At the outset of his presidency, Donald Trump pledged to refrain from opening any new business deals in foreign countries.
So much for all that.
As a new undercover report from pro-transparency watchdog Global Witness uncovered earlier this week, the Trump Organization has been exploring the construction of a new beachside resort in the Dominican Republic, and local representatives said that a “new development with the Trump Organization” is underway.
According to Global Witness, the development would see the Trump Organization and local partners are considering developing a new resort called “Juanillo Beach” in the Dominican Republic’s Cap Cana district. As a sales representative filmed by Global Witness relayed, the planned resort will have apartments and a commercial area. The representative said that the Trump Organization isn’t merely going to license its name to the project, as it often does — it will also be a partner in the project’s overall development.
“Global Witness went undercover at the Cap Cana resort and discovered that the Trumps are pursuing what appears to be a new deal, in contradiction to Trump’s pledge not to,” the group’s report said.
In statement given to ThinkProgress, a Trump Organization spokesperson said that the Global Witness report was “completely false.”
EXPOSED 📣Trump broke his promise. We went undercover to show how President Trump is moving ahead with what looks to be a new business deal in the Dominican Republic, despite his "no new foreign deals" pledge. Watch and share! #TrumpDeals https://t.co/0HbubecsQk pic.twitter.com/A2Nz10JkYc
— Global Witness (@Global_Witness) December 17, 2018
Partners new and old
The Trump Organization’s denials appear to hinge on the definition of “new,” with the company’s spokesperson specifically linking the project detailed by Global Witness to a former effort from Trump to develop in the Dominican Republic. “The Trump Organization has no plans to either develop or license its brand with respect to any new real estate project in the Dominican Republic,” said the spokesperson, who asked to remain anonymous.
That former project shares some things in common with the current project underway in Cap Cana. The most significant overlap of these shared characteristics centers on Trump’s partnership with Ricardo and Fernando Hazoury, a pair of Dominican businessmen. Their previously planned project saw Trump and the Hazourys ink a licensing agreement in 2007 for a “super-luxury project” that included a section called the Trump Farallón Estates.
Unfortunately for both Trump and the Hazourys, the timing of the deal couldn’t have been worse. The 2008 financial crisis tanked the project’s prospects, and eventually led to outsized acrimony between the partners. A lawsuit filed on behalf of Trump’s company described the Hazourys’ business model as “textbook fraud on such a wide scale.” The two parties eventually settled, with the Hazourys’ company giving Trump’s company cash and a pair of property lots on the plot that was originally supposed to hold the Trump Farallón Estates. (The Farallón property is currently abandoned.)
Fast-forward to the first month of the Trump presidency, and it appeared that the relationship between Trump and the Hazourys was back on. Just weeks after Trump’s inauguration, Eric Trump was photographed alongside the Hazourys in a picture posted on their real estate company’s website — not long after the president pledged that he wouldn’t start any new foreign deals. (Trump’s sons, Eric and Donald Trump,Jr., currently run the Trump Organization’s daily operations via a trust Trump created, but Trump can still receive income from the company.)
The Global Witness report distinguishes between the decade-old real estate deal and this new one. “Hallmarks of a new deal include, among others, a potential change in Trump’s role as developer instead of licensor, and the fact that the new and previous projects are not even close to one another – they are five miles apart,” Global Witness wrote.
Global Witness also said that there’s on easy way to determine whether the project is new: Trump’s tax returns. “Through his tax returns one could see the extent to which Trump companies originally doing business at the Cap Cana resort and the entities now doing business there are related for tax purposes,” the watchdog wrote.
Trump has refused to release his tax returns, becoming the first president since the mid-20th century to do so.
The fact that Trump has apparently broken his pledge is but one of a litany of issues surrounding the project.
In addition to concerns over environmental degradation — including potential damage to mangrove forests and local wetlands — the project comes steeped in domestic controversy inside the Dominican Republic. Last year, the Dominican government waived building-height restrictions in the area, and Fast Company reported that the change was specifically intended to benefit Trump.
If officials occupying the highest levels of the Dominican government are working to materially assist the Trump Organization, it could be a violation of the U.S. Constitution’s Emoluments Clause. That law prevents the president from accepting payments or profit from foreign sources while in office.
In other words, removing height restrictions to help the Trump Organization build a resort could be construed as something that would influence the White House’s position on U.S.-Dominican relations. (Coincidentally, ABC News reported that the Dominican Republic recently hired its first lobbying firm in Washington since 2007.)
In a statement, Sen. Dianne Feinstein (D-CA.) said that the Global Witness report demonstrated “the need for greater oversight of the president’s business and financial dealings,” because of this very issue.
The Trump Organization’s pursuit of business abroad creates glaring conflicts of interest, with the president’s foreign policy decisions potentially being influenced by his personal financial interests. Foreign governments may also make decisions affecting the Trump Organization with the goal of receiving favorable treatment from the Trump administration.
Our founding fathers drafted the Emoluments Clause of the Constitution to prevent this situation. They did not want foreign governments to be able to put financial pressure on the president.
Feinstein went on to note that the report “also raises questions about taxpayer dollars being used to support business trips taken by the president’s children.” Indeed, over the past two years, members of the Trump family have made repeated trips to the Dominican Republic — costing taxpayers tens of thousands of dollars for their security and raising new questions about the purposes of their visits.
When Eric Trump swung through the country in early 2017, to hobnob with the Hazourys, the Secret Service racked up over $4,000 in expenses for rental vehicles alone.
Ivanka Trump and Jared Kushner also traveled to the Dominican Republic in August of this year. The White House described it as a “personal trip” — but the trip cost taxpayers nearly $60,000 in security expenses, according to Quartz.
As ThinkProgress has reported, the president’s daughter has been directly involved in two of the Trump Organization’s most scandal-plagued foreign ventures, in Panama and Azerbaijan. Both of those projects eventually imploded, following allegations that the Trump Organization had turned a blind eye to massive money laundering operations.
As the State Department notes, the Dominican Republic remains “vulnerable to money laundering” — regardless of whether Trump’s ongoing real estate ventures are new deals, old projects, or something in between.