The Jury Talks Back

9/11/2017

Trump Organization Breaks Promise Not to Deal With Foreign Governments

Filed under: Uncategorized — Patterico @ 8:00 am

McClatchy reports that the Trump Organization has broken one of the first promises Trump made after his election: to ensure that the organization does not do business with foreign governments.

A major construction company owned by the Chinese government was hired to work on the latest Trump golf club development in Dubai despite a pledge from Donald Trump that his family business would not engage in any transactions with foreign government entities while he serves as president.

Trump’s partner, DAMAC Properties, awarded a $32-million contract to the Middle East subsidiary of China State Construction Engineering Corporation to build a six-lane road as part of the residential piece of the Trump World Golf Club Dubai project called Akoya Oxygen, according to news releases released by both companies. It is scheduled to open next year.

The companies’ statements do not detail the exact timing of the contract except to note it was sometime in the first two months of 2017, just as Trump was inaugurated and questions were raised about a slew of potential conflicts of interest between his presidency and his vast real estate empire.

The Chinese company, known as CSCEC, is majority government-owned — according to Bloomberg and Moody’s, among others — an arrangement that generally encourages growth and drives out competition. It was listed as the 7th largest company in China and 37th worldwide with nearly $130 billion in revenues in 2014, according to Fortune’s Global 500 list.

At a news conference on January 11, 2017, Trump announced that he would be the beneficiary of a trust holding his assets in the Trump Organization. I cannot find the actual language of the trust agreement online, but the arrangement with the Chinese-owned company violates the terms of the trust agreement as laid out in a white paper prepared for that press conference. The white paper states:

[T]he Trust Agreement prohibits The Trump Organization from entering into any new transaction or contract with a foreign country, agency, or instrumentality thereof, including a sovereign wealth fund, foreign government official, or member of a royal family, the United States government or any agency or instrumentality thereof, or any state or local government or any agency or instrumentality thereof, other than normal and customary arrangements already undertaken before the President-Elect’s election.

Obviously, a contract signed “sometime in the first two months of 2017″ was not signed before Trump’s election. Trump defenders may claim that, for all we know, the deal was struck in principle before the 2016 election, and merely set down on paper in the first two months of 2017. But in the press conference, Dillon said already pending deals not yet finalized had been terminated, at great expense to Trump and his family:

Through instructions in the trust agreement, President-elect trust — President-elect Trump first ordered that all pending deals be terminated. This impacted more than 30 deals, many of which were set to close by the end of 2016. As you can well imagine, that caused an immediate financial loss of millions of dollars, not just for President-elect Trump, but also for Don, Ivanka and Eric.

There is really no excuse for this arrangement. It is a financial arrangement made after Trump’s election with a foreign government by the Trump Organization. It violates Trump’s promises to the American people. Trump is simply banking on the notion that nobody will call him on it — or if they do, his supporters will shrug their shoulders, as they shrug at all his ethical lapses.

By the way, in that same press conference, Dillon also claimed:

President-elect Trump has decided, and we are announcing today, that he is going to voluntarily donate all profits from foreign government payments made to his hotel to the United States Treasury. This way, it is the American people who will profit.

It hasn’t happened yet. Color me skeptical that it ever will.

I know it makes Trump supporters angry when people point out things like his broken promises and questionable ethical arrangements. That attitude makes it even more important to talk about them. Were this Hillary Clinton or Barack Obama, these exact same people would scream to the heavens and never stop — so I’m not terribly interested in listening to them whine about how we should ignore this.

Donald Trump was elected in part on the argument that he could “drain the swamp” — that he could uniquely limit the influence of lobbyists and foreign governments on the workings of government. He promised specific ways that he would deal with the issue of retaining a financial stake in his businesses while occupying the Oval Office. Now that we are learning that he broke that promise, those who actually care about draining the swamp should raise hell.

[Cross-posted at RedState.]

52 Comments »

  1. As we learned at the very site during the run-up to November 2017, most stuff that has Trump’s name on it is not owned by him, he has merely licensed his name.

    And at the bottom of the article, they fess up:

    An official with the Trump Organization, which is run by the president’s adult sons, confirmed the company licensed its name and brand to DAMAC Properties and has entered into an agreement to manage the Dubai golf course.

    So if Trump Organization did break its promise and hire a company majority-owned by a foreign government, this article is not evidence of that.

    Comment by Frederick — 9/11/2017 @ 8:40 am

  2. Not long ago I posted here a definition of “fake news” and the McClatchy article here would qualify.

    There’s a narrative which they present, and selectively present facts which support it–and they selectively leave out facts that contradict it.

    To find out who DAMAC is, and that they are a publicly-traded company not belonging to Trump, and that they built the golf course and licensed Trump’s name, took a moment to Google. Journalists know how to Google when they want to.

    Comment by Frederick — 9/11/2017 @ 9:51 am

  3. I tentatively agree with Frederick that it’s fake news.

    As I understand it, The Trump Organization has an agreement to manage this Dubai golf course. The Chinese company was hired by an entity other than The Trump Organization to do work not on the golf course, but rather on an adjacent residential project that would not be under management of the Trump Organization. At the very least there is ambiguity here, which should have been mentioned in this blog post.

    Comment by Andrew — 9/11/2017 @ 11:40 am

  4. @Andrew: In Patterico’s defense, the article made it as difficult as they could to put two-and-two together. It is deliberately deceptive.

    Comment by Frederick — 9/11/2017 @ 11:48 am

  5. Well, Frederick, if Patterico misunderstood, then I’m sure that a correction will be appended to the blog post.

    Comment by Andrew — 9/11/2017 @ 11:51 am

  6. @Andrew: Not misunderstood, deceived. McClatchy worked deliberately to deceive. It’s not as though they put all the relevant information together. They put a false narrative together and left out any fact that falsified it, deliberately to deceive. There’s nothing for Patterico to correct.

    Comment by Frederick — 9/11/2017 @ 11:55 am

  7. If Patterico agrees he was deceived, then that would warrant some kind of note added to the blog post so that the deception stops.

    Comment by Andrew — 9/11/2017 @ 12:30 pm

  8. Trump has a partnership agreement with

    Comment by DRJ — 9/11/2017 @ 1:58 pm

  9. Trump has a partnership agreement with DAMAC, and DAMAC has hired a company in which the Chinese government is a majority owner. Patrick did not misunderstand the article and it is not deceptive. It clearly states what I said in my first sentence, and that violates what Trump promised to do UNLESS you think going into partnership with a company and letting the company front the deal insulates Trump from any responsibility for this partnership.

    Comment by DRJ — 9/11/2017 @ 2:03 pm

  10. Answer: It doesn’t.

    Comment by DRJ — 9/11/2017 @ 2:03 pm

  11. Trump understands it is a problem for him to do deals like this, which is why he turned down future deals. But as the post clearly shows, Trump also PROMISED not to do deals with foreign governments or related entities, yet his partner is doing one here. The partner is acting for the partnership, which means Trump is also doing a deal with a foreign government.

    Comment by DRJ — 9/11/2017 @ 2:10 pm

  12. Our franchise President.

    Comment by DRJ — 9/11/2017 @ 2:13 pm

  13. @DRJ: Sorry, you are misstating the nature of the “partnership”. Trump licensed his name to the golf course, and manages it. DAMAC paid to have a road built in the same residential complex, which it owns, and Trump does not own or manage that.

    Trump is not responsible for everything DAMAC does with its properties, which are worldwide, simply because he manages a golf course for them in one country.

    Comment by Frederick — 9/11/2017 @ 2:25 pm

  14. I don’t see anything wrong with Frederick’s reasoning about this. I have an open mind about it, but being in partnership with someone regarding a particular matter does not create joint responsibility for all other matters.

    Comment by Andrew — 9/11/2017 @ 2:35 pm

  15. “Partner” is overused, and I doubt the media are using it correctly, here. I represented a baking company who wanted to license the “Brand-X” trademark for a line of cookies and pastries. Brand X’s rights under the agreement revolved around getting its fees and not giving the mark a bad name, not the actual operations of the company and certainly not about such things as whom to hire to repave its truck lots and driveways.

    Comment by nk — 9/11/2017 @ 5:05 pm

  16. wow

    Comment by happyfeet — 9/11/2017 @ 5:34 pm

  17. i thought this place was more thinky than the other one

    Comment by happyfeet — 9/11/2017 @ 5:36 pm

  18. @17. A coat and tie is required, Mister Feet. If you require them, the Management can provide them for you.

    Comment by DCSCA — 9/11/2017 @ 5:39 pm

  19. So:

    Trump’s deals involve licensing his name to and managing properties for his partners pursuant to agreements, but these are not partnership agreements.

    Trump is not responsible for anything his partners do on behalf of their joint ventures because licensing and managing is not a real partnership.

    This is Trump’s exclusive business model now.

    Despite having no responsibility for his foreign ventures, Trump nevertheless promised not to enter into transactions with foreign governments as President. Strange, right?

    Got it.

    Comment by DRJ — 9/11/2017 @ 5:51 pm

  20. DRJ, the residential project next to the golf course is not put of what you call the “joint venture”, as best I can tell. The Trump Organization did not agree to manage the residential project, and if the Trump Organization licensed its name to the residential project that did not apparently give the Trump Organization power to veto most decisions about that residential project such as road access decisions. Tell us how you think this analysis is wrong, and perhaps we’ll stop calling this fake news.

    Comment by Andrew — 9/11/2017 @ 6:05 pm

  21. put of >> part of

    Comment by Andrew — 9/11/2017 @ 6:06 pm

  22. Frederick,

    It is a much better argument to claim DAMAC is the general partner and Trump is the limited partner, with no authority to make operating decisions. Or to claim that they aren’t partners at all and their agreement establishes a limited liability relationship.

    Both could be true … or not. They could both be general partners, especially since the Trump Organization will reportedly manage the golf course operations.

    We don’t know without reading the agreements.

    Comment by DRJ — 9/11/2017 @ 6:07 pm

  23. @DRJ:Trump nevertheless promised not to enter into transactions with foreign governments as President.

    The transaction featured in this article simply does not qualify, DRJ, because he didn’t engage in that transaction, an entirely different company, that hired him to run a golf course, did for something that company owns and not him.

    However, that golf course, which he’s managing but does not own, is buying power and water from some entity that is probably owned at least in part by the UAE. So I can join you if you’re condemning that, if that turns out to be the case that utilities are provided by UAE-owned entities.

    Comment by Frederick — 9/11/2017 @ 6:08 pm

  24. @DRJ: Trump Organization will reportedly manage the golf course operations.

    The transaction at issue has nothing to do with the golf course, you see. The road is for the residential complex. The golf course is part of that complex.

    But, as I said above, the golf course does consume utilities, and if those are provided by UAE, well, fire away. They might hold the golf course hostage if he doesn’t abandon Israel or something.

    Comment by Frederick — 9/11/2017 @ 6:11 pm

  25. We don’t know what authority or decision-making the Trump Organization (Trump) has without reading the agreements, Andrew. But we do know there is a relationship and we also know Trump has management authority. Maybe it only involves deciding the design of the club house and course but Trump promised not to do business in any way, through any instrumentality, with foreign governments. It woulkdn’t surprise me to see him call this an exclusive Trump property where he makes every decision, but and small, while simultaneously claiming he had nothing to do with the roads, etc.

    Comment by DRJ — 9/11/2017 @ 6:16 pm

  26. @DRJ: Once again, the road is for the residential community. The work is not being done for the golf course. The golf course is located in that residential community, which Trump does not own, so I imagine it is possible people might use the road to access the golf course and he will benefit in some indirect way.

    But the utilities is where I would look, if I were you, that would be an open-and-shut case. If they bill the course monthly, then he’d be breaking the promise monthly.

    Comment by Frederick — 9/11/2017 @ 6:20 pm

  27. Do you want me to repeat my comment that we don’t know what the parties agreed to, or do you want to continue assuming you know the terms?

    Comment by DRJ — 9/11/2017 @ 6:33 pm

  28. @DRJ:Do you want me to repeat my comment that we don’t know what the parties agreed t

    No, I’d prefer you acknowledge that the residential complex is not the golf course, and that Trump does not own or manage the residential community for which the road was built, according to this article.

    Comment by Frederick — 9/11/2017 @ 6:37 pm

  29. If Trump organization is managing the golf course, then I was wrong. That is a partnership with Trump organization as the general, active, partner, or an analog of it.

    Comment by nk — 9/11/2017 @ 6:39 pm

  30. @nk:If Trump organization is managing the golf course, then I was wrong.

    Yes, and if Trump is buying water or electricity supplied by a UAE owned entity, he is certainly breaking his promise.

    But he does not own or manage Akoya Oxygen, for which the road was built, and the golf course is only one of the many amenities to be found there.

    Comment by Frederick — 9/11/2017 @ 6:42 pm

  31. Here’s some of DAMAC’s press material regarding Akoya Oxygen. They’ve hired lots of foreign companies to build stuff there, which is not surprising.

    “DAMAC has delivered almost 1,100 units in its flagship community DAMAC Hills, bringing the number of villas and apartments delivered there to over 3,100 units. It also launched the Trump International Golf Club Dubai in February, and continues to deliver its golf facing apartments, hotel rooms, hotel apartments and serviced units there. Since January 2017, DAMAC has awarded contracts valued at AED 127 million, which included works for a host of services for various clusters of villas and landscaping fit-outs for villas being completed for handover in the community.

    Some of the major partners appointed by DAMAC Properties include industry leaders Arabtec Construction, China State Construction Engineering, Ghantoot Gulf Contracting, Towers Technology Contracting Co LLC, Mohammed Abdulmohsin AI-Kharafi & Sons LLC, (CRC) Engineering Construction & Reconstruction Co LLC, KEO International Consultants and Simplex Infrastructure Limited (Dubai branch).

    During the summer, DAMAC awarded a AED 628 million contract for the construction of nearly 1,300 villas at AKOYA Oxygen, in addition to awarding global contractor Multiplex a AED 1.14 billion construction contract for DAMAC’s premiere luxury residential project, AYKON London One, in the United Kingdom.”

    Comment by Frederick — 9/11/2017 @ 6:46 pm

  32. I don’t know what Trump’s interest is because I haven’t read the agreements. He could have anything from a limited licensing agreement to a full-blown general partnership, covering a specific area to the entire development. We don’t know.

    Comment by DRJ — 9/11/2017 @ 7:51 pm

  33. By the way, are those companies working on the project owned by or agents of foreign governments?

    Comment by DRJ — 9/11/2017 @ 7:52 pm

  34. What we do know is that Trump promised not to enter into new transactions with foreign governments. This is a new transaction with a company owned in part by a foreign government. It’s incumbent on the Trump Organization to show it is not involved.

    Comment by DRJ — 9/11/2017 @ 7:55 pm

  35. @DRJ:By the way, are those companies working on the project owned by or agents of foreign governments?

    I think it’s safe to assume China State Construction Engineering is.

    This is a new transaction with a company owned in part by a foreign government

    ..but not entered into by Trump Organization. Instead, an entirely different company, that HIRED Trump to manage a golf course, did.

    covering a specific area to the entire development. We don’t know.

    I am sure if you asked the management of DAMAC if Trump was secretly running Akoya Oxygen, the question would be met with derisive laughter.

    DAMAC is exactly the kind of company Trump likes pass himself off as running.

    Comment by Frederick — 9/11/2017 @ 8:12 pm

  36. Some more background on Akoya Oxygen:

    “History of Akoya Oxygen

    The project is a resurrection of the 2006 Tiger Woods-Dubai project originally proposed by Tatweer. Construction of the golf course and club house was started but the project went on hold in 2009 due the global financial crisis before being cancelled entirely in 2011.

    The land and the commercial agreement with Tiger Woods was bought up by Damac Properties in 2014 and re-branded as Akoya Oxygen.

    The golf club is now titled “Trump World Golf Club Dubai” with the course designed by world famous golf champion Tiger Woods. In 2006 Tiger Woods used his rich playing experience and extensive knowledge to launch Tiger Woods Design which has completed a number of prestigious projects in the US and Mexico. He will introduce elements from some of the world’s finest golfing destinations to the 18-hole Championship course at Akoya Oxygen – from classic Scottish links courses, to famous parkland courses in America and the sandbelt courses of Australia.”

    Comment by Frederick — 9/11/2017 @ 8:18 pm

  37. I believed you when you said Trump is only involved in the golf course and has nothing to do with the residences. Silly me.

    Comment by DRJ — 9/12/2017 @ 6:14 am

  38. This report says Trump not only managed the Akoya-Trump golf courses, he built at least one of them. In addition, my last link shows his name is on some of the residences. Given that, it’s not unrealistic to think he might make some decisions regarding the roads, too.

    Comment by DRJ — 9/12/2017 @ 6:22 am

  39. Reports keep describing the former Akoya (now Trump International) property as a joint venture of DAMAC and Trump. They could all be wrong, of course, but maybe they aren’t. If Trump or his Organization are general partners, Trump is responsible for everything just as much as DAMAC.

    Comment by DRJ — 9/12/2017 @ 6:27 am

  40. @DRJ: Trump licensed his name, yes,as you have shown in your link.

    Reports keep describing the former Akoya (now Trump International) property as a joint venture of DAMAC and Trump.

    Note that the links I posted show a history going back to 2006, when it wasn’t even DAMAC’s and Tiger Woods was the celebrity endorsement.

    To make your narrative tenable you are having to assume many facts which are apparently not public knowlege. Granted that absence of evidence is not evidence of absence, it is certainly not a license to assume evidence.

    The development and the golf course predate Trump’s involvement, and belong to a company he does not own. He’s been hired to manage the golf course and put his tacky name on things. That’s we have public evidence for.

    But again, as I said, if he’s managing the golf courses and buying utilities from the local government, he is breaking his pledge. We’ve got that common ground.

    Comment by Frederick — 9/12/2017 @ 7:48 am

  41. Do you understand that business entities can enter into joint ventures with other businesses, even with regard to properties they already own?

    Comment by DRJ — 9/12/2017 @ 8:21 am

  42. @DRJ: Lots of things can happen, but the topic is on what did, and what you say you think happened is not supported by the McClatchy article or anything else we’ve examined together.

    The McClatchy article was cleverly and deliberately written to provide you with that narrative but without saying anything actually false, and they never came out and said that Trump Organization made the deal with the Chinese construction company–because that didn’t happen. They never came out and said the construction was for the golf course–because it wasn’t. They put unrelated facts in proximity and let you connect them, and deceive yourself.

    In order to save your narrative you keep having to assume that secret things exist that you don’t have evidence for.

    Yeah, I know Trump is not above breaking promises, like I know the ocean is not above the sky. But that does not mean he hired the Chinese construction company, or that he had any influence or responsibility over that transaction.

    Comment by Frederick — 9/12/2017 @ 9:25 am

  43. I agree we can’t rely on reports to know what the relationship of these parties is. That’s why I’ve repeatedly said we need the business agreements. But based on the various reports, it is possible they are partners or in a joint venture. If so, then they are both responsible for the subcontractors who are hired.

    Comment by DRJ — 9/12/2017 @ 11:19 am

  44. You have a curious style of arguing, Frederick. Maybe this is how it’s done in your world so I will assume you don’t mean anything by it, but telling me I am putting unrelated words in proximity and deceiving myself and assuming secret things is insulting where I come from. I haven’t done any of those things, not have I insulted you simply because we see this in different ways. I would appreciate it if you would not read my comments or respond to them in the future if this is your normal style of discussion.

    Comment by DRJ — 9/12/2017 @ 11:24 am

  45. @DRJ:They put unrelated facts in proximity is what I said. McClatchy. As you can see by reviewing the above comments, I did not say that you did so. I hope you no longer feel insulted since the misunderstanding is cleared up.

    Everything I have expressed, even if you feel it is critical, has been civilly presented and supported where possible; and I have not attributed invidious motives to you, or speculated on your motives at all. I have said I believe you to be wrong in your interpretation of what we are reading, yes.

    Your feelings are your own of course, and need no justification, but I think few readers of our exchanges would conclude I had “insulted” you in any way.

    Comment by Frederick — 9/12/2017 @ 11:55 am

  46. Frederick,

    It does not make me feel better for you to say that I am too stupid to avoid being manipulated by an article. But I wasn’t manipulated. I understand your point that you don’t believe Trump had anything to do with the decision about using this subcontractor. I have acknowledged why that might be true. Do you understand my point regarding why Trump might be responsible?

    No one knows what relationship Trump has with DAMAC in these projects because we don’t have access to thir agreements. If it is a licensing agreement or limited partnership, Trump is not responsible for the decisions of the managing partner. But if they are general partners and both Trump and DAMAC have management authority — and at least one report suggests that is the case because Trump is described as responsible for building and managing the golf course — then both are responsible for things done by either party. That is how general partnerships work.

    Of course, we don’t know what their agreements are. But do you think Trump should be able to use the secrecy of his agreements as a basis to avoid keeping his promise not to do business with foreign governments?

    Comment by DRJ — 9/13/2017 @ 4:36 am

  47. Managing a venture is different than licensing. Trump cannot manage a property under a licensing agreement. If he is managing the property or any part of it, that means he is doing more than merely licensing the use of his name.

    Comment by DRJ — 9/13/2017 @ 4:40 am

  48. Tell me this, Frederick: If Trump is in charge of building and managing the golf course as one report said, and if Trump hired a company to excavate the land for the course, do you think DAMAC (as a partner in the project) might be liable if there were claims against Trump? I think it would, subject to any indemnity agreements, because that is how general partnerships work. One partner can’t avoid responsibility by claiming it wasn’t his decision. The actions and decisions of one general partner binds all of them, as if each had made the decision themselves.

    Comment by DRJ — 9/13/2017 @ 4:52 am

  49. I should add that if this is a limited partnership, Trump would not be responsible for DAMAC’s decision to hire the Chinese company but he would still have to pay his share of any costs incurred under the partnership agreement. A limited partner can’t refuse to pay the bills but he can credibly say it wasn’t his decision to hire the subcontractor. Some might say that merely paying a foreign government subcontractor violates Trump’s promise.

    Comment by DRJ — 9/13/2017 @ 5:04 am

  50. @DRJ: Please retract this:

    for you to say that I am too stupid to avoid being manipulated

    I said no such thing, and my comments are up for everyone to read.

    Thanks in advance.

    Comment by Frederick — 9/13/2017 @ 9:01 am

  51. Yes, it is all there for everyone to read.

    Comment by DRJ — 9/13/2017 @ 9:02 am

  52. @DRJ: I have courteously asked you to retract a characterization of my words which is not accurate and which I have disavowed. How you handle that request is up to you, and here for all to see.

    Comment by Frederick — 9/13/2017 @ 9:05 am

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