The Donald and the Snitch

Donald Trump’s Business Empire Offered Mob-Linked FBI Informant a Target-Rich Environment

Republican presidential candidate Donald Trump’s business relationship with a U.S. government informant named Felix Sater raises some interesting questions about what Trump knew and when he knew it — and whether Trump, at some point, also agreed to become an informant himself.

Sater, a convicted fraudster with Russian roots speaks highly of Trump in the media, telling the Washington Post earlier this year that “he will make the greatest President of our century.” Sater also has donated the maximum amount allowable, $5,400, to Trump’s presidential campaign and claims to have visited Trump Tower on “confidential” business this past summer, according to media reports.

Trump, however, has told the media he barely remembers Sater, despite their years-long business relationship, which involved numerous formal and informal interactions and at least one joint public appearance.

So why would Trump be so eager to distance himself from a former business associate and advisor now that he is running for president?

One possibility is that Sater’s work as a government informant hits too close to the vest for the billionaire presidential candidate, whose business empire allegedly is propped up by plenty of Russian money and who operated in the mafia-invested casino industry from 1995-2009.

In fact, according to the Wall Street Journal, Trump met with FBI agents in the early 1980s to discuss his plans to enter the casino business in Atlantic City, in part, because of concerns about the influence of organized crime in that industry and Trump’s fears that such a move would sully his family’s reputation. An FBI agent advised him to invest elsewhere.

Still, Trump moved forward, ultimately controlling four casinos and amassing a mound of debt that would eventually force him out of the business by 2009.  One of the co-owners of the site where Trump built his first Atlantic City casino in the early 1980s was a mob-linked FBI informant named Daniel Sullivan, whom Trump also later used as an advisor on labor issues, the Wall Street Journal reported. So Sater does not represent the first time Trump has done business with an FBI informant.

Not a Coincidence

Trump’s relationship with Sater was not likely the byproduct of a chance meeting, according to a group of former federal agents interviewed recently by Narco News. The veteran agents, all of whom have extensive experience in intelligence operations and in handling informants, contend Sater likely cozied up to Trump on purpose in an effort to advance his informant goals.

Several of the agents said Trump’s business network represents a target-rich environment, both for law enforcement and intelligence agencies. They said Sater, if he was doing his job as an informant, would have been reporting back to his FBI and other law-enforcement and intelligence-agency handlers about Trump’s activities.

Sater, when asked about his relationship with Trump in a recent email interview with Narco News, declined to address whether he was monitoring Trump as part of his informant role, or if his government handlers were aware of his business dealings with Trump. Sater did say, however, that “I’m pretty sure the government knew my dog’s weight down to the ounces”— an indication that the law enforcement and intelligence agencies he was reporting to were well aware of his business dealings with Trump.

Whether Trump was aware that Sater was an informant from the start is not clear. Trump, according to media reports, denies he knew about Sater’s sordid past when they met and began working on deals. Trump’s press secretary, Hope Hicks, did not respond to a request for comment.

In 2007, however, the New York Times published a story about Sater’s past criminal history and his alleged cooperation with the U.S. government, a story in which Trump is quoted. It seems Trump should have known Sater was likely an informant at that point, yet he still continued to do business with Sater.

One of the former federal agents interviewed by Narco News, who asked not to be named, said if Trump continued to work with Sater even after he became aware that Sater was an informant, it could be a sign that Trump, too, may have been cooperating with federal authorities.

“One possibility is that Trump was working with the Russians [relying on Russian investments to fund his ventures] and the U.S. government planted Sater [in Trump’s orbit] to monitor that activity,” said Celerino Castillo, a former DEA agent who played a key role in exposing the US government’s role in narco-trafficking during the Iran/Contra era. “The Russians launder a lot of money.”

During the time Sater was working with Trump, the billionaire’s business financing relied heavily on Russian investments, according to Trump’s son, Donald Trump Jr., who in 2008 at a real estate conference in New York said: “Russians make up a pretty disproportionate cross-section of a lot of our assets. We see a lot of money pouring in from Russia.”

Several of the former federal agents interviewed by Narco News, who also asked that their identities not be disclosed, said if Trump decided to cooperate with federal authorities with respect to the Russians, his knowledge of organized-crime activities or some other matter, it would likely be to done to protect and advance his own business interests.

One of those agents, who has extensive experience dealing with both FBI and CIA operations, explained that the FBI operates an intelligence division that performs a function domestically that is similar to the role played by the CIA oversees. He said given Trump’s business interests — which included casino-industry and Russian connections — it is not out of the realm of possibility that he was recruited as a source of information:

Most people are complimented by having the CIA or FBI on their doorstep asking for favors in the form of intel. The citizen sees it as a chance to indemnify [protect] themselves from charges of corruption, fraud, theft, even adverse publicity. The CIA may find it in their interest to help the citizen expand his business and coincidentally, improve his access to intel. In most cases, the citizen's assumptions prove correct. Once again, I emphasize that those agencies consider the gathering of high-level intel far more important than crime stopping.

And that approach, according to former deep-cover DEA agent Mike Levine, is what leads to corruption in the informant-handling world.

Levine, who now regularly testifies in court as an expert witness, explained:

I am involved in a case where I am representing a mafia hood against the FBI. He was an 18-year top-echelon informant who in that time earned a total of about $30,000 in unspecified fees. [That] means he was given a license to commit any crimes he had to in order to maintain his standing within the mafia so that the FBI agents could file very cool reports. But I could find no convictions wherein the man was instrumental in obtaining same during that whole period of time. Sound like the Whitey Bulger case?

That is the problem. The FBI and CIA have created a situation where, if you are well placed in any criminal organization, you can get an FBI or CIA license to commit all kinds of crimes (to maintain your cover) in return for which you give the Feds bullshit.

Ergo, if Sater et al. have any smarts, they will become FBI or CIA informants, because they have nothing to lose and everything to gain. Crime does pay.

The former federal agents who spoke with Narco News made it clear that, in their experience, informants and other cooperators rarely act out of altruism or a sense of patriotism. Their cooperation is almost always based on ego and self-interest. If Trump was working as a cooperating source, or informant, either in relation to his casino-industry ties, Russian investors or some other matter, the agents said it was likely because he stood to gain from that cooperation, similar to Sater.

There is precedent for that kind of cooperation on the part of a well-heeled business figures. Former New York Yankees owner George Steinbrenner worked as an FBI informant assisting with criminal-investigation and national-security matters from 1976-1987, according to former DEA agent and attorney Dennis Fitzgerald’s book, Informants, Cooperating Witnesses, and Undercover Investigations. In Steinbrenner’s case, according to the book, he was motivated by the desire to get a presidential pardon for his Watergate-era felony conviction for obstruction of justice and authorizing illegal campaign contributions to President Richard Nixon.

“On January 20, 1989, President Reagan had at least three celebrities seeking pardons: industrialist Armand Hammer, heiress and Symbionese Liberation Army bank robber Patty Hearst, and George Steinbrenner,” Fitzgerald writes in his book. “Only one of them won the lottery: Steinbrenner’s pardon was one of the former FBI informant President Ronald Reagan’s last official acts.” Yes, Reagan, a former actor (like Trump), worked as an FBI informant during the 1940s as part of the effort to purge “communist infiltrators” from the film industry in Hollywood.

Sater Time

Sater, while serving as a U.S. government informant, was an executive with a real estate development company called Bayrock Group LLC, which as early as 2003 leased office space at Trump Tower in Midtown Manhattan.

While with Bayrock, Sater got to know Trump and the duo were soon pursuing multimillion-dollar business deals in Russia and the U.S. between 2005 and 2007, including a condo development project called Trump SoHo in Midtown Manhattan.

In 2005, Trump cut a business deal with Bayrock to build a hotel in Moscow, but the project didn’t pan out. He did later team with Bayrock, however, on the Trump SoHo project, which in 2007 received a shot in the arm, along with several other Bayrock projects, in the form of a $50 million dollar investment from an Icelandic investment firm. That company, the FL Group, was backed by Russians “who were in favor with [Russian President] Putin,” pleadings in a lawsuit against Bayrock allege.

Bayrock is currently the target of a civil-racketeering lawsuit filed by the company’s former finance director and another employee. The plaintiffs allege in the pleadings that Bayrock is “covertly mob-owned and operated” and accuse the company’s principals of engaging in “money laundering, conspiracy, bribery, extortion and embezzlement.”

Bayrock was founded and led by a native Russian named Tevfik Arif, who served as a commerce official during the Soviet era, according to the litigation, which is still pending and being contested by Bayrock’s attorneys in federal court in New York.

Sater was hired by Bayrock a few years after he pleaded guilty in 1998 to racketeering charges in relation to his role in a $40 million pump-and-dump Wall Street stock and money-laundering scheme that was carried out in partnership with Russian and New York organized-crime syndicates, according to legal documents and media reports related to the case. In fact, Sater worked in Russia from roughly 1996 through 1998, when he returned to the U.S. to face criminal charges pending against him in that case, according to his sentencing-hearing transcript. 

In the early 1990s, Sater also was convicted and served a year in prison for stabbing a man in the face with the stem of a margarita glass during a bar fight.

Sater’s criminal past, however, was cloaked from public view because his legal case was sealed after he cut a deal in 1998 to become a U.S. government informant in exchange for hopes of a lighter sentence in the stock-fraud case. That also meant his criminal past and work as an informant was presumably kept secret from Bayrock and Trump.

That is, until 2007, when a New York Times story exposed Sater’s past misdeeds and the fact that he likely agreed to cooperate with the US government to avoid a long jail sentence. Still, in 2010, after Sater had left Bayrock in the wake of the public exposure of his past, the Trump Organization retained Sater as a consultant and issued him a business card with the title “Senior Advisor to Donald Trump.”

One of Sater’s FBI handlers, Leo Taddeo, whose specialty was US and Russian organized-crime syndicates, told the judge at Sater’s 2009 sentencing that “without his cooperation, it would have been a few more years [before] the FBI would have effectively removed La Cosa Nostra [the New York City Mafia families] from the penny stock business.”

Years later, in early 2015, in written congressional testimony, current U.S. Attorney General Janet Lynch also made public that in addition to Sater’s work as an FBI informant targeting organized crime, he also provided “information crucial to national security.”

By the time of his sentencing hearing in 2009, Sater had worked some 11 years as an informant (or cooperating witness per the technical term) — most of that time during the Bush presidency. The judge in Sater’s case apparently believed he had been redeemed. Slater walked away from his judgment day in court with a $25,000 fine and no jail time or restitution required for his role in a $40 million mob-linked stock-fraud scam.

Sater’s light sentence isn’t necessarily an accurate reflection of the value of his work and character, however. The federal judge in Sater’s stock-fraud case, Leo Glasser, gave a similarly light sentence years earlier to the notorious Salvatore “Sammy the Bull” Gravano, who participated in some 19 murders while working as a mob hitman. Gravano later became an FBI informant and helped to convict his boss, the so-called Teflon Don, John Gotti.

Judge Glasser sentenced Gravano in 1994 to a five-year prison stint, or about three months for each murder. The judge’s character assessment in that case proved faulty, however, given Gravano was later convicted of running a major ecstasy-distribution ring out of Arizona, in league with a white supremacist group, and in 2002 was sentenced to 20 years in prison.

House of Mirrors

Former DEA agent Levine’s warnings about the nature of the informant business and the potential for informants and other cooperators to abuse the system seems to merit some attention in the case of Sater, given claims he recently made about his “national security” work.

Sater told Narco News the following via email correspondence:

I was the person buying the 20 stingers [shoulder-fired missiles] in Afghanistan not Russia, on behalf of the CIA. We needed to scoop them all up. The old stingers didn't have the chip that prevented shooting them at US aircraft, and when some fell into the hands of Al-Qaeda, we needed to get the rest off the market as fast as possible. I was on the ground running an operation for US military intelligence already, so the CIA let me run with this as well.

I developed a strong relationship with [name redacted] and we began arranging the purchase of stingers based on President Clinton’s directive. As well as planning attacks and elimination of UBL [Osama bin Laden] in 1998, [a] couple of years before 9/11.

Yes I played a major role in President Clinton’s bombing of UBL's camp in ‘98. And after 9/11, I went into overdrive on the World Trade Center bombers, their financial network, hunting for operatives still at large, etc., as well as coordination of bombing targets in Afghanistan etc. etc. etc.

[Emphasis added.]

One former CIA officer who spoke with Narco News, but asked that his name not be used, said of Sater’s Forest Gump-like claims: “I would not trust him. My sense from being in the intelligence business would be to let him go. If he was in business with Trump, that’s Trump’s problem. If Russia was using him, then they got suckered too. I simply would not want to get my hands dirty with him.”

As evidence of the CIA officer’s trust issues with Sater, two statements made by Sater in his account of his alleged Al-Qaeda-hunting adventures don’t pass the smell test.

First, it is difficult to imagine US military commanders allowing Sater, a convicted con man with Russian-mob connections, “running an operation for US military intelligence.” Second, with respect to Sater’s claim that he “played a major role in President Clinton’s bombing of UBL's camp in ’98,” the timeline simply doesn’t work.

Those bombings occurred in August 1998. Sater didn’t become a US government informant until December of that year, nearly five months after the bombings, according to the cooperation agreement he signed with the U.S. Attorney’s Office in Eastern New York.

Finally, in Sater’s email to Narco News bragging about his national-security work, he reveals the identity of his alleged source of information in Afghanistan. Narco News chose not to print that information, because even if Sater wasn’t telling the truth, that person’s life may well still be put in danger if exposed in a news article — simply because some might believe Sater’s assertions.

Narco News asked Levine to weigh in on Sater’s account of his national-security undercover work. Here’s what Levine had to say about it:

All stool pigeons tell fantastic moviesque stories. This guy is no exception. The stories fall apart when you apply the standards of corroboration that I still teach. Keep in mind that Operation Agent Brush revealed that 60 percent of all CIA agents [informants] were selling bullshit to their officer/handlers for decades. The surface of this guy’s [Sater’s] story reeks of bullshit. He's selling himself not truth.

Sater’s criminal past and his willingness to expose the details of his national-security work, or, as is likely the case, to misrepresent the details of that work, for his own self-aggrandizement, raises serious questions about his credibility as an informant. It also raises serious questions about presidential candidate Donald Trump’s judgement in choosing to do business with such an individual, whether he knew of Sater’s informant status or not at the time. Once president, the opportunities for being duped by con men with far more power than Sater magnify exponentially.

There is no doubt that Sater was an FBI informant for years, and that he contributed intelligence that was deemed by some federal agents as valuable to US national security, but the veracity of that information is still very much an open question, as is the role Trump played in advancing Sater’s mechanizations.

“A guy like Sater would make any deal he could [with the government] to get that ‘license to commit crimes,’” Levine added.

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