During the 2016 GOP convention, Trump surrogates met with Russian actors to discuss dropping Russia sanctions from the party platform, aimed at forestalling reprisals for Russia’s abuse of Ukraine, among other things.
Last July, Congress overwhelmingly passed — and Trump signed — a bipartisan bill imposing sanctions on Russia for its meddling in the 2016 election. It established penalties against entities doing “significant” business with Moscow’s defense and intelligence sectors.
However, the Trump administration recently told lawmakers it will not be implementing the new sanctions, arguing the measures are not necessary yet because they’re already “serving as a deterrent.” This despite credible and abundant evidence the Russians are at it again, using the internet and social media to renew their assault on Americans’ confidence in the democratic process. The State Department claimed that not implementing sanctions as required by law is “using this legislation as Congress intended to press Russia to address our concerns …”
Oct. 17, 2013. Future President Donald Trump boasted to David Letterman that he’d “done a lot of business with the Russians — they’re tough.” Then he also acknowledged business dealings with the mob.
He “really tried to stay away from them as much as possible. … Growing up in New York and doing business in New York” meant dealing with organized crime was unavoidable. “I would say there might have been one of those characters along the way, but generally speaking I like to stay away from that group. … Although I must say I have met on occasion a few of those people. They happen to be very nice people.” (Like American Nazis?) “You just don’t want to owe them money.”
And you don’t want to be indebted to Russian oligarchs and mobsters either, for the same reasons.
The “oligarchs” are extremely wealthy industrialists who emerged after the collapse of the Soviet Union — with the Kremlin’s blessing, and Putin’s encouragement. Despite all his denials, Trump has accumulated his own “web of direct and indirect connections, with a far-flung private Russian/FSU (former Soviet Union) network of outright mobsters, oligarchs, fraudsters and kleptocrats."
The “Bratva” (Brotherhood), or “Russian Mafia,” is widely considered the most powerful mob in the world, certainly the most violent and feared. It’s a highly decentralized group of 10 separate quasi-autonomous “brigades” operating more or less independently, with over 9,000 members.
This collective does pool its resources, though, and a 12-person council oversees the money. Regular meetings are held at varied locations around the globe, often disguised as festive occasions. It derives most of its income from drugs and human trafficking, and operates in unexpected places — for example, it controls prostitution in China.
It does no good to be awash in funds if you can’t find a way to spend them without getting caught. Dirty money, like dirty clothing, requires laundering.
“Money laundering” is a financial transaction scheme intended to conceal the identity, source and destination of money obtained through criminal means, making it appear that the income originated with a legitimate source. Typically the money movement involves foreign banks, or otherwise legitimate businesses.
The process consists of three stages. First, criminal income is acquired by a “launderer.” Next, the launderer passes the money through complex transactions that hide the original sources of the funds. Finally, the money returns to the launderer via indirect and obscure channels.
Handling large sums of cash is inefficient and dangerous. Criminals need to consolidate their funds in accounts with financial institutions, feasible only if the money seems to be legitimate income.
Common types of laundering include tax evasion and false accounting. One tactic is the use of “shell companies,” which are incorporated entities that actually possess few or no assets, but perform significant operations. Large, otherwise-legitimate businesses can serve in this capacity by renting out spaces and services comprising only a portion of their overall commercial activities.
Shell-company equivalents ostensibly market services and products, but create fake invoices and receipts to account for the income. The launderer leaves his dirty money with the shell, which deposits it into its own accounts. It only remains for the shell to withdraw the “clean” money via ordinary procedures, and return it to the criminal enterprise that first accumulated it.
Other dodges utilize holding companies and offshore accounts.
Nowadays launderers hide online. Online banking services, anonymous online payment, peer-to-peer transfers via mobile phones, and virtual currencies such as Bitcoin make the final stage of laundering — returning funds to the launderer — hard to detect. Money can be transferred or withdrawn without leaving tell-tale tracks.
Trump’s organization offers an excellent means of laundering because real estate has an arbitrary value. Is an apartment worth $1 million, or $2 million or more? Depends on who wants it badly enough. When a transaction involves one LLC with undisclosed ownership paying another LLC with undisclosed owners, the hidden money is secure from prying eyes. Real estate is flexible.
Consider this: Why would Russian billionaire and Putin-pal Dmitry Rybolovlev pay some real-estate mogul $95 million for a mansion that the mogul bought for only $40 million? Why would Rybolovlev undertake a series of flights from Moscow to uncommon destinations like Charlotte and Concord, as well as to Vegas, New York, Burbank and Miami — at the exact times when said mogul was in those exact locations? Should it surprise us to learn that the mogul is Trump?
Stay tuned — there’s much more.
Jon Hauxwell, MD, is a retired
family physician who grew up in Stockton and lives outside Hays.