Trump’s Conflicts of Interest in Uruguay

Children play in front of the Trump Tower under construction in Punta del Este, Uruguay, January 17, 2017.

Trump’s son on the taxpayers’ dime

In 2012, the Trump Organization signed a deal with Argentine development firm YY Development Group to develop a Trump-branded tower in the town of Punta del Este in the neighboring country of Uruguay, with the longer-term goal of expanding the Trump brand into Argentina. The tower, with condo prices ranging from $550,000 to $8 million, is currently under construction and expected to be finished in late 2018. According to YY Development Group’s chief executive, Juan Jose Cugliandolo, the average unit prices increased 30 to 35 percent in the past year, and as of January, between 65 and 75 percent of the units were sold.

As described by Leonardo Carbonell, the president of an organization that promotes investment in Punta del Este, the town “started off as a money laundromat for Argentines,” where they could invest money as a way to evade taxes at home. There is no evidence, however, that the Trump Punta del Este project has been involved in money laundering. The deal for the resort is a licensing agreement in which Trump provides the use of his name for the resort in exchange for royalties.

YY Development Group, which is also in charge of a now reportedly stalled project in Buenos Aires, has a number of personal connections both with the Trump family and with officials in the government of Argentine President Mauricio Macri. YY Development Group managing partner Moisés Yellati is the brother-in-law of Argentina’s new finance minister, Nicolás Dujovne. Both men have previously been partners in separate real estate ventures.

Dujovne’s father, Bernardo Dujovne, is also the founding architect and partner of Dujovne-Hirsche & Associates, which is the firm working with YY Development Group to build Trump’s tower in Punta del Este. YY Development Group hired Uruguayan architect Jorge Pieri to handle the permit approval process in Maldonado, the department where Punta del Este is located.

Pieri’s father was an official in Maldonado’s Ministry of Planning at the time the permits were approved, although Pieri noted that “the procedure [for the permit approvals] was correct.” He further claims that his father did not assist him in obtaining the permits.

Yellati and Felipe Yaryura, also with YY Development Group, both attended Trump’s victory party on election night, as well as each of the debates between Trump and Hillary Clinton. In an interview with La Nación, Yaryura touted his relationship with the Trumps, noting that the morning after election night, he joined one of Trump’s children for breakfast to discuss Trump’s presidency and how it would improve the Trump brand around the world—further evidence that Trump sees the presidency as a vehicle to enrich himself.

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.

In January 2017, Eric Trump traveled to Uruguay on a business trip to promote the Trump-branded tower in Punta del Este. As an immediate member of the president’s family, Eric was provided taxpayer-funded Secret Service protection, which, according to The Washington Post, cost taxpayers $97,830 in hotel rooms alone for Secret Service and embassy staff: Secret Service rooms totaled $88,320, and embassy staff hotel rooms totaled $9,510. The hotel tab was paid through the U.S. Department of State, although officials there declined to comment on the trip. Eric Trump’s spokeswoman declined to make him available for an interview with The Washington Post concerning the trip, nor did he respond to written questions about the trip.

The issue with Eric Trump’s trip to Uruguay is not that he was given Secret Service protection—as the son of the president, he is guaranteed this right—but that U.S. taxpayers were essentially charged for the business expenses of a trip meant to further enrich the Trump family. As summarized by Jeremy Venook, “The problem is that the $97,830 charge was for all intents and purposes a business expense, one of what will likely be many instances of the federal government paying to effectively subsidize the Trump Organization.” It is unclear whether any money was spent to book rooms at Trump properties.

While Eric Trump is guaranteed Secret Service protection, it is unclear why State Department staff also participated in this business trip. As pointed out by Kathleen Clark, a government ethics expert and law professor at Washington University in St. Louis: “There is a public benefit to providing Secret Service protection. … But what was the public benefit from State Department personnel participating in this private business trip to the coastal town? It raises the specter of the use of public resources for private gain.”

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 related to business in Uruguay:

  • Trump Marks Punta del Este LLC, president, member
  • Trump Marks Punta del Este Manager Corp., president, director, chairman

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 was paid as much as $1 million in royalties and owned, had ownership interest in, or was a managing member of the following two companies related to business in Uruguay:

  • Trump Marks Punta del Este LLC, president, member, received between $100,001 and $1 million in royalties
  • Trump Marks Punta del Este Manager Corp., president, director, chairman

As Trump has not divested himself from his business, he, along with his children, will presumably continue to receive money from this arrangement.

Again and again, Americans have seen the same pattern with Trump and his family: They not only continually fail to address serious conflicts of interest, but they are actively using the machinery of the U.S. government—from the Secret Service to the State Department—to effectively subsidize their business activities abroad. As a result, America looks corrupt to its partners, and U.S. taxpayers see their hard-earned dollars being used to promote Trump’s business interests overseas.

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.