Trump Hotel in Baku Partnered With ‘Notoriously Corrupt’ Oligarch Family With Ties to Iranian Revolutionary Guard Corps

Conflicts of interest have been a permanent fixture of Donald Trump’s campaign and presidency. But a new report from the New Yorker shines a damning spotlight on one of Trump’s most ethically hazy deals, and one that may leave the Trump Organization open to federal prosecution: The Trump Organization’s work to build and manage a hotel in Azerbaijan in partnership with corrupt oligarchs, themselves apparently linked to individuals tight with the Iranian Revolutionary Guard Corps.

To build the Trump International Hotel & Tower Baku — a project conceived in 2008, and nearly finished, but never opened to the public — the Trump Organization worked with the family of Azerbaijan’s transportation minister and a powerful oligarch, Ziya Mammadov. The project has plenty of problems — it’s in the wrong part of town, and can’t compete with existing high-end hotels there — but seems likely to have fallen prey to the notoriously lax local ethics for business dealings.

Adam Davidson describes in great detail in his investigative report how Mammadov was known as “notoriously corrupt even for Azerbaijan,” in a U.S. diplomatic cable leaked by WikiLeaks years ago. He and his family also have close ties to a prominent Iranian business family, the Darvishis, whose members headed Revolutionary Guard-controlled firms that the U.S. government accused of sponsoring terrorism abroad and engaging in illicit activity including drug trafficking and money laundering.

With the Baku hotel deal, the Trump Organization may have violated federal corruption laws, including the Foreign Corrupt Practices Act (FCPA), the New Yorker notes. The heart of the problem seems to be little due diligence before Trump jumped into the project, even though the country is known for being corrupt, his partners were billionaires on a $12,000-a-year-government salary, and corrupt practices were so commonly talked about they litter the State Department cables released by WikiLeaks and featured prominently in a 2014 Foreign Policy piece, “The Corleones of the Caspian.”

“The entire Baku deal is a giant red flag — the direct involvement of foreign government officials and their relatives in Azerbaijan with ties to the Iranian Revolutionary Guard. Corruption warning signs are rarely more obvious,” Jessica Tillipman, an FCPA expert and assistant dean at George Washington University Law School, told the New Yorker.

“The Trump Organization’s Baku project shows the lack of ‘extreme vetting’ Mr. Trump applied to his own business dealings in corruption-plagued regimes around the globe…. Congress — and the Trump Administration itself — has a duty to examine whether the President or his family is exposed to terrorist financing, sanctions, money laundering, and other imprudent associations through their business holdings and connections,” Sen. Sherrod Brown (D-Ohio) said in an email to New Yorker.

The Baku hotel isn’t of course the only conflict of interest Trump faces with his sprawling business empire that spans over 20 countries. He pledged to divest himself from his business, ceding oversight of day-to-day operations to his sons Don Jr. and Eric, but retains financial interest in the company. But ethics experts, including the Office of Government Ethics director Walter Shaub, said Trump wasn’t doing enough to divest his business interests while serving as president. Critics fear Trump could weigh his company’s profits in making policy.

People pay a $200,000 initiation fee to join the Trump-owned Florida Mar-a-Lago resort, and rub elbows with top Trump officials and cabinet members as he installs the White House there every weekend thanks to taxpayer largesse. (Lucky club members can watch real-time national security briefings on an open-air terrace.)

Foreign diplomats are flocking to stay at Trump Hotel in Washington, D.C. Several administration officials, including Treasury Secretary Steven Mnuchin, even live there during the week, feeding more money to the Trump brand. The Trump Organization pledged to scrap foreign business dealings in January, but it it’s already violating that deal. Eric Trump flew to Uruguay in January for a business trip that cost the taxpayers nearly $100,000 in security. And Don Jr. was likely paid at least $50,000 to speak at an event in France, an event organized by friends of the Russian government.

American taxpayers aren’t the only ones shouldering the cost of Trump’s business empire. According to the New Yorker, the Azerbaijani government forcibly evicted 30 families from their homes in 2011 to build a project of “crucial government significance.” That project was the still-never-opened Trump Hotel.

Photo credit: Chip Somodevilla/Getty Images

Correction, March 6, 2016: Donald Trump Jr.’s Paris speaking appearance was organized by the Center of Political and Foreign Affairs, a think tank whose president is friendly with the Russian government. Due to editorial oversight, a previous version of this article mistakenly said the Russian government organized the event.