If At First You Don't Succeed, Try, Try Again: A Difficult Journey of Trump In Quest For Russian Money. Investigation report by historian Felshtinsky

If At First You Don't Succeed, Try, Try Again: A Difficult Journey of Trump In Quest For Russian Money. Investigation report by historian Felshtinsky Felshtinsky: In case Russian businessman Babel would be arrested in the USA he would surely tell Americans everything he knows including what he knows about Trump
Фото: Zakhar Leventul / Facebook

Last year Russian businessman Michael Babel fled to the USA. Russian prosecutors accused him of fraud and called for an international search. However, they have not demanded his extradition up to now. Russian-American historian Yuri Felshtinsky in exclusive article for GORDON has looked into Babel’s connections with Russian highest officials and businessmen and with President Trump family.

Trump considered construction of a skyscraper in Moscow. Yet he had no luck

Michael Babel had never planned to become famous. He just wanted to become rich. And all others on this photo taken in gloomy Moscow in 2007 unlikely had anything but money on their minds. Here is the photo. It shows the people who are now recognizable by many worldwide. To be precise, all but one person on this picture are recognizable by many.  Meanwhile, he is the most important character in the picture.

Фельштинский: Итак, слева направо: Елена Баронова (после эмиграции в США Елена стала писать свою фамилию на иностранный манер – Baronoff), брокер по продаже недвижимости Трампа во Флориде; Иванка Трамп, дочь президента; Майкл Дезер – глава Дезер Девелопмент (Dezer Development), главный и единственный девелопер Трампа во Флориде; Михаил Бабель – о нем ниже; сыновья Дональда Трампа – Дональд-младший и Эрик. В Felshtinsky: For the sake of completeness, here is the cast of characters (from left to right): Elena Baronova (after immigrating to the US, she started spelling her last name in a foreign manner: Baronoff), a real estate broker for Trump in Florida, Ivanka Trump, the daughter of Donald Trump, Michael Dezer, CEO of Dezer Development, the exclusive Trump’s developer in Florida, Michael Babel, who will be described below, Donald Trump Jr. and Eric Trump, the sons of Donald Trump. In the Trump Organization, Donald Trump Jr. supervised construction projects. Notably, Jared Kushner, who married Ivanka Trump on October 25, 2009, was not yet a part of the Trump’s family at the time this photo was taken. Photo: Scott Dworkin‏ / twitter.com

It was greed that brought these Americans to gloomy Moscow at the time. Donald Trump himself first came to Moscow in July of 1987. In his memoirs, he described that journey as “an extraordinary experience” and mentioned that he stayed in the “Lenin suite” at the National Hotel (notably, many years later, in 2013, Trump would stay in the “Obama suite” at the Ritz-Carlton Hotel). At the time, Trump was negotiating with Goskominturist (the State Foreign Tourism Committee in the USSR) regarding the construction of a luxury hotel at the center of Moscow. Local media even announced that Trump had agreed to refurbish the Soviet-era Hotel Moscow; however, the project never materialized.

In December 1996, the Moscow government officials were negotiating with Trump regarding the reconstruction and renovation of the two hotels – Hotel Moscow and Hotel Russia, with the estimated cost of about $300 million. However, as was the case previously, the parties failed to reach an agreement. The Russian media reported in 1998 that Trump was willing to invest about $200 million into the reconstruction of Hotel Moscow in exchange for being a 65-percent stakeholder in the project. In addition, around the same time, Trump considered building a skyscraper in Moscow but the project never took off as Moscow Deputy Mayor Vladimir Resin did not approve of the issuance of the construction permit, stating, “[w]e will not build any skyscrapers in a historic part of the city as we have no right to turn a historic area into Manhattan.” This must have been in reference to the proposal to erect a 51-58-floor building on Novy Arbat Street at the center of Moscow.

The negotiations were renewed in 2004 but instead of new a construction and renovation, Trump was now interested in franchising, which involved exclusively the monetizing of his name. The co-owner of MosCityGroup, Pavel Fuks, was keenly interested in Trump’s brand at the time. “I had an idea to use Trump’s name for one of the towers that were under construction in Moscow-City – i.e., ‘Imperia Tower’. However, no agreement was reached,” Pavel Fuks said in an interview for the Russian newspaper Kommersant.

The issue was that Trump was not willing to invest anything upfront but wanted to receive a 20-25% stake in the project for the right to use his name and brand. As an overall investment in the Imperia Tower project was estimated at approximately $1.2 billion, Fuchs would have had to pay Trump $240-$300 million in the form of a franchising fee, which was deemed by him to be too steep.

Lawsuit stated that Trump development company’s money were predominantly of Russian origin, and that Russian were not so scrupulous when they lent to Trump

The tide turned only in 2007, and since then, the members of the Trump family started visiting Moscow so frequently that tracking their comings and goings had become challenging. In 2008, Donald Trump Jr. stated that he visited Russia six times over the previous eighteen months, which meant he had flown there once every three months.

And while at the beginning, before his first trip in 2007-2008, Donald Trump, according to his own tweet, had “ZERO investments in Russia,” the situation had changed significantly by the last trip during that same period, when Donald Trump Jr. went as far as giving a speech in Moscow at a Russia Real Estate conference on June 3, 2008. As Donald Jr. pointed out at another event (namely, Manhattan Real Estate Conference), “Russians make up a pretty disproportionate cross-section of a lot of our assets... We see a lot of money pouring in from Russia”. He added that he preferred Moscow “over all cities in the world.”

The Trumps needed Russian money at the time. In 2004, Trump filed for bankruptcy with respect to the Trump Hotels and Casino Resorts, which affected three casinos in Atlantic City and one in Indiana. While the bankruptcy allowed Trump to get out from an estimated $1.8 billion in debt, the traditional lenders became reluctant to lend to him. Indeed, in a 2010 US Federal lawsuit, it was alleged that much of the money that financed the Trump SoHo luxury hotel development in Manhattan, which broke ground in 2006, came from a shadowy Iceland-based corporate entity, with the backing money having been “mostly Russian.” In the same lawsuit, it was also alleged that if traditional lenders were reluctant to get involved with Trump, the Russians had no such compunctions.

Since at least 2005, another Russian-born individual in the US became Trump’s agent in Russia. The individual in question is Felix Sater, a man of dubious reputation, with convictions for a first-degree assault and for fraud in the US, with alleged Russian mafia connection, and with childhood and business connection to Trump’s personal lawyer, Michael Cohen. Sater’s name is consistently mentioned alongside Cohen’s, as well as in the context of the Trump Organization’s projects - which explains why he would become one of the main persons of interest in the Mueller investigation.

In 2005, Felix Sater was pursuing an ambitious plan in Moscow to build a Trump Tower on the site of an old pencil factory along the Moscow River bank that would offer hotel rooms, condominiums and commercial office space. Letters of intent had been signed and square footage was being analyzed. “There was an opportunity to explore building Trump Towers internationally,” said Mr. Sater, who worked for a New York-based development company that was a partner with Donald Trump on a variety of deals during that decade. “And Russia was one of the countries [where Trump Towers could be built].”

In 2006, Sater traveled to Moscow again with two of Trump's children, Donald Jr. and Ivanka, who stayed in the Hotel National for several days to see promising partners, with the intent of striking real estate development deals. “Let’s do a deal here, ”Sater stated during that trip. He wrote later that, during the 2006 visit to Moscow, he “arranged for Ivanka to sit in Putin’s private chair at his desk and office in the Kremlin.”

Just like before Trump had no intention to actually build anything in Russia

It was through Sater that Trump also met Tevfik Arif, formerly a Soviet government official from Kazakhstan and founder of a development company called the Bayrock Group, of which Sater was also a partner. Bayrock was also interested in deals in Russia. As described by Sater himself, "We looked at some very, very large properties in Russia," "think of a large Vegas high-rise."

In 2007, Bayrock brokered a potential deal in Moscow between Trump International Hotel and Russian investors. The Trump Organization representatives discussed a plan to construct in Moscow a 58-floor analog of New York’s Trump Tower and hoped to sell the right to use the brand name. In April 2007, the Trump trademark was registered in connection with provision of services in residential, commercial and hospitality real estate.

Сolumbus Circle Trump International Hotel. Фото: Wikimedia.org The Trump International Hotel and Tower in New York. Photo: Wikimedia.org

But, as before, Trump had no intention to actually build anything in Russia. Maksim Temnikov, a member of the board of directors of the Mirax Group, mentioned in this regard that Trump was only willing to work in Russia as a franchisor but that the franchising business model was not attractive to his potential business partners in Russia. “Our market is already mature and major companies would not be interested in this type of business ventures; at the same time, Trump would not see as worthwhile a potential business partnership with anyone other than major players in the Russian market,” Temnikov added.

Alexei Belousov, a commercial director at the Capital Group shared that view: “Russian real estate market is at another level of development, and the time of franchising is gone”, but many people might be interested in American corporate experience and investments. “Trump’s participation in our market would be a significant moment, with other investors from US and Europe being willing to follow suit,” mused Belousov.

In November of 2007, Trump arrived in Moscow as a guest of the Moscow Millionaire Fair that opened on November 22, 2007, at the Crocus Expo Center. He was promoting Trump Vodka, which cost $40-50 per bottle. The spirit was produced by Drinks Americas Holdings, a US-based company. However, the sales of Trump Vodka failed to get proper traction in Russia and its production was stopped in 2009.

Stanislav Kaufman, a brand manager at Vinexim (a company that produces vodka “Putinka”), stated that “Donald Trump’s name has zero relation to vodka, it is a typical way to product capitalizing on his celebrity status in America. But in Russia, vodka consumption is not based on image or status, but instead involves a whole range of philosophies which cannot be understood by an American manufacturer.”

Still, at the Millionaire Fair, Trump met one more ”useful Russian-American” -- a Belarus-born Siarhei Kukuts, more commonly known as Sergei Millian. Right away, Trump invited Millian to a horse race in Miami. Millian, who is now in his late 30s, graduated from the Minsk State Linguistic University in 2000. He never mentioned the circumstances of his arrival in the US or of obtaining the US citizenship. In 2006, he founded the Russian-American Chamber of Commerce (RACC) and a translation bureau in Atlanta; after that, he became a real estate broker specializing in residential and commercial real estate in the US and abroad.

The last time Millian and Trump spoke was in 2008 but it was Millian who became one of the sources providing information for so called “Trump dossier”

Millian supported closer commercial ties between Russia and the United States, assisting US companies looking to conduct business in Russia. In 2009, RACC appealed to the US Congress “to foster necessary political changes to produce a healthier economic environment” and to grant permanent normal trade relations status to Russia. Its website noted that it “facilitates cooperation for U.S. members with the Russian Government, Russian Regional Administrations, U.S. Consulates in Russia, Chambers of Commerce in Russia, and corporate leaders from CIS [Commonwealth of Independent States] countries.”

Millian also assisted Trump in “studying the Moscow market” for the potential real estate investments. “Later,” Millian said, “we met at his office in New York, where he introduced me to his right-hand man—Michael Cohen. He is Trump’s main lawyer, all contracts go through him. Subsequently, a contract was signed with me to promote one of their real estate projects in Russia and the CIS. You can say I was their exclusive broker.”

Sergei Millian / Facebook Millian is on the left from Trump on the photo Photo: Sergei Millian / Facebook

Millian was working with Russian investors looking to buy property in the United States. “We have signed formal agreements with Richard Bowers and Co., the Trump Organization and The Related Group to jointly service the Russian clients’ commercial, residential and industrial real estate needs… In general, Trump has a very positive attitude towards Russians because he sees them as clients for his businesses. Incidentally, he has done many projects with people from the Russian-language diaspora - for example, the development of Trump SoHo in New York with billionaire Tamir Sapir [a real estate developer from the former Soviet republic of Georgia who died in 2014].”

The last time Millian and Trump spoke was in 2008, but it was Millian who became one of the sources providing information that formed a basis for the so-called Trump Dossier that triggered an ongoing investigation of the alleged Trump-Russia connection and of the compromising material on Trump allegedly in the possession of the Kremlin and the FSB.

After President Trump’s inauguration Superior Court of Connecticut dismissed all the charges of family violence against Chigirinsky

In 2007-2008' Trump was discussing business with yet another person of questionable background: Shalva Chigirinsky, the owner of Russian Land Ltd. This Georgian-born businessman was one of the richest men in Russia at the time. He made the list of the wealthiest Russians compiled by the Institute for the Study of the Reform for the first time in 1995, coming in the 15th place. According to Forbes, as of 2007, Chigirinsky’s fortune was estimated at $1.6 billion. In 2008, he was ranked by Forbes as the 524th wealthiest entrepreneurs in the world, with an estimated net worth of $2.3 billion.

Shalva Chigirinsky was born on July 1, 1949, in Kutaisi, Georgia. After graduating from First Moscow State Medical Institute named after I.M. Sechenov, Chigirinsky became an antiques dealer. In 1987, he moved to Spain and later to Germany where he lived for about two-and-a-half years while working as a realtor. In 1989, Chigirinsky and a German businessman Ivot Shtok together founded a development company, S&T Group, which specialized real estate development in Moscow, with Chigirinsky becoming the Chairman of the Board of Directors of that entity in 1997.

In December of 2004, S&T Development, one of the entities within S&T Group, won a tender to become an investor in the demolition of the Hotel Rossia in Moscow and a subsequent development of the area in the center of Moscow called Zaryadye. Later yet, in 2007, Chigirinsky transferred the ownership of all of his development projects to Russian Land Ltd.

In the 1990s, simultaneously with running his real estate development business, Chigirinsky became interested in the oil business. In 1996, jointly with British Petroleum, he founded Petrolcomplex Company for the development of a network of gas stations in Moscow under the British Petroleum brand name. In 1999, Chigirinsky joined the Board of Directors of Sibir Energy, a British company focused on oil exploration, extraction and refinery. In 2000, he launched, and became a president of, Moscow Oil Company (abbreviated in Russian as MNK).

In January 2001, he also became the president of Central Fuel Company, the principal owner of Moscow Oil Refinement Factory (abbreviated in Russian as MNPSZ). Furthermore, in 2003, Chigirinsky became the general director, and in 2004, the president, of Moscow Oil and Gas Company (abbreviated in Russian as MNGK), where the then-mayor of Moscow, Yury Luzhkov, was the Chairman of the Board of Directors. In 2010, Chigrinsky transferred his 23.3% share ownership in Sibir Energy to Gazprom Oil (in Russian, Gazprom-Neft).

Among his other possessions, Chigrinsky could boast a villa on the French Riviera (Côte d'Azur) that previously had been owned by Zaire’s military dictator Mobutu; Hugh House mansion in London; villa Maria Irina in France; Sovetsky Hotel on Leningradsky Avenue in Moscow; apartments on Romanov Lane and Maly Patriarshy Lane in Moscow; as well as a collection of some 50 Fabergé watches.

By the time of Chigrinsky and Trump’s meeting, Chigirinsky’s track record included projects by Russian Land Ltd. involving the demolition and reconstruction of Hotel Rossia, Zaryadye development, construction of Rossiia Tower in Moscow City, planned cultural and business development related to Crystal Island in Nagatin floodplain, and many others. Chigirinsky himself has referred to these projects, including Nagatin floodplain development, City skyscrapers and Zaryadye project, as his lifelong mission.

However, the Chigirinsky-Trump negotiations led nowhere. In 2008, in the midst of the global real estate crisis, Chigirinsky’s business suffered a series of setbacks. Many of his large projects in Moscow had to be abandoned – including his investment in the construction of Rossiia Tower and his stake in the Crystal Island project. November 2008 saw the suspension of the construction of an ambitious 118-floor, 612-meter (2000 feet)-high building that was intended to become the highest building in Europe and to accommodate approximately 25,000 people. When Chigirinsky commenced this project in 2007, its cost was estimated at approximately $2 billion.

Чигир Фото: russian.rt.com Felshtinsky: Chigirinsky was forced to flee in March 2009 – first to England where he applied for a political asylum, subsequently to Israel where he obtained Israeli citizenship, and eventually to the US where he settled in a posh New York suburb of Greenwich, Connecticut. Photo: russian.rt.com

In early April 2009, Sibir Energy announced that it filed a lawsuit against Chigirinsky in the High Court of Justice (England and Wales) (EWHC), seeking $325 million in compensation. As of July 2009, Chigirinsky faced several other legal predicaments. After Vneshtorgbank’s loan of RUB 3 billion to Russian Land Ltd. personally guaranteed by Chigirinsky became overdue, EWHC froze Chigirinsky’s assets, including his business assets, real estate, and even his antique watch collection. Also in July 2009, Central Investigation Department – Internal Affairs (Moscow) accused MNK and MNGK of tax evasion to the magnitude of approximately RUB 600 million dating back to the very time that Chigirinsky was the president of both companies.

In August 2010, Chigirinsky lost the last one of his big development projects in Russia, namely, Hotel Sovetsky on Leningradsky Avenue in Moscow. Eventually, two criminal lawsuits were commenced against Chigirinsky on account of the alleged tax evasion. By that time, his creditors were after his properties outside of Russia. In particular, as part of the $400 million lawsuit against him, he lost Marina Irina villa on Cap Martin and his London Hugh House in London. By 2009, his fortune has shrunken to a “mere” $600 million. The number of lawsuits commenced against Chigirinsky, as well as the number of lawsuits commenced by Chigirinsky himself, in different parts of the world, cannot be catalogued easily. Suffice it to say that some of the lawsuits are still pending.

As it was getting tougher and tougher for him to remain in Russia, Chigirinsky was forced to flee in March 2009 – first to England where he applied for a political asylum, subsequently to Israel where he obtained Israeli citizenship, and eventually to the US where he settled in a posh New York suburb of Greenwich, Connecticut.

While still in Russia, Chigirinsky divorced Tatiana Panchenkova who currently also resides in Greenwhich, Connecticut. In November of 2012, Panchenkova accused her ex-husband of the various forms of mental and physical abuse, which allegedly lasted for the entire duration of their more than 10 years of marriage; she even accused him of sexually abusing their daughter. Panchenkova demanded $2 million in compensation for these transgressions. Chigirinsky was arrested in March 2016 but released on a $50,000 bail; he was under investigation for 11 months and, in early February 2017, soon after Trump’s inauguration, Superior Court of Connecticut dismissed all the charges of family violence against Chigirinsky. Yet, as soon as on February 21, 2017, he was subpoenaed by Grand Jury on account of alleged financial and tax violations in the US and was ordered to produce all relevant financial documentation.

For obvious reasons, any past negotiations with Chigirinsky is not something that the members of Trump Organization care to discuss these days; Trump Organization’s associations with the shadowy elements of Russian descent are already abundant.

After his return to Russia, Kalmanovich became a successful businessman, which included being one of the leaders of an organized crime group called Solntsevo, a producer for Russian rock star Zemfira, and an owner of several basketball teams in Russia and Lithuania

But let’s get back to that original photo from 2007. In freezing Moscow, Ivanka Trump and Elena Baronoff received as a gift the fur coats made of the most expensive fur on the market – chinchilla. After that, the negotiations began, of which very little is known.

Babel was born in 1962. In 1984, he graduated from V. V. Kuibyshev Moscow Construction Engineering Institute as a construction engineer, and for the next 30 years, he worked in construction business in Moscow, its suburbs and in other Russian regions. In 2003, he was promoted to the First Deputy Chairman and then to the Vice-President of Glavmosstroy. According to some sources, he became a president of Glavmosstroy in 2006.

Somewhat earlier, in 1994, Babel set up NBM-Stroyservice, a construction company, which he used in 2006 as a foundation for establishing NBM, a development group, through which he became an exclusive developer for a Soviet-time secret service agent and a KGB officer named Shabtai Kalmanovich, who received a 9-year prison sentence in Israel in 1988 as a Soviet spy. Kalmanovich was released from prison in March 1993 after numerous petitions from Russian secret service.

After his return to Russia, Kalmanovich became a successful businessman, which included being one of the leaders of an organized crime group called Solntsevo, a producer for Russian rock star Zemfira, and an owner of several basketball teams in Russia and Lithuania (including a female basketball team Spartak). In addition, Kalmanovich remained one of the most powerful players in a Russian pharmacology market, as well as a personal friend of organized crime boss, Vyacheslav Ivankov (a/k/a "Yaponchik") and another suspected crime boss, Semion Mogilevich.

Babel was in charge of construction projects under the auspices of Kalmanovich’s “organization” – in particular, he was in charge of building a home office for Kalmanovich’s umbrella enterprise on Makeev Street and developing an infrastructure for female basketball team Spartak in the town of Vidnoe in Moscow suburbs (he even obtained a new registered office for his own company in that town).

During the 2000’s, NBM developed a number of residential complexes in Podolsk and Krasnogorsk, and started to venture into the banking business. By 2008, NBM subsidiaries could be found among shareholders of Peresvet (a bank), holding about 25% of its shares. An additional 9.3% of the shares were acquired in 2008 by Amir Almukhametov, Babel’s long-term business partner and a CEO of Globinveststroy, one of NBM’s subsidiaries.

Фото: rucompromat.com Felshtinsky: During all these years, the “Honorary Builder”, seems to have been stealing and cheating on a large scale, engaging in activities undoubtedly worthy of a title of “Ph. D. in Commerce”. Photo: rucompromat.com

In the following years, Peresvet actively sponsored its shareholders’ projects. Among others, it financed the construction of a residential development called Seventh Mile on Novorizhskoe Highway, as well as of a residential complex Terletski Park in the Eastern part of Moscow (originally started by Globinveststroy in mid-2000s) and of a residential complex named Capital’s Western Gates (Zapadnye vorota stolitsy) (originally started in 2002). In 2006, ISK ENBIEM, an affiliate of NBM, became a construction partner, securing a RUB 5.5 billion (appx. $180 million) loan from Vneshtorgbank of Russia.

According to Babel, he was persuaded to sign up for this project by the Regional Moscow government «in exchange for specific conditions.» The arrangement included an increased scale of construction, of which Babel’s company would receive «about 120 thousand square meters of residential real estate». The developer promised that construction would be finished «in 18-24 months» but the project was never completed. In 2007, just one of the five of the residential construction components of the project was ready (while the list of investors consisted of as many as 1,200 individuals).

NBM partnered with the Rose Group (RGI) on a number of projects, including, for example, a construction project called “In The Forest” (in Russian, V lesu) for erecting 1.6 million square meters of residential properties in Otradnoe, Krasnogorsk district. Further, RGI had purchased from Babel a right to erect several business centers: Dream -- on Schepkin Street, Maya -- on Gilyarovsky Street and Media City -- on Academic Korolyov Street. Moreover, Boris Kuzinets, one of RGI partners, had purchased from Babel the right to reconstruct three blocks on Rozhdestvenskiy Boulevard, where RGI was planning on building the Chelsea apartment building spanning about 263,000 square meters of living space.

In July 2007, RGI reported to its investors that its assets had a fair market value of more than $190 million. Michael Babel not only received his share of the assets but also retained an approximately 27% stake of the “In The Forest” project (which later became an 18% stake in Sucreti, an offshore company). Notably, all these shenanigans were carried out under the auspices of Kalmanovich, a legendary KGB/FSB spy.

Deripaska was the FSB agent at least since the late '90s and had signed the papers confirming his consent to work for the FSB

Babel’s partnership with Kalmanovich ended abruptly on November 2, 2009, when the latter was assassinated in broad daylight in the center of Moscow and died on the spot after his Mercedes was shelled by two unknown gunmen with automatic firearms. Kalmanovich’s driver, Petr Tumanov, was gravely injured. Inside the car, the investigators discovered $1.5 million in cash that somehow remained untouched by the attackers.

In order not to put all of the eggs in one basket, Babel joined Glavmosstroy as its vice-president in 2003. Glavmosstroy was an integral part of the Glavstroy Group owned by Basic Element, Oleg Deripaska’s industrial group. It seems that this business partnership of Babel was also along the lines of collaboration with Russian intelligence agencies. According to Iskander Makhmudov, Deripaska’s business partner, Deripaska was an FSB agent at least since the late 1990’s, after having given his written consent to work for the FSB. Such consent was obtained by coercion from the Russian government and the FSB, threatening to take away his business. Notably, Iskander Makhmudov himself had given similar written consent. Deripaska would later become a Kremlin/FSB handler of Paul Manafort, a future Trump's Presidential Campaign manager.

As part of his association with Deripaska’s Glavmosstroy, Babel (who, may we suppose, being a business associate of Kalmanovich and Deripaska, was an FSB agent in his own right?) happened (or was ordered) to invite to Moscow a group, which included Donald Trump, his children, his developer Dezer and a real-estate broker Baronova (Baronoff), who accompanied Dezer on all of his trips.

Баронова Фото: / Instagram Felshtinsky: Baronova’s murky autobiographical details led some reporters to speculate that she was a Soviet secret service officer and a Soviet/Russian spy in the United States. Screenshot: Elena Baronoff / Instagram

Baronova’s biography also seems to raise a number of questions. In 1989, she emigrated from the USSR, finding herself in Iowa and subsequently relocating to, and settling in, Florida, where she first became a travel agent and eventually a real estate broker. By 2004, she was listed as a Vice President of Customer Relations, at Trump Grande, one of the subsidiaries in the Trump Organization’s corporate group. She was featured alongside Trump and his daughter Ivanka on The Women’s City magazine cover, with the article branding her as “Donald Trump’s Russian Hand”.

At the same time, without going into any details, she notes in her biography that she was “serving as a cultural attaché in public diplomatic branches of the Russian Government.” It is not clear what exactly she meant by it and whether she actually worked for the Russian Government. Anecdotally, cultural attaché positions in Russian embassies were well-known as a cover-up for the KGB/FSB officers. Hence, Baronova’s murky autobiographical details led some reporters to speculate that she was a Soviet secret service officer and a Soviet/Russian spy in the United States.

Baronova’s professional activities as a real estate broker in the Trump’s Organization did not diminish any suspicions of her potential role as a spy because, unfortunately for her, a notorious Russian “sleeper spy” Anna Chapman also happened to have been using a cover of a real estate broker in the US at the time she was discovered and deported to Russia in a spy swap deal. Baronova’s latest title obtained in 2008 -- namely, the International Ambassador of the City of Sunny Isles Beach (the same city in Florida where Trump was selling residences developed by Michael Dezer to the Russian clients through Baronova) – only confirmed the suspicions that, after visiting Moscow, the Trump Organization developed a scheme to sell properties to the Russians.

The sales were soaring. This is how Dezer Development website describes its business:

”Dezer Development was founded in 1970 by creative and innovative real estate visionary, Michael Dezer. With the involvement of his son, Gil Dezer, President of Dezer Development, the company has grown to encompass unique and strategic holdings in New York, Florida, and Las Vegas over the past 45 years. In 1985, the Dezers began to acquire oceanfront hotel properties in South Florida. Today, with just over 27 oceanfront acres, Dezer Development has arguably one of the largest holdings of beachfront property owned and developable in the state. Most of this property is earmarked for redevelopment as mid-and high-rise luxury condominiums, condo-hotels, resorts, and rental communities. The renowned father and son team are credited as major players in the rebirth of Sunny Isles Beach, having developed nine luxury high-rise residential and condo-hotel[s]. Dezer Development’s branded real estate portfolio includes six-Trump branded towers, Porsche Design Tower, and Residences by Armani/Casa. Generating an unprecedented response from a broad range of local, national, and international buyers, the prolific developer has successfully sold over 2,700 units and generated over $3.6 billion in sales. In addition to their Miami Beach properties, the Dezers have significant holdings in New York. Their portfolio encompasses more than 20 properties with over one million square feet.”

As a matter of fact, no special gimmicks were necessary for the scheme to be successful. It is just that neither the Trump Organization members nor Baronova’s firm asked any questions about the origins of the buyers’ money. Any Russian official or law enforcement officer, however corrupt, and any kind of a Russian businessman, whether law-abiding or not, regardless of the source of his/her wealth, was welcome to purchase real estate in Trump’s elite developments. All that they had to do was wire the requisite funds to the seller, whether from a personal, corporate, offshore, Russian or non-Russian account, whether it was an account in their own name or in the name of someone else.

Trump International Beach Resort Miami, an upscale family-friendly enclave on Miami’s Sunny Isles Beach. Photo: dezerdevelopment.com Trump International Beach Resort Miami – family hotel complex on Miami’s Sunny Isles Beach. Photo: dezerdevelopment.com

There were cases when senior executives of corporations or banks used corporate funds to purchase properties for themselves, without the knowledge or approval of the Board of Directors or shareholders. And in the instances where such a blatant and straightforward way of conducting business was for some reason not desirable, an additional “buffer” in the form of a US-based attorney would be involved, whereby a payment from the buyer would first be transferred to an attorney, who, in turn, would transfer the requisite funds on behalf of his/her client to the seller (either an entity at the Trump Organization or an intermediary selling apartments in one of Trump’s buildings).

In the event that a Russian buyer could not finance his/her entire purchase with cash but could advance a down payment of 50% or more of the purchase price, Baronova arranged for financing through her own channels. The lenders in such cases were often recommended by Baronova’s son George Baronoff, also a real estate broker in Florida. Although not an illegal activity per se, combining real estate brokerage and financing activities did not used to be a common practice in the United States.

The foregoing seems to be the key to Trump’s success in dealing with clients from countries with underdeveloped market economies, be it Trump Tower in Panama or in Miami. One of the sources estimates that in five of the Trumps buildings in Miami, clients from the former Soviet Union/Russia made up about 50% of the population (notably, in the three smaller towns near Miami - Sunny Isles, Hallandale and Hollywood - there were approximately 30,000 "Russians"). For similar reasons, Trump’s sixth skyscraper was mostly occupied by Hispanics of Latin/South American origin.

Suffice it to say that in modern reality, failure to verify the sources of funds in a real estate deal renders both parties responsible in a potential money laundering scheme.

It would be natural to clarify the answers to all of the open questions with Elena Baronoff herself. Unfortunately, she was diagnosed with leukemia in 2014 and died the following year. Rumor has it that Donald Trump had visited her in a hospital and even paid for her funeral; others claim this not to be true. In any event, Elena’s son, George Baronoff, is now firmly established as a Florida real estate broker for the Trump Organization.

There were even rumors that the loans extended to Trump by Deutsche Bank were acquired by Vnesheconombank, a Russian Government-owned financial institution, to get an additional leverage on Trump

Still, here is a brief narrative provided at my request by another Florida real estate broker regarding Trump/Dezer skyscraper developments:

"We estimate that there has to be at least 300 tenants/apartment owners in each building, with at least half comprised of the “Russians”. I’d say that the cheapest unit costs about $1.1 million – and this is for all of the five buildings plus the new Porsche Building [that has no Trump name]. When Elena Baronova was on her deathbed in the hospital, Trump was already campaigning but he visited her at the hospital and went to her funeral. I heard, but do not know for sure, that he paid part of her medical expenses or the funeral expenses, one or the other, I don't know. I do know that Trump is supposed to get $5 [per day] for every [hotel] reservation that's made in the hotel-condo as everything goes through the reservation system.

Truthfully, I do not think he personally conducts much business with the Russians. I have a friend that went to an event with him in Miami ([Paul O'Brien, the owner of Star Lights in Moscow, a 1950’s American-style chain of four diners and two upscale restaurants]), one of those Americans that works in Moscow. He said that Trump acted very arrogantly and rudely, especially to the waitresses and stuff, while he appeared to have a good time himself. But, I reckon, since he is the President, as I would say with respect to any other President, one must be very careful and not dig too deeply since these people have an enormous power and it behooves one to be on his good side, rather than on his bad side".

Naturally, Dezer needed seed money to start any skyscraper construction. This funding was provided by the banks. It is useful to describe here the history of a relationship between Trump/Trump Organization and the German Deutsche Bank.

Фото: ЕРА Felshtinsky: For the private banking division of Deutsche Bank, Trump remains a valued client. Фото: ЕРА

Since 1998, Deutsche Bank extended $2.5 billion in loans to Trump’s companies, including $125 million that were advanced for the reconstruction of a New York skyscraper. In 2005, Deutsche Bank lent Trump $640 million for the construction of a high-rise building in Chicago. The applicable charges that Deutsche Bank was entitled to receive in this deal were approximately $12.5 million but, due to mortgage and financial crises of 2008, Trump underpaid Deutsche Bank about $40 million on the basis that the crisis ought to be considered force majeure and thus should excuse the underpayment. Bank attempted to collect the shortage through legal means but Trump counterclaimed, seeking a compensation for the $3 billion loss incurred by his organization on the basis that the Bank was responsible for the financial crisis, which led to the loss.

While the court did not buy Trumps’ arguments, it ordered Deutsche Bank to restructure the relevant debt. The term of the borrowing was extended and, in 2012, it was finally settled on new conditions. After that, Trump turned into a persona non-grata for the credit department at Deutsche Bank. Similarly, Citibank, JP Morgan Chase and Morgan Stanley do not do business with Trump on account of his several bankruptcies. The Goldman Sachs executives also “have enough sanity to keep away from any deals related to Trump”, according to one of the bank’s former top managers quoted in Wall Street Journal.

But for the private banking division of Deutsche Bank, Trump remains a valued client. Just during the 2012-2015 period, this division financed $170 million of Trump’s Washington hotel construction, as well as $125 million of his development projects in Miami. To be fair, neither the bank nor the Trump Organization disclosed the exact terms and amounts of the borrowings, and thus these figures may not be entirely accurate. There were even rumors that the loans extended to Trump by Deutsche Bank were acquired by Vnesheconombank, a Russian Government-owned financial institution, to get an additional leverage on Trump.

deutsche-bank-frankfurt-am-main. Фото: Wikimedia.org Deutsche Bank headquarter in Frankfurt am Main. Photo: Wikimedia.org

To that end, a meeting between Trump’s son-in-law, Jared Kushner, and Sergei Gorkov, an FSB officer (a 1994 alum of the FSB Academy) and the Chairman of Vnesheconombank, which took place in Washington in December 2016, soon after Trump was elected as the President of the US, could have had the financial situation of Trump Organization, including the old and new borrowings, as the main part of its agenda.

Deutsche Bank’s Russia branch merits particular attention. On May 12, 2006, the Bank announced that Ilya Sherbovich and Nicholas Jordan were appointed as the co-leaders of the Branch. In particular, the announcement stated that Sherbovich had been employed by the Bank for over 10 years and participated in a number of transactions to which Deutsche Bank’s Russia branch was a party:

“Advising Gazprom on the sale of its 10.74% stake to Rosneftegaz and its $13 billion acquisition of Sibneft; arranging for a buyer consortium to acquire a 34.5% ownership stake in Magnitogorsk Iron & Steel Works factory from Mechel steel group through privatization and direct purchase; advising the Russian Federal Property Fund in connection with the privatization of a 7.59% ownership stake in Lukoil; advising a major juice producer Multon on the sale of its assets to Coca-Cola. Sherbovich is also credited with establishing one of Russia’s most advanced teams in the Russian stock market, which participated in a number of initial public offerings at both Russian and non-Russian stock exchanges of the major Russian companies, including the telecommunications company Comstar-OTS, Russia’s largest consumer-oriented private sector company AFK Sistema, the supermarket giant The Seventh Continent and the juice producing enterprise Lebedyansky.

Jordan has been with Deutsche Bank since 1996. A graduate of Boston University, he spent 10 years at Chemical Bank in New York before transferring to Deutsche Morgan Grenfell to manage its operations in Russia in 1997-1999. During that time, Morgan Grenfell Securities was considered one of Russia’s top 5 equity brokerage houses and was a leader in the local currency and financial market. Jordan has broad experience in advancing Russian companies to the international capital markets, as well as in advising clients on some of Russia's largest M&A transactions. ‘Ilya and Nicholas have reputations as leading investment bankers in the Russian market. They will become a major resource as we continue to develop investment banking services and strengthen our presence in the market,’ said Charles Ryan, a Regional Leader and a Chief Executive Officer of the Deutsche Bank Group in Russia.”

Based on the foregoing, one might conclude that by 2006, the Russian operations of Deutsche Bank had become a very important component of its overall operations and that the Bank’s leadership would be inclined to consider the Russian market as part of its core strategy.

It is unclear who paid for Trump Jr.’s visit to Moscow and if he received any payments from Russian entities back in 2008

In May 2008, Lev Levayev, Russian businessman and a co-owner of AFI Development, came to the US for meetings with Trump. The subject matter of the discussions were never made public. According to Natalia Ivanova, AFI Development’s representative, no agreement was reached between the parties with respect to any joint projects in Russia. Nevertheless, on June 3, 2008, in the middle of a financial crisis in the US, Donald Trump Jr. participated in the “Real Estate in Russia” conference organized in Moscow by the Adam Smith Institute. As part of his keynote speech, he described the plans for elite residential real estate and hotel construction in Moscow, St. Petersburg and Sochi. He added that the US mortgage crisis had forced many investors to look for projects elsewhere and that was the reason that he had visited Russia six times during the previous eighteen months. Donald Trump Jr. also stated that the Trump Organization was not considering any real estate development projects in the US at the moment, but instead it focuses on strengthening its brand in the “global market,” which included real estate development projects in Panama, Seoul, Honolulu, Istanbul, Dominical Republic, Dubai and Russia. “When we announced our intent to enter the Panamanian market, local real estate prices immediately increased by 25%,” said Trump Jr. “Compared to a stagnation in the US real estate market, a recent 50% increase in Russia of a price per square meter was a revelation for me,” he added.

It is unclear who sponsored Donald Trump Jr.’s visit to Moscow and whether he was already receiving any payments from the Russian interests – in particular, for his keynote speech at the conference in Moscow - back in 2008. There are reasons to believe that he was being paid. For example, on October 11, 2016, Donald Trump Jr. was paid $50,000 for attending a conference in Paris, which was organized by the Center of Political and Foreign Affairs, a little-known and openly pro-Kremlin Think Tank. Among the participants at this conference was Randa Kassis, a known Syrian politician with Russian connections. One of the topics highlighted at the conference was US/Russian cooperation in achieving the end of the Syrian Civil War. On March 2, 2017, Wall Street Journal reported:

“Donald Trump Jr. addressed a gathering at a dinner on Oct. 11 at the Ritz Carlton Hotel in Paris, hosted by the Center of Political and Foreign Affairs. The Center’s president, Fabien Baussart, and his Syrian-born wife, Randa Kassis, have cooperated with Russia in its drive to end the Syrian civil war […] In December, Baussart formally nominated Russian President Vladimir Putin for the Nobel Peace Prize. Kassis is a leader of a political faction endorsed by Russia in negotiations concerning Syria. The couple stated that they did not represent Russia and were solely focused on ending the Syrian conflict. […] Donald Trump Jr. was likely paid for his Paris appearance at least $50,000 by the Center of Political and Foreign Affairs. The Trump Organization representatives did not dispute the fact of the payment itself or the amount when asked about it by The Wall Street Journal.

Фото: ЕРА Donald Trump Jr. with his father. Photo: ЕРА

“Donald Trump Jr. has had numerous business-related speaking engagements for over a decade, discussing a range of topics, sharing his entrepreneurial experience and offering career advice,’ said Amanda Miller, the company’s Vice President for Marketing. All American Speakers, a corporate entertainment booking agency, lists Donald Trump Jr. on its website as a client who commands a minimum of $50,000 per appearance. People who have participated in events at the Center of Political and Foreign Affairs say that it is not unusual for the speakers at these events to get paid 20% to 30% above their ‘going rate’.

Mrs. Kassis […] regularly visits Moscow to coordinate policy with Russia’s Foreign Ministry, stated Arab and European officials. In an interview, Mrs. Kassis stated that she emphasized to Donald Trump Jr. in a conversation which took place in October 2016 the need for the United States and Russia to cooperate in ending the Syrian conflict. She said she passed on Mr. Trump’s views to Russian diplomats in subsequent trips she has made to Moscow.

Mr. Baussart stated to Russian Media that President Putin should be recognized for his efforts to end the Syrian Civil War and to combat international terrorism. […] ‘I am certain that President Putin deserves it,’ Mr. Baussart told RIA Novosti in reference to the Nobel Peace Prize. ‘He is the only one who is truly fighting terrorism”.

Of course there is nothing illegal in getting paid for the speaking engagement in Moscow. But it is true only so long as Donald Trump Jr. declares the payment as part of his taxable income for the relevant year and discloses it to the relevant Congressional Committees in response to information requests as part of an on-going investigation concerning the Trump-Russia financial connection, among other things. Still, the fact that in the midst of the Presidential Campaign, Donald Trump Jr. flew to Paris for $50,000 to meet with pro-Russian Syrian activists speaks volumes not only about the Trumps’ greed but also of their political unscrupulousness. From the Kremlin’s and FSB’s point of view, the son of a soon-to-be President who would participate in a pro-Russian event for $50,000 could be an easy recruitment and blackmail target.

Just like many other American businessmen at that time, Trump did not have any cash and his intention was not to pump the funds into Russia but rather to secure a cash flow from Russia

In 2008, the Trumps were most interested in building hotels utilizing an approach similar to that employed in building condominiums under the “Trump International Hotel & Tower” brand. “Moscow is the perfect market, and it is exactly the place where we should be,” stated Donald Trump Jr. He emphasized that, unlike in New York, there was still a lot of space in Moscow to realize large-scale real estate developments. “We want to enter the Russian market with a meaningful project,” - he said, adding, without naming any names, that the Trumps had had meetings with a number of Russian real estate developers. “As no agreements have been reached yet, it is too early to talk specifics,” he said.

Since all Trump was offering was the franchising of his famous name in exchange for 20-25% stake in a project, rather than any actual financing, the negotiations were challenging as the Russian developers were looking for financing, first and foremost, rather than for the right to use Trump’s name. That would explain why Donald Trump Jr. was hesitant to come up with an estimate of planned investments into the Russian market. Just like many other American businessmen at that time, Trump did not have any cash and his intention was not to pump the funds into Russia but rather to secure a cash flow from Russia.

Russian developers, in turn, were wary of dealing with Trump. “There is no guarantee that in Russia the Trump brand would enjoy the same success as in America where people were willing to pay extra 20-30% for the Trump-branded properties,” offered Maksim Temnikov, a member of the Board of Directors of the Mirax Group. That view was shared by the commercial director at Capital Group, Alexey Belousov:

“For Russian companies, the value of this brand is not obvious. Even the quality standards implemented by Trump would need to be synchronized with the existing Russian GOST standards.” Turkhan Makhmudov, a Managing Director at BBDO Branding, noted that the Trump brand was not widely recognized in Russia and thus any added value from using that brand could be expected only with respect to the projects aimed at a relatively narrow business audience.

But the popularity of the Trump brand was declining even in the US. If the brand was ranked seventh in 2004, yielding in popularity only such brand names as Apple, Google, Target, Starbucks, Pixar and Amazon.com, it moved down to the 24th place in 2005, and to the 48th place in 2006. Such was the backdrop against which to view Trump’s efforts to enter the Russian real estate market with his brand since Russian funds appeared to be the only reliable source of capital.

Soon after Donald Trump Jr.’s cameo appearance at the real estate conference in Moscow, Trump sold his Palm Beach mansion in Florida to a Russian billionaire and former Uralkalii co-owner, Dmitry Rybolovlev, for $95 million, after having purchased it in 2004 for $41.4 million. According to some sources, Trump invested approximately $25 million in the renovations of this property; others say he invested much less. The deal closed on July 15, 2008. “For tax purposes, the sale price is stated at $95,000,000.00,” stipulated the bill of sale for the property, which included a 62,000-square-feet building space and about 6.26 acres (2,535 hectares) of land, and was located at 515 North County Road. The property was purchased by a trust established in the names of Rybolovlev’s wife Elena and daughter Anna.

It was a rather peculiar deal. Without spending a single day at the property, Rybolovlev received in 2016 a demolition permit for all the structures on the property and, for additional $234,000, had the buildings razed, and the lot divided into three parcels and put up for sale. Yet, only one of the three parcels was sold for $34 million – potentially, the “best” one. While all three parcels had an oceanfront access, the one that was sold had an oceanfront line of about 52 meters long (compared to about 46-meters long for the other two), and that same parcel was about 2.72 acres – i.e., significantly larger than a third of the total original size of the lot.

Trump and Rybolovlev managed to stay on good terms despite the fact that Rybolovlev seemingly would have had reasons to be dissatisfied with the deal. On many occasions, their jets were spotted on the same airfields even though Trump denied any subsequent meetings with Rybolovlev.

In November of 2013 Trump renewed his discussions with Aras Agalarov regarding the construction of a 58-floor-high skyscraper in Moscow

Trump also developed special relationship with Aras Agalarov and Emin Agalarov (the father and son, respectevely). Even though they realized no joint real estate development projects, Aras Agalarov received in 2013 the exclusive right to run Miss Universe Beauty Pageant in Russia and other CIS countries, with a $20 million budget. The pageant was owned by Miss Universe Inc., an entity controlled by Trump and National Broadcasting Company.

In November of 2013, Trump arrived in Moscow to attend a beauty contest in Crocus City Hall, a venue owned by Agalarov. Even the meeting with President Putin appeared to be on the agenda for Trump’s visit; however, Putin cancelled the meeting at the last minute, sending Trump a gift box and a letter. Nevertheless, Trump seems to have wasted no time during that visit, meeting with a dozen of powerful Russian businessmen. The get-together was organized by Herman Gref who had served in the various key roles in the Russian Government, including that of a Chairman of Sberbank of Russia. “I called it my weekend in Moscow,” Trump reminisced in September 2015. “I spent some time with the top-level people – oligarchs, military personnel, top government officials. I cannot go into too much detail but I will tell you that I met with some very important people and was treated extraordinarily.”

Trump made some $12.2 million on the Miss Universe Pageant, while Emin Agalarov established his public reputation as a pageant host and also as a person who invited five prostitutes to Trump’s hotel suite. Further details remain unknown, with some sources claiming that the group visited Trump at the hotel and others saying that this did not happen. What is obvious is the fact that Trump was pleased with Emin’s hospitality and had no complains whatsoever, tweeting in November 2013: “I had a great weekend with you and your family. You have done a FANTASTIC job. TRUMP TOWER-MOSCOW is next. EMIN was WOW!” “We had an awesome time TRUMP tower Moscow – let’s make it happen!” Emin responded.

Also in November of 2013 Trump renewed his discussions with Aras Agalarov regarding the construction of a 58-floor-high skyscraper in Moscow. It was Trump’s third attempt to enter Russian real estate market, with the first two attempts dating back to 2004 and 2007-2008. “I do have plans to establish business in Russia. I am currently in negotiations with several Russian companies regarding skyscraper construction,” Trump stated in an interview on November 9, 2013, while refusing to divulge any specifics. At the same time, Crocus Group had confirmed that “the tower will likely be built as part of the second wave of the Crocus City development in Krasnogorsk, near Moscow.”

“Indeed, Crocus Group does own some land in Krasnogorsk, not far from Expo Center. But so far, there are no documentation or permits issued regarding this project,” reported a source in Moscow Regional Government. According to an official policy, no construction above 17-story-high level (and starting January 1, 2014 – above 9-story-high level) was allowed in the Moscow Region. However, the officials were quick to add that exemptions were granted in some cases.

The Crocus Group, one of the largest Russian development enterprises, was founded in 1989 and was wholly owned by Aras Agalarov, who also owned Crocus City, the largest business and Expo Center in Russia (the very same center where Trump’s Miss Universe Beauty Pageant took place). The Group also operated shopping mall Vega, Crocus Bank and a hypermarket chain called Your Home (In Russian, Tvoi Dom). In 2009-2012, the Group generated RUB 131 billion (approximately $4 billion) in revenue from the government contracts in Russia. In 2012, Emin Agalarov, Crocus Group’s Vice-President, estimated its annual revenue at about $700-800 million.

На снимке (слева направо) вице-президент группы Crokus Эмин Агаларов, Дональд Трамп и президент группы Crokus Арас Агаларов на пресс-конференции конкурса On the photo (from left to right) Vice-President at Crocus group Emin Agalarov, Donald Trump and President at Crocus group Aras Agalarov at a press conference for “Miss Universe 2013” contest in Moscow in October 2013. Photo: ЕРА

Nevertheless, the project stalled despite the mutual interest of the parties. Then, in January 2016 (as reported by Washington Post on August 28, 2017), at the request of Felix Sater who worked as an intermediary on the deal, Michael Cohen contacted the President Putin directly (through an email to his press-secretary, Dmitry Peskov). Sater suggested to contact Putin because, according to him, the planned massive real estate development in Moscow by Trump would require the Russian Government approval. In his email to Peskov, Cohen wrote, among other things, the following:

“Over the past few months, I have been working with a company based in Russia regarding the development of a Trump Tower-Moscow project in Moscow City. Without getting into lengthy specifics, the communication between our two sides has stalled. As this project is too important, I am hereby requesting your assistance. I respectfully request someone, preferably you, contact me so that I might discuss the specifics as well as arranging meetings with the appropriate individuals. I thank you in advance for your assistance and look forward to hearing from you soon.”

According to Washington Post, “Cohen told congressional investigators that the deal was envisioned as a licensing project, in which Trump would have been paid for the use of his name by a Moscow-based developer called I.C. Expert Investment Co. Cohen said that he discussed the deal three times with Trump and that Trump signed a letter of intent with the company on Oct. 28, 2015. He said the Trump сompany began to solicit designs from architects and discuss financing. However, he said that the project was abandoned ‘for business reasons’ when government permission was not secured”.

It is very hard to find Cohen’s testimony credible. Trump entered the US Presidential race in June 2015, and by January 2016, he was leading in the polls for the Republican nomination. Cohen, accompanied by Sater and foreign partners, was conducting negotiations regarding the construction of the Trump Tower in the Russian capital from September 2015 through the end of January 2016, during the same time as Trump was actively campaigning for President. In one of his e-mails to Cohen, Sater mentioned that he could get Putin to assist with the project and that it would help Trump’s Presidential Campaign. “Our boy can become president of the USA and we can engineer it,” Sater wrote in a November 2015 email. “I will get all of Putin’s team to buy in on this, I will manage this process”.

What exactly Sater did to «get all of Putin’s team to buy in on this» is yet unknown. What is known is a statement made by an official of Urban Development Department in the government of Moscow who said at the peak of the US Presidential Campaign: “We have invested in Trump so much money that he cannot lose.”

“Michael Cohen was the only member of the Trump Organization with whom I communicated on this project,” Sater continued, emphasizing the extent of trust between him and Cohen. So there was no surprise that later on, another Sater’s initiative related to getting the so-called “Artemenko’s Plan for Peace” in front of Trump was once again initiated through Cohen, who suggested it be handed over to Gen. Michael Flynn, President’s National Security Advisor at the time.

Russia is not interested in hype over Babel’s case. In Russia he had wide connections with top officials and businessmen including Deripaska who is very close to Putin

Michael Babel, while much more of a business and political lightweight than Sater, still made tremendous effort to climb up the government power-ladder. In 1997, he became a Full Member of the Academy of Economics and Entrepreneurship of Russia, with a Ph. D. in Commerce. In 2007, he received a Juris Doctor degree from Moscow State University. In 2008, he graduated “with distinction” from the Russian Academy of State Service under the President of the Russian Federation, and, to top it all off, he became an “Honorary Builder of Russia” and an “Honorary Builder of Moscow”.

During all these years, the “Honorary Builder”, seems to have been stealing and cheating on a large scale, engaging in activities undoubtedly worthy of a title of “Ph. D. in Commerce”. On November 27, 2016, Babel was arrested and put in custody in the Detention Center in Mozhaysk, where he spent the next five months. He was charged with large-scale fraud to the tune of at least RUB 21.6 million (which carries with it a prison sentence of up to 10 years, according to article 159, Part IV, of the Criminal Code of the Russian Federation). Yet the formal charges looked like peanuts in light of the real scale of the underlying crimes.

Babel was suspected of organizing the so-called «double sales». For example, residential complex called Terletski Park had about 300 paid share ownership units while it consisted of only 72 apartments. Further, one of Babel’s companies concluded multiple agreements with, and collected money from, the buyers in the residential complex that was to be built near Marfino, a village in the Odintsovo District near Moscow. By that time, Babel already secured in 2009 a RUB 5.5 billion (appx. $180 million) loan from Vneshtorgbank. The residential complex was never built.

Фото: nbm-stroy.ru Design of residential complex Terletsky park in Moscow. Photo: nbm-stroy.ru

In May 2015, City Prosecutors of Odintsovo District launched a criminal investigation of Michael Babel in his capacity as a Vice President of Soyuz-Vozrozhdenie corporation and as a President of NBM corporation, in connection with the suspected large-scale fraud involving “double sales” at the residential complex Western Gates of the Capital. According to the official sources, as of May 2015, the developer defaulted on more than 1,400 deals related to that residential complex.

The mechanics this shadowy deal-making were described by the Moscow Post on February 14, 2017, as follows:

“How did he do it? Actually, pretty easily, and all thanks to the government officials with whom Michael Babel was apparently very chummy. For example, when Soyuz-Vozrozhdenie had felt that something went wrong with the project, the officials who supervised the construction, instead of taking appropriate action, were trying to convince the corporate management to help Babel secure additional funding from Vneshtorgbank. Most likely, these guys were ‘in’ on a deal and were actively assisting Babel in his criminal activities. Clearly, this would not have been done for nothing – and, keeping in mind the scale of Babel’s development projects, one can only imagine how many government officials he ‘bought.’”

At the end of 2016, Babel’s detention was extended until March 14, 2017, and it was extended again on that date. However, on March 27, 2017, the Moscow Regional Court granted Babel’s appeal in part and ordered his release on a RUB 10 million bail. Soon after his release, in April of 2017, Babel was allowed to leave Russia, and went first to Israel and then to the US. By that time, it became known that he probably was one of the largest borrowers from Peresvet, a bank affiliated with the Russian Orthodox Church.

As of October 1, 2016, Peresvet was ranked 44th in the Russia bank system, by asset size. The total debt owed by Babel’s enterprises to Peresvet was estimated at RUB 10-12 billion (or appx. $180-$200 million). In early February of 2017 Peresvet’s negative capital amounted to over RUB 100 billion (or appx. $1.7 billion). In October of 2016, the Russian Central Bank appointed a provisional administration to manage the capital of Peresvet and to implement a financial restructuring/bailout with a budget of RUB 66.7 billion (or appx. $1.1 billion).

Today, Babel’s name is officially on the international “wanted persons” list. On October 4, 2017, he was personally sued for RUB 1.34 billion (or appx. $200 million). He was also arrested for a couple of months by the Russian court, in absentia, which was formally required in order for him to be placed on the international “wanted persons” list. However, it does not appear that anyone is seriously looking for him because Russia is not interested in any hype over Babel.

This makes sense as his network among top Russian officials and businessmen is quite extensive and includes, for example, Deripaska, an individual close to Putin; there might be many damaging details that Babel can reveal about these people. At the same time, he appears on the photo with Trump’s children and employees, and may have some information regarding their visit to Moscow that could be of interest to the Mueller’s Investigative Committee. This is the main reason why Russian prosecutors do not demand Babel’s arrest and extradition. If Babel were arrested in the US, he may reveal a lot of damaging details about Trump in exchange for leniency.