I’ve got. it Let’s build a thirty-three story ultra-luxury hotel in a crap part of Baku, the capital of Azerbaijan, far from other luxury developments, where no one will come to. Further, let’s do the deal with some really dicey folks who are known to be corrupt and who have ties to other dicey people and entities, like Iran’s Revolutionary Guard, which owns hundreds of businesses and sometimes needs to move money and goods around without it being noticed.
And let’s build it using very expensive materials, then never open it.
Huh. Why you might think the purpose of the development had nothing to do with the business of making money running a hotel.
That’s exactly what happened with the Trump Tower Baku.
A few excerpts from the New Yorker article, which is careful to say while there is no evidence that Trump or his family was engaged in money laundering, also details obvious and massive corruption by other partners in the project. Further, the Foreign Corrupt Practices Act makes it “a crime for an American company to unknowingly benefit from a partner’s corruption if it could have discovered illicit activity but avoided doing so.” Saying you didn’t know is not an excuse.
If parties involved in the Trump Tower Baku project participated in any illegal financial conduct, and if the Trump Organization exerted a degree of control over the project, the company could be vulnerable to criminal prosecution. Tom Fox, a Houston lawyer who specializes in anti-corruption compliance, said, “It’s a problem if you’re making a profit off of someone else’s corrupt conduct.” Moreover, recent case law has established that licensors take on a greater legal burden when they assume roles normally reserved for developers. The Trump Organization’s unusually deep engagement with Baku XXI Century suggests that it had the opportunity and the responsibility to monitor it for corruption.
The Revolutionary Guard and its business interests are involved.
But the Mammadov family, in addition to its reputation for corruption, has a troubling connection that any proper risk assessment should have unearthed: for years, it has been financially entangled with an Iranian family tied to the Iranian Revolutionary Guard Corps, the ideologically driven military force.
But there is a catch: from time to time, they should expect to be asked to serve the needs of the Guard. “When the Revolutionary Guard says, ‘We need to move some illicit stuff,’ or ‘We need new parts for our missiles,’ they reach out to these guys,” McInnis explained. “It’s a soft network that can do all sorts of things that are very hard to trace.”
[Trump lawyer] added, “We did not pay any money to anyone. Therefore, it could not be a violation of the F.C.P.A.”
“No, that’s just wrong,” Jessica Tillipman, an assistant dean at George Washington University Law School, who specializes in the F.C.P.A., said. “You can’t go into business deals in Azerbaijan assuming that you are immune from the F.C.P.A.” She added, “Nor can you escape liability by looking the other way. The entire Baku deal is a giant red flag—the direct involvement of foreign government officials and their relatives in Azerbaijan with ties to the Iranian Revolutionary Guard. Corruption warning signs are rarely more obvious.”
Trump being blackmailed is a possibility.
In recent months, American officials have expressed concern that Trump Administration figures might be blackmailed by foreign entities. U.S. law-enforcement investigators and congressional staffers have probed claims that Russian government officials possess compromising information about President Trump, which might be used to blackmail him. (The President maintains that there is no such information.) In January, the Department of Justice informed the White House that Michael Flynn—then the national-security adviser—was vulnerable to being blackmailed by the Russians because he had lied about having spoken with the Russian Ambassador. Flynn subsequently resigned.
In Azerbaijan, the power and the influence of the Mammadovs has declined sharply. Elton lost his seat in parliament in 2015. In February, Ziya was abruptly removed from his ministry. Anar has settled in London, an associate of his told me, and is living on a fraction of his former wealth. Meanwhile, in Iran, government officials are likely facing additional sanctions on the Iranian Revolutionary Guard. If the Mammadovs or powerful Iranians have evidence that the Trump Organization broke laws, they might be tempted to exploit it.