A guide to the Trump/Russia collusion case

Each new disclosure in the investigation of Trump’s ties to the Russians seems to further complicate the overall picture. With salacious details leaking out bit-by-bit, we seldom get help assembling the larger narrative. More clues add up to more confusion.

Based on the information available to date, here’s how the pieces of the Trump/Russia puzzle seem to be coming together.

Start with the Trump business model

Trump’s ties to the Russians rose from the unusual structure of his business, so this story starts with understanding of how that business works. Conventional journalistic accounts of the Trump/Russia investigation are confusing because journalists are reluctant to state certain realities about the nature of Trump’s businesses. The Trump family earns most of its income from money laundering. This is common knowledge, but also unprovable in a “beyond a reasonable doubt” sense without access to business records, which the family has opted (of course) to keep secret. Nothing in the story of Trump’s collusion with the Russians makes sense without understanding the nature of the Trumps’ business.

The Trump family has made many attempts to engage in conventional businesses, like airlines, vitamin supplements, publishing or vodka. Those businesses invariably fail. The Trump businesses that don’t fail are his real estate ventures, which cater to high-wealth individuals looking to launder money. It was these relationships, cultivated over decades, that eventually ripened into his collusion with Russian intelligence.

Despite the reluctance of journalists to state this openly, Trump’s history of money laundering is surprisingly public, dating at least to the early nineties. When his first casino was collapsing in 1990, Donald Trump’s father used the casino’s lax financial controls to launder a $3.5m loan to the business. Was it illegal? Absolutely, but the penalty was just a $30,000 fine, little more than a transaction fee. With the right knowledge and connections, white collar crime is good business.

Trump has wanted to do business in Russia since the late 80’s. He met the Soviet Ambassador in 1986 to pitch a hotel project in Moscow. He gave it another try late in the late 90s, but his failing businesses in the US were weighing him down, and his effort fell short again. However, that failed attempt in the 90s yielded valuable new contacts with oligarchs, mafia figures, and politicians near the top of the Russian economy. His new Russian contacts were interested in his ability to launder their money into the US economy.

Over the next few years, a close friend, Howard Lorber, would help the struggling New York Trump Tower attract dozens of Russian buyers. Among his many business interests, Lorber was listed as a co-owner of Aegis Capital. The SEC just settled a complaint with Aegis for a nominal fine, rising from the firm’s failure to report suspicious transactions going back many years.

Connections to Russians looking to launder money into US capital markets would provide Trump with a financial lifeline. Being hopelessly incompetent, even this new source of millions would not shield him from further bankruptcies, but it would provide a crucial bridge across his financial disasters. Access to cash from Russian criminals would keep the Trump family afloat while their other businesses continued to struggle and fail.

How the Trumps launder money for Russian oligarchs and others

A vacant property in Florida provides a quick 101 on the machinery of the Trump family businesses – the successful ones. In 2004, Trump bought an empty Palm Beach mansion in a bankruptcy sale for about $40m. In the midst of the 2008 real estate crash, Trump unloaded the property for $95m to Russian oligarch Dmitry Rybolovlev, who was trying to hide assets from his wife. It remains the largest single-buyer real estate deal in Palm Beach history. For reference, Rybolovlev is a Russian billionaire who definitely did not murder his business partner in 1995. Charges against him were dropped in 1997.

Trump claimed the premium on the deal was attributable to “improvements” he made on the house. Despite those alleged improvements, Rybolovlev almost immediately tore the house down. It is unclear whether he has ever even visited the property. A quick look at Google Maps reveals that the property at 515 North County Road remains an empty lot, though a portion was eventually sold off to someone else, probably following the same business model.

How do you make $50m from a shady Russian oligarch? You don’t do it by renovating a property destined for the bulldozer. You need some money to start with, good connections, and a business model built for money laundering. It helps to have influential people in Russia who may encourage your buyer to trust you. Trump has built his lifestyle on connections to influential overseas criminals. For a more detailed background on the Trump money laundering business model, see documentation on the Panama City Trump Tower project.

Going back to the 80s, about a fifth of Trump’s condo transactions have been cash sales to anonymous shell companies. These transactions shield the real buyers from scrutiny. Buyers get their illicit cash cycled into legitimate commerce while Trump reaps a hefty premium for his discretion and willingness to accommodate criminals.

Why hasn’t Trump faced penalties for money laundering?

Here’s the remarkable fact that most people miss in examining the Trump family businesses.

Money laundering, like bribery, is practically legal in the US if you do it through proper channels, avoid scrutiny, and maintain the right connections. White collar crime isn’t treated like a crime.

Keep in mind that there are few government enforcement entities with the sophistication and resources to even investigate financial crimes. If you avoid their attention, there’s basically no one to who will stop you. Actions taken by the Bush II administration gutted both government and private power to act on white collar crimes. Institutions that retain some enforcement authority have lost most of their resources or will. Unless they draw the attention of the FBI, SEC, DEA, or banking regulators for other reasons, usually related to drug smuggling or terrorism, white collar criminals who avoid unnecessary publicity (see Shkreli, Martin) face little risk.

Notice one important institution you don’t need to worry about – the IRS. The IRS only matters to your criminal enterprise if you’re very careless, or you attract the attention of one of those other, still-powerful institutions. On their own, the IRS has been stripped of any serious investigative or enforcement power. The agency has lost almost a third of their staffers over the past decade, on top of earlier erosion under Bush II. With money, decent lawyers, and reasonable political ties, the IRS in a post-Bush II world will not touch you on their own.

Our government will take little interest in your financial crimes as long as you:

    • Do not cultivate ties to drug smugglers. Sure, a lot of the buyers at the Trump Tower in Panama City and other locations earned their money in the drug business, but you won’t see daughters or mistresses of drug lords traveling around with Ivanka Trump. They’ve kept those people at arm’s length.
    • Do not cultivate ties to arms dealers. This is a very tricky business. Playing in that realm demands more skill than a Trumpkin can deploy.
    • Avoid any involvement in regulated securities or the banking industry.
    • Do not run for public office. Becoming a public figure inevitably creates rivalries with other corrupt interests, which may be more powerful than you. Political ambition can be poisonous for a crime family. This is where Trump made his crucial mistake.

Trump attracts the attention of Russian Intelligence

A career of connections to Russian figures granted Trump unique access to shady Russian capital. Leveraging those connections, Russian intelligence found a way to parlay Trump’s greed and ego into the most audacious intelligence project in their history.

We still don’t know how the Russian intelligence project to recruit Trump got started, but through the Steele Dossier we know they began their work around 2011. The dossier describes the FSB’s first success in fine, well-corroborated detail.

Trump was lured to Moscow in 2013. The bait was a $20m fee offered to Trump by Putin ally Aras Agalarov to bring Trump’s Miss Universe pageant to Russia. That may not have been the only attraction. Agalarov has said that Putin was planning to meet with Trump, but cancelled. A more honest reading is that the Russians teased Trump with an offer to meet Putin, an offer which they had no intention of delivering. Here’s what Trump said he expected from the trip:

Almost makes you feel bad for the poor, desperate sucker.

During his visit, the FSB staged a successful effort to obtain compromising information on Trump. This blackmail apparently provided them leverage that had eluded them in previous recruitment efforts. Between that blackmail and promises of assistance, the FSB was finally able to secure Trump’s cooperation.

Putin awarded Agalarov the “Order of Honor” in November, 2013.

What did the Russians want from Trump?

Russian goals from their work with Trump should to be divided into two phases. Prior to 2016, no one seems to have expected Trump to be a serious political candidate. Their ambitions were probably far more modest. In fact, at the time they obtained their blackmail material in 2013, the Russians may have had no plans for Trump specifically. It’s routine for Russian intelligence to seek leverage over prominent figures. Julia Ioffe described the FSB’s methods in The Atlantic, “the FSB kompromat operation is akin to a trawler, gathering anything and everything in its path, just in case anything good is down there.”

As time passed, they may have developed some minor political plans for Trump. Frankly, we don’t know. We can get some hint of the Russians’ hopes for him in the pre-2016 period by looking at their investment in another 2016 Presidential candidate, Jill Stein.

Perennial third-party nutjob, Jill Stein, got far more supportive airtime in 2016 from the Russian state media outlet, RT, than from any US sources. That’s probably not an accident. She met with Russian Foreign Minister, Sergey Lavrov in New York in 2015. A few months later she shared a table at a Russian state media gala in Moscow with Vladimir Putin himself. Also at that table was a man who would become an important Trump advisor, Michael Flynn. The Russians paid Flynn $34,000 for his appearance at the event. Whether Stein received any payment is unknown. While in Moscow, Stein recorded this gem of a video with Red Square in the background:

What the Russians hoped to accomplish by cultivating Stein is fairly obvious, amounting to little more than political vandalism. They saw how a minor gadfly candidate could wreak havoc on our system in 2000, when Ralph Nader’s half-assed Green Party run threw an already tight race into dangerous gridlock. They may not have hoped for something that specific, but anything that might complicate our political process or stoke division would have pleased them. Funny enough, Stein in 2016 managed to eke out just enough votes in Michigan, Pennsylvania and Wisconsin to tip those states to Trump.

Russian interest in Trump’s campaign had changed in a visible way early in 2016, when it appeared he might win the Republican primaries. That’s when Paul Manafort was introduced to the campaign and Russian involvement seems to have taken a more muscular and enthusiastic turn.

What the Russians wanted from Trump seems to have evolved as he became a credible contender. Judging by the subject matter of the known contacts between Trump staffers and Russian representatives in 2016, they seemed to hope for relief from the Magnitsky Act and other financial sanctions. As time wore on and ties grew deeper, it became clear that a Trump administration would cripple US efforts to contain Russian power in Syria and elsewhere, even weakening constraints on their cyber-espionage. It is highly unlikely that anyone in the FSB ever imagined their espionage efforts with Trump would succeed on such a magnificent scale.

What did Trump want from the Russians?

Like the Russians’ ambitions from Trump, his hopes from the relationship likely evolved as his circumstances changed. Over the decades, Trump never abandoned his dream of placing his name on a Russian skyscraper. There is evidence that he anticipated Kremlin support for his plans. As late as 2016, during his Presidential campaign, he still was negotiating with a Russian bank under US sanctions to finance a Moscow tower project. The notorious Felix Sater was working with Trump lawyer Michael Cohen on a complex plan that would get the project sold and get Trump elected President. According to Sater emails obtained by the New York Times, he explained “Our boy can become president of the USA and we can engineer it. I will get all of Putins team to buy in on this, I will manage this process.”

It also seems clear from recent events  that Trump cares more about whatever compromising material the Russians recorded in 2013 than one might expect. A figure as openly vulgar as Trump shouldn’t be bothered about something as mundane as a sex tape. However, when you look closely at the Stormy Daniels hush money and the cash paid out to other women to buy their silence over his dalliances, it looks like this is a surprising soft spot. Strange as it sounds, that compromising video tape might have been all the leverage the Russians needed.

Trump has long dreamed of a run for the White House. He was hinting at it as early as 1987. He actually ran for the Reform Party nomination in 2000. During that campaign he stated that his perfect running mate would be Oprah. If the Russians stroked his ego and offered support for a run, it’s not hard to imagine that the combination of threats and blandishments could move him to action.

Setting up the infrastructure for cooperation

Once it started to look like Trump might be a serious candidate, the Kremlin appears to have scrambled to get more directly engaged. In their efforts to coordinate Russian assistance, Trump and the FSB faced a challenge. You don’t just go out and hire traditional America political staffers and tell them to cooperate with your friends in Russian intelligence. Collusion would depend on establishing indirect methods of communication that would obfuscate the Russian role.

Announcing his candidacy made it necessary for Trump to cease high-level, open ties to many of his Russian business associates. To sustain collaboration with the FSB, his campaign was scrambling from the beginning to establish reliable, low-level lines of communication that would allow minor staffers to use what the Russians could provide.

Russian intelligence had compromised the email accounts of high level Clinton and DNC staffers. They needed a way to leverage those materials to the benefit of the campaign. They had also set up an entire disinformation infrastructure, a “troll factory” based in St. Petersburg, aimed at right-wing US social media. To get the most out of these resources, the Russians needed guidance on campaign plans and themes, and the Trump campaign needed access to stolen Russian data.

We know that the campaign was successful in setting up lower-tier Russian contacts through clueless patsies like George Papadapoulos, but someone had to make the initial arrangements. Trump’s friend Thomas Barrack helped out, brokering a connection to seasoned Kremlin allies, Paul Manafort and Rick Gates. Manafort owed $19m to Russian mob figure, Oleg Deripaska, when he “volunteered” in 2016 to work for the Trump campaign for free.

Manafort brought at least one active Russian intelligence agent, Konstantin Kilimnik, into the campaign, and even into Republican National Convention. Kilimnik later took credit for a strange turn of events at the convention – the GOP’s softening of its platform plank on Russia. Trump ally Roger Stone would work a different angle, brokering contacts with sources in possession of stolen data. Stone was in direct communication with a Russian intelligence agent operating under the name “Guccifer” who claimed to be responsible for the hacks of Democratic officials. The Russians used Wikileaks to make the stolen data available.

Circuitous, lower-level channels of communication with the Russians helped the campaign amplify disinformation produced by Russian intelligence and prepare their messaging ahead of anonymous and sometimes fraudulent leaks of stolen information. Right wing paranoia was weaponized by the Russians, with help from the Trump campaign.

Is any of this illegal?

Here’s the problem. Though the outline of the Trump family’s Russia dealings is plain, it’s unclear what laws may have been broken. As stated earlier, money laundering isn’t a crime in the US if you do it properly. Receiving political help from a foreign intelligence service (in peacetime) is not necessarily a crime. Establishing culpability would depend on a thorough review each transaction. Since the Trump family has kept their business dealings secret, and Congressional Republicans have shut down any honest inquiry, journalists have struggled to make a printable case. It seems that no one but the Special Council (or perhaps the New York Attorney General) has a reasonable shot of proving out a crime.

Chances are, a competent auditor given the right access to Trump corporate records would find a rich trove of crimes. Yes, money laundering is legal if you do it properly, but Trump hires lawyers who can’t spell-check a document. The family trusts are a blatant, unapologetic fraud. Business ventures like Trump University are almost comically fraudulent. For decades they’ve operated under an assumption of virtual impunity, making little effort to comply with laws, buying their way out of trouble with bribes, fines and court settlements. If the Special Council has an interest in the financial misdeeds that brought the Trumps into the Russian orbit, and if they gain access to the documents behind those transactions, it’s likely they’ll find prosecutable offenses.

Beyond the question of whether these activities are culpable lies the even more depressing question – does anyone care? Everything in this post is public knowledge, requiring little insight or effort to assemble. Despite what we know about who Trump is and what he’s done, roughly 40% of the American electorate remains committed to supporting him. Prosecuting Trump associates or even Trump himself is hardly meaningful if it does not undermine his political support.

Whatever the Special Council decides to do, the damage is done. Maybe we can get rid of Trump, but we will never again be the country we were before 2016. Perhaps this is the lesson of the Trump debacle: We never were the people we thought we were.

22 Comments

  1. Off topic, but I can’t resist posting this as an antidote to Trumpism.

    Last evening I did an outreach event for Seattle Audubon at a local elementary school science night. In 1 1/2 hours we had over 220 parents and kids visit our table. We had bird skins stuffed with cotton. We were able to explain the birds to the parents and kids. They were all very fascinated. The people were of all ethnicities including whites, blacks, Asians, Indians, Muslims and Hispanics. In general the kids were all well behaved, respectful of us and the birds and very interested and enthusiastic.

    When I do one of these events I am always inspired by how well they are attended, the enthusiasm and the parents all taking an interest. There is something incredibly right about America. It is not going to “hell in a handbasket” as one could easily get the impression from the daily news, the zero-sum mentality of Trump, his Administration and this Congress. There is truly something about which to be optimistic.

  2. EJ

    Great article, Chris. It’s good to see you returning to combative form.

    The question you end on, “Does anyone care?”, is to me the most interesting. As you’ve pointed out before, a civil society is made up not of laws but of behavioural norms. If one can violate those norms without being expelled from polite society, they were never norms to begin with.

    What we’re seeing now may be the step before Americans realise just how badly they need to tighten up their norms, and so presage the rebirth of a better nation.

    1. EJ,
      Does anyone care? i think alot of people care. BUT, a ton of people, those Fox News addicts, do not have a clue what is going on. Trump could tweet he already built the Wall, Mexico paid for it and not one illegal has come in to the USA in weeks and his cult followers would be ecstatic. the Russinan bots would be all over it, sending out posts about how great Trump is.
      In some ways i have the feeling the battle is lost. So many people now think Fox and Alex Jones, Infowars, are the real news!
      Like Chris says, we never were the people we thought we were!!!

  3. Glad to see you are gaining strength Chris. This article must have been a beast to put together.

    A couple points:

    1. I guess you don’t expect that any cultist will see this, and forward it to their leaders to initiate lawsuit against you. You know better than most how this crew operates.

    2. Every day I am more shocked that no one has killed the puppet tyrant. If you can connect the dots, surely any number of intelligence agencies across the planet (and in the U.S.) have done the same, with even more detail.

  4. “Perhaps this is the lesson of the Trump debacle: We never were the people we thought we were.”

    Thank you Chris. For me that is the silver lining. We sold ourselves really big stories about how special our system of government is and the caliber of people who serve in it. This debacle proves our system is based on non-codified political norms of behavior. It assumes accountability enforced by an informed electorate.

    We’ve had bad people in office before but enough people of character performing their job and the potential retribution of an informed electorate forced out the most egregious actors. Chris you’ve pointed out before the recent caliber of MOC are ambulance chasers and grifters. Now we know there are actually few institutions and laws to protect us when public servants who have little exposure or accountability to voters don’t do the J.O.B. The integrity of our system of government now rests with a special prosecutor and even his findings will be subject to the whim of these same people.

    We aren’t extraordinary. The Russians spent less that 28 million over 7 years and sold us this chaos. They don’t care who is President so long as the government is in chaos and flux and we are out of the game. They got what they wanted without firing a shot.

    We fought for public education largely on the concept of having an informed citizenry. I think thats the building block. Teach young citizens how this is suppose to work. It doesn’t come in our DNA…we aren’t special.

    1. You wrote:
      Now we know there are actually few institutions and laws to protect us when public servants who have little exposure or accountability to voters don’t do the J.O.B.

      That’s the stunner. We are left to just watch — for four years — while damage is done to the environment, to our sense of social justice, to how we are perceived in the world.

      It’s clear our national history has been written by a series of public relations outfits. Boosters. Their lies and redirection make it very difficult to confront and deal with real problems that need solutions.

      I’ve been dipping into old history books to help me understand. Interesting enough, only two on a shelf of 20 even discuss populism.

      However, in a section on range wars in the late 1800s, a cattlemen’s group “insisted that God and Nature had decreed that this was not a ‘poor man’s country’.”

      An honest declaration, still.

  5. With the caveat that I have never voted third party or write-in for POTUS, I can’t be too judgmental of folks who do. Casting a ballot for HRC was probably the ickiest feeling I have ever felt leaving a voting booth. Her record is the furthest thing from what I feel Democrats should represent.

  6. Perhaps this is the lesson of the Trump debacle: We never were the people we thought we were.

    After the Monica Lewinski scandal, I voted for Bob Dole. I had voted for Clinton in the ‘92 election, but in spite of a lot that i likes, I was worried about blackmail and ethics.

    Fast forward to Trump. The other day, I was talking to a big time libertarian/republican in my office who was going off about the hypocrisy of democrats and republicans. I talked about my decision with Clinton and that I felt pretty comfortable and consistent with my position on trump. His response? Well, he “no longer” cared about personal character or ethics anymore as long as his pet domestic policies got through the door. Now that his side was in power, hyprocracy is actually a-ok.

    Let’s stop wringing our hands about the blinders on trump supporters. They simply don’t care that he’s not ethical, and – to the contrary – they like it. Consistency only matters when it’s the other guy.

    1. I can understand being ambivalent at least about personal character and ethics in a public official (as long as you haven’t been going on and on about morality and family values for the last 50 years). But ask your friend if he’s ok with obstruction of justice and using the public office for private gain and undermining rule of law and freedom of the press and as long as his preferred policies are enacted.

  7. Wonderful, interesting piece. As you noted, most of this information is in the public domain but the way you have put it together makes it much more understandable. Friends of mine who were career IRS agents (and still in contact with friends who work there) shared the fact that not only has the IRS staff been cut, but the department is still operating under 20th Century technology due to budget cuts. It’s no wonder people like Trump can game the system. Of course this deliberate dismantling a la Bannon, is happening across all sectors.

    The saddest note in your post is that 40% of the electorate don’t care what Trump does. That percenage is much higher among his Republican base. I do believe that the Mueller Investigation has the documentation to prove all of the allegations you cite; however, we both know the House will never bring impeachment charges. I’m more interested in what the NY AG is doing however, Eric Schneiderman has not proven himself capable of standing up to lessor temtations. One wonders if Preet Bahara is quietly aiding the NY investigation. He certainly has an insider knowledge of the Russia/Trump investigation and lots of incentive to blow the walls down.

    As for whether anyone cares….Women care. They may not be enough, but they are working. They have not given up. I’m less optimistic for a Blue Wave, but I do believe Ryan is correct that Dems have enthusiasm on their side which may help. You didn’t comment on the likelihood that the Mueller Investigation will be allowed to continue, which is critical to the court of public opinion. The damage that is being done to our democratic institutions is deadly serious and I agree that the greatest damage is to the American beacon of hope. Our country is in a very sad place and if the Republican Party is not ousted from at least the House, I shudder to think how much worse it will get.

    Thanks for a great piece and I will re-post!

  8. “What the Russians hoped to accomplish by cultivating Stein is fairly obvious, amounting to little more than political vandalism. They saw how a minor gadfly candidate could wreak havoc on our system in 2000, when Ralph Nader’s half-assed Green Party run threw an already tight race into dangerous gridlock. They may not have hoped for something that specific, but anything that might complicate our political process or stoke division would have pleased them. Funny enough, Stein in 2016 managed to eke out just enough votes in Michigan, Pennsylvania and Wisconsin to tip those states to Trump.”

    Left wing nuts have just as much guilt for Trump as right wing nuts. I voted for Bush II both times. He was a major disaster. The loyal opposition was right that time. And Bush I lost to Clinton because of third party candidate Ross Perot.

    1. Well, let’s be clear.

      The hippies have been screaming for the past 40+ years that modern US conservatism was going to lead to Strongman Trump, and out-in-the-open fascism. And of course, they were not only correct, but were either mocked, or ignored for it.

      Those same hippies were essentially locked out of any type of power above county-level politics for those 40+ years, and at best, barely kept the mainstream liberals left-of-center.

      Now, yes, some left-wing nuts are responsible for carrying water for the right-wing authoritarians, by making similar or the same arguments, while doing nothing but disparaging center-left liberals as simply the same as Strongman Trump.

      But, that said, those left wing nuts have never held any real power, and they’re not really calling any shots at the moment. At least actual left wing nuts. People like Sanders and Warren are actually what the rest of the civilized world considers actual liberals.

      1. Actually Warren and Sanders both would be conservative in most countries. The both believe in capitalism, but with regulation to keep it open and fair. If that makes you left wing then I guess I fit the shoe.

      2. EJ

        In France or Germany, Warren would be considered a staid, traditional centre-Left candidate; and Sanders the same but with a habit for disloyalty and showboating.

        There seems to be nobody further Left than them in the mainstream American system. Questions which Europeans would ask, like “are our military and security establishment too powerful?” and “how much land do we need to give back to the Native nations?” seem to be relegated to fringe groups. Meanwhile, figures like Ben Shapiro are almost unimaginable in Europe; and some people further Right than him would, at least in Germany, have gone to jail.

        Overal, America just seems to be shifted two notches to the Right compared to Europe.

      3. “The hippies have been screaming for the past 40+ years that modern US conservatism was going to lead to Strongman Trump, and out-in-the-open fascism.”

        “If American democracy ceases to move forward as a living force, seeking day and night by peaceful means to better the lot of our citizens, fascism will grow in strength in our land.” –Franklin Delano Roosevelt, November 4, 1938.

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