One of the important facts about Trump is his lack of creditworthiness. After his 2004 bankruptcy and his long streak of lawsuits, the big banks decided he wasn’t worth the effort. They’d rather not touch the self-proclaimed “king of debt.” This sent him chasing less conventional sources of cash. BuzzFeed has shown, for instance, his efforts to woo Muammar Qaddafi as an investor. Libyan money never did materialize. It was Russian capital that fueled many of his signature projects—that helped him preserve his image as a great builder as he recovered from bankruptcy.
The money didn’t come directly. Hunting for partners with cash, he turned to a small upstart called the Bayrock Group, which would pull together massive real estate deals using the Trump name. Its chairman was a former Soviet official named Tevfik Arif, who made a small fortune running luxe hotels in Turkey. To run Bayrock’s operation, Arif hired Felix Satter, a Soviet-born, Brighton Beach–bred college dropout. Satter changed his name to Sater, likely to distance himself from the criminal activity that a name-check would easily turn up. As a young man, Sater served time for slashing a man’s face with a broken margarita glass in a barroom brawl. The Feds also busted him for a working in a stock brokerage tied to four different Mafia families, which made $40 million off fraudulent trades. One lawsuit would later describe “Satter’s proven history of using mob-like tactics to achieve his goals.” Another would note that he threatened a Trump investor with the prospect of the electrocution of his testicles, the amputation of his leg, and his corpse residing in the trunk of Sater’s car.
What was Trump thinking entering into business with partners like these? It’s a question he has tried to banish by downplaying his ties to Bayrock and minimizing Sater’s sins. (“He got into trouble because he got into a barroom fight which a lot of people do,” Trump once said in a deposition.) But he didn’t just partner with Bayrock; the company embedded with him. Sater worked in Trump Tower; his business card described him as a “Senior Advisor to Donald Trump.” Bayrock put together deals for mammoth Trump-named, Trump-managed projects—two in Fort Lauderdale, Florida, a resort in Phoenix, the Trump SoHo in New York. Several of those projects broke ground, but they were a mere prelude. “Mr. Trump was particularly taken with Mr. Arif’s overseas connections,” the Times reported (after buyers of units in the Trump SoHo sued him for fraud). “In a deposition, Mr. Trump said that the two had discussed ‘numerous deals all over the world’ and that Mr. Arif had brought potential Russian investors to Mr. Trump’s office to meet him.” Trump described the scope of their ambitions: “[T]his was going to be Trump International Hotel and Tower Moscow, Kiev, Istanbul, etc., Poland, Warsaw.”
Based on its cast of characters, Bayrock itself was an enterprise bound to end in a torrent of litigation. The company’s finance chief Jody Kriss has sued it for fraud. In the course of the litigation, which is ongoing, Kriss alleged a primary source of funding for Trump’s big projects: “Month after month for two years, in fact whenever Bayrock ran out of cash, Bayrock Holdings would magically show up with a wire from ‘somewhere’ just large enough to keep the company going.” According to Kriss, these large payments would come from sources in Russia and Kazakhstan that hoped to hide their cash. Another source of Bayrock funding was a now-defunct Icelandic investment fund called the FL Group, a magnet for Russian investors “in favor with” Putin, as a lawsuit puts it. (The Daily Telegraph has reported that Bayrock mislabeled FL’s investment as a loan, in order to avoid at least $20 million in taxes.)
These projects are simply too ambitious, too central to his prospects, for Trump to have ignored the underlying source of financing. And it was at just the moment he came to depend heavily on shadowy investment from Russia that his praise for Putin kicked into high gear. In 2007, he told Larry King, “Look at Putin—what he’s doing with Russia—I mean, you know, what’s going on over there. I mean this guy has done—whether you like him or don’t like him—he’s doing a great job.”