The flurry of emails began in the spring of 2008. On one side was Marie Williams, representing the Trump Ocean Club International Sales Group. On the other was Mossack Fonseca, the law firm known as Mossfon, whose leaked data became the Panama Papers.
Construction on the 70-story tower in downtown Panama City was not yet complete at the time. Announced in April 2006, Trump Ocean Club International Hotel and Tower Panama would not launch until 2011, when the Trump family came down for a triumphant ribbon cutting alongside President Ricardo Martinelli and developer Roger Khafif.
In 2007, Trump Ocean achieved a significant milestone. It pre-sold enough condos to convince Wall Street to back $220 million in construction financing. A significant portion of those early sales went to Russian buyers hiding behind anonymous shell companies. Few were seeking a home in which to live. Some were simply parking cash they had spirited out of Russia. Others, it now appears, were Russian mafia laundering money. They joined money launderers from South American drug cartels who were also buying property at Trump Ocean Club.
In September 2008, Donald Trump, Jr. said at a real estate conference that “Russians make up a pretty disproportionate cross-section of a lot of our assets… We see a lot of money pouring in from Russia.”
Fast forward to last week. The Associated Press broke the news that condo owners in the Trump Ocean Club want to remove President Donald Trump’s name from the development. They also hope to fire his company’s management of the Ocean Club’s hotel.
Occupancy in the hotel has shriveled, according to reports. Condos aren’t selling either. Last August, 202 still-unsold condos were part of a sales package that included the Ocean Club’s restaurants and conference center. Khafif’s firm, Newland International Properties, filed for bankruptcy in 2013. Martinelli is living in Miami, fighting extradition back to Panama, where he faces criminal charges. The development shaped like a sail, or perhaps, as Ivanka Trump said, “a giant D,” is fast becoming an international symbol for money laundering.
How did it all go so wrong? The emails from the Panama Papers help tell the story.
Trump Ocean contacted Mossfon for translation services in June 2008. Khafif wanted the firm to translate the condo sales agreement from Spanish into Russian. It cost $15 a page. The total came to $600. The payment was late.
Trump’s own company was not directly involved in selling the units but it helped with the marketing. Trump reaped millions of dollars from the naming rights and management contract. Estimates are he took in well over $75 million from the development.
During those initial years, hot money was pouring into Panama. Some joked that those who complained about the traffic and parking from the new buildings filling the skyline had nothing to worry about – nobody actually lived in the apartments. The benign view was that these empty properties were awaiting Americans or Canadian snowbirds who would someday quit working and claim their retirement homes. Others suspected the bulk were being used for money laundering or as investments for wealthy elites from places like China and Russia. These buyers were unreliable. They would soon flip their properties, particularly at the first sign of trouble.
Trump and Khafif were not interested in asking too many questions about who purchased the Ocean Club units. They didn’t care that their building was built on a shaky foundation of flighty capital and money laundering. For Trump, it has always been about the quick score, consequences be damned. As long as he could maintain plausible deniability, the origins of the cash handed to him didn’t matter.
In one of her emails sent to Mossfon in 2008, Williams, the Trump sales executive, had another question:
Additionally, we are working with an Iranian broker who has individuals residing in Iran or who are residents in the UK with Iranian passports desiring to purchase in Panama. Does your firm have experience with Iranians? Would the visa requirements be any different from someone from Russia or Europe? You were so helpful with the information your forwarded before pertaining to Russians. I would like to create this same experience for this broker who has connections with the wealthy Iranian nationals.
On the campaign trail and as president, Trump savagely attacked Iran in speeches. He described the country as a “fanatical regime” that “raided the wealth of one of the world’s oldest and most vibrant nations, and spread death, destruction, and chaos all around the globe.”
Yet in private business, Trump grabbed that wealth with both hands.