US President Donald Trump’s company helped develop a property in Azerbaijan with a pair of local businessmen whose family is said to have extensive ties to the Iranian Revolutionary Guard Corps, according to a report in The New Yorker.
The Trump Organization’s partner for the Trump Tower Baku, for which the firm licensed its name, was a company owned by Anar and Elton Mammadov, the respective son and brother of Ziya Mammadov, who served as the country’s transportation minister until February of this year.
According to the report in The New Yorker, Ziya Mammadov — who is described in US diplomatic cables published by Wikileaks as “notoriously corrupt even for Azerbaijan” — granted a number of multimillion dollar contracts as transportation minister to the Iranian construction firm Azarpassillo, whose chairman Keyumars Darvishi previously headed the IRGC construction company Raman and fought in the Iran-Iraq war.
The IRGC is one the most powerful entities in Iran, tasked with both defending the regime at home and exporting the country’s “Islamic Revolution” abroad. It also controls large swaths of the Iranian economy, including through its extensive holdings in the country’s oil and gas industries.
The IRGC has drawn the ire of the US for sponsoring terrorist groups such as Hezbollah and Hamas and over accusations it deals in drug trafficking and money laundering. The Trump administration is reportedly weighing labeling the IRGC a terrorist organization.
Although the report in The New Yorker does not say whether or not the IRGC had any indirect involvement in funding the project through their ties to the Mammadovs, it details the extensive business ties between the family and Darvishi while raising the possibility money tied to the IRGC may have been funneled into the project.
According to the report, the IRGC’s interest in doing business in Azerbaijan with the Mammadovs may have in large part been connected to the latter’s ownership of a bank, allowing the IRGC to launder money at a time that Iran was largely cut off from the international financial system due to sanctions relating to the country’s nuclear weapons program.
The report noted that during the same years that the transportation ministry was awarding lucrative contracts to Azarpassillo, the Mammadovs invested in a number of building projects, while also putting money in a number of offshore banking accounts and shell companies, all of which are widely used for money laundering due to their lack of transparency.
Three of Keyumars Darvishi’s brothers are also believed to have ties to the IRGC, with his brother Kamal having formerly headed Nasr, which was sanctioned by the US in 2007 over its connection to Iran’s nuclear weapons program.
The New Yorker piece raises the possibility that the Trump Organization may have violated the Foreign Corrupt Practices Act, passed in 1977, which forbids “American companies from participating in a scheme to reward a foreign government official in exchange for material benefit or preferential treatment,” and makes it a crime for “an American company to unknowingly benefit from a partner’s corruption if it could have discovered illicit activity but avoided doing so.”
But no evidence of such a violation was uncovered and Garten has maintained that the company had commissioned a risk assessment before going ahead with the deal and performing “extensive due diligence,” even as he said that he personally did not oversee the process and that the people who did were no long with the Trump Organization.
When asked to provide the documentation on due diligence, he declined.
After Trump became a presidential candidate in 2015, a number of US outlets ran stories on the Baku project, prompting the Trump Organization’s chief legal counsel, Alan Garten, to claim that Trump had very little to do with the deal and that the company did not engage directly with Mammadov.
Trump, Garten told the Washington Post, “invested virtually no money in the project while selling the rights to use his name and holding the contract to manage the property.”
But an Azerbaijani lawyer who worked on the project told the New Yorker that Trump Organization was heavily involved and that staff, including Ivanka Trump who was the most senior executive at the company at the time, visited Baku frequently to sign off on orders.
“We were always following their instructions. We were in constant contact with the Trump Organization. They approved the smallest details,” the unnamed lawyer said.
Garten flatly denied to the New Yorker that the Baku deal was in violation of the FCPA, even if corruption occurred, because: “We didn’t own it, we had no equity. We didn’t control the project. The flow of funds is in the wrong direction. We did not pay any money to anyone. Therefore, it could not be a violation of the FCPA.”
After Trump’s election in November, Garten said the company had severed ties with the project.