A Russian state-owned bank under US sanctions, whose CEO met with President Donald Trump's son-in-law in December, helped financed the construction of the president's 65-story Trump International Hotel and Tower in Toronto, according to a new report.
The bank, Vnesheconombank (VEB), bought $850 million of stock in a Ukrainian steelmaker from billionaire Russian-Canadian developer Alexander Schnaider, who was constructing the hotel at the time, The Wall Street Journal reported on Wednesday.
Shnaider initially purchased the stock via his company, Midland Resources Holding, for about $70 million after the collapse of the Soviet Union, according to the Journal.
The money from the sale of that stock to VEB — which the Journal said went through while Russian President Vladimir Putin was chairman of VEB's supervisory board — was then used to help finance the construction of the Toronto hotel tower "at a key moment for the project."
From the Journal:
"After Mr. Shnaider and his partner sold their stake in the steelmaker, Mr. Shnaider injected more money into the Trump Toronto project, which was financially troubled. Mr. Shnaider's lawyer, Symon Zucker, said in an April interview that about $15 million from the asset sale went into the Trump Toronto project. A day later, he wrote in an email: 'I am not able to confirm that any funds' from the deal 'went into the Toronto project.'"
Symon Zucker, Shnaider's lawyer, did not immediately respond to request for comment from Business Insider. But he told the Journal that Midland Resources "has never had any relationship with VEB" and "does not dictate where their purchasers borrow funds."
The Trump Organization has distanced itself from the Toronto project, which faced financial difficulties last year. The company "merely licensed its brand and manages the hotel and residences," the Organization told the Journal in a statement.
The project was initially a joint venture between Trump and Schnaider, who approached Trump in 2004 asking to license the Trump name for the 65-story tower. Trump said at the time that he would "manage the hotel's operations," according to the Journal, while Shnaider and his business partner, Val Levitan, focused on the development.
Trump's son-in-law and a top adviser, Jared Kushner, met with the Vnesheconombank CEO Sergey Gorkov in December 2016, The New York Times reported in late March. Gorkov was appointed by Putin in January 2016 as part of a restructuring of the bank's management team, according to Bloomberg.
Kushner's meeting with Gorkov, the struggling bank's CEO, came as Kushner was trying to find investors for a Fifth Avenue office building in Manhattan that is set to be heavily financed by Anbang Insurance Group, a firm with ties to the Chinese government.
White House spokeswoman Hope Hicks told the publication at the time that the "Kushner Tower" project wasn't discussed during his meeting with Gorkov, and a White House official said in a statement that Kushner took the meetings as part of his role as "the official primary point of contact with foreign governments and officials."
But the meeting was reportedly orchestrated by Russian ambassador Sergey Kislyak — who also met with Kushner in December — and caught the eye of the Senate Intelligence Committee, which has invited Kushner to testify about his meetings with Gorkov and Kislyak. The committee is investigating Russia's interference in the 2016 election and whether any members of Trump's campaign colluded with Russian officials.
Former Director of National Intelligence James Clapper also appeared to signal during a hearing before the Senate Judiciary Committee earlier this month that the intelligence community was scrutinizing Trump's business ties to Russia.
Republican Sen. Lindsey Graham, the chairman of the Senate Judiciary subcommittee on crime and terror, asked Clapper if he ever found "a situation where a Trump business interest in Russia" gave him "concern."
"Not in the course of the preparation of the intelligence community's assessment," Clapper said.
Graham pressed Clapper on whether he had ever come across such a situation, to which Clapper replied, "I can't comment on that because that impacts an investigation."
As Trump praised and defended Putin along the campaign trail, many questioned whether the real-estate mogul had any financial incentives — including business ties or outstanding debt — to seek better relations with Moscow.
The White House did not immediately respond to request for comment.