[Congressional Record Volume 163, Number 85 (Wednesday, May 17, 2017)]
[House]
[Pages H4291-H4294]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]
RAISING A QUESTION OF THE PRIVILEGES OF THE HOUSE
Mr. PASCRELL. Mr. Speaker, I rise to a question of the privileges of
the House and offer the resolution previously noticed.
The SPEAKER pro tempore. The Clerk will report the resolution.
The Clerk read as follows:
Expressing the sense of the House of Representatives that
the President shall immediately disclose his tax return
information to Congress and the American people.
Whereas, in the United States' system of checks and
balances, Congress has a responsibility to hold the Executive
Branch of government to the highest standard of transparency
to ensure the public interest is placed first;
Whereas, according to the Tax History Project, every
President since Gerald Ford has disclosed their tax return
information to the public;
Whereas, tax returns provide an important baseline
disclosure because they contain highly instructive
information including whether the candidate paid taxes, what
they own, what they have borrowed and from whom, whether they
have made any charitable donations, and whether they have
taken advantage of tax loopholes;
Whereas, disclosure of the President's tax returns could
help those investigating Russian influence in the 2016
election understand the President's financial ties to the
Russian Federation and Russian citizens, including debts owed
and whether he shares any partnership interests, equity
interests, joint ventures or licensing agreements with Russia
or Russians;
Whereas, the President fired FBI Director James Comey last
week, whose FBI was investigating whether the Trump campaign
colluded with Russia to influence the 2016 election;
Whereas, Attorney General Jeff Sessions, who made the
recommendation to fire Director Comey, during sworn testimony
neglected to mention his contacts with the Russian ambassador
and recused himself from anything involving the Russian
investigation;
Whereas, Senate Russia investigators have requested
information from the Treasury Department's criminal
investigation division, the Financial Crimes Enforcement
Network, or FinCEN, which handles cases of money laundering,
for information related to President Trump, his top officials
and campaign aides. FinCEN has been investigating allegations
of foreign money-laundering through purchases of U.S. real
estate;
Whereas, the President's tax returns would show us whether
he has foreign bank accounts and how much profit he receives
from his ownership in myriad partnerships;
Whereas, the President hired a law firm to send a letter to
Senator Lindsey Graham to fight suggestions he has Russian
business ties; this letter left open the question whether Mr.
Trump or his firms received Russian income or loans or
derived income from Russian-linked partnerships.
Whereas, Donald Trump Jr. said the Trump Organization saw
money ``pouring in from Russia'' and that ``Russians make up
a pretty disproportionate cross-section of a lot of our
assets.''
Whereas, the White House will not confirm whether the
President has filed a 2016 tax return;
Whereas, Congress gave itself the authority to review an
individual's tax returns to investigate and reveal possible
conflicts of interest of executive branch officials involved
in the Teapot Dome scandal.
Whereas, President Donald Trump's executive order on the
Review of designations under the Antiquities Act has directed
the U.S. Secretary of the Interior Ryan Zinke to review
national monuments that presidents have designated or
expanded since 1996.
Whereas, this review was praised by industry groups who
could benefit financially from oil, gas and mining and
condemned by environmental organizations concerned this
review will scrap or scale back critical federal designation
to protect tribal and historic lands.
Whereas, the American people are in the dark to knowing if
this review was started to justify selling or leasing public
lands to private corporations that could enrich the President
or his business partners without reviewing the President's
tax returns.
Whereas, it has been reported that federal prosecutors have
issued grand jury subpoenas to associates of former National
Security Advisor Michael Flynn seeking business records as
part of the ongoing probe into Russian involvement in the
2016 election;
Whereas, according to his 2016 candidate filing with the
Federal Election Commission, the President has 564 financial
positions in companies located in the United States and
around the world;
Whereas, against the advice of ethics attorneys and the
Office of Government Ethics, the President has refused to
divest his ownership stake in his businesses; and can still
withdraw funds at any time from the trust of which he is the
sole beneficiary;
Whereas, the Emoluments Clause was included in the U.S.
Constitution for the express purpose of preventing federal
officials from accepting any ``present, Emolument, Office, or
Title . . . from any King, Prince, or foreign state'';
Whereas, the most signed petition on the White House
website calls for the release of the President's tax return
information to verify compliance with the Emoluments Clause,
with 1 million, 94 thousand signatures as of date of this
resolution;
Whereas, the Chairmen of the Ways and Means Committee,
Joint Committee on Taxation, and Senate Finance Committee
have
[[Page H4292]]
the authority to request the President's tax returns under
Section 6103 of the tax code;
Whereas, the Joint Committee on Taxation reviewed the tax
returns of President Richard Nixon in 1974 and made the
information public;
Whereas, the Ways and Means Committee used IRC 6103
authority in 2014 to make public the confidential tax
information of 51 taxpayers;
Whereas, the American people have the right to know whether
or not their President is operating under conflicts of
interest related to international affairs, tax reform,
government contracts, or otherwise: Now, therefore, be it:
Resolved, That the House of Representatives shall--
1. Immediately request the tax return information of Donald
J. Trump for tax years 2006 through 2015 for review in closed
executive session by the Committee on Ways and Means, as
provided under Section 6103 of the Internal Revenue Code, and
vote to report the information therein to the full House of
Representatives.
2. Support transparency in government and the longstanding
tradition of Presidents and Presidential candidates
disclosing their tax returns.
{time} 1745
The SPEAKER pro tempore. Does the gentleman from New Jersey wish to
present argument on the parliamentary question whether the resolution
presents a question of the privileges of the House?
Mr. PASCRELL. Yes, Mr. Speaker.
The SPEAKER pro tempore. The gentleman from New Jersey is recognized.
Mr. PASCRELL. Mr. Speaker, the stunning conflicts of interest are
piling up as the President, his family, and his friends profit in their
personal business endeavors while serving in public office.
Under rule IX, clause 1, questions of the privileges of the House are
``those affecting the rights of the House collectively, its safety,
dignity, and the integrity of its proceedings.'' There is nothing more
of a threat to the integrity of this House than ignoring our duty to
provide a check and balance to the executive branch. To restore the
dignity of the House, we must use our authority to request President
Trump's tax returns and begin to give the American people the
transparency they deserve. That is what we should be giving them.
Now, Mr. Speaker, it is evidence time. Today there is in The Wall
Street Journal an article entitled, ``Russian State-Run Bank Financed
Deal Involving Trump Hotel Partner.'' It is a very interesting article,
I advise, and I want to put it into the Record with your permission.
Mr. Speaker, a letter was sent just recently from Mr. Trump's lawyers
to Mr. Trump and then on to Senator Lindsey Graham. That letter was
supposed to be an explanation of the President of the United States'
involvement in the finances and vice versa of Russia and President
Trump. It does not in any manner, shape, or form, Mr. Speaker, go into
any partnership which may exist. There is nothing about that. There is
nothing about the Russian state-run bank financing a deal involving Mr.
Trump's hotel partner in Toronto.
Number three, the Financial Crimes Enforcement Network, FinCEN as it
is called, which is part of the Treasury Department but independent--
independent--has independent investigative powers. They are looking
into the money laundering in that situation. They are already
investigating that with these Russian oligarchs--very interesting.
Also we know of what happened----
The SPEAKER pro tempore. The gentleman's remarks must be confined to
the question of order. The gentleman may proceed.
Mr. PASCRELL. Well, I would like to know, Mr. Speaker--I am sure you
would, Mr. Speaker--how foreign investments have enriched the President
of the United States. That is the only way we are going to find out the
conflicts of interest--the only way.
So I have heard some House leaders argue that the House should not
concern itself with things outside of its control. But section 6103 of
the IRS Code is very much within the control of the House, if you have
read it, giving specific responsibility to the chairman of the Ways and
Means Committee, and the American people are demanding the Congress
request the President's tax returns be exercised for several reasons.
Mr. Trump has not divested himself from his businesses as was
recommended by the Office of Government Ethics.
Mr. Speaker, I think it is relevant if we look at what was produced--
remember, it is evidence time--what was produced on January 21, 2009,
the ethics commitments by executive branch personnel and what has been
committed and produced under this administration. They have laughed at
Mr. Shaub, who is the ethics commission chairman. They have laughed at
him because it is almost like Cornelius Vanderbilt: You have the law; I
have the power.
The SPEAKER pro tempore. The gentleman will suspend.
The Chair will hear argument only on whether this resolution
qualifies under the rule----
Mr. PASCRELL. On a question of privilege, Mr. Speaker----
The SPEAKER pro tempore. On the question of order.
Mr. PASCRELL. I'm sorry to interrupt.
The SPEAKER pro tempore. The Chair will only hear----
Mr. PASCRELL. On a question of privilege--I am talking about the
privilege of this House. I am talking about the privilege of
Republicans and Democrats. We are all alike. We are all equal. Nobody
is better than anybody else.
What I am saying to you tonight, Mr. Speaker, is that this goes to
the very heart of the issue and why this is a privileged resolution
because we have a right to know, we have a right to uphold the
integrity of this institution--everybody--not just some.
Mr. Trump has not divested himself from his businesses as was
recommended by the Office of Government Ethics. We need to see how our
President--our President--would personally benefit from changes to our
Tax Code. Tax Code changes proposed by his administration could lower
his own personal tax bill by tens of millions of dollars. The American
people have a right to know that.
We have learned that earlier this year the President apparently asked
Mr. Comey to cease his investigation of Trump National Security Advisor
Flynn. In a surprise move last week, Mr. Trump fired the Director of
the FBI.
The SPEAKER pro tempore. The gentleman is reminded that remarks must
be confined to the question of order.
Mr. PASCRELL. Mr. Speaker, I am saying here and very specifically, we
have no way of knowing whether Mr. Trump or his firms have received
Russian income. It is an insult to the integrity of this House--
Republicans and Democrats alike. We need to know this. We need to know
that the President of the United States is beyond question in his
objectivity with any nation, and particularly those who are pretty
shaky in relationship with, like Russia.
A certified letter from paid attorneys that actually confirms the
President, in fact, does have financial ties to Russia does nothing to
assuage these concerns.
The legislative branch has the responsibility--it has the authority--
to check the executive branch, and section 6103(f)(1) is very clear,
very distinct, the privilege of the House--the privilege of the Tax
Code--which allows for an examination of the tax returns, the authority
put in place specifically so Congress could examine conflicts of
interest in the executive following the Teapot Dome scandal. As I
mentioned before, the possible sale of public lands under this
administration is not very different than the biggest scandal of the
20th century at Teapot Rock, Wyoming.
Mr. Speaker, nothing could be more of a threat to the integrity of
this distinguished----
The SPEAKER pro tempore. The Chair has heard the gentleman's argument
and is prepared to rule.
Mr. PASCRELL. Mr. Speaker, I have only 2 more minutes. May I finish?
The SPEAKER pro tempore. If the gentleman confines his remarks to the
question of order, the gentleman may conclude his argument.
Mr. PASCRELL. I am confining my remarks to the question of privileges
which I said last night. Mr. Speaker, I will not yield on that issue.
That is all I am doing--no more, no less. This is not a court. All I am
saying is putting forth the rationale behind the resolution which I
have put forth today--put forth yesterday and was read today.
[[Page H4293]]
We have nothing but evidence to justify an examination, Mr. Speaker.
This is not hot air. If and when such conflicts are revealed, I do not
want to say to our constituents that we had the power to review these
conflicts, but we did nothing. I for one do not want the integrity--my
integrity, the integrity of my colleagues, and the integrity of this
House--to be demeaned by such a shameful failure. That goes to the very
heart in their own words of what of a privileged resolution is.
To restore the dignity of the House, we must use our authority to
request President Trump's tax returns and give the American people the
transparency they deserve.
My concluding statement is this, Mr. Speaker: I mentioned Vanderbilt
before because that is a very powerful statement he made--a very rich
guy. He felt he could do anything: The law? What law? I am all the
power.
This is not the United States of America, this is not our democracy,
and this is not what Republicans and Democrats have fought for since
they have been in this House and before. I stand with us in only
getting what we deserve, and then we decide whether we will communicate
it to the American people through the Speaker.
Mr. Speaker, I thank you for your courtesies.
The SPEAKER pro tempore. The material referenced by the gentleman's
earlier unanimous consent request will be inserted following
disposition of the question of order.
The Chair is prepared to rule.
The gentleman from New Jersey seeks to offer a resolution as a
question of the privileges of the House under rule IX.
As the Chair ruled most recently on April 5, 2017, the resolution
directs the Committee on Ways and Means to meet and consider an item of
business under the procedures set forth in 26 U.S.C. 6103 and,
therefore, does not qualify as a question of the privileges of the
House.
Mr. PASCRELL. Mr. Speaker, I appeal the ruling of the Chair.
The SPEAKER pro tempore. The question is, Shall the decision of the
Chair stand as the judgment of the House?
Motion to Table
Mr. ROTHFUS. Mr. Speaker, I have a motion at the desk.
The SPEAKER pro tempore. The Clerk will report the motion.
The Clerk read as follows:
Mr. Rothfus moves that the appeal be laid on the table.
The SPEAKER pro tempore. The question is on the motion to table.
The question was taken; and the Speaker pro tempore announced that
the ayes appeared to have it.
Mr. PASCRELL. Mr. Speaker, on that I demand the yeas and nays.
The yeas and nays were ordered.
The SPEAKER pro tempore. Pursuant to clause 8 of rule XX, this 15-
minute vote on the motion to table will be followed by a 5-minute vote
on the motion to suspend the rules and pass H.R. 1177.
The vote was taken by electronic device, and there were--yeas 229,
nays 188, answered ``present'' 1, not voting 12, as follows:
[Roll No. 261]
YEAS--229
Abraham
Aderholt
Allen
Amash
Amodei
Arrington
Babin
Bacon
Banks (IN)
Barletta
Barr
Barton
Bergman
Biggs
Bilirakis
Bishop (MI)
Bishop (UT)
Black
Blackburn
Blum
Bost
Brady (TX)
Brat
Bridenstine
Brooks (AL)
Brooks (IN)
Buchanan
Buck
Bucshon
Budd
Burgess
Byrne
Calvert
Carter (GA)
Carter (TX)
Chabot
Cheney
Coffman
Collins (GA)
Collins (NY)
Comer
Comstock
Conaway
Cook
Costello (PA)
Cramer
Crawford
Culberson
Curbelo (FL)
Davidson
Davis, Rodney
Denham
Dent
DesJarlais
Diaz-Balart
Donovan
Duffy
Duncan (SC)
Duncan (TN)
Dunn
Emmer
Estes (KS)
Farenthold
Faso
Ferguson
Fitzpatrick
Fleischmann
Flores
Fortenberry
Foxx
Franks (AZ)
Frelinghuysen
Gaetz
Gallagher
Garrett
Gibbs
Gohmert
Goodlatte
Gosar
Gowdy
Granger
Graves (GA)
Graves (LA)
Graves (MO)
Griffith
Grothman
Guthrie
Harper
Harris
Hartzler
Hensarling
Herrera Beutler
Hice, Jody B.
Higgins (LA)
Hill
Holding
Hollingsworth
Hudson
Huizenga
Hultgren
Hunter
Hurd
Issa
Jenkins (KS)
Jenkins (WV)
Johnson (LA)
Johnson (OH)
Jordan
Joyce (OH)
Katko
Kelly (MS)
Kelly (PA)
King (IA)
King (NY)
Kinzinger
Knight
Kustoff (TN)
Labrador
LaHood
LaMalfa
Lamborn
Lance
Latta
Lewis (MN)
LoBiondo
Long
Loudermilk
Love
Lucas
Luetkemeyer
MacArthur
Marchant
Marino
Marshall
Massie
Mast
McCarthy
McCaul
McClintock
McHenry
McKinley
McMorris Rodgers
McSally
Meadows
Meehan
Messer
Mitchell
Moolenaar
Mooney (WV)
Mullin
Murphy (PA)
Noem
Olson
Palazzo
Palmer
Paulsen
Pearce
Perry
Pittenger
Poe (TX)
Poliquin
Posey
Ratcliffe
Reed
Reichert
Renacci
Rice (SC)
Roby
Roe (TN)
Rogers (AL)
Rogers (KY)
Rohrabacher
Rokita
Rooney, Francis
Rooney, Thomas J.
Ros-Lehtinen
Roskam
Ross
Rothfus
Rouzer
Royce (CA)
Russell
Rutherford
Scalise
Schweikert
Scott, Austin
Sensenbrenner
Sessions
Shimkus
Shuster
Simpson
Smith (MO)
Smith (NE)
Smith (NJ)
Smith (TX)
Smucker
Stefanik
Stewart
Stivers
Taylor
Tenney
Thompson (PA)
Thornberry
Tiberi
Tipton
Trott
Turner
Upton
Valadao
Wagner
Walberg
Walden
Walker
Walorski
Walters, Mimi
Weber (TX)
Webster (FL)
Wenstrup
Westerman
Williams
Wilson (SC)
Wittman
Womack
Woodall
Yoder
Yoho
Young (AK)
Young (IA)
Zeldin
NAYS--188
Adams
Aguilar
Barragan
Bass
Beatty
Bera
Beyer
Bishop (GA)
Blumenauer
Blunt Rochester
Bonamici
Boyle, Brendan F.
Brady (PA)
Brown (MD)
Brownley (CA)
Bustos
Butterfield
Capuano
Carbajal
Cardenas
Carson (IN)
Cartwright
Castor (FL)
Castro (TX)
Chu, Judy
Cicilline
Clark (MA)
Clarke (NY)
Clay
Cleaver
Clyburn
Cohen
Connolly
Conyers
Cooper
Correa
Costa
Courtney
Crist
Crowley
Cuellar
Cummings
Davis (CA)
Davis, Danny
DeFazio
DeGette
Delaney
DeLauro
DelBene
Demings
DeSaulnier
Deutch
Dingell
Doggett
Doyle, Michael F.
Ellison
Engel
Eshoo
Espaillat
Esty (CT)
Evans
Foster
Frankel (FL)
Fudge
Gabbard
Gallego
Garamendi
Gonzalez (TX)
Gottheimer
Green, Al
Green, Gene
Grijalva
Hanabusa
Hastings
Heck
Himes
Hoyer
Huffman
Jackson Lee
Jayapal
Jeffries
Johnson (GA)
Johnson, E. B.
Jones
Kaptur
Keating
Kelly (IL)
Kennedy
Khanna
Kihuen
Kildee
Kilmer
Kind
Krishnamoorthi
Kuster (NH)
Langevin
Larsen (WA)
Larson (CT)
Lawrence
Lawson (FL)
Lee
Levin
Lewis (GA)
Lieu, Ted
Lipinski
Loebsack
Lofgren
Lowenthal
Lowey
Lujan Grisham, M.
Lujan, Ben Ray
Lynch
Maloney, Carolyn B.
Maloney, Sean
Matsui
McCollum
McEachin
McGovern
McNerney
Meeks
Meng
Moore
Moulton
Murphy (FL)
Nadler
Neal
Nolan
Norcross
O'Halleran
O'Rourke
Pallone
Panetta
Pascrell
Perlmutter
Peters
Peterson
Pingree
Pocan
Polis
Price (NC)
Quigley
Raskin
Rice (NY)
Richmond
Rosen
Roybal-Allard
Ruiz
Ruppersberger
Rush
Ryan (OH)
Sanchez
Sarbanes
Schakowsky
Schneider
Schrader
Scott (VA)
Scott, David
Serrano
Sewell (AL)
Shea-Porter
Sherman
Sinema
Sires
Slaughter
Smith (WA)
Soto
Speier
Suozzi
Swalwell (CA)
Takano
Thompson (CA)
Thompson (MS)
Titus
Tonko
Torres
Tsongas
Vargas
Veasey
Vela
Velazquez
Visclosky
Walz
Wasserman Schultz
Waters, Maxine
Watson Coleman
Welch
Wilson (FL)
Yarmuth
ANSWERED ``PRESENT''--1
Sanford
NOT VOTING--12
Chaffetz
Cole
DeSantis
Gutierrez
Higgins (NY)
Johnson, Sam
Napolitano
Newhouse
Nunes
Payne
Pelosi
Schiff
{time} 1821
Ms. SPEIER changed her vote from ``yea'' to ``nay.''
Mr. POSEY changed his vote from ``nay'' to ``yea.''
So the motion was agreed to.
The result of the vote was announced as above recorded.
A motion to reconsider was laid on the table.
The material previously referred to by Mr. Pascrell is as follows:
[From the Wall Street Journal]
Russian State-Run Bank Financed Deal Involving Trump Hotel Partner
(By Rob Barry, Christopher S. Stewart and Brett Forrest)
VEB, a Russian state-run bank under scrutiny by U.S.
investigators, financed a deal involving Donald Trump's
onetime partner in a Toronto hotel tower at a key moment for
the project, according to people familiar with the
transaction.
Alexander Shnaider, a Russian-Canadian developer who built
the 65-story Trump International Hotel and Tower, put money
[[Page H4294]]
into the project after receiving hundreds of millions of
dollars from a separate asset sale that involved the Russian
bank, whose full name is Vnesheconombank.
Mr. Shnaider sold his company's share in a Ukrainian
steelmaker for about $850 million in 2010, according to S&P
Global Market Intelligence. According to two people with
knowledge of the deal, the buyer, which hasn't been
identified publicly, was an entity acting for the Russian
government. VEB initiated the purchase and provided the
money, these people say.
U.S. investigators are looking into any ties between
Russian financial institutions, Mr. Trump and anyone in his
orbit, according to a person familiar with the probe. As part
of the investigation, they're examining interactions between
Mr. Trump, his associates and VEB, which is now subject to
U.S. sanctions, said another person familiar with the matter.
The Toronto deal adds a new element to the list of known
connections between Mr. Trump's associates and Russia.
After Mr. Shnaider and his partner sold their stake in the
steelmaker, Mr. Shnaider injected more money into the Trump
Toronto project, which was financially troubled. Mr.
Shnaider's lawyer, Symon Zucker, said in an April interview
that about $15 million from the asset sale went into the
Trump Toronto project. A day later, he wrote in an email: ``I
am not able to confirm that any funds'' from the deal ``went
into the Toronto project.''
A spokesman for the Trump Organization, the family's real-
estate firm, said Mr. Trump had no involvement in any
financial dealings with VEB and that the Trump company
``merely licensed its brand and manages the hotel and
residences.'' VEB didn't respond to requests for comment.
Mr. Trump has said he has no dealings with Russia. ``To the
best of my knowledge, no person that I deal with does,'' he
said in February. On Friday, Mr. Trump's lawyers released a
two-month-old letter stating that 10 years of his tax returns
show little income, investments or debt from Russian sources
beyond items already known to the public.
VEB has long been viewed by Russian analysts as a vehicle
for the Russian government to fund politically important
projects, including the 2014 Winter Olympics in Sochi. A VEB
executive in New York was sentenced to prison last year after
pleading guilty to conspiring to act in the U.S. as a Russian
agent without notifying U.S. authorities.
In the wake of U.S. intelligence agency findings that
Russian government-directed hackers interfered in the 2016
election, several agencies, including the Federal Bureau of
Investigation, are conducting a counterintelligence probe
into whether Mr. Trump's campaign staff had any contact with
Russian officials. Committees in the House of Representatives
and the Senate also are investigating the matter. Russian
authorities have denied any interference.
At the time of Mr. Shnaider's steelmaker deal, Russian
President Vladimir Putin was chairman of VEB's supervisory
board, and major deals would have been approved by him,
according to a former Russian government official and several
Russian government and economic experts. The bank later was
placed on the U.S. sanctions list after Russia's intrusion
into Ukraine and its annexation of Crimea in 2014. American
entities are barred from financial involvement with the bank.
VEB made headlines when it emerged that its chairman met
with Mr. Trump's son-in-law, Jared Kushner in December. A
bank spokesperson has said VEB's leaders met Mr. Kushner and
numerous global financial executives as it developed a new
strategy for the bank. Mr. Spicer has said Mr. Kushner's
meeting was part of his role during the Trump transition as
the ``primary point of contact with foreign government
officials.''
The Toronto project was billed in 2007 as a joint venture
between Mr. Trump and Mr. Shnaider and was projected to cost
about 500 million Canadian dollars. Mr. Trump said at the
time he would manage the hotel's operations and Mr. Shnaider
planned to develop the tower, which also would include
condominiums, through his company, Talon International
Development Inc.
The project has been dogged by financial problems. In
November, it entered insolvency proceedings, and a judge in
March approved its sale.
Alan Garten, the Trump Organization's general counsel, said
the company ``was not the owner, developer or seller'' of the
project. While The Wall Street Journal and others reported in
2011 and 2012 that Mr. Trump had a minor ownership stake in
it, Mr. Garten now says Mr. Trump ``did not hold'' equity and
had no involvement with the financing.
The Trump Toronto Hotel Management Corp. has received at
least $611,000 in fees from the project since 2015, federal
financial-disclosure forms filed last May show. The forms
don't disclose the company's total income from the deal.
Shortly after the project broke ground in 2007, about 85%
of the units were presold. During the financial crisis, some
buyers pulled out and others were unable to get financing,
receivership documents show. Midland Resources Holding Ltd.,
then owned by Mr. Shnaider and a partner, was on the hook for
cost overruns, the documents show.
Midland Resources had acquired its stake in the Ukrainian
steelmaker, called Zaporizhstal, for about $70 million after
the collapse of the Soviet Union. The 2010 transaction to
sell it was opaque. Midland transferred ownership of its
portion of the steelmaker to the unnamed buyer through five
offshore companies, according to Mr. Shnaider's lawyer and
court documents.
The idea for the deal was brought to a top VEB executive by
a former Ukrainian government official, according to an
investment banker familiar with what happened. Although the
buyer wasn't named, a steel trader with knowledge of the deal
said VEB itself ended up with control of Midland's share of
the steelmaker. At the time, Russian entities saw gaining
control of large industrial assets in Ukraine as having
strategic value to Russian political interests in the future,
said another investment banker with knowledge of the deal.
Mr. Zucker, Mr. Shnaider's lawyer, said Midland Resources
``has never had any relationship with VEB'' and ``does not
dictate where their purchasers borrow funds.'' He declined to
identify the buyer, citing confidentiality provisions, other
than to say it was a ``Ukrainian industrial group.''
Mr. Shnaider's companies continued to pump money into the
Toronto tower as it struggled to stay afloat, according to
his lawyer and later court documents. Later, Mr. Shnaider
became embroiled in a legal battle with Mr. Trump's companies
over management issues. The Trump Organization declined to
comment.
In November, a Canadian judge placed the tower into
receivership. Mr. Trump's company was owed C$116,165.72, and
Mr. Shnaider's company as much as C$105 million, court
documents show.
Recently, a judge approved the sale of the building to a
California-based investment firm for about $220 million.
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