The Trump Inaugurations Unconscionable Contract
Hello Trump INC listeners. It's Ilia if you've been listening to the PODCAST for a while. You know. We have a lot of questions about the nonprofit committee that Organiz the parties around. Donald Trump's inauguration a little over a year ago my propublica colleague Justin Elliott and I first reported that the trump hotel hell in DC was paid by the trump inaugural committee to host events. So the president's business made money from a nonprofit posting a civic celebration but it went beyond fat elite planner on the inaugural committee warned that the hotel was overcharging. The committee she wrote this warning in an e mail and sent it to vodka trump. Now we have an update on January twenty second twenty twenty about a year after our reporting and three years after the inauguration the Attorney General of Washington D. C. charged the inaugural committee the trump organization and the trump hotel in civil court with abusing the laws on nonprofits quote members of the trump family. Were aware of and involved in the negotiation of this. Unconscionable contract at the center of the whole thing is a four day rental agreement for the ballroom and some adjacent spaces that the trump hotel an agreement justin and I examined in detail last year in our episode about the inauguration. And Its chairman Tom Barrack. So we're sharing that episode with you again now and just one note before we hit play. We did not immediately received comment about the lawsuit from the inaugural committee from Barrick spokesman or or from a vodka trump we did hear from the trump organization in an emailed statement. A spokesperson said the claims are false. Intentionally attentional misleading and riddled with inaccuracies. The rates charged by the hotel. Were completely in line with what anyone else would have been charged for an unprecedented precedent event of this enormous magnitude. Okay here's our story in New York City. Today Tom Barrack the Inaugural Committee Chair visited trump tower to meet with the president-elect it's that limbo period after Donald Trump's surprise win in the presidential election and before his swearing in and trump tower with its gold elevators and security dogs pacing. The lobby is the momentary center of the universe. A man appears wearing a thick winter scarf. His head is bald his face looks kind. A reporter asked him a question just wondering a little tease of what we can expect the inauguration the balls maybe Milanez gown anything you can share I mean inaugurations GonNa be amazing and what we're doing is trying to oriented towards the greatest tribute to America. Our story today is all about this man. Tom Barrack he ran. Donald Trump's inauguration an event that two years later is coming under intense scrutiny. For the record sums of money raised and how it was spent barrick has been friends with trump for decades and the story of how they met is an old chestnut barrick shared at the Republican National Convention. I was young pop. He was a big guy in New York at the time and he wanted to by Nineteen eighty-eight Donald Trump is desperate to buy the Plaza Waza hotel across the street from Central Park. It's a landmark building. He can see from the top of trump tower and it happens to be for sale. And it happens that the seller you're is represented by Tom. Barrack trump and barrack get together and trump agreed to pay an eye popping sum of money for the building. There is no contract no contract you and I shake hands right here. No lawyers no contract. No nothing you just tell me things that I should know and how to fix it and I'll do this deal on the New York Times. Ran this quote from an executive familiar with the sale. Tom Played Donald like a stradivarius decades later. Barrick gave a a different spin to trump supporters in the convention hall. He played me like a steinway piano. The two men have remained friends. It was one of the most amazing things I'd ever seen. He practices an unbelievable set of disciplines. So everybody says okay now. Let's jump forward. Three decades gates to trump tower January twenty seventeen barrick has made a fortune in business. His friend is heading to the White House. He's playing native honor. So we're GONNA GONNA surrounded with his. The soft sensuality of the place. So we have all the back. But it's a much more poetic cadence. You'll make sure everything is he's just right last question. You talked about What he wanted? Tell us what he has told you. He wants what is some specifics that he wants to be a part of the inauguration. He really wanted it to be about the people not about so his instructions to me by the way which is the worst job in America right right. He gave the best job in America. All very bright guys each and you get the party. The worst job in America master of a one hundred million dollar party chest the world's most powerful people on the invite list. Hello and welcome to season. Three of trump inc chameleon merits from WNYC. And I'm just in Elliott from PROPUBLICA TRUMP INC of course a co production of PROPUBLICA and. WNYC's an open investigation in real time into the business ties that underpin the trump presidency a year ago. We brought you a story that asked a simple question. The inaugural inaugural committee raised nearly one hundred seven million dollars. What did they do with all that cash? Or as George W Bush's inaugural chief Greg Jenkins put it so. They had a third third of the staff and a quarter of the events and they raise. What at least twice as much as we did so? There's the obvious question. Where do they go? I don't know no ideas. No ideas and since Jenkins the spark last year. ABC News is reporting. That Robert Morris probing right now. The donations made the trump's inaugural committee from one key inaugural official testified under oath that he might have dipped into the fund gates admitted to Manafort's lawyers in open court that he quote possibly wrongfully submitted personal expenses to the inaugural committee for Reimbursement. DC lobbyist pleaded guilty to silting an illegal contribution from Ukrainian businessman and member of parliament San Patent admitting to arranging an illegal foreign donations Asian. Donald Trump's inauguration then last December tonight. We're learning how a lot of that money went right into the pockets of the trump family business. Here's what we we Republican. WNYC Brooks News ourselves have uncovered evidence that a vodka trump played a role in how hotels were booked for the inauguration. impossibly next the inaugural committee came directly under investigation. Federal prosecutors in New York is a wide ranging subpoena for documents and records and how to relate nice to potential crime conspiracy against the US false statements mail fraud people from the Middle Eastern countries including Qatar Saudi Arabia and the U. A. e. a used Straw donors to disguise contributions. The trump administration has attracted people who've tried to profit from government connections. Think think Michael Cohen or Michael. Flynn now with a federal investigation of the inaugural committee. It looks as if that pattern may have been set. Even before trump took the oath that brings us to the man in charge of the celebrations in January. Twenty Seventeen Tom Barrack stylistically. He could not be more different from from the president. Trump's thing is bragging don't show and exaggeration barrick can be almost comically self-effacing. All of the really smart intelligent people are in the transition edition taking jobs. That trade finance nuclear disaster. I am the master party platinum. This is a man who fortune magazine on on its cover. Once called the world's greatest real estate investor he oversees a company called colony capital with forty four billion dollars of assets under management. He's in hotels offices and warehouses a word he uses a lot is opportunistic that you have to be opportunistic. Even if Barrick took took the job of inaugural chairman simply as a fever for a friend he still had something to gain. Barrack gets fanshawe financing and does a lot of deals Shen with Middle East countries. This propublica Peter Elkins the perception and reality of his. Having influence government policy is something that matters. There's deeply to all the Middle Eastern states sovereign wealth funds investors who are are really important part of a funding with our does. ooh We found a confidential memo that shows that colony capital this global finance and real estate firm had a well-developed plan to profit from its connections and trump's Washington. Right from the start one note on this story. People who worked inauguration were covered by a confidentiality reality clause. So if you're wondering why am. I not hearing the voices of the people who made this party happen that's one reason Justin's going to rejoin the story in in a little bit. Tom Barrack is seventy one years old. He serves plays Polo received the French Legion of honor for his skills. As a Vintner you look at the vine the divine itself was capable at every level of growing these kinds of berries look sometimes gives out these little laminated cards hearts to people. He meets with his twenty rules for success. Number nine always be nice to the invisible people number fifteen take care of others and the A universe. We'll take care of you even angry. Tom Barrack doesn't really sound mad. At one of the few people in the business world that is really supporting Very publicly Donald trump wi high as a user of the system. I'm also angry with the system. I'm not angry at President Obama. It's really really difficult unless you have. Somebody who's chipping away at all of these bureaucratic pieces his whole adult life. Life Tom Barrack has walked the corridors of power his first job straight out of law school for the personal lawyer to the president of the United States. The president at that time is Richard Nixon. The lawyer is named Herbert Kulmbach. He's the man who personally delivered bags. Full of cash to the Watergate break in team combat claimed he. It didn't know what was in the back. Barrick doesn't stay there long. An assignment takes him next to the gas fields of Saudi Arabia. Where he has a happy accident? I was terrible the Laura Gasification but I play racquetball so one day my boss comes into play by play records. Well there's guy watching racquetball with not sets me up with one of the sons of the king from this first connection with a Saudi Prince Barrick spins out a web of new personal and business relationships around the Middle East relationships that continue to this day. Is there anybody in corporate America who knows the Saudis as well as you do. I'm sure there's there's there's plenty of people that I I started as a young pup. While he's in the Middle East Tom Barrack also spends time in Beirut there he strikes up a friendship with another young American. WHO's also interested in business and politics politics? Paul Manafort next Barrick travels to Haiti to negotiate an oil refinery deal with that country's dictator. Baby Doc Duvalier in the eighties. It's onto Washington. Eric briefly holds a job in Ronald Reagan's Interior Department. Not long after that. He's called before Congress to answer some tough questions questions about a home loan. He forgave which some saw as questionable. Thank you senator. I I would like to make a brief statement that the loan benefited Reagan's incoming Attorney General. Oh Ed meese. An independent counsel investigates and finds no evidence. Barrack was doing a favor to get a job. In Washington. Barrick returns the private sector. He founds ounce colony capital a private equity firm and colony thrives buying up bad loans for cheap in the savings and loan crisis of their early nineteen nineties after the two thousand eight financial crash rush. He scoops up foreclosed homes by the hundreds. And he's not at all I can swoop in and grab something in profit on somebody's misery. You know that's capitalism This is Peter Elkin from propublica who's researched barracks career with colony capital. They're involved in financing of deals or restructuring of deals. They're really pretty ECLECTIC. Operation in reflect barracks personality in many ways when Michael Jackson sinking in debt colony capital buys his Neverland ranch and makes plans for a world world concert tour. Connie also helps any leave of its hang onto the rights to her photographs when her creditors come calling require of both distressed assets and distressed. There's people he's really good at buying low in developing relationships with people often times when they're in trouble and doing big favors for them. AALTO will help him down. The road on at least two occasions colony shows interest in partnering with Donald Trump. Both Times the result is the same. No deal bill. In the nineties colony. Talks trump about financing for Manhattan development called Riverside South. They pull out and the project is built with someone else's help in twenty twelve. Twelve colony lends its name to the trump organization bid to renovate the old post office in Washington. DC There are nine other bidders trump. beat the odds. Let's wins the contract and then go somewhere else for financing Deutsche Bank today. It's the trump international hotel on Pennsylvania Avenue. I think barracas America's willing to put his neck in this company on the line a little bit to help somebody out of the critical moment. Even if it doesn't necessarily make business sense in the short-term now now a close friend business associate of Donald Trump Tom Barrack the real estate billionaires known trump for more than thirty years he's when Donald Trump runs for president barrack becomes one of the few prominent business leaders to endorse him. He goes further and recommends his old friend from Beirut days to the campaign Paul Manafort Donald Trump's campaign campaign chairman barrick raises money for the calls. Today What you're calling the real deal? Super PAC has launched and in just a few hours. How much money has it raised just about? Thirty two million in contributions a thirty pack noon is rebuilding. America now actually falls about nine million dollars short of that target but with the millions barracas. They produce a blizzard of ads. Like this one. So who is all four women until she isn't Hillary Clinton when Bill Cosby was accused of sexual assault. Mrs Clinton tweeted every survivor of sexual assault. Deserve right after the Republican National Convention. In Cleveland Paul Manafort is forced out of the trump campaign after his undisclosed work for a pro Russian Ukrainian strongman is reported in the news barrick was on TV. Paul Manafort the best in the business incredibly credible incredibly thoughtful mazing track record. He did the job and and then as politics goes everybody gets attacked. I mean this is just a week after. Donald Trump wins the election. He picks Tom Barrack to run his inaugural committee. He's the chairman now. People start start to call him that. In the past inaugural chiefs were often creatures of Washington. Sometimes they went onto jobs like White House. Chief of staff Tom Barrack like the man man who chose him is a wealthy outsider. What he wanted from the GIG is not so clear in Tom Barracks world? You make money by managing other people's money. The thoughts are on a colony financial collie finances one will and even more money flows your way and you get cheered on by Jim Cramer on CNBC. By it's run by Tom. Barrack and I think Tom Barrack is money. I'm going to recommend let's. Let's go to Brian. Brian Unlike private equity firms where the goal is prophets with a nonprofit inaugural committee. The goal is to raise the money. You need to support the mission and then close up shop. You're the instructions. President George W Bush gave to his second inaugural planner. Greg Jenkins you. Don't turn on the spigots full speed ahead. You raise what you need with a ten percent contingency and then live within your means means spend within your means and then you should not have much more leftover. The fifty eighth presidential inaugural committee under under Tom. Barrack does not adopt this thrifty attitude on paper. They say they aim to raise fifty million dollars. Almost one hundred seven comes in their forty seven one one million dollar checks. I've seen notes from the committee's first meetings. You can feel the participants trying to manage. Trump's impulses people say things like make it more pageantry than just the military or eliminate all the parts about winning in a different meeting. According to one source the president elect said. He wanted the kind of show. They have in North Korea for his right hand man in the committee running things day to day Baruch turns to Rick Gates. This is the same Rick Gates was Paul Manafort's number two in Ukraine worked for the trump campaign and much later pleaded guilty to conspiracy and lying to the FBI. In the Mueller. Probe in the midst of inauguration Planning Ricketts rights rights to Ivanka trump. He's looking for price quote on the event spaces at the trump international hotel in Washington. Ivanka connects gates with the hotels director over email propublica just Elliott and. I got the emails and spent a lot of time reading them. The prices they quote are hundred. Seventy five five thousand dollars per day and this is going to be for four days. One hundred seventy five thousand times four is seven hundred thousand. This information is forwarded to Stephanie. Winston walk-off and experienced Newark event planner responsible for conceiving and organising many of the party's we'll call expresses her concerns to vodka and Gates in writing and she essentially says this price is ridiculous. She says please take into consideration that. When this is audited it will become public knowledge stat? Locations were also gifted union station like the trump hotel is a grand old space. That's book for an inauguration. Week event on like the Trump hotel the operator of union station decides to donate that space for free I called up a bunch of DC event planners to ask what they make of this one hundred seventy five five thousand dollar a day number. Their views fell on a spectrum. Somewhere between. Oh that's high and you've gotta be kidding me a spokesman for the inaugural committee confirm. I'm to us that the number and those emails four days for seven hundred thousand dollars total. That is what the committee paid. Which means that the objections in this email exchange exchange from Stephanie Winston? Walk off the event planner to that one hundred thousand dollars a day raid did not win the dentist. The quoted one hundred hundred dollar a day raid was the rate that they paid. Those emails would be of interest to the Internal Revenue Service if they were to conduct it. This is Brett Capelle. He's an attorney down in in Washington. Who Specializes in political nonprofits like the inaugural committee? He told US American tax laws were written to discourage the people who run on profits from steering steering money to insiders and their family members. Ivanka trump who helped set the price. Once testified she owned seven percent of the trump hotel her father and two the eldest brothers on the rest Capelle says if the committee paid them above market rate. Well it's violation of entities tax exempt status and the regulations regulations that govern tax exempt transaction. Now that's that's just a civil violation. Now if they uncovered evidence of a conspiracy to deliberately violate the Internal Revenue Cook by charging two or three times the fair market value in order to derive an illegal profit. Then you get into the criminal side the tax law and those emails Certainly are not helpful to them in that regard the criminal violation hinges on whether the committee committee knowingly deliberately overpaid and whether it can be proven federal. Prosecutors are now looking at the committee's finances though we don't know whether tax laws part of their probe prob- one transaction like this is enough to bring a criminal tax case but if there's a pattern involving other transactions involving the inaugural uh-huh committee and I suspect what they're going to be doing is a forensic audit of all expenditures made by the committee to see you know who ultimately received the money the fifty eighth Presidential Inaugural Committee reported to the IRS that it did not pay above market rates to insiders. We wanted to ask Barrick about this us as the guy in charge. Why did you book the Trump Hotel? Were you concerned about overpaying. Baruch did not agree to an interview. His spokesman and the inaugural committee did not answer our questions about this. Then there's Ivanka. Her spokesman basically told us that vonk wanted a quote fair market rate for the event space in the hotel but he wouldn't give us any evidence of that. One thing is clear. The inaugural committee treated booking the trump hotel not as an option but as a necessity. We know this because the committee he tried to muscle out someone else who booked the ballroom months earlier. She was pretty much the last person you'd want to give the boot Reverend Mary. Turner and I I am the host of the presidential inaugural prayer breakfast in Washington DC. It's a smaller event than the National Prayer Breakfast that you may have heard about. You've been doing that. Since how long we began our husband each in nineteen ninety three to pray for the nation and the Office of the presidency in December. She started getting emails and phone. Calls from Rick Gates Tom Barracks Deputy at the committee wanted our face and Wanted the entire hotels blocked for the full week of inauguration after she politely declined Reverend Turner Heard From Hotel management the cancelled her booking invoking a common clause in contracts newness force measure or an act of God like a hurricane military invasion in this case. They predicted civil unrest. That was their excuse. Which of course it does legal grounds because they had not cancelled other nog girl events being being held there you know about the inaugural committee so if it was unsafe for our group? It would've also been unsafe for the Presidential Inaugural Committee orth Republican Party to hip offense there at the entire week. End Inauguration Day Reverend her did not back down and days later the hotel while on canceled. Her contract on inauguration morning hundreds of God fearing men and women ate Hala and drank communion wine in the trump hotel ballroom Right back We're back and we're looking at Tom. Barrack the man who ran Donald Trump's inaugural committee. It's now inauguration week with balls lunches a concert at the Lincoln Memorial. Thank you very much. Everybody thank you Tom. And an event that has never happened before a five hundred guests. black-tie tag gathering chairman's Global Dinner Chairman. As in Tom Barrack we have so many friends hundred forty seven diplomats invested. It's never been done before. Never had the entire foreign diplomatic core is invited. Plus top dollar donors and there's a separate guest list of over one hundred people invited by the chairman including ambassadors and foreign ministers from Saudi Arabia and the United Arab Emirates. Oh I know how this room is why this is one. This place is surrounded tonight but I want to thank you all for being here. We have great respect for countries. We have great respect for world. Just a short snippet video is all that was released to the public but for five hundred people who mattered. Tom Barracks closeness to his friend. The incoming the president of the United States of America is on vivid display as a troop of Las Vegas dancers Stevens showstoppers pivot and twirl. On a purpose built stage. That cost close to three million dollars. Paid for by the committee. The Tax Tax Return the nonprofit fifty eighth presidential inaugural committee gives this mission statement to promote the social welfare by supporting the inaugural activities of the president elect and vice cuts off there. But what was Tom Barracks Mission Statement. If you thought it was the worst job in the world. Why did he take Justin? And I found a clue. This is an eight-page strategic plan for colony it's dated February twenty seventeen and it's on colony letterhead labeled private and confidential and. Let me restate that date February. Twenty seventeen right after the inauguration. What I found so interesting about this memo is is that it seems to represent colony hatching a plan to profit off? It's access to the trump administration and it's access has to all of these foreigners who were in town for the inaugural events the memo talks about setting up a DC office. The White House Liaison and Public Affairs team quote tie into international bilateral meetings already occurring with key members of the trump administration this would include taking a leadership role in informing the events the participants and the agenda. They seem to be envisioning sort of form of soft lobbying and actually say explicitly in here. We want to establish this brand brand but we want to do it without the appearance of actually lobbying serve suggested. They they were going to be lobbying. Didn't WanNa look like they were lobbying. Yeah and you know another thing about colony is one of the ways they make. Money is by investors giving the money to manage and they make fees off that so I think sort of the subtext text here is that if they position themselves as sort of gatekeepers to the trump administration that's only going to be good for their investment business and for sort of potential inflows inflows from foreigners we asked colony about this document. Here's their statement. This memo was simply an outline of proposed potential business plan which was never acted acted upon or implemented colony at no time has maintained a DC office. There is one thing that we do know which is that. We have calendars from from Steve. MNUCHIN DON trump secretary of treasury. That show in the weeks and months after this memo has written Tom Barrack and Rick Gates. Who is a consultant consultant? At the time. Were having a series of meetings with Secretary Mnuchin and one of which included a bunch of ambassadors from Middle Eastern countries like cutter and UAE at a fancy restaurant in the Georgetown neighborhood of Washington. It was in a private space called the mermaid room with seven ambassadors others. A barracks spokesman told US quote. Tom Has meetings with Mnuchin all the time before during and since the election and quote and so you look look at that calendar Van. We don't really know what was discussed there. But it looks a lot like what they're describing in this memo which is putting colony in between meetings of the trump administration and foreign officials so one big question is was colony somehow trying to profit from those meetings and we. I don't really know what was discussed. And they wouldn't tell US frankly. We do know that around this time. Barrick was promoting a private companies plan to export. US nuclear technology to Saudi Arabia. He discussed leading a White House. Initiative in the Middle East and Barrack told our PROPUBLICA colleague. ARNS DORF that. He considered buying a stake. In and Westinghouse the only American manufacturer of large-scale nuclear reactors whistleblowers rest concerns about the nuclear plan and the House Oversight Committee investigating since trump took office more than seven billion dollars has flowed into colony capital investment funds a quarter of that from Saudi Arabia and the United ended Arab Emirates. We started our reporting with a question. Where did all that inaugural cash go? We found some answers answers. The trump organization was paid which lead to bigger more troubling questions. Did the inaugural committee break the law. Where people taking part in this cash bonanza to to benefit themselves and by access now federal prosecutors in New York have opened a criminal probe that separate from the Muller investigation? They've subpoenaed documents. Let's it's Tom. Barrack lawyers for the inaugural committee who after respond in the past presidential inaugurations. Got Maybe one line in the history bucks. This one keeps making news As you know we love tips. Tell us what you know about the inaugural committee colony capital or Tom. Barrick's relationship with Donald Trump find out how to share information securely at trump INC podcast dot org and while you're there sign up for our newsletter this week. We have Tom Barracks tips. For success and one update in an earlier version we overstated the fundraising target of the inaugural committee in State Level Filings. The committee said it aimed to raise fifty million dollars coming up on trumping rumor. It happens the lobby of the trump international hotel in Washington. DC What do you think of it luxuriance. Is that what purpose huge. It's big it's I like it we go there. This episode was produced by Catherine Sullivan. The senior producer of trump ink is made Kramer. Bill Moss is technical director. Charlie Herman and Eric Manzke the editors special. Thanks this episode to Propublica Peter L.. Kind Nick Varsha Ver- Jake Pearson Jesse. And Isaac arns dwarf thanks also to Aaron Glance senior reporter at reveal provin fields is PROPUBLICA managing editor. Jim Schachter is the vice president for news at WNYC. Steve Engelberg is the editor in chief At propublica original music composed by Hannah's Brown What do you say to somebody who looks at this and says that Guy Tom Barrack? He's raising Polo. PONIES is growing wine. But he's not doing it for a living. He's just a rich dilettante. What do you say to that person? I say common with me for a week. If you can keep up with me you do what I do to make a living for a week you can then be here and thank the you're rich dilettante.