The Company That Donald Trump Keeps
With Donald Trump's skeletal presidential operation navigating rough waters, how might he steer his ship back on course? He could try taking his own advice and begin building relationships with respected, trustworthy advisers and fellow politicians.
"Donald Trump and the Trump Organization are masters of opportunity recognition," noted "Entrepreneurship 101," a slender volume published almost a decade ago under the Trump University imprint. One path to success, the book advised aspiring tycoons, is to cultivate "relationships with the best business partners."
In his own career, alas, Trump hasn't often followed this strategy. Instead, he has routinely relied on his own instincts and operated impulsively both at home and abroad, sometimes corralling business partners who haven't been A-listers.
Consider the Trump SoHo, a swanky hotel in lower Manhattan that offers, the Trump Organization says, "world-class hospitality," "sophistication and style," and "true decadence."
One of Trump's partners on the project was the Sapir Organization. That company's founder, the late Tamir Sapir, arrived in New York from the Soviet Union as a cab driver before striking it rich trading Russian oil and local real estate. Six years ago, Forbes described him as a "tough, unloved landlord, a pariah to many brokers."
Trump's other partner on the project was the Bayrock Group, based in Trump Tower, which was controlled by a former Soviet official and Kazakh named Tevfik Arif.
(Trump also asked Arif to testify as a trusted business partner and character witness when he sued me for libel 10 years ago, claiming that my biography, "TrumpNation," had damaged his business prospects in Russia and elsewhere. He lost the case.)
The man who played a pivotal role connecting Trump and Arif, bringing Trump into the mix on the SoHo hotel and other projects, was a Bayrock employee of Russian descent named Felix Sater. Over the years, Sater had repeatedly drawn the attention of law enforcement officials for, among other things, money laundering, helping organized crime families defraud stock investors, and stabbing a man in the face with the stem of a broken margarita glass.
Trump has repeatedly denied knowing that anything was amiss with Sater during the years they worked together, though he maintained a relationship with Sater even after news accounts about his sordid background surfaced.
During a deposition of Trump in late 2007, my lawyers asked him whether he planned to sever his relationship with Sater because of his organized crime ties. Trump said he hadn't made up his mind.
"Have you previously associated with people you knew were members of organized crime?" one of my lawyers asked.
"No, I haven't," Trump responded. "And it's hard to overly blame Bayrock. Things like that can happen. But I want to see what action Bayrock takes before I make a decision."
In fact, Trump had knowingly associated with mob figures before.
When he entered the Atlantic City casino market in the late 1970s, two of his partners, Kenneth Shapiro and Daniel Sullivan, were men he knew to have organized crime ties. Shapiro was a street-level gangster and a bag man for Philadelphia's Scarfo crime family; Sullivan was a Mafia associate, an FBI informant, and a labor negotiator.
Trump told me when I was reporting "TrumpNation" that anyone entering Atlantic City during the early gambling frenzy had to work with guys like Shapiro and Sullivan, that he used intermediaries to deal with both men, that he didn't like either of them, and that he wasn't concerned that the partnership might sully his reputation. There was money to be made, after all.
This conflicted with what Trump told New Jersey regulators when he sought a gambling license in Atlantic City in 1982. During a public hearing, he said that he didn't "think there's anything wrong with" Shapiro and Sullivan and that they, like others, "have been in Atlantic City for many, many years and I think they are well thought of."
Prior to that testimony, Trump met with FBI agents and told them, according to an FBI memorandum about the meetings, that he believed "Organized Crime elements were known to operate in Atlantic City" and that he "did not wish to tarnish his family's name." He also told the FBI that Sullivan was a "labor consultant to their firm," that he was "aware that this is a very rough business," and that Sullivan "knows people, some of whom may be unsavory by the simple nature of the business."
When Trump later chatted with me aboard his jet about his troubled gambling career -- almost 25 years after he entered Atlantic City -- his recollections of Shapiro and Sullivan had sharpened.
"They were tough guys," Trump told me. "In fact, they say that Dan Sullivan was the guy that killed Jimmy Hoffa."
Sullivan "probably wasn't an honest guy," Trump added, and Shapiro "was like a third-rate, local real estate Mafia."
Atlantic City wasn't the only market in which Trump paired with Sullivan, however. Back in the 1970s, when Trump remade a rundown Manhattan hotel into the Grand Hyatt, he used Sullivan as a labor negotiator, an episode Tom Robbins detailed for the Marshall Project.
In fact, when Trump entered the Manhattan real estate market as a young man -- and particularly when he developed his signature project, Trump Tower -- he intersected with an even broader array of mobbed-up contractors, disreputable concrete vendors and the like. Wayne Barrett outlined those relationships in his book "Trump: The Greatest Show on Earth." (I was a research assistant on the book.)
As Barrett pointed out, at the time Trump ventured into the Manhattan market it would have been almost impossible for any developer to completely avoid the mob. On the other hand, as Barrett also noted, major New York developers, including the Lefraks and the Resnicks, went out of their way to publicly condemn the Mafia cartels or to file lawsuits against them. Trump didn't emulate those developers, however, choosing instead to simply go along to get along.
When Trump did try to forge relationships in Atlantic City and New York with mainstream corporations that might have helped him transcend some of his riskier partnerships, the collaborations soured. Disagreements over control, marketing, accounting and basic trust unwound partnerships with the Pritzker family on the Grand Hyatt in New York, as well as a joint venture with Holiday Inn in Atlantic City.
In his presidential run, too, Trump hasn't bonded with seasoned politicians like Paul Ryan and John McCain who might strengthen his bid -- people who might have helped him avoid the alternately alarming and comic mistakes he has made in the past week alone.
Between now and Nov. 8, Trump could mend the damage by pulling his splintered campaign team together, further professionalizing his staff, focusing on proper messaging, and, above all, building relationships with GOP leaders and operatives.
But don't expect that to happen.
This column does not necessarily reflect the opinion of the editorial board or Bloomberg LP and its owners.
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