Trump’s Conflicts of Interest in Canada

The sun sets over the Toronto skyline, July 2015.

Shady dealings north of the border

In 2007, the Trump Organization broke ground on a $500 million Canadian project in Toronto in partnership with the real estate development firm Talon International Development Inc. Five years later, in 2012, Donald Trump and his daughter Ivanka cut the ribbon on the gleaming 65-story Trump International Hotel and Tower Toronto that was the result of that partnership. The ribbon cutting ceremony may have been the high-water mark for the ambitious project. President Trump’s partner in the enterprise was Russian-born Canadian Alexander Shnaider, who leads Talon. The deal between the two companies was a licensing and management arrangement in which the Trump Organization provided the use of the Trump name for the hotel and tower and also managed the property in exchange for royalties and management fees. For his part, Shnaider was to develop the tower and the condominiums.

The project, however, was beset by financial problems almost from its onset, and The Wall Street Journal recently broke the story of some troubling sources of finance associated with the project. As that story notes:

VEB, a Russian state-run bank under scrutiny by U.S. investigators, financed a deal involving Donald Trump’s onetime partner in a Toronto hotel tower at a key moment for the project, according to people familiar with the transaction. 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.

Vnesheconombank has become a key subject of focus for U.S. investigators looking at links between Trump and his team and Russian interference in the U.S. political system. VEB is currently on the U.S. sanctions list, and it has frequently been used to provide cover for Russian intelligence operatives in the field. Russian President Vladimir Putin was chairman of the bank’s supervisory board at the time of the Trump deal with Schnaider. A Trump Organization spokesman told The Wall Street Journal that Trump was not involved in any of the financial dealings with VEB, noting that the organization, “merely licensed its brand and manages the hotel and residences.” VEB did not respond to the newspaper’s request for comment.

In addition, presidential son-in-law and White House adviser Jared Kushner has come under scrutiny for meeting with VEB’s chairman during the transition period. Kushner initially failed to disclose the meeting, and VEB officials and Kushner have provided contradictory statements regarding under what capacity Kushner took part in the meeting. VEB officials claim the meeting was to discuss new business opportunities, even as Trump was set to be  sworn in as president, while administration officials assert that Kushner did not discuss business during the meeting.

According to a number of news reports—and verified by court records—a VEB official was also engaged in an effort to recruit the Trump campaign’s foreign policy adviser, Carter Page, as a Russian agent. This VEB official was eventually arrested for espionage in 2015 and plead guilty to “conspiracy to act in the United States as an agent of a foreign government.” He was sentenced to 30 months in prison and dealt a $100,000 fine.

This considerable pattern of engagement with VEB and the large infusion of Russian money into the Toronto project seriously call into question Trump’s assertion that he personally has “nothing to do with Russia” and that “no person that I deal with does.” The Toronto project also makes clear that Russian money can easily pass through second or third parties before it flows directly to Trump interests.

Trump's Conflicts of Interest

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This interactive map of the world spells out President Donald Trump’s and his family’s conflicts of interest in 25 countries around the globe.

As Jeremy Venook at The Atlantic noted, “As with many of Trump’s business holdings, the property represents a conflict of interest because it brings him revenue that’s made possible by money from a bank owned and operated by a foreign government.” Through his licensing arrangement with Talon, Trump still profits from the building and—because Shnaider leads Talon—by extension, from Shnaider’s sale involving VEB, which “potentially gives the Russian government leverage that it could use should it want to influence Trump’s policies.” Such an arrangement may be a violation of the U.S. Constitution’s Emoluments Clause, which bars elected officials from accepting gifts from a foreign state.

Even with a massive infusion of questionable outside money, the Trump project in Toronto had gone into receivership by November 2016, and it was sold for a fraction of its original cost in March 2017.

The Trump Organization also has a licensing and management agreement, announced in 2013, with the real estate company Holborn Group for a Trump-branded hotel and tower in Vancouver—a project that brings its own set of conflicts. Like the Trump Organization, the Holborn Group is a family run business, headed by Joo Kim Tiah, the eldest son of one of Malaysia’s wealthiest families. Tiah’s father, Tony Tiah Thee Kian, was convicted in 2002 of providing false information to the Kuala Lumpur Stock Exchange, for which he was fined roughly $675,000. He now serves as the executive chairman of TA Global Berhad, the company behind the Holborn Group.

As the Financial Times chronicles, “The Vancouver development raises the risk of violating the emoluments clause in the US constitution prohibiting elected officials from receiving benefits from foreign governments. The hotel also invites scrutiny of his business partners such as the elder Mr. Tiah, who was convicted of providing a false report to the Kuala Lumpur stock exchange.”

Some of the units in the Vancouver property have been bought by investors with strong ties to the Chinese government, again suggesting a pattern that has been seen elsewhere where Beijing may be purchasing Trump properties as part of an effort to influence his decision-making.

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 made at least $571,665 and owned, had ownership interest in, or was a managing member of several companies related to his business in Canada, including the following:

  • DT Marks Vancouver LP, partner, president
  • DT Marks Vancouver Manager Corp., director, chairman, president
  • DT Marks Vancouver Member Corp., owner
  • THC Vancouver Management Corp., director, chairman, president, received $28,571 in management fees
  • THC Vancouver Payroll ULC, director, president
  • Toronto Development LLC, member, president
  • Trump Marks Toronto Corp., director, president
  • Trump Marks Toronto LLC, member, president
  • Trump Marks Toronto LP (formally Trump Toronto Management LP), partner
  • Trump Toronto Development Inc., director, president, secretary, received “None (or less than $201)”
  • Trump Toronto Hotel Management Corp., president, received $543,094 in management fees
  • Trump Toronto Member Corp. (formally Trump Toronto Management Member Corp.), director, chairman
  • Trump Canadian Services Inc., president, secretary
  • Trump Education ULC, director, chairman

According to Trump’s May 2016 financial disclosure—which was also not verified by regulators and therefore may not include all of his foreign deals or assets—Trump made at least $647,578 and owned, had ownership interest in, or was a managing member of several companies related to his business in Canada, including the following:

  • DT Marks Vancouver LP, partner, president
  • DT Marks Vancouver Manager Corp., director, chairman, president
  • DT Marks Vancouver Member Corp., owner
  • THC Vancouver Management Corp., director, chairman, president, received $35,714 in management fees
  • THC Vancouver Payroll ULC, director, president
  • Toronto Development LLC, member, president
  • Trump Marks Toronto Corp., director, president
  • Trump Marks Toronto LLC, member, president
  • Trump Marks Toronto LP (formerly Trump Toronto Management LP), partner
  • Trump Toronto Development Inc., director, president, secretary
  • Trump Toronto Hotel Management Corp., president, received $611,864 in management fees
  • Trump Toronto Member Corp. (formerly Trump Toronto Management Member Corp.), director, chairman
  • Trump Canadian Services Inc., president, secretary
  • Trump Education ULC, director, chairman

Based on both disclosure forms, Trump received at least $1,219,243 in management fees from his Canada projects over the previous two years, and he and his children will presumably continue to receive money from these arrangements. Interestingly, unlike for his other licensing arrangements, these forms do not appear to list any royalties Trump received from these projects.

Trump’s Canada projects have all the hallmarks of his classic conflicts of interest: links to Russian money; grand business plans that end in receivership; a willingness to comingle the office of the president with his own financial interests; and foreign governments that may be looking to buy property as an easy means to influence him. At a time when the North American Free Trade Agreement is about to be renegotiated, potentially affecting millions of American workers, do the American people really want a president who is possibly more concerned with investigations into Russian money in his business dealings in Toronto and into Chinese influence in his project in Vancouver than he is about American jobs?

Read the full series of columns here.

John Norris is a senior fellow at the Center for American Progress. Carolyn Kenney is a policy analyst with the National Security and International Policy team at the Center.