A real estate deal from the 1990s mentions President Trump by name. What is the document and what does it mean?
According to documents in the Panama Papers, in 1991 a Panamanian company called Process Consultants bought a condo on the 16th floor of the recently completed Trump Palace. Construction on the skyscraper began in 1989, with a budget of $185 million. Process Consultants was created four years earlier; it was owned through “bearer shares,” which can be a sign of money laundering.
Process Consultants was created by Dresdner Bank LatinAmerika AG for a client who may have been a German-Ecuadorian industrialist. Regardless, in 1994, the owner of the condo decided to sell, and Trump Corporation was their exclusive broker. The eventual purchaser may or may not be a woman from Hong Kong who has been mentioned several times in other Panama Paper documents. If you are looking for the bottom line up front, there are a lot of unanswered questions (and typos) in the document.
The Panama Papers have been a significant source for investigative journalists to uncover corruption by the rich and powerful. In October, the former prime minister of Pakistan was indicted on corruption charges stemming from details uncovered in the papers. The mention of the current president is the first time an American politician has been mentioned in the trove of documents. However, it is important to note that the Obama White House pushed for trade deals in countries that include Panama, despite being warned that it would make money laundering and tax evasion easier.
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The real estate documents mark the earliest mention of President Trump in the Panama Papers. Despite what many are claiming, the documents themselves do not provide any proof of illegal activities. What does raise concern is the fact that bearer bonds and Mossack Fonseca were involved in some capacity.
So what exactly are bearer shares? And who or what is Mossack Fonseca?
Most Americans have never heard of bearer shares or bearer bonds outside of the 1988 movie Die Hard, in which a group of terrorists attempts to steal $640 million in bearer bonds from Nakatomi Plaza. Bearer shares are bearer instruments that are issued by a business organization or a government; these documents entitle those in physical possession of the document to the ownership of the specified property.
What makes them unique is that unlike other investment securities, they are unregistered. This means that there are no records maintained about who owns them or any transactions they are involved in.
What makes them unique is that unlike other investment securities, they are unregistered. This means that there are no records maintained about who owns them or any transactions they are involved in. This makes them an attractive option for those who wish to maintain their anonymity, at the risk of the bonds or shares being unrecoverable in the case of loss, theft, or destruction. These features make bearer shares and bearer bonds an ideal instrument for money laundering and tax evasion. Because of this, the United States severely limited the issuance of new bearer shares and bonds with the Tax Equity and Fiscal Responsibility Act of 1982.
Mossack Fonseca & Co. is a law firm and “corporate service provider” that is headquartered in Panama. Before the Panama Papers began leaking, they were unknown to most of the world. Their specialty was helping their clients incorporate firms in offshore jurisdictions. In and of themselves, much like bearer shares, shell companies and offshore bank accounts are not illegal. However, given their inability to mask ownership and financial transactions, they can be utilized to launder money and evade taxes.
Many of Mossack Fonseca’s clients revealed in the Panama Papers have been blacklisted by the United States government for their ties to drug trafficking and terror activities. For their part, Mossack Fonseca has denied any wrongdoing.
So what does this all mean for President Trump?
Quite frankly, nothing unless it can be proven that he knew that his company was facilitating money laundering or tax evasion. The only thing that the use of bearer shares signals by itself is that one of the participants wanted to keep the transaction private.
This does not mean that the transaction itself is questionable at all, but it does raise valid concerns about why the entity in question wanted to conduct business in this way. However, it is important to remember that it does not appear that the Trump Corporation wanted this privacy, but rather it is a question of the original property owner.
This “revelation” is not at all the smoking gun that some had hoped for, or at least not yet.
