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Someone’s Lying About the Money for Trump Tower Moscow

It could be a key link between Trump world and the Kremlin: Trump’s pal says he lined up a sanctioned Russian bank to finance the project. But VTB says that’s completely false.

Credit Photo Illustration by The Daily Beast

Someone is lying.

Either it’s Felix Sater, President Trump’s felonious old crony, who claimed that a sanctioned Russian bank was ready to finance a Trump Tower in Moscow.

Or it’s representatives of the bank, Russia’s second-largest, who say they never considered providing cash to the project, contradicting Sater’s emailed assertions to his boyhood friend, Trump attorney Michael Cohen, revealed by congressional investigators this week.

At issue is a question central to Bob Mueller’s special counsel probe: Just how closely did Trump associates work with Russian power brokers in the lead-up to the 2016 presidential election?

Reports from earlier this week indicate Sater, a convicted felon and former business associate of Trump, claimed in November 2015 he had lined up funding from VTB—a huge Russian bank, 60 percent of whose shares are owned by the Kremlin—for a Trump Organization construction project in Moscow.

If Sater’s claim is true, it could be a key link between Trump world and the Kremlin. But the bank at issue told The Daily Beast it isn’t. The Daily Beast cannot independently determine which side is telling the truth.

“VTB never held any negotiations about financing the Trump Tower in Moscow,” a bank representative told The Daily Beast in a statement. “We’d like to underline that not a single VTB group subsidiary had any dealings with Mr.Trump, his representatives or any companies affiliated with him.”

VTB has deep ties to the Russian government. Its CEO, Andrey Kostin, is a former Soviet-era diplomat who articulates the Kremlin line on English-language cable business TV. Vladimir Putin, who has denied any interference in the 2016 election despite the assessment of U.S. intelligence that he ordered such interference, has spoken at Russian investment conferences VTB has hosted.

Nor, despite Sater’s association with the president of the United States, is  he himself a necessarily reliable narrator. New York magazine has described him as “a canny operator and a colorful bullshitter.” And while Sater was embroiled in a lawsuit regarding his real estate deals with Trump, he launched a host of crudely named websites—including and—that went on to attack a former business partner.

The Daily Beast asked Sater about the bank contradicting his reported claim to have secured VTB financing—which The New York Times paraphrased from his email and did not directly quote. Sater referred questions to his lawyer.

Sater’s attorney, Robert Wolf, refused to answer questions for this story because of a previous piece The Daily Beast published about his client’s creation of the crudely named websites.  

“That was a malicious and gutless article by those ‘reporters,’” Sater’s attorney wrote in an email. “As a result, no cooperation will be provided to the Daily Beast. Everyone has to live with themselves. Punishment enough. No surprise as you recognized.”

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In between living with ourselves, The Daily Beast made time to review Foreign Agents Registration Act filings showing VTB has launched a lobbying campaign to try to end U.S. sanctions targeting the bank.

One of the bank’s lobbyists is Emanuel “Mike” Manatos, a Hillary Clinton bundler who donates generously to Democratic politicians. On Inauguration Day, Manatos gave $2,500 to Trump’s inauguration committee, according to a filing with the Justice Department. Manatos also neglected to disclose some of his lobbying on behalf of VTB until a year after it happened—including meetings he set up for CEO Kostin with members of Congress and Hill staffers.

The bank has also paid about $450,000 in legal fees to the firm Sidley Austin since June 2016, according to Department of Justice filings. Those filings say Sidley Austin “provides legal advice on U.S. laws and regulations” to the bank.

U.S. sanctions wouldn’t have kept VTB from financing the Trump Tower Moscow project but could have made it more difficult.

Brian O’Toole, an Atlantic Council nonresident senior fellow and former senior adviser in the Treasury Department’s Office of Foreign Assets Control, said that while the sanctions effectively bar the bank from borrowing money from U.S. persons, they don't block those persons from borrowing from the bank.

But depending on how a hypothetical deal to finance a construction project was put together, sanctions could have been a hindrance, either because they could prohibit certain contract provisions or because Western banks have shied away from business more broadly with sanctioned Russian banks.

“The sanctions would have potentially made it more troublesome to secure the financing needed for a deal of that size, even though sanctions generally would not prohibit borrowing from VTB,” O’Toole said. “A VTB Bank official would have been accurate to represent to a Trump Organization official that the sanctions would make it harder for them to finance a project in Moscow.”

Sater claimed in his November 2015 email to Trump attorney Michael Cohen—since acquired by the House Intelligence Committee—that the Moscow real estate venture would have secured Trump’s presidential bid, then in its fifth month.

“I will get Putin on this program and we will get Donald elected,” Sater emailed Cohen—though it is unclear how exactly a Moscow real estate deal would have “engineer[ed]” Trump’s victory, in Sater’s phrase.

Trump had signed a nonbinding letter of intent for the project on Oct. 28, 2015. Cohen, in January 2016, wrote to Kremlin spokesman Dmitry Peskov for aid in advancing the inchoate deal. But Cohen said it collapsed that same month, after he “lost confidence that the prospective licensee would be able to obtain the real estate, financing and government approvals necessary.” The Trump Organization said in a statement Monday that among the reasons the real-estate deal fell through was “no financing.”

Trump has long been a critic of U.S. sanctions against Russia and complained noisily before signing a bill on Aug. 2 to tighten sanctions on the Kremlin.