Toronto Trump Tower Developer Paid $100 Million To Kremlin-Linked ‘Fixer’: Report

An investigation into the troubled development formerly known as the Trump International Hotel & Tower in Toronto has found evidence of financial links between the building’s developer and the top echelons of the Russian government.

According to documents uncovered in a 10-month probe by the Financial Times, Alex Shnaider, the Russian-Canadian billionaire who developed the building, paid US$100 million to “a Moscow-based fixer representing Kremlin-backed investors” while the Toronto tower was being built.

Donald Trump didn’t develop and never owned the building. Rather, his Trump Organization licensed the Trump name to Shnaider, and had a contract to manage the property.

According to the Financial Times, the $100-million payment was meant to facilitate the sale of a stake in a Ukrainian steel mill that Shnaider held, to buyers acting “on behalf of the Russian government.” The deal went through, and Shnaider was reportedly paid US$850 million for his share in the steel mill.

According to a 2017 report in the Wall Street Journal, the steel mill’s sale was financed by Vnesheconombank (VEB), a Russian government-owned bank chaired at the time by Vladimir Putin.

“Given that the ultimate backer of the deal was the Kremlin, that raises the possibility that money passed from Trump’s business partner to Russian officials,” the Financial Times stated.

Read the full Financial Times investigation here.

Shnaider’s lawyer, Symon Zucker, denied the link to VEB, telling Business Insider in 2017 that the Wall Street Journal had “got their facts all wrong.” He said Midland Resources, the company through which Shnaider owned a stake in the Ukrainian steel mill, never had a relationship with VEB.

After the deal went through, Shnaider reportedly made an additional $40-million investment into the construction of the Toronto Trump tower, the Financial Times reported. Zucker has denied that money from the sale went to the Toronto Trump Tower, though the Journal quoted him as saying some $15 million from the asset sale went into the project.

The Times estimates Donald Trump himself made at least $4 million from licensing his name and managing the Toronto Trump Tower possibly much more, given that Trump has only released his finances from 2014 onwards.

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The Toronto Trump Tower was beset by problems from the time it broke ground in 2007, including construction delays and falling glass. After opening, the building struggled with low occupancy rates, prompting some individual investors to launch legal action against Shnaider’s company, Talon. In a suit filed in 2016, a group of investors called the project an “investment scheme and conspiracy.”

The tower was sold off in a court-ordered sale in 2017, after Shnaider’s Talon defaulted on an approximately $300-million loan to Austrian bank Raiffeisen. The bank sold the loan to JCF Capital, which last year took ownership of the Toronto tower. The management contract with the Trump Organization ended and the new owners promptly removed the Trump name from the building.

Experts say the sort of payment Shnaider made to a “fixer” is common practice in Russia, but can easily be interpreted as a bribe.

An expert interviewed by the Times said that if it were seen as a bribe, it could be argued the Trump Organization received “proceeds of crime.” There does not seem to be any evidence Trump was aware of Shnaider’s transaction.

Canada’s Corruption of Foreign Public Officials Act makes it illegal for Canadian businesses to bribe government officials in other countries.