There has been an avalanche of news this week. Much of it Washington gossip. While the Washington chatter class feasted on a harvest of gossip for the ages, the Wall Street Journal put out a Pulitzer Prize worthy story that looked into the financing behind the troubled hotel in Toronto with Donald Trump's name on it.
I covered the Russian ties of Trump's business associates Val Levitan, Alex Shnaider, and Shnaider's business partner Eduard Shifrin last week. But this week's remarkable Wall Street Journal story went much, much further.
First, let's set the scene: it is 2010, Shnaider's Toronto hotel project is failing and Trump can't get a loan after his 2004 bankruptcy. According to the Wall Street Journal, suddenly, VEB, a Russian Bank that finances politically important projects, takes an interest in the Trump Toronto project:
Alexander Shnaider, a Russian-Canadian developer who built the 65-story Trump International Hotel and Tower, put money into the project after receiving hundreds of millions of dollars from a separate asset sale that involved the Russian bank, whose full name is Vnesheconombank.
Mr. Shnaider sold his company’s share in a Ukrainian steelmaker for about $850 million in 2010, according to S&P Global Market Intelligence. According to two people with knowledge of the deal, the buyer, which hasn’t been identified publicly, was an entity acting for the Russian government. VEB initiated the purchase and provided the money, these people say
In May of 2017, the Trump Organization told the Journal that they had no ownership stake in the project and that there was only a management contract and a name licensing deal on the project. When the same Wall Street Journal interviewed Trump about the project in 2011, he boasted that it was a "great product."
Mr. Trump, who licensed his name to the project but has only a minor equity stake, shrugs off worry about the market's health.
"You never know about cycles. Where does it start? Where does it end? You can guestimate," he said in a brief interview. "But it is a great city, and we built a great product."
Again, at the time this project was being started, Trump's Atlantic City Casinos were in bankruptcy. Trump was short on capital. The Journal reports that Mr. Shnaider used $15 million of the money he received from the Russian Bank for the Trump Toronto project. Donald Trump has never released his tax returns, so we do not know how much he charges for licensing his name, but $15 million is a reasonable amount for a name licensing deal. If my hunch is right, Trump was paid $15 million, through a third party, by a bank Chaired by Putin in 2010.
The amazing Journal Story looked at just what VEB is and why they might be interested in the Trump Toronto project.
VEB has long been viewed by Russian analysts as a vehicle for the Russian government to fund politically important projects, including the 2014 Winter Olympics in Sochi. A VEB executive in New York was sentenced to prison last year after pleading guilty to conspiring to act in the U.S. as a Russian agent without notifying U.S. authorities…
At the time of Mr. Shnaider’s steelmaker deal, Russian President Vladimir Putin was chairman of VEB’s supervisory board, and major deals would have been approved by him, according to a former Russian government official and several Russian government and economic experts.
Earlier today, the the Washington Post reported that a "Senior White House Advisor is a person of significant interest" in the FBIs investigation into the Russian scandal.
The law enforcement investigation into possible coordination between Russia and the Trump campaign has identified a current White House official as a significant person of interest, showing that the probe is reaching into the highest levels of government, according to people familiar with the matter.
The senior White House adviser under scrutiny by investigators is someone close to the president, according to these people, who would not further identify the official.
This set off hyperventilating in DC and pontificating on cable news. Who could be the senior advisor close to the President? I guess none of the pundits read this paragraph of the Journal's Story.
VEB made headlines when it emerged that its chairman met with Mr. Trump’s son-in-law, Jared Kushner in December. A bank spokesperson has said VEB’s leaders met Mr. Kushner and numerous global financial executives as it developed a new strategy for the bank. White House press secretary Sean Spicer has said Mr. Kushner’s meeting was part of his role during the Trump transition as the “primary point of contact with foreign government officials.”
Jared Kushner's Title? Senior Advisor. Connect. The. Dots. The New York Times and Washington Post think they're having a newspaper war. They don't realize the Wall Street Journal has already won it.