Weeks before his inauguration, Donald Trump was allied with a company in the former Soviet republic of Georgia that planned to build a 47-story luxury tower in the Black Sea resort of Batumi.
The tower, nixed in early January, was to bear Trump’s name – in exchange for which he would receive royalties, as he does from similar arrangements around the world.
But the company, Silk Road Group, had business ties and relationships that could have been problematic for a sitting U.S. president. Over the years it had oil trading and transport deals with companies in both Russia and Iran, countries currently facing varying degrees of U.S. and European financial sanctions.
It was also a strategic fuel supplier to U.S. and NATO troops in Afghanistan, and had partnered with a Kazakh bank whose former leader is accused of stealing billions and laundering some of it through luxury real estate in the United States, including Trump-branded condos.
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None of this is revealed in Trump’s financial disclosure statements. And since he hasn’t released his tax returns, these sorts of relationships are not apparent.
The Trump Organization’s push into Georgia and the broader region called Eurasia offers a made-to-order example of how little is publicly known about its foreign commitments, both past and present, and the sometimes conflicted activities of overseas associates.
A McClatchy investigation reveals that Trump ventured more aggressively into the former Soviet empire from 2005 to 2015 than has previously been known, even seeking to have his name atop a massive shimmering glass tower in Astana, the post-Soviet capital of Kazakhstan.
And Trump sought a trademark in Iran, a country he has sought to isolate as president, that would reserve use of his name among other things for real estate and hotels.
Trump now makes policy decisions with the potential to affect the Trump Organization and its associates in any number of ways, and the questions multiply. Deals that may not have been problematic for a celebrity developer look far different when he is also the U.S. commander-in-chief, with his sons still running the family named business.
Trump’s businesses are spread well beyond U.S. borders.
McClatchy estimates that at least 159 of the 565 companies Trump listed in his most recent disclosure report, released on June 16, were tied to business abroad.
Special Counsel Robert Mueller’s investigation into Russian meddling in U.S. elections and possible obstruction of justice by Trump may delve into the Trump business empire as it examines suspicious financial activity by Russian operatives.
Trump denies having business in Russia, but has benefited from Russian investors in Trump-branded projects and Russian buyers in his luxury hotels and residences.
McClatchy’s investigation reveals how Trump sought a foothold not just in Russia but across the former Soviet empire. Not known before, the Trump Organization in 2012 negotiated with then-Kazakh Prime Minister Karim Massimov for an obelisk-shaped tower to be built near the presidential palace, designed by architect John Fotiadis, who also did the Batumi project and lists offices in New York and the Ukrainian capital of Kiev. Trump Diamond lost out to a rival project in Astana for the tallest building in Central Asia, the 75-story Abu Dhabi Plaza.
Development in the region, say experts, often requires the participation of politically connected elites or government officials.
When Trump and Silk Road Group deep-sixed their Batumi arrangement via a joint statement on Jan. 6 a Trump Organization executive said the decision was “purely business related” and not because of ethical concerns.
Silk Road, however, attributes the deal’s collapse in part to “intense media scrutiny” following a Wall Street Journal report that alleged that the company’s chairman had earlier ties to militia groups, which the company strongly denies.
“Even if this (partnership) has now been terminated, I think it deserves a hard look,” said Norman Eisen, a former U.S. ambassador to the Czech Republic and a former White House ethics officer in the Obama administration. “I think it’s another set of questions that need to be asked.”
Entrepreneurs Without Borders
Trump’s attempt to penetrate the ex-Soviet empire began in 2005 when he inked a one-year deal with developer Bayrock Group, run by Kazakhs and Russian-émigré, felon and Trump associate Felix Sater, to find a suitable location in Moscow for a Trump tower. Bayrock failed in that attempt, though it teamed with Trump for projects in New York, Florida and Arizona.
McClatchy has learned that over the next two years Trump applied for trademarks for his name on a potential tower in Kazakhstan, and for Trump vodka there, too.
In fact, Trump had sought trademarks in 2007 for his vodka_ which ended production four years later amid poor U.S. sales_ in Armenia, Azerbaijan, Belarus, Georgia, Kyrgyzstan, Moldova, Turkmenistan and Uzbekistan.
In 2012, Trump sought to trademark his name for use in hotels and real estate in Armenia, Belarus, Iran, Kyrgyzstan, Moldova, Tajikistan, Turkmenistan, Ukraine and Uzbekistan, McClatchy’s investigation found.
All signed off on the requests except Iran, which took no action. Under international norms, inaction is generally assumed to mean de facto approval, but it’s unclear whether Trump’s trademark is active in Iran.
The Trump organization also signed a letter of intent, which was not executed, to license the Trump name for the Trump Diamond tower near Akorda, the opulent presidential palace in Kazakhstan, ruled by autocrat Nursultan Nazarbayev since 1989. An architect’s rendition, obtained by McClatchy, shows an obelisk with Trump’s name at the apex, and it would have soared over everything else within miles.
“The whole aesthetic of Trump goes very well with Central Asia -- the emphasis on ‘the personal is political,’ the use of personal connections … this kind of murky world of transnational relations in real estate, relatively unregulated and unmonitored,” said Alexander Cooley, director of a Columbia University institute on Russia and Eurasia and author of a new book called Dictators Without Borders.
Trump’s push happened at the same time that ex-Soviet republics, rich in natural resources and rife with corruption, authoritarian governments and political persecution, were playing the United States, Russia and China off each other in pursuit of investors.
It’s a part of the world filled with intrigue, where loyalties aren’t always clear. The New Yorker magazine reported in March that Trump’s business associates in Azerbaijan had ties to Iran’s Revolutionary Guard, the dreaded military wing of the Iranian government under financial sanction by the United States and the European Union. The Trump Organization backed out of that relationship in mid-December, about a month before Trump took office and about three weeks before scrapping the Georgia deal.
Georgia on His Mind
None of Trump’s initial plans came to fruition. The Georgia project was the first to advance. The plan began to hatch in 2010 and was finalized in 2012. That’s the same year Trump signed on to a deal in Azerbaijan to lease his name and scoop up royalties from a building to be constructed in Baku.
The Georgia project’s origins trace to a relationship between then-Trump Organization lawyer Michael D. Cohen and one of the Silk Road Group partners, U.S.-based Giorgi Rtskhiladze.
Rtskhiladze (pronounced Skil-Lad-ZEE) is married to Kazakh movie star Ayanat Ksenbai. He is a financier in energy, banking and media who once backed the clothing lines sold throughout the former Soviet Union by singers Jennifer Lopez, Gwen Stefani and Beyoncé Knowles.
The U.S.-based partner Rtskhiladze and Silk Road Chairman George Ramishvili formed a Delaware-incorporated company called Silk Road Transatlantic Alliance, hoping to leverage Trump’s name to bring glitzy casinos to their country; it was part of a larger effort that Georgian leaders hoped would boost tourism and investment.
Cohen traveled to Georgia twice to scope out potential sites. The Trump Organization envisioned Batumi as the starting point of what trademark filings and architect’s drawings show would have been several Trump towers in the region.
Later, Cohen teamed up with Rtskhiladze to push Trump Diamond in Kazakhstan, the Georgian tapping his Kazakh ties to seek financial backing. Cohen did not respond to requests by phone and email for comment.
Georgia’s charismatic English-speaking leader Mikheil “Misha” Saakashvili, who had been pitched on the project by Rtskhiladze, went to Trump Tower in Manhattan in March 2011 to announce plans for the Batumi tower and another in Tbilisi, the capital. A year later, Trump and Cohen returned the favor in palm tree-lined Batumi, unveiling details alongside Saakashvili of the planned $250 million five-star luxury tower.
Neither Trump nor Silk Road Group has disclosed anything about the financing of the planned Trump Tower Batumi or the royalties it would throw off to Trump.
“These are subject to non-disclosure agreements,” Silk Road said in written answers to McClatchy from its headquarters in Tbilisi. Both parties are privately held business empires.
Saakashvili “was going to turn this sleepy little port town into the Las Vegas of the Black Sea,” said Paul Rimple, the Tbilisi-based author of Who Owned Georgia, a book about who owned what during the Georgian president’s eight years in office. “For Saakashvili, having the Trump name gave him legitimacy.”
But voters ousted Saakashvili in late 2012. His successors did not share the dream of making Batumi the gaming capital of the region.
Still, even after Saakashvili fled Georgia, the project hadn’t been scotched, though it was sidelined by a regional economic crisis. A side letter to the Batumi deal allowed the parties to leave it dormant if necessary, McClatchy has learned, making it unclear why Trump walked away in January.
Who Is Silk Road Group?
Calling itself one of the largest private-investment firms in Central Asia, the Silk Road Group does business in the energy, transportation, banking, media, winemaking and digital sectors. Its reach extends throughout the former Soviet Union and Persian Gulf.
Two prominent persons in Georgia, demanding anonymity in order to speak freely, said its chairman, Ramishvili, made his fortune transporting oil and other commodities shortly after the collapse of the Soviet Union. The 1990’s were a time of turmoil, with plenty of opportunities for creative entrepreneurs and little enforceable law standing in the way.
“There was a lot of smuggling going on, and it was well connected to the state security services,” recalled one of the businessmen.
This was hardly unique to Georgia.
“The oligarchs in the former Soviet space … are people who figured out how to make money in an emerging market system where rule of law was not well established,” said William Courtney, U.S. ambassador to Georgia from 1995 to 1997 and now a senior fellow at the Rand Corp., a policy research organization.
The Silk Road Group flatly denied involvement in smuggling, and Georgian financial-crime investigators, citing “the absence of a crime,” closed a yearlong money-laundering probe in 2014.
“Any such references have no factual basis and are based on unsubstantiated rumors,” the company said in a statement provided to McClatchy through its U.S.-based partner’s spokeswoman Melanie A. Bonvicino.
The statement said Silk Road forged its oil and logistics business working with major European oil trading companies and Western banks to get Kazakh oil out through Georgia to world markets.
Silk Road challenged accusations first made in local media and later reported by the Wall Street Journal late last December that Ramishvili had ties to militia groups in the 1990s.
Giorgi Nasrashvili, a senior analyst in Transparency International’s Georgia office, cautioned that “detailed information on these issues beyond these rumors is not available.”
Silk Road intends to pursue all available legal remedies against the U.S. newspaper, said Bonvicino, because of “false and defamatory reporting that definitely contributed to the termination of the Trump deal.”
Steve Severinghaus, a spokesman for the Wall Street Journal, said, “We stand by our reporting.”
A key Trump Organization executive said the Georgia project termination was simply a business decision.
“All I can tell you is that the decision by the parties to terminate the development was purely business related and that we had no knowledge whatsoever with respect to any of the other business dealings” (of Silk Road Group), said Alan Garten, executive vice president and chief legal officer for the Trump Organization. Garten declined to answer specific questions.
Ramishvili was among numerous businessmen who had become wealthy during the tenure of Eduard Shevardnadze, a former Soviet foreign minister who was twice elected to lead post-Soviet Georgia.
When Saakashvili took office in 2004, he detained many of these tycoons, including Ramishvili.
“Mr. Ramishvili was not jailed in 2004, he was briefly questioned by Georgian law enforcement and quickly released,” the company explained in its statement to McClatchy.
Ramishvili later developed the prominent Radisson Blu Iveria in Tbilisi, the Georgian capital. Located on the square that was the epicenter of Georgia’s 2003 pro-democracy Rose Revolution, the posh hotel opened in 2009 and includes a casino.
By that year, Silk Road Group was an integral part of a supply line that delivered jet and diesel fuel to U.S. and NATO troops in Afghanistan and to the Manas Air Base in Kyrgyzstan. It also moved military equipment to Afghanistan from Iraq, where Georgian troops had been deployed as a U.S. ally.
Details on this are found in the Panama Papers, a trove of 11.5 million leaked documents that shined light on the murky world of offshore companies, which can be used for legal international business or illicit purposes such as tax evasion and bribery. The documents were the basis of investigations by McClatchy and others last year under the umbrella of the International Consortium of Investigative Journalists.
Silk Road Group is referenced 1,901 times in the Panama Papers. The documents include contracts dating to 2012 between Silk Road Group and British partner and fuel supplier Milio International. Records show the U.S. Defense Logistics Agency has paid Milio more than $19 million since 2009 for supplying refined fuel products to U.S. and NATO forces.
“Milio devised, established and, together with Silk Road, opened such Route and has operated it for a number of years and so it is a condition of the Parties doing business with each other that they agree to the exclusivities set out in this Agreement,” said the 2012 contract describing the fuel-supply route to Afghanistan from Georgia’s Black Sea ports via the Caspian Sea. Milio did not return calls to offices in London and Dubai.
But there was an addendum to that exclusive contract. It gave an offshore company, Tepco Limited, use of the same supply facilities for business within Georgia and nearby Armenia.
The documents show that Tepco was owned by the Petrocas Energy Group, a Russian-owned oil trading and distribution company. In 2015, Russian energy giant Rosneft bought 49 percent of Petrocas at a time when Rosneft faced U.S. and European financial sanctions for Russia’s annexation of Crimea in 2014.
Tepco itself, the Silk Road Group business partner, is not under sanction; but the Rosneft connection could have presented bad optics for an incoming president already dogged by Russia controversies. Petrocas did not respond to a request for comment.
Not only that, but multiple news outlets in Azerbaijan last year quoted Petrocas executives saying they would soon begin using the Georgian port of Poti to export gasoline to Iran.
The Silk Road Group’s website includes Iran among the countries it ships to and works out of as a service provider. It had a joint venture until 2009 that traded Iranian crude oil.
“As the sanctions [on Iran] were imposed both the trading and transportation activities were terminated,” the company told McClatchy, saying it no longer does business in Iran.
The Panama Papers reveal another optics problem for Trump in his association with Silk Road. They show borrowing by Silk Road Group from Bank TuranAlem, the large Kazakh bank that in 2005 took a 49-percent stake in Silk Road Bank, which was owned by Silk Road Group and was then renamed BTA Bank Georgia.
The loans from BTA Bank in Kazakhstan date to mid-2006, a period when it and Silk Road Bank were already partners in Georgia, and include a six-year general credit agreement for $8.5 million at a lending rate of 12.5 percent, backed by 303 railcars as collateral.
BTA’s flagship operation in Kazakhstan collapsed in 2009; its majority stakeholder fled the country, accused of massive theft through fake loans. Kazakh regulators seized BTA Bank and invested in it in a rescue bid.
That effectively made Silk Road Group a business partner with the Kazakh president and his son-in-law Timur Kulibayev, who oversaw the rescue effort and is one of the richest men in Kazakhstan. Silk Road Group, which was not accused of any wrongdoing, eventually bought back BTA’s stake in its bank and restored its name and independence.
Trump’s attempted business ventures in Georgia – and throughout the former Soviet Union – all are part of a complex web of the now-president’s little-known foreign entanglements, which Trump’s 98-page financial disclosure makes no clearer.
Ethics experts say that Trump has revealed so little about his businesses that it’s virtually impossible to know who provided the money for his activities, including his attempts to emblazon his name atop towers in far-flung nations.
“You’re not getting any disclosure on the companies he owns and who he is doing business with,” noted Richard Painter, a corporate law specialist who served from 2005 to 2007 as the chief ethics lawyer in George W. Bush’s White House.
This story has been updated to reflect that the letter of intent signed for a Kazakh tower was not executed, and that Bonvicino is the spokeswoman for the U.S.-based Silk Road partner.