Earlier this year, the Trump Organization got kicked out of a hotel it had been managing in Panama, previously known as the Trump Ocean Club. Ithaca Capital Partners and its leader Orestes Fintiklis celebrated the change with piano serenades in the lobby and cleverly named drinks at the hotel bar, like the “Fire and Fury” and the “Stormy Jack Daniels.” The project had struggled for years ahead of the abrupt shift in management, and the Trump Organization can not escape responsibility.
Rather than only sticking to licensing the Trump name as part of the development, the Trump Organization also functioned in crucial roles like securing funding. It got a now defunct bank Bear Stearns to underwrite $220 million worth of bonds on the project that were then sold off to investors — and a large chunk of that money (around half) was eventually lost forever. The investors were to have their money secured by advance purchases of space in the hotel complex before it was built, but by the time the building was actually ready to be occupied, a large swath of those buyers backed out. Many of the purchases were made via shell companies, so it’s not immediately possible to tell who the buyers even were let alone why they abandoned the project.
What can be discerned, however, is troubling. Shell companies, while themselves not illegal, are often used as tools in a money laundering scheme (just ask Paul Manafort). A number of the individuals known as behind the shell company purchases are confirmed to have connections to organized crime, including money laundering and the Russian mafia. Many of the sales to deeply questionable individuals went through Alexandre Ventura Nogueira, eventually sued by the team behind the building for supposedly lying to clients.
The team behind the project can’t escape responsibility for wrongdoing, though. For instance, they set up a system in which brokers would be rewarded handsomely for making sales, letting them have 90 percent of their commission before the sales were even finalized. Normally, commissions are paid out in portions mirroring what the buyer has actually paid out of their purchase price.
The Trumps, although not the only ones involved in the project — which they’d been drawn into via a Lebanese-American businessman whose background included far more clothes than buildings — themselves peddled falsehoods. Apparently, the propensity for lying runs in the family, since in late 2008, Ivanka Trump claimed that the building was 90 percent sold out and to top it off, she personally had sold 40 units just the previous month. In fact, there’s no available confirmation that she sold any units, and despite efforts to misrepresent the financial status of the project, the truth remains — three months after that claim from Ivanka, only 79 percent of the building’s space was under a purchase contract.
Through all the twists and turns of the development — including much more than just Trump licensing his name for $1 million and that’s that — the Trump Organization and the now president in particular stood to profit big time. They were set to take in revenue from everything from random purchases from hotel guests to unsold units, which their contract demanded they be paid a fee for.
Although this particular project is no longer in the Trumps’ hands, the Trump Organization — and the president’s connection to it — continue.
Featured Image via YouTube screenshot