Trump’s first kleptocrat

One was a brutal Haitian dictator. One was a burgeoning real estate developer. And both wanted what the other had.

In the mid-1980s, Haitian dictator Jean-Claude "Baby Doc" Duvalier and Donald Trump finally crossed paths. (Illustration by Diana Ofosu)
In the mid-1980s, Haitian dictator Jean-Claude "Baby Doc" Duvalier and Donald Trump finally crossed paths. (Illustration by Diana Ofosu)

In the mid-1980s, Jean-Claude “Baby Doc” Duvalier had more money than he knew what to do with. The brutal Haitian dictator, a linchpin in America’s network of anti-communist strongmen helping keep Soviet influence at bay, effectively controlled his country’s coffers, taking whatever he could to entrench his grand corruption.

Duvalier had a problem, though: all that cash was clearly unclean, ill-gotten. And, in the years before online transactions, much of it was stored in Haiti proper, kept not far from the citizens he’d pillaged since 1971.

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As such, like Ferdinand Marcos, Mobutu Sese Seko, and the caste of global kleptocrats before him, Duvalier turned northward. To Geneva. To Paris. To New York.

In each Western locale, Baby Doc was greeted with open arms and new opportunities to hide his stolen riches. One luxury apartment in New York seems to have caught his eye in particular. Far up on the 54th floor, overlooking Fifth Avenue, the apartment provided stunning views — and a chance to launder millions in dirty cash.

But even during those heady ’80s — “Excess is best,” as a certain voice summed — Duvalier couldn’t just show up at the signing with bags of money on hand. So he skirted the law in the same manner that had served his fellow dictators: he signed up a Panamanian shell company, hired an American lawyer, and put pen to paper.

On August 22, 1983, as property records and later investigations would show, Duvalier officially snagged the apartment he coveted, with his shell company doling out upwards of $1.65 million. A New York-based lawyer, Kevin MacCarthy, represented Duvalier’s Panamanian company, Lasa Trade and Finance, Inc., and signed the deed to make the deal final.

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And there, on the deed next to MacCarthy’s signature, was a name that would only grow more famous — or infamous — over the coming years: Donald Trump, namesake of the same Trump Tower in which Duvalier had just bought an apartment.

In that moment, Trump snagged his first dictator. The Duvalier deal was Trump’s first transaction with a kleptocrat, drenched in drug and arms monies, looking for a spot to park his cash. And it wouldn’t be his last.

Kleptocratic baby steps

Despite the fact that Trump’s signature appears on the same document as a shell company tied directly to one of the Western Hemisphere’s most notorious dictators, his deal with Duvalier has been largely overlooked in the past few years.

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This isn’t entirely surprising, considering the president’s past. Between his alleged affairs, his ties to the mob, and his Constitutional illiteracy, there’s an unending torrent of corruption and misconduct to probe.

“This is consistent with this idea of… kleptocrats parking their money – and using Trump.”

But Trump’s deal with Duvalier is worthy of examination for a pair of reasons. For one, it highlights how steeped the president has been in the murk of globalized kleptocracy — the money-men, the shell companies, the secrecy and hidden finances that continue to characterize the world’s wealthiest.

The Duvalier deal also highlights another reality that would have been concerning enough had the president never neared the power he now knows. From Panama to Azerbaijan, Americans have become increasingly aware of Trump’s prior proximity to massive money laundering, and corruption writ large, via luxury vehicles like his apartments.

Now, given that the Trump Tower property was first publicly tied to Duvalier in 1986 and that Trump has since been elected to the nation’s highest office, it’s critical to explore how the deal steered Trump’s business practices and set a model for his presidential priorities, including his clear admiration for some of the world’s foremost kleptocrats. (See: Vladimir Putin.)

After all, while Trump’s shady business dealings would garner more scrutiny through the 1990s and 2000s, it seems the president took his first step toward this world of modern kleptocracy when Duvalier, via his Panamanian shell company, reached out — and Trump and his business reached back.

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Despite clear reason for suspicion, there’s no indication Trump bothered with any kind of due diligence about the provenance of the money soaking his tower — a lack of scrutiny evident in his investments in both Panama and Azerbaijan, where the signs of massive money laundering were all but impossible to miss. (Much of that money, we now know, was tied intimately to the Russian mob.) Trump was, in a sense, a creature of his time; in the mid-1980s, any notion of regulation when it came to American luxury markets was a farce.

But the Duvalier deal was consistent with other “investments in Trump properties from dodgy places,” James Henry, an investigative economist who has written extensively about Trump’s past property deals, told ThinkProgress. “This is consistent with this idea of… kleptocrats parking their money — and using Trump.”

Towering in New York

According to Transparency International’s most recent rankings, Duvalier — estimated to have pilfered upwards of $800 million — was the sixth-most egregious kleptocrat of the past 50 years, just behind Serbia’s Slobodan Milosevic. And Duvalier and his inner circle made sure to spend what they stole. As Reed Brody, counsel for Human Rights Watch, told ThinkProgress, Duvalier and his wife “just went through that money like there was no tomorrow. They took a massive amount out of Haiti, and in a relatively short time it was all gone.”

Jean-Claude "Baby Doc" Duvalier, the man behind the Panamanian shell company investing in Trump Tower. (CREDIT: GETTY/BETTMANN)
Jean-Claude "Baby Doc" Duvalier, the man behind the Panamanian shell company investing in Trump Tower. (CREDIT: GETTY/BETTMANN)

Duvalier didn’t see all of the money himself; much of it was spent on his entourage, or on his family. But after Duvalier left the presidency in the mid-1980s, the country’s Ministry of Finance tried to tabulate, via a series of affidavits, just how much Baby Doc’s regime had swindled.

A final affidavit summed up the ministry’s findings, which were grim. “This [final] affidavit is kind of an overreaching affidavit, saying, ‘Looking at these other affidavits, this is all the money [Duvalier] stole, and if this money had been invested in clean water projects, we would have saved so many thousands of lives,'” Brian Concannon, executive director of the Institute for Justice and Democracy in Haiti, told ThinkProgress. “It’s a deeply sobering and disturbing document… And that, to me, is the legacy when I think of Duvalier.”

In the grand scheme of Trump’s dealings, the Trump Tower apartment doesn’t stand out; it represents a sliver of Duvalier’s reported wealth and a small piece of what would eventually become Trump’s (claimed) fortune. But it was enough to help set the president down a path of catering to the massively corrupt — an ethos that would, unsurprisingly, infect his own leadership.

Asset accumulation

Some 35 years later, many of the details of that Duvalier purchase have been lost. Duvalier died a few years ago, and the possibility of Trump commenting on the sale remains about as likely as the release of his tax returns.

But some details can be gleaned from existing records, press clippings at the time, and a handful of lawyers who spoke to ThinkProgress about their attempts to wrest the apartment back from Duvalier’s grasp.

“They were skimming money off things like children’s hospitals… and then using the money to buy these things: a yacht in Florida, an apartment in Trump Tower, a couple apartments in New York.”

For instance, it’s evident the apartment was a key piece of Duvalier’s American assets, which included a $2 million yacht in Miami, alongside a bank account holding some $1.2 million.

“They were skimming money off things like children’s hospitals and bringing the money to the Bank of New York, and then using the money to buy these things: a yacht in Florida, an apartment in Trump Tower, a couple apartments in New York on the East Side,” Ira Kurzban, a lawyer tasked with later tracking Duvalier’s assets, told ThinkProgress.

It’s also apparent Duvalier himself didn’t spend much time at the apartment. Rather, according to a 1986 piece from New York Magazine, the primary tenant was Jean “Johnny” Sambour, a French citizen happily on the dole of Baby Doc’s Port-au-Prince regime, and someone who stuck close to the Duvalier family.

Duvalier’s wife would later describe Sambour as a “good friend of ours.” And according to New York Magazine, “At first, MacCarthy” — the lawyer who acted on behalf of Duvalier’s Panamanian shell company — “denied knowing anyone named Sambour. Later, he acknowledged that he had met Sambour on several occasions.”

MacCarthy did not respond to ThinkProgress’ multiple requests for an interview.

Tracking the assets

Like the kleptocrats before him — Marcos, Mobutu, Alberto Fujimori, Arnoldo Alemán — Baby Doc’s graft eventually caught up with him. In the mid-1980s, a series of demonstrations, some targeting food warehouses in particular, erupted across the country. After nearly 30 years of Duvalier family rule in Haiti, a popular revolt finally tossed the dictator off his perch.

But Duvalier had a soft landing — thanks in large part to help from Washington. As Jason Sharman, an expert in grand corruption at Cambridge University, wrote last year, “The Reagan administration helped to evacuate the ruling clique with as much of their loot as they could carry in 1986 in the face of the food riots that forced their departure.”

The American government ensured Baby Doc’s safe escape, despite the fact that his regime was “probably even more debauched and indifferent to the fate of its citizens than that of Marcos,” Sharman noted.

In the mid-1980s, Donald Trump provided his luxury apartments in New York - and at least one dictator came calling. (CREDIT: GETTY / JOE MCNALLY)
In the mid-1980s, Donald Trump provided his luxury apartments in New York - and at least one dictator came calling. (CREDIT: GETTY / JOE MCNALLY)

For the first time in decades, Port-au-Prince could take a step toward democracy. But the country’s Potemkin economy, one of Duvalier’s main legacies, was running on fumes. So the new government turned toward the assets Duvalier had squirreled out of the country — like those he’d placed in Trump’s hands — and hired a series of American lawyers to track them down, including Stroock & Stroock & Lavan, as well as investigators from the New York-based Kroll Associates.

The search didn’t take long. According to Jules Kroll, the man behind Kroll Associates, Duvalier left a trail of bread crumbs that was impossible to miss — clues that led investigators directly to Trump Tower. As a 2009 piece in the New Yorker related:

Kroll told stories about recovering the wealth plundered by dictators, among them Ferdinand Marcos, Saddam Hussein, and Jean-Claude (Baby Doc) Duvalier. Baby Doc, Kroll said, was “not the sharpest nail in the box.” He had looted the Haitian treasury by writing big checks. “Apartment in Trump Tower?” Kroll made a show of laborious penmanship. “‘Trump… Tower.’ Even we could figure that one out.”

Indeed, Duvalier didn’t make it difficult for anyone interested to tie him directly to Trump. A separate piece in the New York Times described corroborating evidence of Duvalier’s ownership of the Trump property: “telephone records, which were available only because Baby Doc had not paid his bills[.]”

Defending Duvalier

All told, the Duvalier assets that the new Haitian government could easily repatriate totaled upwards of $75 million. It wasn’t the entirety of Duvalier’s efforts at ransacking his country, but an important initial estimate nonetheless. (In a still-unexplained twist, Duvalier’s American safety deposit boxes were cleared out just before investigators located them.)

“For the first couple years, we had a very productive and cooperative relationship with the government – and then the government changed.”

But Haiti’s post-Duvalier transition toward a firm democracy was already backsliding by the late 1980s. Infighting and instability cycled leadership in Port-au-Prince. And suddenly, by 1989, investigators realized that the payments from Port-au-Prince, which had been footing their bills in search of Duvalier’s assets, had inexplicably stopped.

Following Duvalier's ouster, Haiti began the process of recovery – and recovering the dictator's assets. (CREDIT: GETTY / BETTMANN)
Following Duvalier's ouster, Haiti began the process of recovery – and recovering the dictator's assets. (CREDIT: GETTY / BETTMANN)

The assumption, naturally, is that some of Duvalier’s made men remained in government, despite efforts to eliminate the former dictator’s network. “All I can tell you is that for the first couple years, we had a very productive and cooperative relationship with the government — and then the government changed, and we no longer had a cooperating client,” one of the lawyers who worked on the case told ThinkProgress.

Soon, the investigators refused to carry on without payment. As another lawyer involved in the case told ThinkProgress, the investigators, not seeing any point in carrying on the work without compensation, washed their hands of the case and the assets alike.

And not long after the Haitian government had been poised to regain the funds its former dictator had poured into Trump Tower, Duvalier’s shell company, by all appearances, carried on its ownership of the apartment as if nothing had happened.

Moving on

When asked what became of the Trump property purchased by Duvalier, one of the lawyers involved in tracking Duvalier’s goods was blunt: “Frankly, I can’t tell you what happened to the assets that were frozen in the U.S.” It’s equally unclear what became of Duvalier’s yacht, or his millions in the Miami bank account.

But according to existing property records, it appears Duvalier’s Panamanian shell company didn’t wait long to distance itself from the Trump Tower apartment, which had already gained an estimated $1 million in value. In 1991, the Panamanian shell company unloaded the apartment to Equipment and Parts Export, a New Jersey-based company.

Later that year, Richard Newcomb, director of the Treasury Department’s Office of Foreign Assets Control, sent a letter to both MacCarthy and Trump’s company, letting them know that “all property and interests in property of the Government of Haiti that are in the United States are blocked.” (Then-President George H.W. Bush had issued an executive order to that effect in October 1991.) As such, wrote Newcomb, “no interest of any nature whatsoever in this property may be transferred without authorization from the Office of Foreign Assets Control.”

By that point, however, the deed had already been signed transferring the Trump Tower apartment from Duvalier’s shell to another owner. And Duvalier was free to enjoy his largesse, living the life of a gilded exile in France.

Lex Duvalier

It wasn’t until 2016 that the U.S. Treasury Department would take its first, hesitant steps toward transparency in the luxury real estate sector in Manhattan. Such lethargy is, indeed, one of the primary reasons the U.S. recently took the second slot in the Tax Justice Network’s latest Financial Secrecy Index.

“Lex Duvalier” now “serves as a model to other countries” for how to recover from the mass swindling suffered under former dictators.

As it is, Duvalier’s ties to Trump have been all but forgotten. (Even after Trump referred to Duvalier’s former fiefdom a “shithole” earlier this year.) But in Switzerland, Duvalier’s legacy has spurred far more far-reaching consequences — especially when it comes to asset recovery. Legislation passed in 2011, known colloquially as “Lex Duvalier,” made it easier for Swiss authorities to repatriate dictators’ monies stashed in the country, namely by forcing foreign officials from countries with high levels of corruption to prove that they didn’t accumulate their wealth through graft.

According to Sharman, “[Lex Duvalier] put Switzerland at the forefront of asset recovery.” Added an American lawyer, “Lex Duvalier” now “serves as a model to other countries” for how to help recover the wealth swindled by former dictators. (Other attempts to recover Duvalier’s assets haven’t seen as much success; plaintiffs lost a 1987 case in France to recover $120 million from Duvalier, while a separate, $504-million judgment against Duvalier passed through Florida courts in 1998, but the money was never recovered.)

Of course, the likelihood of Trump backing anything similar to “Lex Duvalier” in the U.S. — especially as the president continues to profit from anonymous shell companies — is remote. As was evidenced by his dealings with Duvalier’s shell company, Trump’s priorities lie clearly in expanding kleptocracy globally, alongside his support for the strongmen profiting from such global systems in places like Moscow and Manila. Much like his Duvalier deal, Trump has spent his time as president asking as few questions as possible of the dictators looting their own countries, all with the aim of maximizing profits, some of which flow to the president’s own bank accounts.

“Baby Doc could have been one of the earliest,” Henry said, discussing kleptocrats and their allies investing in Trump properties. “But I wouldn’t be surprised to find other potentates from Latin America specifically [investing in Trump properties].”

Time and again, the president has found common cause with the types of kleptocratic governments that have taken root in Russia, Kazakhstan, Hungary — all of which profit from the same corrupt, opaque financial flows that first knitted Trump and Duvalier together. The president may now speak highly of dictators like China’s Xi Jinping, or strongmen like the Philippines’ Rodrigo Duterte, but it was back in the early 1980s, when he was only a gregarious, cocksure real estate developer, that Trump bagged his first kleptocrat. And several decades later, it’s become increasingly clear that that move set as clear a precedent as any for a man who would become president.