This is just the tip of the iceberg…
This week, The New Yorker published “Donald Trump’s Worst Deal,” an investigation into a hotel-development deal that the Trump Organization made with notorious Azerbaijani oligarchs tied to Iran’s Revolutionary Guard. On Facebook and Twitter, we asked readers to submit questions they had after reading the article. (Questions were edited for clarity.)
What governmental entity would normally be tasked with investigating this malfeasance? —@AgentMoore
Any case brought in connection to the deal I described in my article would most likely be brought under the Foreign Corrupt Practices Act, which prohibits American companies from benefitting, even unknowingly, from a foreign business partner’s corruption. Unlike almost all other federal crimes, F.C.P.A. cases can be prosecuted only with the consent of what is called “Main Justice,” meaning the Justice Department’s headquarters, in D.C. Normally, district-level U.S. Attorneys have enormous discretion over the cases they prosecute. But, with the F.C.P.A., they need permission from headquarters. This is done in deference to the possible diplomatic implications of an F.C.P.A. violation. By definition, every F.C.P.A. case involves a foreign government official, and investigating these cases often requires F.B.I. agents to fly to foreign countries, including allies of the U.S., and dig into political officials. F.C.P.A. enforcement is concentrated at Main Justice so that it can keep the State Department in the loop.
One issue I heard about while reporting the story is that Main Justice tends to be more of a bureaucratic and political place than many of the U.S. Attorney offices. Many people believe that Main Justice is far too timid in its F.C.P.A. prosecutions, trying only for home-run cases that are easy to win.
The Azerbaijan deal might also be looked at for possible violations of Iran sanctions, which would also be investigated by the Department of Justice, along with the Treasury Department’s Office of Foreign Asset Control. Questions about money laundering could be investigated by a number of different authorities: federal U.S. Attorneys, the Manhattan District Attorney’s office, the New York Attorney General, or the New York State Department of Financial Services. Since this was a global deal, involving partners in the U.K., Azerbaijan, and elsewhere, one could imagine prosecutors in those countries also looking into it.
Why hasn’t he been charged and why haven’t there been investigations under the Foreign Practices law? —@m4ndypants
If the Trump Organization were nothing more than a relatively small (though famous) development/licensing firm in Manhattan, it is highly unlikely that this case would ever be prosecuted. It’s an extremely difficult case to win, requiring a lot of investigation in a country—Azerbaijan—that has little incentive to help investigators. And it’s a relatively small-potatoes case, compared to the multi-billion-dollar examples of corruption that F.C.P.A. prosecutors typically go after. Several former D.O.J. prosecutors told me that if a junior prosecutor presented this case to her bosses at Main Justice, they would tell her to find an easier, more promising case to work on.
My view is that Trump becoming President transformed this from a challenging, obscure case into a crucial one that requires a special prosecutor or other type of independent investigator. The point is less about whether or not the Trump Organization violated a particular law and far more about the nature of the company’s relationships with corrupt officials in countries all over the world. We know they have such relationships, but we don’t know much about them.
Minor detail … but is there a reason @adamdavidson didn’t say Trump’s call re: bribes was referring to a Walmart case? #context —@bleu_ruby
As I wrote in my article, Donald Trump discussed the F.C.P.A. during an appearance on CNBC’s Squawk Box, in May, 2012, the same month that his company finalized its deal in Azerbaijan. It’s true that his comments came after other commenters discussed a case of Walmart potentially violating the F.C.P.A. in Mexico. However, Trump spoke broadly and clearly about the law, in general, and about how paying bribes was the cost of doing business globally. He voiced specific concerns about the law that suggest it was on his mind. That his comments came after a discussion of Walmart didn’t seem relevant to me.
What happens next? How does this get put to rest legally? —@LGonzalez555
There is no active case (so far as I know), so there is nothing that needs to be put to rest legally. The question is whether or not the Department of Justice or another investigative body opens a case. It is, currently, fully at rest.
I do hope that this story will encourage more journalists and government investigators to look into this deal, and others like it. If, as many suspect, the pattern of lax due diligence and unusually high risk tolerance is endemic in the Trump Organization, it seems quite possible there are many more cases as troubling as this one.