Trump thrown question on dubious Kazakh money during Nazarbayev visit

Trump thrown question on dubious Kazakh money during Nazarbayev visit
By bne IntelliNews January 18, 2018

Donald Trump was briefly put on the spot by a reporter over whether Kazakh money was invested in Manhattan’s Trump SoHo, during Kazakh President Nursultan Nazarbayev’s visit to the White House. News agencies on January 17 reported that the US president “looked surprised” when asked the question, before responding: “No idea. Really no idea.”

Trump SoHo, a 46-storey luxury apartments and hotel complex in Manhattan, is now named The Dominick after having the name of Trump removed from it last December following the Trump Organization’s loss of control of the building and speculation that some residents did not want to be associated with the tumultuous president.

A Financial Times investigation alleged in 2016 that the Trump SoHo venture might have links to a claimed Kazakh money laundering scheme tied to the family of a former Kazakh energy minister and ex-mayor of Almaty city, Viktor Khrapunov, and the building’s past may feature in investigations being conducted by US special counsel Robert Mueller into Russian interference in the 2016 United States elections. Specifically, Khrapunov’s son, Ilyas Khrapunov, supposedly bought condos in the complex. It was later alleged that Khrapunov’s purchases were meant to conceal assets of his oligarch father-in-law and fugitive banker Mukhtar Ablyazov.

A Bloomberg report recently reiterated these allegations, also noting Ilyas Khrapunov worked on a separate deal with Felix Sater, a former executive of New York-based real estate developer Bayrock Development and one-time adviser to Trump.

Moreover, the report alleged that millions of dollars from a Kazakh chromium miner, Aktyubinsk Chromium Chemicals Plant (AZXS), flowed into Bayrock, which partnered with Trump to construct Trump SoHo. Bayrock was founded and run by Tevfik Arif, a Kazakh of ethnic-Turkish origin.

An ongoing civil lawsuit against Bayrock and its executives revealed that Arif supposedly funnelled money to the Trump Tower-based company from the profits of AZXS, which was controlled by Arif's brother Refik. However, Bayrock has rejected these and other allegations in the lawsuit. The lawsuit, filed by an ex-finance director of Bayrock, Jody Kriss, also suggests the company may have been involved in money laundering.

Off the agenda
The meeting between Trump and Nazarbayev did not appear to brush against any of Trump’s own potential business ties to Kazakhstan.  

Some analysts believe Nazarbayev, whether willingly or on behalf of Russia, may have attempted to take on the mantle of a mediator between the US and Russia and that Trump’s choice to host a meeting with Nazarbayev was due to his present inability to meet with Putin directly.

After all, Kazakhstan last year supported Russia’s Syrian peace talk efforts by hosting gatherings in the Kazakh capital of Astana.

But the meeting of the presidents, at least officially, stayed away from the topic of Russia as far as possible. Instead the two sides pledged to strengthen cooperation under the Enhanced Strategic Partnership Dialogue framework, the C5+1 (five Central Asia countries plus the US) partnership, and related projects. They also discussed the fourth Five Year Plan for Military Cooperation between the US Department of Defense and the Ministry of Defense of Kazakhstan and the ex-Soviet nation’s interest in joining the Cybercrime Convention.

On the agenda
The primary reason behind Trump’s decision to meet Nazarbayev may have related to Kazakhstan’s ambassador to the UN, Kairat Umarov. He took over the rotating presidency of the UN Security Council on January 1. Umarov has already overseen debates concerning the outbreak of demonstrations across Iran, among other issues. Trump’s focus during the meeting on Kazakhstan’s role in providing logistical support for US troops fighting in Afghanistan was largely in line with Kazakhstan’s commitments to the security council and Nazarbayev’s goal of burnishing his country’s image as a successful breakout nation.

With a concluding flourish rounding off the visit, Nazarbayev said on January 17 that Kazakhstan has reached agreements with several US companies worth a total of $7.5bn. The deals include contracts to supply Boeing passenger planes and General Electric locomotives to the Central Asian nation as well as investments in Kazakhstan’s agricultural sector.

The timing of the meeting also happened to coincide with an earlier decision by the US-based Bank of New York Mellon to freeze 40% of the assets of Kazakhstan’s sovereign wealth fund as part of a legal dispute between the Kazakh government and a Moldovan businessman. The row, while unrelated to Kazakhstan’s relations with the US, paints Nazarbayev’s government as corrupt and racketeering, something which does not bode well either for Nazarbayev’s perennial Kazakhstan PR campaign or for Trump’s reputation as a president who critics say has a knack for associating with corrupt ex-Soviet politicians and a fondness for dictators.