Wall Street Journal story ties Trump Toronto to suspect Russian bank

As if he didn't have enough on his plate.

President Donald Trump and his administration's ties to Russia have been the subject of unceasing scrutiny—and they are mounting. The Wall Street Journal is reporting that construction of Trump International Hotel and Tower in Toronto had ties to a suspect state-run Russian bank that has been under U.S. sanctions since 2014 and has ties to Vladimir Putin. 

According to the article, VEB, whose full name is Vnesheconombank, helped finance the deal involving Trump's one-time partner on the hotel, Alexander Shnaider, a Russian-Canadian developer, who reportedly sunk money into the development "after receiving hundreds of millions of dollars from a separate asset sale that involved the Russian bank."

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Shnaider received $850 million from VEB in 2010 after selling his company’s share in a Ukrainian steelmaker. Russian President Vladimir Putin was chairman of the bank’s supervisory board at the time, and would have approved these sorts of high-level deals, according to the report.

After Shnaider sold his stake in the steelmaker, he reportedly put more money into the Trump Toronto project, which was financially troubled and continues to be

For its part, a spokesman for the Trump Organization told The Wall Street Journal that it had no involvement with VEB and that Trump only licensed its name and manages the hotel.  

As The Wall Street Journal writes, "VEB has long been viewed by Russian analysts as a vehicle for the Russian government to fund politically important projects, including the 2014 Winter Olympics in Sochi."

To be sure, the linkage between VEB and Trump is tenuous and, as the below graphic illustrates, a little like Six Degrees of Donald Trump. VEB didn't directly finance or invest in Trump Toronto; rather, Shnaider used proceeds from a sale to a VEB entity to invest in the project. 

In addition, like most other Trump projects, Trump Organization is not a direct investor; it instead lends its name and brand in exchange for a fee. In some cases, like Toronto, it also manages the property for a fee.

Shnaider is the chairman of Talon International, which owns the Trump Toronto and has reportedly been in default on the property since as far back as 2015. The hotel was put on the market since January 2017, and in March a Canadian judge approved the $298-million sale of the property to its main debt holder, JCF Capital, which bought the construction loan after Talon defaulted on it. No other bids were submitted.

The Trump Organization says it has no equity stake in the project, but has received fees totaling more than $600,000 since 2015.

 

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