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Monday, May 07, 2018

Follow da money

by digby

Josh Marshall has an interesting bit of analysis over at TPM (subscription required --- highly recommended) about Trump and Cohen's business model based on the big NY Times report on Michael Cohen and the Washington Post expose on Trump's real estate "cash flow" in the Washington Post. This is an excerpt:

The gist of the Post piece is that Trump, like many high profile real estate investors, has always been about debt, getting investors and banks to shoulder a lot of the risks of his investments. This is the standard in that line of business. But Trump always took it much further than almost anyone else. That is, until 2006, when as Post explains, he moved decisively into paying cash. From 2006, Trump spent over $400 million in cash on various investments, often paying for new properties entirely on his own and 100% in cash. Not only was this deeply out of character for Trump. It was out of character for almost everyone in Trump’s business. And it came in the midst of the real estate financial crisis.

Now credit was super tight during the crisis. So not using bank loans would make sense. In fact, investors who had access to lots of cash did very well since they could buy up distressed assets when others had little or no access to capital. But that still doesn’t explain where the cash came from. And the shift started about two years before the crash.

Note that year, 2006. That’s the same year when Michael Cohen came to work for the Trump Organization and, as I’ve noted many times, Cohen was brought into the Trump Organization as a conduit for money from Russia and Ukraine. To be clear, I’m not saying all this cash came from or through Michael Cohen. But there’s good reason to think these two things are related, that the shift toward cash purchases coincided with Trump’s increasingly heavy reliance on post-Soviet cash and that Cohen was an important part of that transition. In a new book to be released this week, Seth Hettana explains that Cohen got his job with Trump in part as a favor to Cohen’s father-in-law, Fima Shusterman, a Ukrainian emigre who appears to have been a silent partner in Trump ventures and does have lots of money. As The Chicago Times revealed last month, just in the last 8 months Shusterman has loaned between $20 and $40 million to another Cohen and Shusterman connected immigrant family, the Schtayners, who have major holdings in the Chicago taxi business. That’s at least $20 million in loans to a family in a collapsing industry backed by collateral that is worth far less than the loans.

He mentions that Eric Trump says they did this because they were so successful that they didn't need loans, which is as fatuous as it gets. First, they were not successful and second, nobody does business like this. And anyway, there was this report from journalist James Dodson who asked Eric Trump in 2014 how they were buying up all these golf courses at a time that banks were not lending to any resort properties:

“So when I got in the cart with Eric,” Dodson says, “as we were setting off, I said, ‘Eric, who’s funding? I know no banks — because of the recession, the Great Recession — have touched a golf course. You know, no one’s funding any kind of golf construction. It’s dead in the water the last four or five years.’ And this is what he said. He said, ‘Well, we don’t rely on American banks. We have all the funding we need out of Russia.’ I said, ‘Really?’ And he said, ‘Oh, yeah. We’ve got some guys that really, really love golf, and they’re really invested in our programs. We just go there all the time.’ Now that was [a little more than] three years ago, so it was pretty interesting.”

Eric says this never happened, but Don Jr said much the same thing a few years before. Weirdly the fake news media was planting these stories long before Trump ran for president.

Marshall emphasizes that we know very little about Trump's finances and that we have to reserve judgement. Maybe Trump really was so successful that he had 400 million in ready cash to spend at a time. We just don't know. But let's just say that it's a little bit suspicious that a man with that much money was slapping his name on every cheap consumer item he could find, including water, and defrauding thousands of people with Trump University.

But that's the problem. There were all these Russians circling around this campaign, all this interference, all this money coming from somewhere, these quotes from membrs of his own family, Michael Cohen and his deep Russia connections, Paul Manafort, Trump stubbornly refusing to criticize Vladimir Putin and blatantly obstructing the investigation --- and a Republican party that was and is fine with having a suspected money launderer in the White House.

Maybe it's all a big coincidence but I doubt it.