“Oh my God, people cried when they heard it was him,” recalled Jenna Knudsen, who worked as a high-ranking saleswoman for Ideal Health when Trump entered the picture. “They cried and looked at each other and said, ‘We’re going to be millionaires!’ ” Trump received a hero’s welcome when he addressed the organization’s convention in Miami in late 2009. As he strode to the podium, a giant screen captured his florid face and pastel-yellow tie. “When I did The Apprentice, it was a long shot. This is not a long shot,” Trump said as more than five thousand attendees roared their approval. Trump said he was a fan of so-called multilevel marketing, a business structure that has drawn criticism for rewarding salespeople based on how many customers they get to join the sales force. Consumer activists and government prosecutors have accused some other multilevel marketing programs of being thinly disguised pyramid schemes, in which early investors become wealthy, but many people lower down the chain lose money or at best break even.
The flagship product of Ideal Health and the Trump Network was a specially tailored multivitamin. Customers took a urine test, which was analyzed to produce a vitamin combination based on their perceived health profile. Consumers paid $139.95 for the urine analysis and $69.95 a month for the vitamins, plus $99.95 for additional testing every six months. Former salespeople praised the product, saying it helped customers live healthier lives. To hear Trump tell it, he wasn’t selling pee-based vitamin protocols. He was selling a golden parachute to a soft landing in the economic downturn. “The Trump Network wants to give millions of people renewed hope . . . with an exciting plan to opt out of the recession,” Trump told prospective network salespeople in a promotional video. “Let’s get out of this recession right now with cutting-edge health and wellness formulas and a system where you can develop your own financial independence. The Trump Network offers people the opportunity to achieve their American dream.”
But within three years after Trump agreed to lend his name, some of the once-ebullient participants at the Miami convention expressed regret, filing complaints with the Federal Trade Commission about the multilevel marketing program. Health experts at universities expressed concerns about the legitimacy of the health care products, warning about the value of the costly tests and the related health claims for the vitamins.
At the end of 2011, Trump’s licensing contract ended and he withdrew from Trump Network. Early the following year, the company was sold to another firm, Bioceutica. Some salespeople who invested thousands of dollars to buy and market Trump Network products felt abandoned. “They devastated thousands of people, and no one ever apologized,” Knudsen said. Garten, the Trump lawyer, gave a familiar response when complaints later arose about the supplement-marketing company. He said Trump was not involved in its operation. He simply licensed his name.
• • •
DESPITE HIGH-PROFILE DISAPPOINTMENTS, Trump’s licensing empire also had striking examples of success. Trump Hollywood in Florida, a luxury condominium project between Miami and Fort Lauderdale with ocean views, was a sold-out project, with an infinity pool, cigar humidors, wine lockers in the lobby, and an on-site movie theater.
It hadn’t always been that way. When construction was completed in 2009, after the Miami condo market had crashed, the building’s original developers could find few takers for apartments that started at around $2 million. A year later, the bank that had financed the building’s construction foreclosed on the property—and Trump quickly pointed out that the failure was not his. “I was a little surprised at the timing myself,” he said about a project he had once championed. He said the Miami-based developer “took a big chance” on constructing a $355 million condo high-rise at the edge of a housing collapse. By Thanksgiving 2010, the building was an empty shell. It was fully staffed but had only two occupied units, whose buyers had secured their apartments amid the downturn, recalled Ken Grossman, a Chicago hedge fund manager who bought in the building at the time.
A new developer stepped in. He bought Trump Hollywood out of foreclosure and slashed prices. At a flashy party in 2011 designed to draw new attention to the project, a cigar roller offered eight hundred guests handmade stogies, a five-piece jazz band entertained by the pool, and models strolled the grounds adorned with Ivanka Trump–brand jewels. Posing for pictures, Trump once again happily touted the project. “A fantastic relaunch for a phenomenal building on the ocean,” he declared.
Within fifteen months, all the units in the building were sold, with Trump receiving an undisclosed percentage of each sale. Suddenly, the building was full. A thick book of Trump’s standards remained in the concierge office years after Trump was paid all his fees and his formal involvement with the building had concluded. The volume guided the staff’s behavior in minute detail. (Fingernails: short, neat. Underwear: always worn. All visitors are to be greeted by staff with eye contact at ten feet and a verbal “hello” at five.)
To Daniel Lebensohn, the successful new developer, the experience showed that doing business well meant doing business aggressively: “Otherwise, you’re going to get crushed. Your name won’t be there. They won’t know who Donald Trump is.” On a project that once looked to be a failure, Trump had made between $10 and $20 million, Lebensohn estimated.
Having figured out how to profit from branding, whether or not projects succeeded, Trump was ready to take on the world.
14
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Empire
About thirteen hundred miles southeast of Moscow, in Baku, the capital of Azerbaijan, on the shores of the Caspian Sea, a gleaming thirty-three-story building rose like a massive copper-colored sail in the heart of downtown. The sign at the building’s elegant peak said, in English, TRUMP TOWER. Down at ground level on a spring day in 2016, however, the structure was only a shell, with a broken window and a section of stone façade chipped out like missing teeth. At night, the building was completely dark but for the glowing white lights of the TRUMP sign.
A couple of security guards and a sleepy caretaker kept an eye on the place, its grounds overgrown with weeds. A huge globe that announced TRUMP sat in a fountain filled with sand and litter, near the locked-up front entrance and another huge sign proclaiming TRUMP INTERNATIONAL HOTEL & TOWER. Inside, the massive lobby—finished in lovely sand-colored tiles with black and gold trim, with mirrored ceilings, and a chandelier sporting a dreamy ribbon of golden bulbs—was covered in construction dust. Reception desks stood sealed beneath plastic wrap. A huge circular staircase remained sheathed in plastic and cardboard. On the second floor, a pool finished in copper-colored tiles awaited water. Next to a sauna that smelled of fresh cedar, a gym was equipped with exercise machines still in cardboard boxes.
A caretaker leading a tour pointed the way with the flashlight app on his phone, stepping around loose wires hanging from unfinished fixtures in a basement passageway because there was neither electricity nor water in this Trump Tower, a huge construction site frozen in time.
• • •
BY THE EARLY 2000S, when The Apprentice launched him from New York household name into a national phenomenon, Donald Trump was already looking well beyond the Atlantic and Pacific horizons. He gazed north, south, east, and west and saw a world that needed Trump. In late 1999, developers broke ground on six Trump World residential towers in South Korea; the next year, Trump promoted a nearly $900 million Trump Tower in Berlin that he called “a bridge between New York and Berlin.” In 2003, Toronto’s City Council approved a seventy-story Trump International Hotel & Tower, which would have been the city’s tallest building. Later that year, Trump unveiled plans for villas around a golf course in the Grenadines in the Caribbean. In the first decade of the new century, he announced projects including hotels, condos, offices, and golf courses with the big gold TRUMP stamp in Dubai, Israel, Panama, Scotland, Mexico, the Dominican Republic, and Turkey.
In 2007, he created the Trump Hotel Collection, a luxury brand targeting the richest 5 percent of global travelers. With his three oldest c
hildren now full-fledged executives in the business, the Trump Organization not only added properties in major American cities from Fort Lauderdale to Waikiki, but sharply accelerated its global expansion. Between 2011 and 2015, Trump announced deals in more than a dozen countries, including two projects in Indonesia in 2015, when he was already running for president. Several Trump projects were located in countries where the United States had important economic and national security concerns—such as Turkey, Indonesia, the United Arab Emirates, and Azerbaijan.
In almost all cases, Trump’s only involvement in the overseas projects was to license the Trump brand to local partners for fees that reached millions of dollars, and sometimes to manage the hotels when they opened. The Trump name proved in some instances to be a hugely successful draw. In others, the name didn’t deliver buyers as promised. But as happened with some of his US deals, when Trump projects overseas went bust, he still got paid, reaping millions even if his local partners ran into financial problems or went bankrupt.
In 2012, Trump boasted that the former Soviet republic of Georgia was “booming” and “unbelievable” and “going to be one of the great places of the world within four or five years.” He announced a $300 million project there: “I’m doing a big development there. And it’s been amazing.” Nothing was built. Trump’s attorney, Alan Garten, said the global recession that started in 2008 forced the cancellation of many projects. “A lot of developers lost their entire portfolios and fortunes,” he said. “Mr. Trump came through that as well as anyone.” By mid-2016, at least seven of Trump’s foreign projects were completed and opened, another eleven were still under construction, and more remained in the planning phase. Other projects never got past the initial announcement. Some were pared down. In Dubai, his promised Trump Tower was never built, but two Trump golf courses were under construction in 2016.
Whatever their ultimate fate, the projects benefited from the Trump treatment, an effusive display of promotional bravado. But sometimes Trump’s charm wore thin and he and his overseas partners got into legal brawls, mainly focused on Trump’s use of complex contracts. In Toronto, angry apartment buyers lashed out at Trump after they found themselves making less money on their investments in Trump buildings than they said they’d been told to expect. Trump contended that he’d acted entirely within his rights as spelled out in the fine print, and he often prevailed in such cases.
Sometimes, Trump teamed with smaller local developers who had never before built anything on the scale of their Trump projects. In other cases, Trump made deals with characters of questionable backgrounds or with developers who lost their passion for the Trump style. In Dubai in 2015, Trump’s comments about Muslims caused a partner to pull the Trump name off a golf course project (he put it back up days later). And in Turkey, the manager of a Trump-branded shopping mall in Istanbul condemned Trump and said he “does not understand Islam.”
Trump’s global ambitions nonetheless remained powerful, and some deals grew out of other, unrelated aspects of his business empire.
• • •
WHEN TRUMP TRAVELED TO Moscow in 2013 to open the Miss Universe pageant at an opulent seventy-three-hundred-seat concert venue called Crocus City Hall, the beauty contest provided a chance to get closer to a prominent oligarch who was interested in building a Trump Tower in Russia. Before the pageant got under way, Trump joined about a dozen Miss Universe contestants in filming the music video for “In Another Life,” the latest single by Emin Agalarov, a hugely successful pop star in Russia who was an executive in his father’s real estate company, which was also Trump’s business partner in Russia.
“I said, ‘Mr. Trump, would you be in my video?’ ” Emin recalled. “He’s like, ‘What am I supposed to do?’ I said just be part of it. He said how long would it be? I said ten minutes.”
Trump responded, “Okay, seven a.m. at my hotel lobby.”
In the video, Emin daydreams about being surrounded by Miss Universes in bathing suits before he finally wakes up to find himself at a boardroom table being barked at by Trump: “Wake him up, right now! . . . What’s wrong with you, Emin? Emin, let’s get with it. You’re always late. You’re just another pretty face. I’m really tired of you. You’re fired!”
Emin’s director wanted to shoot a second take, but Trump would have none of it: “No, it’s perfect, stop.” Off Trump went. The shot was done.
Emin got his start in property development through his wealthy father, Aras Agalarov, and was often seen in public in the company of beautiful women. Emin was sometimes called the Donald Trump of Russia. Early in 2013, Emin was looking for a gorgeous woman to star in the video for his new single, “Amor.” He contacted the Miss Universe organization and asked about hiring Olivia Culpo, an American who had won the 2012 Miss Universe contest. They worked out a deal and shot the video, and that’s when Emin and his father decided to try to bring the pageant to Moscow. Eventually they were led to Trump, and father and son traveled to Las Vegas in June to work out the deal.
There, Trump blew the Agalarovs away with his seductive charm—and home-court advantage. Aras, the father, met Trump for the first time in the lobby of the superglitzy Trump Hotel. When Aras walked in with his wife, daughter, and Emin, Trump was entertaining a group of people in the lobby. Cameras flashed and suddenly Trump pointed at Aras and shouted, “This is the most honest person in Russia!”
“He’s very, very charismatic,” Agalarov said. “I really liked him. I really like him a lot.” The Agalarovs stayed at the Trump Hotel for three or four days, dined at fine restaurants, and took in Vegas shows. Trump appeared with Emin and Aras for the launch of the “Amor” video and posed with Culpo. “He’s the American Dream,” Emin said. The deal, and the friendship, were sealed.
Aras Agalarov had come a long way from his first brush with storybook American settings such as Las Vegas; he had started his business career pirating movies—he said his first big success was editing down The Godfather to fit on illegal bootleg videotapes. Born in 1955 in the former Soviet republic of Azerbaijan, Aras moved to Russia and made his fortune organizing trade fairs and developing high-end real estate, including the mall complex where Trump would bring the Miss Universe contest. Agalarov also had impeccable relations with the government of President Vladimir Putin. Putin selected Agalarov’s Crocus Group to build the Far Eastern Federal University near Vladivostok, where Putin and Secretary of State Hillary Clinton attended a conference together. Shortly before the Miss Universe pageant, Putin presented Agalarov with the Order of Honor, one of Russia’s highest civilian awards.
Trump and Agalarov seemed like a natural fit. They both dreamed and built big. They both had showy taste. Agalarov’s Crocus complex featured a massive shopping mall called Vegas, a neon dream of a place featuring Russia’s largest movie theater. Agalarov also liked to put his name on his buildings. And their interests converged: Trump had found a synergy between his Miss Universe pageant and his development business. Trump would dangle the pageant, with its glamour and huge global television audience, like a baited hook. Dozens of countries bid to host the pageant every year, and sometimes Trump would land a big-fish development partner from among his foreign alliances in the pageant business. Agalarov said he paid about $14 million to put on the pageant, about half of which went to licensing Trump’s Miss Universe brand.
But the deal wasn’t all about bathing beauties: Trump and the Agalarovs planned to do big business together, bringing the big gold T to Moscow. They signed a preliminary agreement to explore building a Trump Tower and an Agalarov Tower side by side on Agalarov’s property in Moscow. Trump met with father and son and other Russian businessmen to discuss the proposal, which Emin said would have involved Trump’s actually investing in the project, not simply licensing his name.
As early as 1987, Trump had expressed interest in building a Trump Tower in the Soviet Union. That year, on a visit to Moscow and Leningrad—now St. Petersburg—he said Soviet officials had asked him to consider bu
ilding luxury hotels there. “There are not too many ideas that I become attracted to, but that is one I think would interest a lot of people,” Trump said at the time. “Not purely from an economic standpoint, either.” In 2008, Donald Trump Jr. said the Trump Organization was keen to build in Russia, noting that Russian nationals made up a “disproportionate” percentage of buyers at Trump projects in New York, Dubai, and elsewhere. But he said Russia was a “scary place” to develop property because of problems with the legal system, government control and corruption, and “whose brother is paying off who, etc.”
At the Miss Universe Pageant in Moscow in 2013, Trump the father said he was in serious talks about building a skyscraper in Moscow. Trump made a series of complimentary comments about Putin, whom he had been scheduled to meet on the day before the pageant. Putin canceled at the last minute to meet instead with a foreign king. “Putin sent him [Trump] a letter, like a friendly letter, saying that he’s very grateful for this event in Russia,” Aras said. “And he also sent him a Russian box, a Fedoskino box. I gave him this box and the letter, so he was leaving with very warm feelings.”
Trump would express admiration for Putin’s leadership, despite his record of prosecuting and persecuting journalists and political opponents. Still, no Trump Tower rose over Moscow. Emin said the plans were on hold, largely because the residential development market in Russia had weakened. Trump’s decision to shift his focus didn’t sour his relationship with the Agalarovs: “Every time I’m in New York and when Trump is also in New York, I go visit him,” Emin said. In their last conversation before Trump announced his candidacy, “he was criticizing the United States government for not being able to be friends with Russia. . . . He thinks America, instead of fighting Russia, should bond and be friends and have common goals with Russia. . . . This could be an amazing breakthrough if he becomes president and actually becomes friends with Putin. . . . Our family vote definitely goes to Mr. Trump.” Emin said Trump’s run was likely good for business: “Even if he never becomes president, if he just capitalized his brand, probably he’ll triple its value, right?”
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