Where Might Donald Trump Hide Russian Money? Attorney’s Letter On Russia Gives Clues
Donald Trump released a letter to the AP this morning from his attorneys. The letter, which was written in order to put an end to the whole Trump-Russia scandal, does just the opposite, raising a lot of questions.
The way the letter was written makes it somewhat suspect. For instance, the fact that it had to be written by his personal attorneys (who have attorney-client privilege with him) is strange. As is the wording of the letter, which has several somewhat vague terms. And there is plenty of room for loopholes in the letter.
Attorney Letter: Impossible For Trump To Hide Russian Money/Connections
So we decided to speak to an expert and see where the problems in the letter may be.
Please note that at this point, there’s no evidence to suggest that Trump is hiding any money or connection with Russians. We’re simply looking at what the loopholes in the letter are in order to show that even if the letter is 100% accurate, it is still possible for Trump to hide Russian money or connections.
Here is the original letter:
How Might Trump Hide Russian Money or Connections?
Below is the letter with commentary from our expert about where questions may be. The comments are marked in red. Note that the formatting below had to be modified to fit the comments.
Re: Transactions with Russian counterparties reported on your U.S. federal income tax returns
Dear President Trump:
We, Sheri Dillon and William Nelson, have served as tax counsel to you and The Trump Organization (“TTO”) continuously since 2005. As such we are familiar with your U.S. federal income tax returns and with transactions that are reported on your returns
Note that everything that wasn’t in Trump’s federal taxes is left out of this letter.
In this capacity, you have asked us to review your returns for the past 10 years. Following such review, we hereby confirm the following facts: As disclosed in your most recent Executive Branch Personnel Financial Disclosure Report (OGE Form 278e), filed on May 16, 2018, you hold interests as the sole or principal owner in more than 500 separate entities…
Note that this letter specifically excludes any businesses where he isn’t the sole or essentially sole owner — including any C-corporations, which are the most common type of corporations.
These entities are collectively referred to and do business as TTO. Because you operate these businesses almost exclusively through sole proprietorships, S-corporations, and/or partnerships…
This letter also does not include anything that is mostly held by his kids or in certain types of trusts.
…your personal federal income tax returns reflect income that is earned by these entities and interest that is paid or received by these entities, as well as income that you directly earned or interest that you paid or received.
With a few exceptions — as detailed below — your tax returns do not reflect (1) any income of any type from Russian sources
The letter doesn’t specifically define Russian sources, and that’s a huge loophole…see the comments in the following sections…
(2) any debt owed by you or TTO to Russian lenders or any interest paid by you or TTO to Russian lenders
Russian lenders implies Russian people or companies whose principal place of business is in Russia. In most reports, the companies that may be connected to Trump are based in other countries (like Cyprus) but run and funded by Russian oligarchs — those are likely excluded from this letter.
(3) any equity investments by Russian persons or entities in entities controlled by you or TTO,
Again, if they do exist, investments would likely come from a shell company based in Cyprus, the Bahamas, or other countries with lax banking regulations. They would not be directly from Russia.
or (4) any equity or debt investments by you or TTO in Russian entities.
The exceptions are: (1) in 2013, the Miss Universe pageant was held in Moscow, and of the $12.2 million of foreign income that it earned that year a substantial portion of it was attributable to the Moscow event; (2) in 2008, Trump Properties LLC sold an estate in Florida, that it had acquired in 2005 for approximately $41 million, to a Russian billionaire for $95 million;
The sale of this home for such a high markup has been a significant question. The letter provides no details about it.
and (3) over the years, it is likely that TTO or third-party entities engaged in ordinary course sales of goods or services to Russians or Russian entities, such as sales / rentals / fees for condominiums, hotel rooms, rounds of golf, books or Trump-licensed products (e.g., ties, mattresses, wine, etc.) that could have produced income attributable to Russian sources (such income would not have been separately identified as “Russian” in your books and records and therefore not separately reflected on your tax returns). With respect to this last exception, the amounts are immaterial.
Regards,
Sheri A. Dillon
So is there evidence that Trump hid Russian money or connections? Absolutely not at this point. However, the letter from Trump’s attorney doesn’t 100% answer the question “might Trump hide Russian money or connections somewhere?”
