During a Senate Judiciary Committee hearing on Wednesday, Democrats drew a connection between the tax returns President Donald Trump steadfastly refuses to release and the FBI’s investigation into potential collusion between Trump’s campaign and Russia.
At one point during the hearing, Sen. Al Franken (D-MN) noted that Russians “have a history of using financial investments to gain leverage over influential people and then calling in favors — we know that.”
“We know that the Russians interference in our election and they did it to benefit President Trump — the intelligence agencies confirmed that,” he added. “But what I want to know is why they favored President Trump, and it seems to me that in order to answer that question, any investigation into whether the Trump campaign or Trump operation colluded with Russian operative would require a full appreciation of the president’s financial dealings. Director Comey, would President Trump’s tax returns be material to such an investigation?”
Comey wouldn’t answer.
The connection between alleged collusion and Trump’s tax returns was also raised by Sen. Sheldon Whitehouse (D-RI), who asked Comey about shell companies, how they’re used to launder money, and how the FBI uses tax returns during investigations.
“The European Union is moving toward requiring transparency of incorporations so that shell corporations are harder to create,” Whitehouse said during a back-and-forth with Comey. “That risks leaving the United States as the last big haven for shell companies. Is it true that shell companies are often used as a device for criminal money laundering?”
Comey replied in the affirmative.
“Is it true that shell companies are often used as a device for the concealment of criminally garnered funds?” Whitehouse followed up. Comey again replied in the affirmative.
“And to avoid legitimate taxation?”
“Yes,” Comey replied.
Whitehouse asked Comey what dangers shell companies pose to the American political process.
“I suppose one risk is that it makes it easier for illicit money to make its way into a political environment,” Comey said.
With regard to tax returns and investigations, Comey said “they’re useful in showing unreported income, motive — if someone hides something that should otherwise be on a tax returns it indicates they might know it was criminal activity.”
Whitehouse framed his question about Russian bribery by noting that Russian officials are known to engage business leaders in foreign companies with bribes “or other highly favorable business deals with a view to either recruiting them as somebody who has been bribed, or being able to threaten them by disclosing the elicit relationship.”
Comey characterized those techniques as “tools the Russians have used over many decades.”
Sen. Amy Klobuchar (D-MN) also raised concerns about shell companies, noting that “organized criminals are using the luxury real estate market to launder money.”
“The Treasury Department has noted a significant rise in the use of shell companies in real estate transactions because foreign buyers use them as a way to hide their identities and find a safe haven for their money in the United States. In fact nearly half of all homes in the U.S. worth at least $5 million are purchased using shell companies,” she continued. “Do you support efforts by the Treasury Department to use its existing authority to require more transparency in these transactions?”
“Yes and yes,” Comey replied.
Trump’s shady dealings
Last month, USA Today reported that since the election, Trump companies have sold 14 luxury condos and home-building lots for about $23 million. In many cases, the identities of the purchasers were concealed by shell companies.
Trump’s involvement with shell companies extends back before the election. The USA Today report details how one mysterious shell company spent $3.1 million to buy 11 luxury condos in a Las Vegas building co-owned by Trump shortly before the Republican National Convention.
At that time, Paul Manafort was Trump’s campaign chairman. He stepped down weeks later amid reports Ukrainian authorities were investigating him for allegedly receiving $12.7 million in illegal payments from Ukraine’s former pro-Russia ruling party — payments we’ve since learned were laundered through offshore accounts.
These are far from the only shady deals President Trump has been involved in. Last week, Mother Jones detailed how a “wide array of Russian oligarchs with links to Vladimir Putin have invested tens of millions of hard-to-explain dollars in Trump properties.” In 2008, for example, Trump sold a Palm Beach mansion to Russian billionaire Dmitry Rybolovev for $95 million — about $53 million more than he paid for it less than four years earlier, according to the Washington Post.
In January, Trump denied he has anything to do with Russia whatsoever.
Russia has never tried to use leverage over me. I HAVE NOTHING TO DO WITH RUSSIA – NO DEALS, NO LOANS, NO NOTHING!
— Donald J. Trump (@realDonaldTrump) January 11, 2017
He has clearly, however, done business with Russian billionaires. Around the same time as Trump’s deal with Rybolovev was going down, Donald Trump Jr. told a real estate conference that “Russians make up a pretty disproportionate cross-section of a lot of our assets” and “we see a lot of money pouring in from Russia.”
Trump has not told the truth about his relationship with Russian President Vladimir Putin, at various times denying that they have one, but at others saying they do. During an interview last summer, Manfort was left stammering when asked if Trump has “financial relationships with Russian oligarchs.”
Watch Paul Manafort, chairman of Trump's presidential campaign, sound VERY unconvincing, re: Jeff Sessions and Russia. pic.twitter.com/5sc3FBMa8H
— #AllofUs (@TimeForAllofUs) March 2, 2017
The Democrats’ line of questioning on Wednesday suggested Trump’s tax returns could be a tool investigators use to get to the bottom of it. In addition to the FBI, there are two ongoing congressional investigation into the Trump campaign’s relationship with Russia.