Trump visited Georgia in April, 2012, at a politically vulnerable time for Saakashvili. Nine years earlier, Saakashvili had led the Rose Revolution, which overturned the country’s autocratic post-Soviet leadership. After assuming power, he initially cracked down on widespread petty corruption and cleaned up the civil service, which had functioned largely on bribes. Then, in 2008, he led a disastrous war against Russia over control of the breakaway region of South Ossetia. By then, his fight against corruption had largely ceased, and Transparency International and other N.G.O.s were reporting that élite corruption—in which wealthy, politically connected people receive better treatment from courts, prosecutors, and government administrators—was rampant in Georgia. Under these conditions, few Western investors or brands were willing to put money into the country. Saakashvili himself was increasingly unpopular, and the Trump deal was meant to help salvage his reputation.
Saakashvili showed Trump around Tbilisi, the capital, and Batumi. Georgian television covered the events fawningly, promising viewers that Trump would soon build a second tower, in Tbilisi. One broadcaster proclaimed that Trump was the world’s top developer. At the groundbreaking ceremony in Batumi, Saakashvili said that the tower was “a big deal . . . that changes everything around here.” At another event, beneath a banner that proclaimed “trump invests in georgia,” he thanked Trump for being part of the project—which, he said, had a budget of two hundred and fifty million dollars. He also awarded Trump the Georgian Order of Brilliance. Trump, in turn, praised Saakashvili. “Everybody in the world, they speak of Georgia and the great miracle that’s taking place,” he said.
Upon returning home, Trump appeared on “Fox and Friends.” Gretchen Carlson, the host at the time, asked him, “What are you going to be investing in?” He responded, “I’m doing a big development there—and it’s been amazing.” He said of Saakashvili, “He’s one of the great leaders of the world.”
Virtually none of the things that Saakashvili and Trump said about the deal were true. The budget of the Trump Tower Batumi was not two hundred and fifty million dollars but a hundred and ten. Trump, meanwhile, could hardly have invested such a sum himself. He professed to be a billionaire, but a few months earlier an appeals court in New Jersey had shut down Trump’s legal campaign against Timothy O’Brien, the author of “TrumpNation,” which argued that Trump had wildly inflated his fortune, and was actually worth less than a quarter of a billion dollars. Julie George, a political scientist at Queens College who studies Georgia, told me that, by 2012, Saakashvili’s tenure could in no way be considered a “great miracle.” The country’s economy was floundering, and shortly after Trump’s visit it was revealed that the government had been torturing political opponents. (Saakashvili did not respond to requests for comment.)
The announcement of the Batumi tower was handled with cynical opportunism by both Trump and Saakashvili, but that was not the deal’s biggest problem. The developer that had paid Trump and invited him to Georgia—a holding company known as the Silk Road Group—had been funded by a bank that was enmeshed in a giant money-laundering scandal. And Trump, it seemed, had not asked many questions before taking the money.
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he Silk Road Group, which was established in Georgia shortly after the fall of the Soviet Union, does not have a conventional corporate structure. It is a holding company that controls dozens of corporate entities registered around the world. In total, B.T.A. loaned the Silk Road Group three hundred million dollars, and these funds were dispersed among its many subsidiaries, making the money trail hard to follow. For example, an eight-million-dollar loan was granted to Batumi Riviera Holding, B.V., which was registered in Holland. Batumi Riviera Holding has reported having a sole asset: a company called Vento, L.L.C., which is registered in Georgia. That registration indicates that its creditor is B.T.A., which made loans valued at seventy-five per cent of the initial investment in the company. Batumi Riviera Holding, in turn, is owned by Tbilisi Central Plaza, a company registered in Malta. Tbilisi Central Plaza is owned by Susalike Holding GmbH, which is registered, in Germany, to a Silk Road Group subsidiary.
Giorgi Rtskhiladze co-owns the Silk Road Transatlantic Alliance, a subsidiary that focusses on business deals involving the U.S. He brokered the Trump relationship. The Silk Road Group’s leadership in Georgia asked him to represent the company in interviews for this article. I recently met him at the St. Regis hotel in New York. When I asked why the Silk Road Group had such a bewildering structure, Rtskhiladze said, “There are tax reasons, and there are other reasons. To reduce liabilities, if we were sued or have to sue, certain courts are more efficient.” He pointed out that many companies legitimately use offshore jurisdictions to register their firms.
“That’s true,” Richard Gordon, the financial-integrity expert at Case Western, said. However, he added, “it is difficult to conceive of legitimate reasons for one shell company in an offshore jurisdiction to own a chain of companies established in a series of other offshore jurisdictions.” Such byzantine arrangements add expense, complexity, and uncertainty—the opposite of what businesses normally want—without providing any clear benefit, other than obfuscation. Moreover, by registering in so many different jurisdictions, the Silk Road Group has actually increased its legal risk, because a potential claimant can sue the company in all those jurisdictions. Gordon, who helped write the Republic of Georgia’s tax law, told me that he could think of no reason that this structure would help a Georgian company lawfully pay fewer taxes.
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It was difficult to pierce the veil of ownership, but I made some headway by collaborating on a reporting project with an investigations team at the Columbia University School of Journalism. Manuela Andreoni and Inti Pacheco, two recent graduates who are now investigative fellows, have spent months researching the Silk Road Group, Mukhtar Ablyazov, Yerkin Tatishev, and B.T.A. Bank. They have looked closely at relevant lawsuits, and they have obtained and translated property records and corporate registries from around the world.
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In December, 2012, not long after Trump signed the Batumi licensing deal, a company called Riviera, L.L.C., bought the fifteen-acre parcel of land on which the Trump Tower Batumi would supposedly be built. The price was twelve million dollars, and the seller was Vento, L.L.C., which was owned by a company that was owned by a company that was owned by a company that was owned by the Silk Road Group. Riviera, L.L.C., was also partly owned by the Silk Road Group. In other words, the Silk Road Group was selling property to itself.
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The Financial Action Task Force, headquartered in Paris, is led by representatives from thirty-seven nations. In 2007, the task force issued a report about the use of real-estate projects for money laundering....The report states that money launderers often find that “buying a hotel, a restaurant or other similar investment offers further advantages, as it brings with it a business activity in which there is extensive use of cash.” Casinos—like the one planned for the Trump Tower Batumi—are especially useful in this regard. The casino was to be owned by the Silk Road Group and its partners.
Alan Garten, the chief legal officer for the Trump Organization, declined to describe the due diligence behind the Batumi tower. When the deal was signed, the general counsel for the Trump Organization was Jason Greenblatt, who is now President Trump’s envoy to negotiate Middle East peace. (The White House declined to comment for this story, referring me instead to Sekulow, Trump’s lawyer, who also declined to discuss the specifics of the Batumi deal.)
A representative of the Silk Road Group told me that the company had been eager to assuage any ethical concerns the Trump Organization or other potential partners may have had, and so it had conducted due diligence—on itself. In May, 2012, the Silk Road Group commissioned K2 Intelligence, a firm founded by the investigator Jules Kroll, to produce a report. (This was fourteen months after the Trump Organization signed the Batumi deal.) ... The summary did not address the Silk Road Group’s funding sources, its complex legal structure, or its relationship to the B.T.A. Bank scandal, which was unfolding in London courts at the time. Other due diligence may have been performed, but the Silk Road Group, K2, and the Trump Organization declined to share specific information.
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So many partners of the Trump Organization have been fined, sued, or criminally investigated for financial crimes that it is hard to ascribe the pattern to coincidence, or even to shoddy due diligence. In criminal law, there is a crucial concept called “willful blindness”: a person can be convicted of a crime even if he was unaware of certain aspects of the crime in which he was engaged. In U.S. courts, judges routinely explain to juries that “no one can avoid responsibility for a crime by deliberately ignoring what is obvious.” (When the Trump Organization cancelled the Batumi deal, it noted that it held the Silk Road Group “in the highest regard.”)
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Giorgi Rtskhiladze, the Silk Road Transatlantic Alliance executive, confirmed that the luxury-housing market in Batumi was nonexistent in 2012, when he invited Donald Trump to visit Georgia, but said that the tower’s investors were nonetheless confident that a Trump-branded skyscraper would attract buyers. He insisted that the Silk Road Group had not taken part in anything illicit, and said that B.T.A. Bank’s 2005 decision to lend the Silk Road Group several hundred million dollars was hardly suspicious. The company had been working in Kazakhstan for years, transporting oil products, and had become close with the Tatishev family. When the bank that Tatishev helped run, B.T.A., decided to invest in redeveloping Batumi, the obvious partner was the Silk Road Group. “We were the partner they knew,” Rtskhiladze said. “We’re active in the region.”
Rtskhiladze acknowledged that it was quite a big loan for such a poor country. “Unbelievable,” he called it. And it was true that the Silk Road Group had little experience in hotels or construction or telecommunications when it suddenly entered those industries. But, he pointed out, Georgia was still emerging from the torpid days of the Soviet Union. “You’re talking about a country that had no experience,” he said. “Nobody else had experience.” In any case, he suggested, “real-estate development wasn’t that complicated. You hire third parties, who do feasibility studies. You look at the numbers. It wasn’t that difficult.” He added, “We like to do clean, transparent business.”
I asked Rtskhiladze why he had invited Trump, who has generally avoided travelling abroad, to Georgia. He told me a story from 1989, when he was a young soldier in the Soviet Army. “They told me, for target practice, to shoot Ronald Reagan’s face,” he recalled. “I refused.” The Army jailed him for several days. Soon after he was released, he said, he saw a magazine with Trump on the cover. He told himself, “One day, I will go to New York and meet this man.”
He argued that the fact that “there was no luxury in Batumi” was precisely why the idea of a Trump Tower was so smart. The skyscraper, with its “pool and gyms and conference rooms,” would single-handedly create “an entire universe of very New York-style luxury in a seaside town.” The luxury condominiums, he added, were “for international buyers—Saudis, Turks, Russians.” In his “strong opinion,” the Trump brand was “the only brand for them.” (David Borger, the Silk Road Group executive, told me that a study by a well-regarded Turkish firm had concluded that the tower was a good business idea, but he declined to share the name of the firm or the study.)
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The Kazakh government placed B.T.A. Bank’s assets under the authority of its sovereign-wealth fund. Soon after, Timur Kulibayev—the powerful son-in-law of the country’s dictator, Nursultan Nazarbayev—became the director of the fund. Kulibayev and his staff had access to all the bank’s internal documents. Recently, Kulibayev became the majority owner of the bank, giving him total control over B.T.A.’s archives, as well as ownership of its assets. Kulibayev was surely familiar with the players involved in the Trump Tower Batumi project. In 2011, Giorgi Rtskhiladze and Michael Cohen, the Trump Organization executive, began promoting the idea of a Trump Tower in Astana, the capital of Kazakhstan. They visited Astana and met with Karim Masimov, the Prime Minister. Masimov is now the head of Kazakhstan’s national-security apparatus.
Keith Darden is a political scientist at American University who has written extensively on the use of compromising information—kompromat—by former Soviet regimes against people they want to control. He told me that Kazakh intelligence is believed to collect dossiers on every significant business transaction involving the country. This would be especially true if a famous American developer was part of the deal, even if it would not have occurred to them that he might one day become the U.S. President. “There is no question—they know everything about this deal,” Darden said.
Darden explained that Kazakh intelligence agents work closely with their Russian counterparts. Kulibayev himself has direct ties to Russia’s leadership. In 2011, he was named to the board of Gazprom, the Russian gas behemoth, which is widely considered to be a pillar of Putin’s fortune. In “The Return: Russia’s Journey from Gorbachev to Medvedev,” Daniel Treisman, a political scientist at U.C.L.A. who specializes in Russia, wrote, “For Putin, Gazprom was a personal obsession. He memorized the details of the company’s accounts, its pricing rules and pipeline routes. He personally approved all appointments down to the deputy level, sometimes forgetting to tell the company’s actual C.E.O., Aleksey Miller.” Kulibayev could not possibly be serving on Gazprom’s board without Putin’s assent.
Robert Mueller has assembled a team of sixteen lawyers. One of them is fluent in Russian, and five have extensive experience investigating and prosecuting cases of money laundering, foreign corruption, and complex financial conspiracies. The path from Trump to Putin, if one exists, might be found in one of his foreign real-estate deals.
When Mueller was appointed special counsel, his official writ was to investigate not just “any links and/or coordination between the Russian government and individuals associated with the campaign of President Donald Trump” but also “any matters that arose or may arise directly from the investigation.” Much hinges on the word “directly.” Sekulow, Trump’s lawyer, insists that Mueller’s mandate essentially stops at the Russian border. Pawneet Abramowski, a former F.B.I. intelligence analyst, told me that Sekulow’s assertion is nonsensical. “You must follow the clues,” she said. When investigating a businessperson like Trump, “you have to follow the money and go wherever it leads—you must follow the clues all the way to the end.”
