Paul Manafort got a $3.5 million tax-free payback-free ‘loan’ from unnamed sources

Disney | ABC Television Group / Flickr paul manafort...
Disney | ABC Television Group / Flickr

Donald Trump’s former campaign chief Paul Manafort has owned a nice apartment in Trump Tower since 2007—one that’s conveniently located near money laundering Russian mobsters and a real estate scheme run by Russian oligarchs. But in 2016, hours after officially leaving his spot at the top of Trump’s campaign, Manafort picked up another bit of property.

On August 19, 2016, Manafort left the Trump campaign amid media reports about his previous work for a pro-Russian political party in Ukraine, including allegations he received millions of dollars in payments.

That same day, Manafort created a holding company called Summerbreeze LLC. Several weeks later, a document called a UCC filed with the state of New York shows that Summerbreeze took out a $3.5 million loan on Manafort’s home in the tiny beach enclave of Bridgehampton.

One thing missing from that transaction …

Manafort’s company never paid $36,000 in taxes that would be due on the loan.

And one other thing missing …

A spokesperson for Spruce Capital said the loan came from an unnamed independent broker.

If that seems like a nice beach house payoff to the guy who fronted Trump’s campaign from sources that would rather keep their identities hidden … that’s exactly what it is. And it’s just the first step in a scheme to give Manafort an even bigger payday.

So, who fronted the cash for Manafort’s beach house? That would be yet another shell company called “S C 3.” That company is a subsidiary of Spruce Capital. And Spruce Capital …

… has partnered with Donald Trump on real estate deals. Spruce is also partially funded by Ukrainian-American real-estate magnate Alexander Rovt, who tried to donate $10,000 to Trump’s presidential campaign on Election Day but had all but the legal maximum of $2,700 returned.

Also missing in action: Any evidence that Manafort is paying back his “loan.” There’s no listed payment. No interest rate. No payment schedule. It certainly looks as if one of the perks of running the Trump campaign was a free spot on the beach for Paul Manafort.

Manafort’s attorneys have an explanation—they screwed up. They mangled the mortgage paperwork so badly that the county rejected it, and they’ve been a bit slow about fixing that problem. But who actually funded Manafort’s loan?

A spokesperson for Spruce Capital said the loan came from an unnamed independent broker. Asked about Spruce backer Alexander Rovt and whether he had any role in the deal, the spokesperson said “We are unaware of any connection to Alexander Rovt.”

Rovt has a not-so-complex relationship to Manafort. He was a oligarch with holdings in both Russia and Ukraine who was connected to the party Manafort helped install in power over Ukraine when Russia hired him to promote that puppet regime.

Rovt is a Ukrainian émigré to the U.S. who earned more than $1 billion selling fertilizer in Ukraine and buying real estate in New York. In 2011, he sold all his overseas interests to Dmytro Firtash, a Ukrainian oligarch who had been Manafort’s business partner in a failed $850 million hotel redevelopment deal.

Purchasing real estate may make it seem as if Rovt has picked up a house here and there. In fact, Rovt owns over 280 buildings in New York City — a real estate empire far larger than Donald Trump’s, much of it built on the backs of investments in Ukraine and in Russia. Those investments then channeled into US real estate holdings by several schemes that take advantage of the special rules awarded “developers” to turn dirty money into physical holdings.

Now that some of this money has been used to reward Manafort with a nice place at the shore, it can be put back to work.

Manafort’s LLC, Summerbreeze, took out a new $9.5 million loan in December using the Hamptons property as part of the collateral. The lender is Federal Savings Bank of Chicago, whose chief executive Steve Calk was an economic adviser to the Trump campaign.

How can what amounts to a $3.5 million debt be used as collateral for another loan? The mysteries of high finance are not for mere mortals to understand.

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