We Don’t Refer To Trump As A Kleptocrat Frequently Enough— Not Even Close

There Are Reasons Conservatives Want To De-Fund The IRS

We sure as hell can’t count on the ole NY Times to get that trend started; they’re not even up to authoritarian yet, let alone fascist. But, like most authoritarians and fascists, Trump surely is a kleptocrat, <> probably— I'm just spit-ballin' here— more so than most<>.

Yesterday, Financial Times readers were treated to an essay by Anne Applebaum about the nexus between authoritarians and kleptocrats… and the very first word was “Donald.” The second was neither “Duck” nor “Roeser” (BKA- Buck Dharma, this guy). No it was about the the developer who sold condos in his eponymously named tower on 5th Avenue to shell companies based in the world’s shadiest jurisdictions such as Panama, the Cayman Islands, the British Virgin Islands and Delaware, which conceal corporate records.

She noted that there was nothing exceptional about any of that: “in the four decades that followed, more than a fifth of the sales in Trump-owned and Trump-licensed buildings, more than 1,300 properties, were made to anonymously owned shell companies, for cash, without a mortgage, which meant the purchasers did not have to have any uncomfortable conversations with lenders. Some of those companies sold those condos again, very quickly, at much higher prices or at much lower prices— usually a sign that money laundering might have been the actual purpose of the purchase. A Trump-licensed building in Florida sold a two-bedroom condo to a shell company on August 12 2010, for example, for $956,768. That shell company sold the condo to another shell company, at a heavy loss, for $525,000 that same day… Russian, Kazakh and other post-Soviet oligarchs had probably been laundering money through Trump-licensed properties.”

There’s no hard evidence yet— at least none shared with the public— that Trump was in on the money laundering. But everyone knows he was. “During Trump’s presidency, the scrutiny on his business dealings intensified, but that made no difference: the proportion of his company’s anonymous sales went up, not down. In 2017, the first year of the Trump administration, more than two-thirds of sales in Trump-owned or Trump-licensed buildings, tens of millions of dollars’ worth of property, went to anonymous purchasers. If any of the buyers were hoping thereby to influence the domestic or foreign policy decisions of the Trump administration, we will never know.” But we do know… we just can’t prove it in court. 

In the years since Trump’s 2016 election, a lot has been written about his autocratic instincts, about his scorn for ethical norms and about his attempt to retain power after losing the 2020 election. But as illustrated by the story of his real estate company’s reliance on dubious shell companies, Trump was already operating in an alternate ethical universe long before he became president, a world where the rules that most ordinary people live by are easily broken. 

Inside this domain, anonymously owned companies and funds based in offshore tax havens hide what could be as much as 10 per cent of the world’s GDP. This is money earned from organised crime or narcotics operations, stolen from legitimate institutions, or simply hidden, legally, with the aim of avoiding taxation, alimony or embarrassment. In this world, theft is rewarded. Taxes are not paid. Law enforcement is impotent and underfunded. Regulation is something to be dodged, not respected. The climate of this alternate reality is so different from the ordinary world that many have sought to find a name for it. The journalist Oliver Bullough called it Moneyland, the title of the book he published in 2018. Tom Burgis, then an FT reporter, named it Kleptopia in his book of 2020.

Until recently, this alternative universe was considered a kind of nuisance, perhaps a problem for chronically underfunded regulators but not really something that required more political attention. However, since Russia’s full-scale invasion of Ukraine in 2022, more people have begun to understand the ways in which the secret economy now poses a genuine national security threat to the US, to the UK, to Europe and to other democracies. 

More to the point, they understand that the confiscation of a few yachts is no solution. What if, instead, we shut it all down? Whatever small advantages secrecy provides to some, businesses cannot compensate for the lethal threat that secretive business practices pose to democracy itself. The banks, financial institutions, law firms and accountants who constructed the opaque world of money laundering and tax havens could now deconstruct it.

Kleptocracy, in its modern form, began in the 1990s. Multiple accounts of Vladimir Putin’s rise to power have shown, for example, how even as deputy mayor of St Petersburg at that time he presided over schemes to steal money from the state, to launder it abroad and then bring it back into Russia, all with the help of European partners. Although Putin has spent his life as a civil servant, he has used his stolen money, and the stolen money hoarded by his inner circle, as a source of power and influence ever since. 

Since the 1990s, the kleptocratic model created in Russia has spread much further. From Angola to Zimbabwe, dictators with access to hidden sources of wealth are better able to resist demands for political change. They can hide their families and their property abroad. They can finance bribery and influence operations. The aura of secrecy they build is also part of what keeps them in power. Ordinary Russians, ordinary Chinese or ordinary Venezuelans are not allowed to know why their rulers, and their rulers’ friends and their families, are billionaires, because they’re not meant to have any influence or understanding or knowledge of politics at all. That lack of knowledge creates a sense of helplessness, apathy, even despair. 

The rise of kleptocratic autocracies has affected the democratic world too, shaping it in unseen ways. That we don’t know whether any Americans or any foreigners sought to influence the Trump administration using the president’s condo sales is only the beginning of the problem. The very architecture of our cities— London, Miami, New York— has been shaped by people who purchase houses as a secret store of value, who don’t necessarily intend to live in them at all. 

This isn’t supposed to help criminals: most EU countries already have anti-money-laundering laws for real estate, for example. But they don’t have the apparatus to enforce them. Meanwhile, in some countries, the US included, the same financial instruments that allow people to hide wealth from tax authorities also allow them to donate anonymously to political campaigns, or to affect politics indirectly, through influence or personal contacts. 

Both the lack of transparency and the law’s helplessness create apathy and cynicism about our political systems, just as they do in the autocratic world— a cynicism that can feed into extremism and support for anti-democratic parties and ideas. 

Sheldon Whitehouse, a US senator who has lobbied hard to end anonymous transactions and curb the role of dark money in US politics, puts it like this: “Secrecy and democracy are antithetical,” he told me. “If American citizens aren’t allowed to understand who’s who on the political playing field, who’s playing for what team, who they really are, who they’re representing, you have disabled perhaps the most fundamental foundation of democracy.”

[This morning, we looked at legendary Nebraska Senator George Norris. We forgot to include this quote he was famous for:

“Publicity is the greatest cure for evils which may exist in government.”

I wouldn’t be surprised if Whitehouse had seen it many times.]

Perhaps the oddest thing about this system is the complacency it engenders. At least until recently, offshore tax havens were often treated like natural phenomena, land formations that cannot be changed or moved. The laws that made US states such as Delaware or South Dakota havens for people who wanted to hide money in trusts or anonymous companies were shrugged away as local problems. But all of these things are creations of the legal system, and they can easily be made illegal too. 

We could, for example, require all real estate transactions, everywhere in the US and Europe, to be totally transparent. We could require all companies to be registered in the name of their true owners, or all trusts to reveal the names of their beneficiaries. We could ban our own citizens from keeping money in jurisdictions that promote secrecy, and we could ban lawyers and accountants from engaging with them. That doesn’t mean that they would cease to exist, but they would be much harder to use. We could close loopholes that allow anonymity in the private equity and hedge fund industries. We could create effective enforcement teams and then help them to operate across countries and continents. 

We could do all of this in co-ordination with other partners around the world, and we could do so firm in the conviction that transparency is the normal, standard way of conducting business. Gary Kalman, the executive director of the US branch of Transparency International, the anti-corruption NGO, points out that the “vast majority of small business owners don’t have a problem naming their company— in fact, they often name the company after themselves.” 

In recent years, both Britain and the US have made progress in this direction. David Cameron, then UK prime minister, held an anti-corruption summit back in 2016. The Biden administration began to treat kleptocracy and grand corruption as matters for the National Security Council, not just for the Treasury. In 2024’s UK general election, Keir Starmer and foreign secretary David Lammy explicitly campaigned around the fight against kleptocracy, including in British Overseas Territories. More than 110 countries have pledged, in theory, to collect the names and basic information about the beneficial owners of companies and property. 

…[A] handful of laws may not be sufficient. Powerful, wealthy people— the leaders of legitimate, prominent businesses, sometimes backed by chambers of commerce or liberal newspapers— will no doubt continue to seek to block transparency. The regulators assigned to monitor these legal changes could be deprived of funding. Although a set of corporate transparency measures did pass during his administration, President Trump was not especially interested in the enforcement of anti-corruption laws, even reportedly telling then secretary of state Rex Tillerson, in the spring of 2017, to “get rid of” the Foreign Corrupt Practices Act, which bars American companies from bribing foreign officials. Although he failed to eliminate that law entirely, he did slow down investigations and prosecutions, and could, of course, do so again. 

The secretive world of kleptocracy is also protected by its own complexity. Money-laundering mechanisms are hard to understand and even harder to police. Anonymous transactions can move through different bank accounts in different countries in a matter of seconds, while anyone seeking to follow the money may need years to pursue the same trail. Civil servants charged with tracking complex, secretive billion-dollar deals earn low salaries themselves, and may not want to tangle with people of much greater wealth and influence. 

… Before his arrest, [Alexei] Navalny made a series of crowdfunded documentary films, posted on YouTube, that tied the leaders of Russia to far-reaching financial scams and broad networks of enablers. 

The videos succeeded because they were professionally made, because they included shocking details— the hookah lounge and hockey rink inside Putin’s vulgar Black Sea residence, as well as the vineyard, the helicopter pad and the oyster farm— and because they linked these stories to the poverty of Russian teachers, doctors and civil servants. You have bad roads and bad healthcare, Navalny told Russians, because they have vineyards, helicopter pads and oyster farms. 

This was investigative journalism but packaged and designed to move people— to explain to them the connection between the palaces built by distant rulers and their own damaged lives— and it worked. Some of the videos received hundreds of millions of views.

Now imagine the same project, but backed by democratic governments, media and activists around the world. Not just investigations, and not just prosecutions, but a campaign to publicise them, and to connect them to ordinary people’s lives. Just as the democratic world once built an international anti-communist alliance, so can the US and its allies build an international anti-corruption alliance, organised around the idea of transparency, accountability and fairness. This isn’t just a nice-sounding idea: it may be necessary for the preservation of liberal democracy, in the form that we know it.

On Saturday, Fox aired an interview with Trump praising Hungary’s fascist leader, Viktor Orbán: “He’s strong. They consider him strong. It’s a good thing, not a bad thing. Runs a strong country.” Yesterday, Politico reported that the Conservative Partnership Institute, “a nerve center for incubating policies for a second Trump administration” and partially financed by Orbán, who has boated that he helped write Señor T’s policy agenda, is all in on a pro-Putin outlook. “Hungary’s attempts to influence the policy debate in Washington are echoing right now in Brussels, where Orbán’s followers have seeded several anti-European Union, right-leaning media outlets and think tanks… seeking to undermine EU action on climate change and backing farmer protests which rocked the EU capital last year. While many of the overtures to U.S. conservatives are ostensibly about policies like global migration and promoting religious values, the message often quickly turns to pro-Russian foreign policy goals. They include curbing Western support for Ukraine and, implicitly, weakening support for NATO… Orbán’s allies have leveraged nonprofits to inject Russian talking points into the Republican agenda.”

Late last month, Viktor Orbán claimed in a speech that Hungary has “deep involvement” in the “programme-writing system of President Donald Trump’s team.” He opened by warning that if Europe does not change its policy of “supporting the war” by financially backing Ukraine, then “after Trump’s victory it will have to do so while admitting defeat, covered in shame.”

…Princeton Prof. Kim Scheppele, an expert on Hungary who has done research at both the Hungarian and Russian Constitutional Courts, pointed out that Orbán is holding international conferences and using his opposition to LGBTQ rights and “pro-family” platform to cultivate ties with the American right.

“Orbán is selling himself as Mr. Christian Europe” but “what’s happening between Russia and Hungary is under the surface,” Scheppele said. Orbán casts his “peace mission” advocacy for quickly ending the war as his “Christian duty.” But critics, including Scheppele, say the culture in Hungary stands in contrast to the public profile Orbán seeks to promote as Europe’s defender of Christianity.

Since Orbán took over in 2011, religious affiliation in Hungary has dropped to a record low, with Catholic Church membership suffering the steepest declines, at 30 percent.

Orbán’s opposition to sending arms to Ukraine, sanctioning Russian entities and individuals and letting Kyiv start the process of joining the pro-Western bloc are notorious in EU circles, where Orbán is tolerated as a “bad boy” among EU leaders— coming up to the brink of serious sanction by the bloc, but rarely if ever crossing over it.

In the U.S., however, he has a new legion of fans. With Trump’s open embrace of Orbán, those seeking to cultivate ties to the next GOP administration are eager to advertise their own pro-Hungary bona fides.

…Of any foreign leader, Trump is arguably closest to Orbán. He calls Orbán his “friend” and a “great man.” In accepting the GOP nomination in Milwaukee, Trump singled out Orbán as a “very tough man” and noted that Orbán credits him for keeping world peace because everybody “was afraid” of Trump.