Alex Shnaider Paid $100 Million To Kremlin-Linked ‘Fixer’
An investigation into the troubled development formerly
known as the Trump International Hotel & Tower in Toronto has found
evidence of financial links between the building's developer and the top
echelons of the Russian government.
According to documents uncovered in a 10-month probe by the
Financial Times, Alex Shnaider, the Russian-Canadian billionaire who developed
the building, paid US$100 million to "a Moscow-based fixer representing
Kremlin-backed investors" while the Toronto tower was being built.
Donald Trump didn't develop and never owned the building.
Rather, his Trump Organization licensed the Trump name to Shnaider, and had a
contract to manage the property.
According to the Financial Times, the $100-million payment
was meant to facilitate the sale of a stake in a Ukrainian steel mill that
Shnaider held, to buyers acting "on behalf of the Russian
government." The deal went through, and Shnaider was reportedly paid
US$850 million for his share in the steel mill.
"Given that the ultimate backer of the deal was the
Kremlin, that raises the possibility that money passed from Trump's business
partner to Russian officials," the Financial Times stated.
Shnaider's lawyer, Symon Zucker, denied the link to VEB,
telling Business Insider in 2017 that the Wall Street Journal had "got
their facts all wrong." He said Midland Resources, the company through
which Shnaider owned a stake in the Ukrainian steel mill, never had a
relationship with VEB.
After the deal went through, Shnaider reportedly made an additional
$40-million investment into the construction of the Toronto Trump tower, the
Financial Times reported. Zucker has denied that money from the sale went to
the Toronto Trump Tower, though the Journal quoted him as saying some $15
million from the asset sale went into the project.
The Times estimates Donald Trump himself made at least $4
million from licensing his name and managing the Toronto Trump Tower — possibly
much more, given that Trump has only released his finances from 2014 onwards.
The Toronto Trump Tower was beset by problems from the time
it broke ground in 2007, including construction delays and falling glass. After
opening, the building struggled with low occupancy rates, prompting some
individual investors to launch legal action against Shnaider's company, Talon.
In a suit filed in 2016, a group of investors called the project an
"investment scheme and conspiracy."
The tower was sold off in a court-ordered sale in 2017,
after Shnaider's Talon defaulted on an approximately $300-million loan to
Austrian bank Raiffeisen. The bank sold the loan to JCF Capital, which last
year took ownership of the Toronto tower. The management contract with the
Trump Organization ended and the new owners promptly removed the Trump name
from the building.
Experts say the sort of payment Shnaider made to a
"fixer" is common practice in Russia, but can easily be interpreted
as a bribe.
An expert interviewed by the Times said that if it were seen
as a bribe, it could be argued the Trump Organization received "proceeds
of crime." There does not seem to be any evidence Trump was aware of
Shnaider's transaction.
Canada's Corruption of Foreign Public Officials Act makes it
illegal for Canadian businesses to bribe government officials in other
countries.
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