Two Trump Companies Discovered In Cyprus, EU's Russian Off-Shore Banking Haven

12/19/2016 02:04 pm ET Updated Mar 02, 2017
Left: Trump’s Commerce pick and Bank Of Cyprus Vice Chair Wilbur Ross with Chairman Josef Ackermann, former head of Deutsche
Left: Trump’s Commerce pick and Bank Of Cyprus Vice Chair Wilbur Ross with Chairman Josef Ackermann, former head of Deutsche Bank. Right: Donald Trump in Miss Universe Pageant 2013 hosted in Moscow’s Crocus City

The Democratic Coalition uncovered two Trump companies registered in Cyprus, the tax haven and money laundering center serving Vladimir Putin and Russian oligarchs.

Notably, Cyprus is the only EU country which has given the Russia military and Navy the right to freely use their bases for operations.

Senior Advisor Scott Dworkin released the information on Trump’s Cyprus shell companies for the Democratic Coalition via Twitter as part of his #TrumpLeaks investigations:

Scott Dworkin, Senior Advisor to Democratic Coalition.
https://twitter.com/funder/status/809835758467108865
Scott Dworkin, Senior Advisor to Democratic Coalition.

One of Trump’s companies in Cyprus was opened in 2008, during the height of the Great Recession’s financial crisis.

Scott Dworkin is Senior Advisor to the Democratic Coalition
https://twitter.com/funder/status/809835758467108865
Scott Dworkin is Senior Advisor to the Democratic Coalition

#TrumpLeaks is different than Wikileaks,” says Dworkin on Twitter, “[It’s] run by Americans. All [documents] obtained legally.”

Trump worked with a notoriously corrupt Cypriot company to bid for casino earlier this year during the Republican presidential primary, as reported by Global Sources and Israel’s Haaretz.

Trump’s companies employed former-high Cypriot government officials in a bid that local media panned as a “desperate bid” that the President-elect’s company lost when ultimately he did not make the final round of three bidders.

But that does not explain why Trump has had a company there since 2008 or if he holds bank accounts and if so, at what institutions.

All of that information should be contained within the tax returns Donald Trump refused to release.

Trump Cabinet Pick Wilbur Ross Is Heavily Invested In Cyprus

Cyprus is notorious for being an often bailed out, off-shore banking center, who is also a member state of the European Union and part of the common currency.

Trump Cabinet nominee Wilbur Ross is the Vice Chairman of the island’s largest institution, the Bank of Cyprus.

This morning Mother Jones released a report detailing Trump cabinet pick Wilbur Ross’ deep ties to Cyprus, its largest bank and his big gamble on the ability to extract the island’s off-shore natural gas reserves.

Wilbur Ross invested $500 million into the once-failed Bank of Cyprus and which bank has been run by an ex-KGB friend of Putin.

Soon they’re going public with shares.

In fact, the Bank of Cyprus released a formal congratulations statement to Ross the day Trump named him as his nominee for Commerce Secretary.

It was at Wilber Ross’ suggestion, that Josef Ackermann - the former Chairman of Deutsche Bank - one of Trump’s major creditors, who is facing a massive DoJ settlement for misdeeds in 2008 - was named as Chairman of the Bank of Cyprus.

Deutsche Bank has been accused of making over $10 billion dollars in transactions to assist Russian money laundering, and is trying to clawback Ackermann’s compensation for misdeeds on his watch - though it will probably be too late.

Former Royal Bank of Scotland CEO John Hourican was also brought in by Ross’ management. He resigned from RBS after being implicated in the LIBOR rate-fixing scandal is the CEO of Ross’ Bank of Cyprus, which sold its Russian operations and is going public on the London Stock Exchange shortly.

Cyprus Has Financial And Cultural Ties To Russia

If there’s one thing Cyprus is known for, it is its oversized banking sector known as a tax haven, money laundering center and for its mostly Russian clientele.

Due to a former British occupation, the island’s media is in English, though the population is highly adapted to Russian culture today as expats have “invaded” the island for years.

Also, the New York Times reports that Russian state intelligence agencies are operating on the island, which is bathed in Russian culture, and has the same Orthodox Christian faith as practiced in the parent state.

The island’s leader was the EU’s only Communist head of state until 2013.

Cyprus’ bank sector - considered an export product - acted like Iceland, but in 2010 they relied on Vladimir Putin himself to bail out the country, after a powerplant failure threatened to bankrupt the island with a 2.5 billion euro loan in 2011.

At the time Putin was seeking to protect what the Financial Times reported was $10 billion dollars in Russian deposits.

By 2013 as experts earlier predicted, Cyprus earlier bailout fixed nothing and the country had a financial crisis of the same proportions as Iceland, but under the EU’s authority and using their strong currency.

Just two years after Putin’s Cyprus bailout, German regulators ironically handed ownership of the Bank of Cyprus and its competitor to a group Russian oligarchs who were its main depositors.

The cost was to investors was hefty, experts estimated that the Russian oligarchs lost 40% of the cash value of their deposits, but they got control.

Nobel Prize winning economist Paul Krugman’s blog cited an FT analysis of Cyprus’ 2013 crisis resolution which called the choice ultimately made by EU regulators the equivalent of turning Cyprus into a Russian vassal state:

Cyprus now has a binary choice: become a gimp state for Russian gangsta finance, or turn fully towards Europe, close down much of its shady banking sector and rebuild its economy on something more sustainable.

Putin’s bailout was later restructured to write off 10% of the value of the loans to Cyprus in 2013.

Just after that write down, Cyprus’s President signed a military base deal last year with Putin to host that Russia’s military forces in two of their Mediterranean ports and on from airbase in the city of Paphos.

Presumably, those military stations are strategically important for Russia’s intervention in Syria’s Civil War, which has turned to a slaughterhouse.

It is clear that Donald Trump could have other financial interests at stake in his relationship to Ross, or to Russia, to Vladimir Putin or towards all of the above, by the existence of two companies in a small island nation with a microscopic GDP and a tremendous amount of bank deposits.

Krugman once called the Cyprus Banks a haven for money laundering in his New York Times column “Treasure Island Trauma,” as mostly for Russian interests:

Why are Cypriot banks so big? Because the country is a tax haven where corporations and wealthy foreigners stash their money. Officially, 37 percent of the deposits in Cypriot banks come from nonresidents; the true number, once you take into account wealthy expatriates and people who are only nominally resident in Cyprus, is surely much higher. Basically, Cyprus is a place where people, especially but not only Russians, hide their wealth from both the taxmen and the regulators. Whatever gloss you put on it, it’s basically about money-laundering.

Putin’s Role In Cyprus Revealed By Panama Papers In Guardian Report

In April, the Guardian identified Cyprus as a major waystation in Vladimir Putin’s global cash flow schemes, a place where ownership is placed, and then money loaned to companies in Russia at favorable terms without certain repayment.

The data leak from Mossack Fonseca’s Panamanian offices provided numerous details of the relationship between government corruption and banking centers who launder cash, hide ownership and create jurisdictional problems to seeking justice.

Putin said that he was main target of the Panama Papers in April to the USA Today and the Financial Times listed him as one of the main figures exposed in the scandal.

Conclusions

Owning an off-shore company isn’t itself illegal.

But without transparency, it presents a natural conflict of interests scenario and the specter of direct ties to foreign adversaries.

And as the Panama Papers exposed, off-shore shell companies in tax havens and money laundering centers are considered instrumental in government corruption around the world

Notoriously, Donald Trump has refused to release any tax returns whatsoever, after earlier promising full disclosure during the Republican primary campaign.

But Donald Trump’s international business ties are already considered a constitutional violation waiting to happen by bipartisan legal experts.

There’s no easy way for oversight of how an American government official would use such companies, besides reviewing their US Tax returns.

Donald Trump’s has extensive business presence on an island with major Russian ties, and he just made a Cabinet appointment of the Vice Chair of the island’s largest bank.

These developments raise troubling foreign relationships between Trump and the Russian oligarch class, between his Cabinet pick and that class, and by both of them with Vladimir Putin’s top EU ally state.

Read more about #TrumpLeaks here:

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