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Donald Trump’s Mystery $50 Million (or More) Loan

Mother Jones

Among Donald Trump’s debts—the source of some of his most intractable conflicts of interest—is a mystery loan that Trump has not publicly explained. And this means that the president could have a secret creditor to whom he owes tens of millions of dollars.

According to Trump’s financial disclosure records and various news reports, Trump is carrying hundreds of millions of dollars in debt. These transactions could provide his creditors with leverage over the new commander-in-chief. Moreover, it would be difficult for Trump to refinance or modify the terms of his various loans without raising suspicion that he is receiving favorable treatment because of his position. (Imagine a bank gives him a good rate. Would this suggest it might receive preferential treatment from the US government Trump heads?) Because Trump has refused to release his tax returns, it’s impossible for the public to know exactly how much he owes and to whom. And Trump never kept his campaign promise to reveal all his creditors and obligations.

The financial disclosure form he filed last year did note more than a dozen loans totaling at least $713 million. But the full amount could be more. And buried in the paperwork is a puzzling debt that ethics experts say could suggest that Trump has a major creditor he has not publicly identified.

According to the disclosure, in 2012, Trump borrowed more than $50 million from a company called Chicago Unit Acquisition LLC. (The true value of the loan could be much higher; the form requires Trump only to state the range of the loan’s value, and he selected the top range, “over $50,000,000.”) Elsewhere in the same document, Trump notes that he owns this LLC. That is, he made the loan to himself. There’s nothing necessarily unusual about that.

Here’s where the situation gets odd. With Trump owning the Chicago Unit Acquisition LLC—and the LLC being owed $50 million or more by Trump—this company should be listed on Trump’s disclosure as worth at least that much, unless it has debt offsetting this amount. Yet on Trump’s latest disclosure form, Chicago Unit Acquisition is not listed at all. The disclosure rules say that any asset worth more than $1,000 must be noted. So this is the mystery: Why is this Trump-owned firm that holds a $50 million-plus note from Trump not worth anything?

The answer could be that Chicago Unit Acquisition has its own debts that cancel out its value, says Kathleen Clark, a law professor at Washington University in St. Louis, who specializes in government and corporate ethics. In other words, Trump’s LLC could owe $50 million and possibly much more to one or more creditors that have not been disclosed to the public. Though the president essentially could be on the hook to some entity or some person for over $50 million, the financial disclosure rules do not require Trump to list the loans and liabilities of companies he owns. (He only has to reveal his personal loans.)

“I think the American people are at risk because we don’t know know with whom Donald Trump is entangled financially,” Clark says. “If I owe a lot of money to someone, I will probably want to do what I can to keep that person or institution happy. We don’t know the terms of this debt and we don’t know whether Donald Trump will be tempted to look out for his own financial interest in addressing the concerns of his creditor, whoever that is.”

A recent Wall Street Journal article noted that Trump pays a minimum of $4.4 million a year in interest in connection with his loan from Chicago Unit Acquisition LLC. His disclosure form states he pays the prime interest rate plus 5 percent for this loan. (Consequently, Chicago Unit Acquisition would have at least that much in annual revenue, though none is reported.) And the Journal report deepened the mystery. It noted that it had paid two research firms to search for paperwork connected to this loan, but both came up empty-handed.

In a 2016 interview with the New York Times, Trump briefly addressed the loan. He said that he had purchased the debt, via Chicago Unit Acquisition, from a group of banks he had previously borrowed from. Jason Greenblatt, the Trump Organization’s chief legal officer, would not discuss with the Times why Trump had not simply retired the debt and instead was continuing to pay interest on it. “I am not sure it’s appropriate for us to discuss our sort of internal financial reasoning behind transactions in the press,” Greenblatt told the Times. “It’s really personal corporate trade secrets, if you will. Neither newsworthy or frankly anybody’s business.”

On his 2015 disclosure form, Trump did list Chicago Unit Acquisition LLC as having a value, putting it at between $1,000 and $25,000—still substantially lower than the sum Trump reports owing to it. When the Times asked Trump why Chicago Unit Acquisition LLC was valued so low on his financial disclosure, he replied, “We don’t assess any value to it because we don’t care. I have the mortgage. That is all there is. Very simple. I am the bank.”

“Whether or not Mr. Trump cares or not about a liability is irrelevant to his obligation to disclose information on the Form 278,” says Norm Eisen, who was a top ethics attorney in the Obama administration and who now co-chairs Citizens for Responsibility and Ethics in Washington. “Questions about the apparent inconsistency in how the loan was and is treated on his disclosures are legitimate, and a normal president would provide additional information to clear them up.”

Alan Garten, Trump’s personal attorney, did not respond to a request for comment, nor did the White House.

Richard Painter, who served as the chief ethics lawyer in the George W. Bush administration and who co-chairs CREW with Eisen, says if there are no loans offsetting the value of Chicago Unit Acquisition, Trump’s disclosure form should list the outstanding debt as an asset. “None of the underlying assets or liabilities of the LLC owned by Trump need to appear on the 278—just its net value and Trump’s ownership in it,” Painter says. “That is one of the reasons the form is incomplete. If the LLC is owed money, that is a positive; if it owes money, that is a negative, for determining its value.”

Either Trump’s disclosure report is incomplete or there could be a hidden creditor, Eisen and Painter assert. If Trump were to release his tax returns, as all other major presidential candidates have done in recent decades, they point out, he could clear up the matter by providing information on his interest payments. (Eisen and Painter have filed a lawsuit against Trump alleging that the president has violated the Emoluments Clause of the Constitution by maintaining a number of beneficial financial relationships with foreign governments.)

“Without more information, we cannot properly assess the import of this entry, or of the changes in how it was reported,” Eisen says. “We need those additional details, including to assess possible conflicts. It may well be the case that the answers lie in Mr. Trump’s tax returns, but he has refused to provide them. This is yet another transparency failure on the part of the president.”

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Donald Trump’s Mystery $50 Million (or More) Loan

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My Job Just Got a Lot Easier

Mother Jones

Donald Trump held a remarkable press conference today—about which more later—but first I have to thank him. Here’s an exchange with NBC’s Peter Alexander:

ALEXANDER: You said today that you had the biggest electoral margin since Ronald Reagan, 304, 306 electoral votes. But President Obama had 365….

TRUMP: Well, I’m talking about Republicans.

ALEXANDER: George H.W. Bush, 426 when he won as president. So why should Americans trust you?

TRUMP: Well no, I was given that information. I don’t know, I was just given—we had a very, very big margin.

ALEXANDER: I guess my question is why Americans should trust you when you use information…

TRUMP: Well, I don’t know, I was given that information. I was given—I actually, I’ve seen that information around.

This is great! I mean, I write for a magazine, and let’s face it: fact checking is a pain. I know my fellow writers will back me up here. I suppose it’s good for readers, who want accurate information, but it’s a huge time sink for us content creators. Next time, my conversation will go like this:

FACT CHECKER: You say in your article that hippos are the largest mammals. Are you sure?

ME: I don’t know, I was given that information. They’re really big.

FACT CHECKER: And mice are the smallest?

ME: I’ve seen that information around.

This is going to make my job a lot easier. Thanks, Mr. President!

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My Job Just Got a Lot Easier

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Michael Flynn Is In Big Trouble

Mother Jones

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The Washington Post has the latest on Flynngate:

The acting attorney general informed the Trump White House late last month that she believed Michael Flynn had misled senior administration officials about the nature of his communications with the Russian ambassador to the United States….It is unclear what the White House counsel, Donald McGahn, did with the information.

Well, within a few days Trump had fired Yates for not defending his immigration order. At that point, I imagine no one in the White House felt like approaching the boss with any other bad news she had passed along. In any case, the issue here is threefold. First, did Flynn talk with Russian Ambassador Sergey Kislyak during the transition to assure him he shouldn’t worry about Obama’s sanctions for interfering with the election? Second, was Flynn in touch with Kislyak before the election, while the Russian interference was actively taking place? And third, did he lie about it?

In the waning days of the Obama administration, James R. Clapper Jr., who was the director of national intelligence, and John Brennan, the CIA director at the time, shared Yates’s concerns and concurred with her recommendation to inform the Trump White House. They feared that “Flynn had put himself in a compromising position” and thought that Vice President Mike Pence had a right to know that he had been misled, according to one of the officials, who, like others, spoke on the condition of anonymity to discuss intelligence matters.

A senior Trump administration official said that the White House was aware of the matter, adding that “we’ve been working on this for weeks.”

….Kislyak, in a brief interview with The Post, confirmed having contacts with Flynn before and after the election, but he declined to say what was discussed.

So: the intelligence community concurred that Flynn had spoken to Kislyak about sanctions; he “misled” Pence about this; the Trump White House has known about this for weeks; and Flynn was indeed in contact with Kislyak during the campaign. It’s no wonder that the White House has declined to stand behind Flynn and now says they are “evaluating the situation.”

The New York Times has more details:

The Justice Department had warned the White House that Mr. Flynn…could be open to blackmail by Russia, said a former senior official….The White House has examined a transcript of a wiretapped conversation that Mr. Flynn had with Sergey I. Kislyak, the Russian ambassador….The conversation, according to officials who have seen the transcript of the wiretap, also included a discussion about sanctions imposed on Russia after intelligence agencies determined that President Putin’s regime tried to interfere with the 2016 election on Mr. Trump’s behalf.

Still, current and former administration officials familiar with the call said the transcript was ambiguous enough that Mr. Trump could justify both firing or retaining Mr. Flynn….Former and current administration officials said that Mr. Flynn urged Russia not to retaliate against any sanctions because an overreaction would make any future cooperation more complicated. He never explicitly promised sanctions relief, one former official said, but he appeared to leave the impression that it would be possible.

The AP’s Julie Pace confirms that the White House has been aware of this for weeks. The Times claims that Mike Pence is especially peeved at Flynn and has taken his concerns directly to Trump. They also say that White House officials have already started “discussing the possibility of replacements.”

The other big question here is, inevitably, what did the president know and when did he know it? Was Flynn freelancing the whole time? Or was he acting with Trump’s blessing? A few days ago David Corn asked what had become of the big Russia scandal, which seemed to have disappeared from view, and now we know. It was just waiting for the right moment to rear its ugly head again.

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Michael Flynn Is In Big Trouble

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Reality Just Keeps Biting President Trump in the Ass

Mother Jones

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Donald Trump’s implicit appeal during the presidential campaign was his status as a complete outsider, a proverbial bull in a china shop who didn’t care if pearl clutching elites took to their fainting couches while he turned their Ivy League world upside down. Was he ignorant? Sure, maybe, but that’s what the country needed: someone with common sense who would just go ahead and do the right thing and not worry about smashing the crockery along the way.

But just as Theresa May and her fellow Brexiteers are learning that the real world is more complicated than they thought, Trump is learning that just because he doesn’t know something doesn’t mean it’s not important:

President Trump, who presented himself as a staunch supporter of Israel during last year’s campaign, took a harder line on settlements in an interview published on Friday and indicated that he was rethinking his promise to move the United States Embassy to Jerusalem….Mr. Trump and Jared Kushner, his son-in-law and senior adviser, have been exploring an Israeli-Palestinian peace initiative that would enlist Arab allies, and a host of Arab leaders have told the new president that provocative pro-Israel positions would not help.

….“They don’t help the process,” Mr. Trump said of settlements in the Israel Hayom interview. “I can say that. There is so much land left. And every time you take land for settlements, there is less land left.” He added: “I am not somebody that believes that going forward with these settlements is a good thing for peace.”

Imagine that. Trump and Kushner have talked to Arab leaders—for the first time ever, I imagine—and discovered that they have big issues with things like settlements and Jerusalem. It wasn’t just a bunch of milksop lefty nonsense after all. It was reality.

But this lesson still hasn’t filtered down to his UN ambassador:

This is all very Trumpish: Obama coddled the Palestinians, therefore we don’t like them and oppose their appointment to anything. As it turns out, a moment’s worth of consultation would have informed Haley that Salam Fayyad is widely respected, including within Israel. He’s long been a moderate, anti-Hamas, anti-corruption voice in the Palestinian Authority, and he was appointed to the Libya mission by a newly installed UN chief who is notably more sympathetic to Israel than his predecessors. The “signal” his appointment sent was a very pro-Western one.

But once again, bumper stickers won the day.

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Reality Just Keeps Biting President Trump in the Ass

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In Israel, It’s Build, Build, Build

Mother Jones

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In Israel, it’s a new era:

Israel approved 3,000 more housing units in the occupied West Bank late Tuesday, the largest number in a wave of new construction plans that defy the international community and that open a forceful phase in the country’s expansion into land the Palestinians claim for a future state.

Emboldened by the new Trump administration and internal battles at home, Israel announced plans for the new units in about a dozen settlements a week after approving 2,500 homes in the West Bank and 566 in East Jerusalem.

….Mr. Trump seems not to share former President Barack Obama’s opposition to the settlements….Husam Zomlot, strategic affairs adviser to Mahmoud Abbas, the president of the Palestinian Authority said that Mr. Netanyahu was using this time of political transition in the United States to test how the new administration’s stance might differ from that of Mr. Obama. The Israeli prime minister is to meet with Mr. Trump in Washington on Feb. 15.

In return for Trump’s support, perhaps Netanyahu will loan him a few experts in wall building.

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In Israel, It’s Build, Build, Build

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