About a week ago James S. Henry who is an investigative economist and lawyer (who has written widely about offshore and onshore tax havens, kleptocracy, and pirate banking) published an article on Daily Mail about the Monaco resident Dmitry Rybolovlev.
Dmitry Rybolovlev is the owner of the famous AS Monaco football team and the article linked him with Vladimir Putin and Donald Trump. Since publication of their article Daily Mail also received a statement from Sergey Chernitsyn, an adviser to Dmitry Rybolovlev.
Last summer, the bulldozers moved in to demolish America’s most expensive private home.
The Maison de l’Amitie, a gaudy 33,000 sq ft French Regency-style mansion on six prime acres with 475 ft of waterfront in Florida’s Palm Beach was subdivided and the first lot sold at a substantial loss.
At first glance, the sad fate of the grandiose building – it had 18 bedrooms, 22 bathrooms, a ballroom, art gallery and 50-car garage – is an indictment of the American property bubble, whose sudden collapse in 2008 led to the worldwide financial crisis.
But the story of the Maison de l’Amitie is much more than that. It is another striking example of President Donald Trump’s connections to Moscow and Russian money – and comes against a background of potentially devastating claims from elsewhere.
Trumps’s election campaign was bedevilled by allegations of links with the Kremlin and financiers who owe loyalty to Vladimir Putin.
Now the fledgling presidency is mired in a fast-moving scandal that revolves around allegations that the Russian Secret Services interfered to swing the election and that members of Trump’s team have had repeated contacts with Russian diplomats and middlemen.
Last month, Trump appointed a new Commerce Secretary, Wilbur Ross, a man with multiple and well-established links to Russian financiers. His National Security Adviser Michael Flynn resigned over his contacts with the Russians.
Last week it emerged that Trump’s new Attorney General Jeff Sessions met the Russian ambassador twice in 2016, despite having denied meeting Russian officials under oath.
Mr Trump has dismissed the furore over Russian links as ‘fake news’, reiterating that he has ‘no business deals in Russia’.
Strictly speaking, that might be correct – if we overlook his £11 million deal to take Miss Universe to Moscow in 2013. But the real question is not about deals ‘in Russia’, but about his relationship with Russians, including oligarchs from former Soviet states.
Now, for the first time, material is emerging that is quite different from the distasteful and unproven suggestions of seedy sex sessions in Russian hotels, the so-called ‘Kompromat’, or compromising material allegedly held by Russian secret services.
Close scrutiny of The Donald’s business history now suggests that if there is a real concern about Russian connections, it may instead lie in hard financial facts and figures.
In particular, the story of the Maison de l’Amitie, goes to the heart of President Trump’s good fortune in keeping his property empire afloat despite a very mixed business track record.
This embraces six corporate bankruptcies, numerous failed limited partnerships and the widely reported refusal of every leading Wall Street bank except Deutsche Bank to lend to him after his 1990s casino ventures in Atlantic City repeatedly went bust.
According to Trump, he survived because of a combination of brilliant deal-making, brand power and raw animal spirit. But like much that comes out of Trump’s mouth, this official story is open to question.
Since at least the late 1990s, it appears that Trump may indeed have been doing business with the abundant new sources of global finance, including figures from kleptocracies such as Russia and the countries of the former Soviet Union. As his son Donald Trump Jr told a Manhattan real estate conference in 2008: ‘Russians make up a pretty disproportionate cross-section of a lot of our assets. We see a lot of money pouring in from Russia.’
Not that today the newly crowned President Trump is in much hurry to acknowledge his Russian ‘friends’.
THE FERTILISER KING
For all his wealth now, it is often forgotten that in 2008 Donald Trump found himself in deep financial trouble. American property prices had crashed and were still falling.
However, some areas such as Miami fared better and that’s where Trump had a significant asset – the Maison de l’Amitie, for which the records show he had paid $41 million (£32 million) four years earlier.
It was widely reported that Wall Street had stopped lending to Trump and now the charismatic property developer was embroiled in legal action against Deutsche Bank, one of the few international banks that would do business with him.
Trump owed it £32.5 million after personally guaranteeing a loan to a failing hotel project in Chicago. He missed a major payment date and stalled for time by suing the bank, claiming that the financial crash was an ‘Act of God’.
Then, a buyer turned up for his Florida mansion in the shape of oligarch Dmitry Rybolovlev, a 41-year-old former cardiologist who had secured the rights to Russia’s vast potash fertiliser reserves after the collapse of the Soviet Union.
Trump had already slashed the asking price by nearly a quarter. Having already expressed an interest two years earlier, Rybolovlev was agreeing to pay Trump $95 million (£48 million) for the house in June 2008, according to US property records.
This was viewed as a surprisingly high price in a crashing market and the most that had ever been paid for a single house in America – even if, as some reports suggest, Trump had made substantial improvements. Other reports say that it was riddled with mould. With typical braggadocio, Trump said of the deal at the time: ‘I love breaking records, and this is a record.’
It certainly aroused comment.
‘There are a lot of suggestions that Dmitry Rybolovlev drastically overpaid for this property,’ said lawyer David Newman, partner in Sills, Cummis & Gross of New York, who represented Rybolovlev’s wife Elena in her divorce from the Russian oligarch. ‘If you look at the four years between Trump’s purchase and his sale to Rybolovlev, there were very few things that increased that much in value.
‘It raises a lot of issues, and nobody knows the answers except Rybolovlev and his close associates.’
As an advocate for the former Mrs Rybolovlev, he might, of course, be parti pris; naturally the transaction has its defenders, too.
These include Paulette Koch, a leading Florida luxury estate agent who was entrusted by Donald Trump with the sale of Maison de L’Amitie. She thinks the Russian got a good deal, saying: ‘It has a lot of acreage on the ocean, and that’s in finite supply and great demand.’
Other Palm Beach estate agents agree with her that this gargantuan sum was worth it for ‘a beautiful piece of land’ – although, again, it might be said they have an interest in backing high property prices in their locality.
Rybolovlev, whose formerly state-owned company Uralkali accounted for 30 per cent of the world’s fertiliser sales, is fabulously wealthy.
In 2014, a court in Geneva ordered him to pay £3.7 billion to Elena in what is thought to be the world’s biggest divorce settlement. (Although on appeal the ultimately undisclosed settlement was probably much lower.)
It is not merely financial clout that makes Rybolovlev a figure of significance to Trump sceptics.
It is notoriously difficult for Russians with that scale of wealth to continue to prosper without the approval of the political establishment – and that usually means the new tsar himself. Oligarchs such as Mikhail Khodorkovsky who have rebelled against Putin have been imprisoned. Others, such as Boris Berezovsky, have met unexplained deaths.
Rybolovlev had risen quickly in the violent wild west world of post-Soviet Russia. In 1995, at the age of 29, he became chairman of the giant Uralkali empire.
But ‘Rybo’ wanted to move as much money as possible out of Russia, where both health and wealth can depend on remaining on good terms with the Kremlin.
This explains his interest in buying assets in America. But the value of Trump’s Florida property dropped precipitously after Rybolovlev bought it.
By 2013, it was independently estimated at $60 million (£38 million) on Palm Beach county’s tax rolls.
Last year, after tearing the mansion down, he sold 2.74 acres of land, including 183ft of ocean-front, for £28 million – a huge pro rata loss approaching £10 million over nine years, or nearly 25 per cent.
For Rybolovlev, an astute businessman, the deal seems unusually poor.
For Trump, it was a potentially life-saving cash injection that let him stave off Deutsche Bank and avoid having to dump his very best New York buildings –Trump Tower and 40 Wall Street – at firesale prices. At the very least, it looks as though Trump owes Dmitry Rybolovlev a little gratitude.
Rybolovlev could well afford the loss. Since disposing of Uralkali, he has bought Monaco Football Club, yachts, private jets and trophy houses around the globe –including an £18 million mansion in Hawaii that once belonged to actor Will Smith and the Greek island of Skorpios, where Aristotle Onassis married Jacqueline Kennedy.
He also – reportedly – bought 9.7 per cent of the Bank of Cyprus for £190 million, becoming its largest single investor. According to experts, the Bank of Cyprus has been up to its ears in Russian ‘flight’ capital – money transferred abroad to avoid taxes, inflation or maybe seizure by the state.
While the bank’s identity records, even for large shareholders, are murky, Dmitry Rybolovlev appears to have retained up to a 3.3 per cent stake, even after the 2013 crash when the island’s entire financial sector failed (and had to be bailed out by the European Central Bank and the IMF).
This is where a second intriguing connection between Dmitry Rybolovlev and Donald Trump comes in, this time through the President’s new Commerce Secretary. In July 2014, Wilbur Ross and his investment group bought a 17 per cent stake in the Bank of Cyprus – one of the key havens for Russian finance and an offshore financial nexus of Russian oligarchs and ‘friends of Putin’. Ross became the bank’s co-chairman.
His fellow investors have included Vladimir Strzhalkovsky, said to be a former KGB agent and a long-time Putin associate, and Viktor Vekselberg, reportedly the seventh wealthiest Russian.
The links between Ross and Trump are strong, going back to at least the early 1990s, when he helped to salvage one of Trump’s failing Atlantic City casinos.
Ross was also a generous donor to Trump’s 2016 campaign.
None of this suggests any wrongdoing whatsoever by Mr Trump –but it makes the point that his links with Russian money are numerous and part of a chain, or series of chains, that go back ultimately to the Russian establishment. And the world of Russian finance is not without its problems.
Then, in 2014 at the age of 77, Wilbur Ross decided to get involved in the Cyprus bank.
In fact, he has played a very active role recruiting its senior management team, especially its board chairman, Josef Ackermann, a long-time former chairman of Deutsche Bank which has a history of doing business with… Donald Trump.
It is now acknowledged that Ackermann’s tenure at Deutsche Bank was a period of spectacular chicanery. This includes anything from sanctions busting, interest rate rigging, and mortgage fraud to facilitating tax dodging, illicit trading, illegal foreclosures, rigging energy markets and laundering Russian money, which has since resulted in it facing fines and settlements totalling £16 billion.
From 2002 to 2012, under Ackermann, Deutsche Bank had become Trump’s largest bank creditor by far, with more than £530 million of loans to the Trump Organization and even more to other Trump partnerships. Trump’s 2016 financial disclosures show the Trump Organization still owes £300 million.
Deutsche Bank has recently been fined more than £506 million for failing to prevent £10 billion of Russian money laundering.
THE TRUMPSKI TEAM
The Trump team’s connections with Russia go beyond Rybolovlev and Ross.
His pick as National Security Adviser, Michael Flynn, was forced to resign within days of taking office after repeated contacts with the Russian Ambassador to Washington, Sergey Kislyak, became known.
Jeff Sessions, the new US Attorney General who swore under oath he had not met representatives of the Russian government, is currently mired in controversy after it emerged he met the Russian ambassador twice during 2006.
Trump’s son-in-law and senior adviser Jared Kushner also had undisclosed meetings with the ambassador.
Trump’s Secretary of State, Rex Tillerson, signed a huge Russian oil deal when he was boss of ExxonMobil. Putin bestowed the Order of Friendship on him in 2013.
Trump’s former campaign manager Paul Manafort spent years working for the Putin-friendly former Ukrainian president Viktor Yanukovych.
Another Trump adviser, Felix Sater, was involved with the recent backdoor Ukraine ‘peace plan’ to oust the current Ukrainian president and lift sanctions against Russia.
He was also MD of Bayrock LLC, which allegedly injected Kazakh and Russian money into Trump construction projects.
Michael Cohen, Trump’s personal lawyer, met with far-Right Ukrainian MP Andrey Artemenko and Sater to thrash out the Ukraine ‘peace plan’.
Trump’s former foreign policy adviser Carter Page is another with suspected links to Moscow.
The intelligence dossier produced by former British spy Christopher Steele claimed Rosneft CEO Igor Sechin offered Page and his associates the brokerage of the sale of a 19 per cent stake in the giant state-owned energy company in exchange for lifting US sanctions on Russia. (Although there has been some scepticism about the reliability of the dossier.)
MYSTERY FLIGHTS TO DULLSVILLE
Did Dmitry Rybolovlev’s ties to Donald Trump end with the rescue –deliberate or fortuitous – of the Trump property empire in 2008?
The oligarch has a private Airbus A319 whose registration M-KATE – named after one of his two daughters, Ekaterina – allows it to be tracked online.
M-KATE is normally based in Moscow or Switzerland, but made numerous flights all over the US from August 2016 through November 2016, the peak season for last year’s presidential campaign – right at the moment when American intelligence agencies believe Moscow was supposedly hijacking the election on Trump’s behalf.
According to flight logs from respected plane logging sites FlightRadar24 and PlaneFinder, as well as photos of planes on the ground during the campaign, M-KATE showed up at the very same cities, and the very same (otherwise unremarkable) airports where Trump happened to be – Charlotte, North Carolina, Concord, North Carolina, Las Vegas and Miami.
Indeed, early last month – on Friday, February 10 – M-KATE flew from Switzerland to Miami, where the President was due to party with hedge fund mogul Stephen Schwarzman. Why would Rybolovlev’s plane scurry back and forth from Moscow to odd destinations such as Charlotte and Concord, or to Las Vegas, New York and Miami, precisely when Trump and his team were in the neighbourhood? Was Rybolovlev some sort of Putin emissary, a go-between for Trump and Moscow?
The flights remain a genuine enigma; there are no eyewitness reports that the two men actually met or indeed of who was on the plane. It is not unknown for jets to be chartered out.
A White House spokesman denied contact between the two men, adding:
‘No member of the Trump campaign or Mr Trump met with Mr Rybolovlev during the campaign or any other time.’
Rybolovlev’s New York spokesman Brian Cattell denied the widespread speculation about the Russian oligarch’s Florida property dealings, and said: ‘We are aware of a number of rumours and far-fetched theories circulating, but none of them has any basis in fact. Mr Rybolovlev has never met Donald Trump.’
But these coincidences certainly deserve further scrutiny – as do the other facts now emerging.
For while, so far, the allegations swirling around Trump have been based on claims and rumour, there are also real deals and actual connections to examine.
It is evidence that raises important questions about the true extent of Trump’s dealings with Putin and the Moscow money men.
Statement from Dmitry Rybolovlev
Since publication of this article Daily Mail received the following statement from Sergey Chernitsyn, an adviser to Dmitry Rybolovlev:
“The Rybolovev family trust did acquire a property in Palm Beach from Mr Trump back in 2008, below the asking price, as an investment and following a process of negotiation. There is every prospect that this investment will turn out to be profitable. Mr Rybolovlev travels frequently to many different destinations. If Mr Rybolovlev was physically in the same place as Mr Trump at any time, this was pure coincidence. Mr Rybolovlev was in North Carolina for a business meeting and we can state categorically that he did not have any contact with Mr Trump or any of his advisers at the time he was there. In relation to Bank of Cyprus: Following the 2013 bail in at Bank of Cyprus, Mr Rybolovlev’s previous shareholding at the bank was diluted to a very low level. He has never met Wilbur Ross.”
Originally published by James S. Henry at Mail Online