nervous throughout the trip because she believed US embassy officials were following her at a time when she was supposed to be meeting with Czech security operatives.59 Twice, the American ambassador to Prague, Julian Martin Niemczyk, invited her to visit the embassy. But Ivana declined.

  Meanwhile, the Czech secret police filed a classified report dated October 22, 1988, saying that “as a wife of D. TRUMP she receives constant attention . . . and any mistake she would make could have immense consequences for him.”

  In addition, the StB report made two noteworthy revelations. For the first time, it was clear that Trump had decided he would run for president. The question was timing. “Even though it [his presidential prospects] looks like a utopia,” the awkwardly translated report said, “D. TRUMP is confident he will succeed.”60 Only forty-two, the report added, Trump planned to run as an independent candidate in 1996, eight years hence.61

  Finally, the StB file made one more curious observation about Trump’s political future: It said he was being pressured to run for president. And exactly where was the pressure coming from? Could it have been kompromat from the honey trap in Moscow? Unfortunately, the answer was unclear.

  CHAPTER SIX

  GANGSTER’S PARADISE

  Semion Mogilevich is not well-known to most Americans, but to the FBI, the five-foot-six, three-hundred-pound1 “boss of bosses” of the Russian Mafia is a legend. Said to be worth more than $10 billion,2 “the most dangerous mobster in the world,” as the FBI calls him, is renowned as the “Brainy Don” thanks to his mastery of sophisticated financial crimes and a vast array of transgressions in other sectors. Even the British press, which is notoriously skittish about libel suits, doesn’t mince words when it comes to Mogilevich, with the Independent calling him “the most evil gangster in the world.”3

  In real life, however, Mogilevich has maintained an extraordinarily low profile. Fans of John le Carré’s spy fiction may get a sense of him in the author’s portrait of Dima—Dmitri Vladimirovich Krasnov, the money-laundering Russian banker in Our Kind of Traitor, who people have speculated is based on Mogilevich. Sometimes referred to as a real-life Keyser Söze, the mythical and legendary villain in the 1995 movie The Usual Suspects, Semion Mogilevich has survived investigations by the FBI, Interpol, and other law enforcement agencies, not to mention multiple assassination attempts.4 It is a safe bet that he knows secrets that men have died for, but it is also clear that he has no intention of sharing them.*

  So it is not surprising that Mogilevich’s media appearances have been few and far between—with the notable exception of “The Billion Dollar Don,” a 2002 episode of the BBC documentary series Panorama.5 There, and in other interviews, Mogilevich reveals himself only to be a gruff and opaque presence with a brush mustache and pockmarked face who dodges questions with sardonic, dismissive responses. “Once I accidentally washed $5 I’d left in my shirt pocket,” he told the Moskovsky Komsomolets, when asked about his mastery of money laundering. “I must say they looked a lot cleaner and brighter after that.”6

  Such false modesty, of course
, only serves to disguise a man who is said to have played a key role in transforming organized crime through globalization. “Mogilevich typifies the new global criminal,” said Jeffrey Robinson, an author who specializes in international financial crime.7 “These men don’t rob banks. They buy them.”

  Taking full advantage of ill-equipped law enforcement and lax money-laundering laws, Mogilevich has become, the FBI says, a strategic threat on the geopolitical playing field, a man who “can, with a telephone call and order, affect the global economy.”8

  The Semion Mogilevich Organization, as his operation is known, has allegedly sold weapons to al-Qaeda,9 financed the sale of enriched uranium to terrorists, laundered money through companies on the New York Stock Exchange, and is said to have assembled a private army of brutal killers.10 It has launched business operations in Austria, Canada, France, Hungary, Israel, Russia, Ukraine, the United Kingdom, the United States, and at least eighteen other countries11 and has been active in areas as disparate as furniture and armaments, gambling and energy, art theft, extortion, drug trafficking, and prostitution. Mogilevich allegedly smuggled more than six hundred thousand gallons of vodka out of Hungary. And in Southeast Asia, Mogilevich provided money laundering services to heroin suppliers, the FBI said, and bought a bankrupt Georgian airline to help make their deliveries.12

  More worrisome is the fact that, according to classified Israeli and FBI documents, Mogilevich sold $20 million worth of stolen Warsaw Pact weapons, including ground-to-air missiles and twelve armored troop carriers, to Iran. As if that weren’t enough, he bought major companies that dominated the Hungarian armaments industry, in the process putting at risk NATO and the war against terrorism.13 He has won a spectacularly lucrative share of the Russia-Ukraine energy trade, provided krysha (literally a “roof,” or protection) for billionaire oligarchs, and laundered countless billions of dollars.