Follow da money

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.

“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.”