Trump’s Conflicts of Interest in the Dominican Republic

Haitian migrants work at the Cap Cana Resort in Punta Cana, Dominican Republic, November 18, 2008.

Should Trump resorts be a foreign policy priority?

In 2007, the Trump Organization signed a deal with Cap Cana, a real estate community owned by brothers Ricardo and Fernando Hazoury in the island nation of the Dominican Republic, to develop a Trump-branded beachfront luxury resort. The development was originally slated to be completed by 2011. The deal stalled, however, after a glitzy rollout and the initial sale of Trump-branded vacant lots at the resort, an apparent victim of the 2008 financial crisis. The Trump Organization and other investors accused the Hazoury brothers of fraud. The Trump Organization’s lawsuit against the brothers was settled in 2013 for an undisclosed amount. The lawsuit brought by other investors is ongoing.

In the years following the settlement, Donald Trump’s name was dropped from Cap Cana marketing materials and real estate projects. In February, however, Eric Trump, the organization’s executive vice president, met with the Hazoury brothers and toured the Cap Cana property with them. In a press release from Cap Cana regarding the visit, the Hazourys proclaimed, “we are excited to be working with the Trump Organization in the future phases of the project.”

As summarized by Jeff Horwitz of the Associated Press, the Trump Organization’s return to this project is “testing the limits of Donald Trump’s pledge to halt new international Trump-branded projects during his presidency” to avoid conflicts of interest. The Trump Organization is trying to claim that this project does not represent a new deal because, according to Chief Legal Officer Alan Garten, the organization never canceled the deal.

Richard Painter, former White House ethics lawyer during the George W. Bush administration, countered that the Trump Organization’s moves in the Dominican Republic show how flimsy President Trump’s pledge was in the first place. “They can take the tiniest little past involvement in something and then extend it into an enormous new deal. There’s no way to distinguish between new business and old business,” said Painter.

Follow the paper trail

The resort deal was a licensing agreement in which Trump would provide the use of his name for the resort in exchange for royalties. 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 listed under Trump Marks Real Estate LLC very modest values for Dominican assets related to the Cap Cana project, although he could potentially profit significantly from it.

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.

Additionally, according to both his 2015 and 2016 federal disclosures, Trump has total ownership of an entity called Caribusiness Investments SRL, which is based in the Dominican Republic and whose underlying asset is listed as land. He did not directly list ownership of the entity, but he reported total ownership of the two companies, Caribusiness Re Corp. and Caribusiness MRE LLC, that do own Caribusiness Investments SRL. In the 2015 disclosure, he reported having “None (or less than $201)” in income from the entity but listed its value between $5 million and $25 million. In the 2016 disclosure, he reported an income amount of $2 million from the entity in land sales, with its remaining value listed between $1 million and $5 million. No further information about this entity is provided.

Further calling into question the president’s conflicts in the Dominican Republic, there are reports that Trump has chosen Robin Bernstein—a campaign donor and founding member of Trump’s Mar-a-Lago Club—for the post of ambassador to the Dominican Republic, though the White House has not confirmed her nomination. Bernstein and her husband Richard have had a business relationship with Trump for two decades through their consulting and marketing firm The Americas Group, which focuses on construction projects in Latin America and the Caribbean. What is more striking is that Trump seems very eager to move ahead with this appointment despite having yet to fill almost any of the senior leadership positions at the U.S. State Department.

As Jeremy Venook argued in The Atlantic:

Trump’s decision to appoint somebody with whom he has long maintained a financial relationship—his second such appointment, after having named fellow billionaire real-estate developer and business partner Steven Roth to head his infrastructure program—suggests a continued willingness to blur the lines between his endeavors as a businessman and his duties as president, all while contributing to the perception that the president is willing to reward those who have done business with him in the past.

Virtually every step to date suggests that Trump cares far more about his business opportunities in the Dominican Republic than America’s foreign policy interests in that country.

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.