The Azerbaijanis behind the project were close relatives of Ziya Mammadov, the Transportation Minister and one of the country’s wealthiest and most powerful oligarchs. According to the Transparency International Corruption Perception Index, Azerbaijan is among the most corrupt nations in the world. Its President, Ilham Aliyev, the son of the former President Heydar Aliyev, recently appointed his wife to be Vice-President. Ziya Mammadov became the Transportation Minister in 2002, around the time that the regime began receiving enormous profits from government-owned oil reserves in the Caspian Sea. At the time of the hotel deal, Mammadov, a career government official, had a salary of about twelve thousand dollars, but he was a billionaire.
The Trump Tower Baku originally had a construction budget of a hundred and ninety-five million dollars, but it went through multiple revisions, and the cost ended up being much higher. The tower was designed by a local architect, and in its original incarnation it had an ungainly roof that suggested the spikes of a crown. A London-based architecture firm, Mixity, redesigned the building, softening its edges and eliminating the ornamental roof. By the time the Trump team officially joined the project, in May, 2012, many condominium residences had already been completed; at the insistence of Trump Organization staffers, most of the building’s interior was gutted and rebuilt, and several elevators were added.
After Donald Trump became a candidate for President, in 2015, Mother Jones, the Associated Press, the Washington Post, and other publications ran articles that raised questions about his involvement in the Baku project. These reports cited a series of cables sent from the U.S. Embassy in Azerbaijan in 2009 and 2010, which were made public by WikiLeaks. In one of the cables, a U.S. diplomat described Ziya Mammadov as “notoriously corrupt even for Azerbaijan.” The Trump Organization’s chief legal officer, Alan Garten, told reporters that the Baku hotel project raised no ethical issues for Donald Trump, because his company had never engaged directly with Mammadov.
According to Garten, Trump played a passive role in the development of the property: he was “merely a licensor” who allowed his famous name to be used by a company headed by Ziya Mammadov’s son, Anar, a young entrepreneur. It’s not clear how much money Trump made from the licensing agreement, although in his limited public filings he has reported receiving $2.8 million. (The Trump Organization shared documents that showed an additional payment of two and a half million dollars, in 2012, but declined to disclose any other payments.) Trump also had signed a contract to manage the hotel once it opened, for an undisclosed fee tied to the hotel’s performance. The Washington Post published Garten’s description of the deal, and reported that Donald Trump had “invested virtually no money in the project while selling the rights to use his name and holding the contract to manage the property.”
A month after Trump was elected President, Garten announced that the Trump Organization had severed its ties with the hotel project, describing the decision to CNN as little more than “housecleaning.” I was in Baku at the time, and it had become clear that the Trump Organization’s story of the hotel was incomplete and inaccurate. Trump’s company had made the deal not just with Anar Mammadov but also with Ziya’s brother Elton—an influential member of the Azerbaijani parliament. Elton signed the contracts, and in an interview he confirmed that he founded Baku XXI Century, the company that owns the Trump Tower Baku. When he was asked who owns Baku XXI Century, he called it a “commercial secret” but added that he “controlled all its operations” until 2015, when he cut ties to the company. Elton denied having used his political position for profit.
An Azerbaijani lawyer who worked on the project revealed to me that the Trump Organization had not just licensed the family name; it also had signed a technical-services agreement in which it promised to help its partner meet Trump design standards. Technical-services agreements are often nominal addenda to licensing deals. Major hospitality brands compile exhaustive specifications for licensed hotels, and tend to approve design elements remotely; a foreign site is visited only occasionally. But in the case of Trump Tower Baku the oversight appears to have been extensive. The Azerbaijani lawyer told me, “We were always following their instructions. We were in constant contact with the Trump Organization. They approved the smallest details.” He said that Trump staff visited Baku at least monthly to give the go-ahead for the next round of work orders. Trump designers went to Turkey to vet the furniture and fabrics acquired there. The hotel’s main designer, Pierre Baillargeon, and several contractors told me that they had visited the Trump Organization headquarters, in New York, to secure approval for their plans.
Ivanka Trump was the most senior Trump Organization official on the Baku project. In October, 2014, she visited the city to tour the site and offer advice. An executive at Mace, the London-based construction firm that oversaw the tower’s conversion to a hotel, met with Ivanka in Baku and New York. He told me, “She had very strong feelings, not just about the design but about the back of the hotel—landscaping, everything.” The Azerbaijani lawyer said, “Ivanka personally approved everything.” A subcontractor noted that Ivanka’s team was particular about wood panelling: it chose an expensive Macassar ebony, from Indonesia, for the ceiling of the lobby. The ballroom doors were to be made of book-matched panels of walnut. On her Web site, Ivanka posted a photograph of herself wearing a hard hat inside the half-completed hotel. A caption reads, “Ivanka has overseen the development of Trump International Hotel & Tower Baku since its inception, and she recently returned from a trip to the fascinating city in Azerbaijan to check in on the project’s progress.” (Ivanka Trump declined requests to discuss the Baku project.)
Jan deRoos, the Cornell professor, developed branded-hotel properties before entering academia. He told me that the degree of the Trump Organization’s involvement in the Baku property was atypical. “That’s very, very intense,” he said.
The sustained back-and-forth between the Trump Organization and the Mammadovs has legal significance. If parties involved in the Trump Tower Baku project participated in any illegal financial conduct, and if the Trump Organization exerted a degree of control over the project, the company could be vulnerable to criminal prosecution. Tom Fox, a Houston lawyer who specializes in anti-corruption compliance, said, “It’s a problem if you’re making a profit off of someone else’s corrupt conduct.” Moreover, recent case law has established that licensors take on a greater legal burden when they assume roles normally reserved for developers. The Trump Organization’s unusually deep engagement with Baku XXI Century suggests that it had the opportunity and the responsibility to monitor it for corruption.
And the rest of the story details a lot of evidence displaying quite a bit of corruption, including the aforementioned money laundering for the Iranians. The Mammadovs were up to their necks in graft, bribery and cooking the books, and Ivanka Trump helped oversee the entire mess.
The rotten apple doesn't fall far from the tree if you were thinking that Trump's daughter was the "nice one" folks. She's just as corrupt as our criminal-in-chief.