Trump’s tax returns detail his business dealings in Turkey

Ahval


By Ian J. Lynch
Sep 30 2020

President Donald Trump’s business ties in Turkey have drawn ongoing
speculation, particularly given the context of his repeated
willingness to accede to his Turkish counterpart’s policy priorities
to the bipartisan consternation of the U.S. Congress and the American
intelligence and diplomatic communities.

New reporting on Trump’s tax returns by The New York Times provides
the greatest detail yet on the scale of Trump’s financial interests in
Turkey, but important questions remain unanswered.

Central to questions surrounding the U.S. president’s potential
conflicts of interest in Turkey is a licensing deal for two Trump
towers and a shopping mall in Istanbul. Trump himself admitted in 2015
that the towers posed “a little conflict of interest”.

The tax records obtained by the NYT show that the deal has earned
Trump at least $13 million, substantially more than previously known,
including more than $1 million since becoming president. Trump had
claimed he would not pursue foreign deals while in office, but NYT
reporting shows he earned $73 million from abroad, including from
authoritarian-leaning countries.

The licensing deal for the Istanbul towers was negotiated in 2008 by
Mehmet Ali Yalçındağ on behalf of his father-in-law’s company, Doğan
Holding. Yalçındağ has since become a key conduit between the Trump
and Erdoğan administrations.

Trump, his daughter Ivanka Trump and her husband Jared Kushner all
attended the 2012 opening of Trump Towers Istanbul with Yalçındağ.
Since then, the Turkish businessman has reportedly socialised with
Trump three or four times a year. When Trump won the 2016 election, it
was Yalçındağ, who was with Trump on election night, that the Turkish
Embassy relied on to connect with the new president-elect.

On the strength of his close relationship with the Trump family,
President Recep Tayyip Erdoğan soon appointed Yalçındağ as the
chairman of the Turkey-U.S. Business Council (TAIK), a state-run
organisation that lobbies the United States government on Ankara’s
behalf.

TAIK has since held its annual conferences at Trump International
Hotel in Washington, generating hundreds of thousands of dollars of
revenue for Trump’s business. Last year, the event also provided the
setting for the informal diplomacy that Yalçındağ facilitates between
Trump’s son-in-law and advisor, Jared Kushner, and Erdoğan’s
son-in-law and Treasury and Finance Minister, Berat Albayrak.

During the April 2019 conference, Kushner arranged an Oval Office
meeting with Trump and Albayrak, in which the latter reportedly
convinced the America president not to impose sanctions on Turkey for
its purchase of Russian-made S-400 missile systems.

After Turkey accepted delivery of the Russian military hardware in
July 2019, the U.S. removed the country from the joint F-35 stealth
fighter programme, but Trump has repeatedly blocked the imposition of
sanctions despite bipartisan demands from U.S. legislators for such
action.

The tax returns obtained by the NYT raise further questions about
consulting fees associated with the Trump Towers Istanbul deal that
initiated Yalçındağ’s relationship with the Trumps.

The records reveal that between 2010 and 2018, Trump deducted $26
million from his taxes for unexplained “consulting fees”. The NYT
speculates that, “Trump reduced his taxable income by treating a
family member as a consultant, and then deducting the fee as a cost of
doing business”.

By comparing Trump’s tax returns to his daughter Ivanka’s financial
disclosure, the NYT found that some payments that her consulting
company received exactly match the consulting fees Trump claimed as
deductions. Such an arrangement, in which Ivanka was treated as a
consultant on projects she helped manage for the Trump Organization,
would raise legal red flags.

The NYT found that in some cases involving millions of dollars in
consulting fees foreign partners reported no knowledge of any outside
consultants: “In Turkey, a person directly involved in developing two
Trump towers in Istanbul expressed bafflement when asked about
consultants on the project, telling The Times there was never any
consultant or other third party in Turkey paid by the Trump
Organization. But tax records show regular deductions for consulting
fees over seven years totalling $2 million.”

Executives involved in another hotel deal in Azerbaijan, Turkey’s
ally, told The New Yorker in 2017 that Ivanka Trump was heavily
involved in that project. A lawyer for the Trump Organization argued,
however, that the Trumps could not be connected to the suspicions of
corruption surrounding the project because Trump was “merely a
licensor” and had no substantive role in the development.

However, according to the new NYT reporting, “the tax records for
three Trump L.L.C.s involved in that project show deductions for
consulting fees totalling $1.1 million that were paid to someone”.

Trump’s tax returns alone cannot prove that Ivanka Trump is collecting
lavish consulting fees that reduce her father’s tax burden in legally
dubious ways, but they do beget the question. Still, the greater
detail the records provide regarding the millions of dollars involved
in the Trump Towers in Istanbul do reinforce the argument that money
lubricates the informal diplomacy conducted between the families of
President Trump and President Erdoğan.