Conflicts amid nuclear tensions
In 1999, the Trump Organization signed a deal with Daewoo Engineering & Construction Ltd., a group that had previously worked with the Trump Organization on Trump World Tower in Manhattan, to develop Trump World in Seoul, South Korea. Opened in 2007, Trump World in South Korea is made up of six condominium properties, three of which—Trump World I, II, and III—are located in Seoul, with the other three located in the cities of Busan and Daegu.
Shortly after the two organizations signed the deal, the parent company of Daewoo Engineering & Construction, the Daewoo Group, went bankrupt in the wake of a $43 billion accounting fraud scandal. Daewoo Group’s chairman initially fled to North Korea but was later arrested and convicted of embezzlement after returning to South Korea in 2005. As a result, the Daewoo Group was eventually broken up, which delayed but did not stop the rollout of the Trump-branded properties.
In December 2010, the state-run Korea Development Bank bought a 50.75 percent controlling stake in Daewoo Engineering & Construction for $1.9 billion; the bank is now reportedly trying to sell its shares.
During the campaign, Trump repeatedly said that South Korea, along with other U.S. allies, should pay more for its defense and not rely so much on the United States, going so far as to suggest that South Korea develop nuclear weapons.
While it may not be likely that South Korea actually decides to develop nuclear weapons, as pointed out by Kurt Eichenwald of Newsweek, Trump’s South Korean partner Daewoo Engineering & Construction is “involved in nuclear energy, a key component in weapons development.” If the United States did indeed adopt the policies advocated by Trump in regard to South Korea developing nuclear weapons, Daewoo Engineering & Construction “would potentially get an economic windfall,” as noted by Eichenwald.
Follow the paper trail
According to Trump’s July 2015 financial disclosure—which was not verified by regulators and therefore may not include all of his foreign deals or assets—Trump owned, had ownership interest in, or was a managing member of the following two companies potentially related to business in South Korea:
- Trump Korea LLC, 59 percent ownership
- Trump Korean Projects LLC, member, 100 percent ownership
According to Trump’s May 2016 financial disclosure—which also was not verified by regulators and therefore may not include all of his foreign deals or assets—Trump owned, had ownership interest in, or was a managing member of the following two companies potentially related to business in South Korea:
- Trump Korea LLC, 59 percent ownership
- Trump Korean Projects LLC, member, 100 percent ownership
Oddly, it appears that Trump did not report any income from his branded South Korean properties on either of his financial disclosure forms, despite the fact that the properties are still open and running. According to two former Daewoo executives, however, the Trump Organization had previously received an annual fee of roughly $8 million for the properties. South Korean news agency Yonhap previously reported that Trump’s brand fee for the six buildings amounted to between $6 million and $7 million in presumed annual payments.
See Also
Given how convoluted these financial disclosure forms are, it’s possible that some type of income from these South Korean properties is buried within the forms. But the difficulty of uncovering this information again highlights the need for Trump to release his tax returns; failing to do so means that the American people can never fully know who is paying Trump and his family, how much they are being paid, and to whom the Trumps themselves owe money.
Trump’s South Korean ties have all the classic hallmarks of his conflicts of interest: corrupt business partners; policies that may be designed to enrich him, his family, and his partners even if those policies are not in the best interests of the United States; and a convoluted and opaque paper trail that it makes it very difficult to understand who is paying Trump and how much he is being paid.
Read the full series of columns here.
Carolyn Kenney is a policy analyst with the National Security and International Policy team at the Center for American Progress. John Norris is a senior fellow at the Center for American Progress.