Menu

Did Donald Trump Owe $560 Million to Blackstone and Bayrock?

Claim

At the time he was elected U.S. president, Donald Trump owed $560 million to Blackstone/Bayrock, a so-called collective of Russian oligarchs that have heavy sway over the Russian government and Vladimir Putin.

Rating

Unknown
Like this fact check?

Reporting

While former United States President Donald Trump’s links to the investment companies Bayrock Group and Blackstone Inc. have been documented, the claim that he is deeply in debt to them has yet to be proven.

It is unclear where the claim that Trump was elected to the presidency while owing the two companies a combined $560 million originated; we found variations in Facebook comments dating back to February 2017, in a post on the Q&A website Quora, and in a January 2019 letter published in the Citrus County Chronicle newspaper in Florida. But there are no substantive reports to corroborate these claims.

Trump’s ties to Bayrock long preceded his presidency; the company financed Trump SoHo, a hotel project Trump announced on his reality show in 2006. But as Variety Fair reported in 2017, Trump and Bayrock were connected as early as 2002, with the company’s managing director, Felix Sater, as the link:

By 2003, Sater was working there in a position variously described as managing director and chief operating officer. His actual proximity to Trump is unclear. On the one hand, Trump had famously testified under oath that he barely knew Sater, that he probably wouldn’t recognize him if they were in the same room, and that he had no knowledge of Sater’s criminal past. But it has been widely reported that Sater did business deals with Trump, that he took Trump’s kids to Moscow, and that he was given a business card identifying him as a senior adviser to the Trump Organization.

The building was completed in 2008 and became the focus of several lawsuits, including one filed in June 2016 by Jody Kriss, Bayrock’s former finance director, calling Trump SoHo “a monument to spectacularly corrupt money-laundering and tax evasion.” That lawsuit was resolved in a February 2018 settlement.

The dealings behind Trump SoHo were reportedly also examined as part of special counsel Robert Mueller’s investigation into the reputed links between Trump’s presidential campaign and the Russian government. Mueller’s April 2019 report found that Russia “interfered in the 2016 presidential election in sweeping and systematic fashion.”

While Mueller would later debunk Trump’s claim that the report had found “no collusion” between his campaign and Russian officials, Mueller determined there was not enough evidence to charge the campaign with conspiracy.

The combination of legal troubles and Trump’s increasingly toxic reputation reportedly caused business to decline at the SoHo, leading to the hotel and Trump’s company, the Trump Organization, severing ties in November 2017. It has since been renamed The Dominick.

Trump’s tie to Blackstone, meanwhile, surfaced later. It is true that in June 2011 Russian President Vladimir Putin — long rumored to wield influence over Trump — made a direct appeal to chief executive officer, chairman, and co-founder Stephen Schwarzman for the company to invest in his country. Within three years, however, the firm allegedly “gave up” on the country and withdrew its operations. But Tony James, Blackstone’s chief operating officer at the time, questioned that account.

“I don’t know where that came from,” James told CNBC in September 2014. “We were never in Russia. We’ve never had an office, employee or investment in Russia.”

James, however, did not call the reporting on the issue inaccurate.

Schwarzman became an “advisor on business policy” to Trump, according to the New York Times, and helped arrange for Chinese President Xi Jinping to visit Trump’s Mar-a-Lago Florida resort in April 2017 only to find out he was not invited to the two leaders’ meeting. Regardless, the alliance between Trump and Schwarzman at one point promised to yield material gains for the latter:

As an adviser, he gained a level of access to world leaders that helped Blackstone cement a $20 billion investment commitment from the Saudi Arabian government in 2017, a deal worth more than $100 million in annual fees if fully executed. A new trade agreement with China, negotiated in part by Mr. Schwarzman on behalf of the U.S. government and completed last January, promised to further open the country’s financial markets to Blackstone and other investors.

Did Donald Trump Owe $560 Million t...
Did Donald Trump Owe $560 Million to Blackstone and Bayrock?

But by January 2021, only $7 billion out of the promised $20 billion had “materialized” because of what was described as sluggish fundraising; the trade agreement with Jinping’s country also stalled, reportedly because of the COVID-19 pandemic.

In 2020, Schwarzman donated $3 million to a political action committee supporting Trump’s re-election campaign. But as the Financial Times reported, he alarmed other corporate leaders in a November 6 conference call when — adopting a right-wing talking point — he asked them whether they “did not find it surprising” that Trump was seemingly leading early on in the vote count for Pennsylvania before later losing the state to Democratic Party nominee Joe Biden:

Mr. Schwarzman said there had been news reports stating that ballots continued arriving days after the election and that some of them may not have been real — issues, he said, that needed to be resolved by the courts, as the president’s legal team has argued.

Participants in the call said Brian Roberts, Comcast’s Philadelphia-based chief executive, responded by explaining that the state’s Republican-led legislature had prevented mailed-in votes from being counted before election day, and that votes from Philadelphia, one of the later parts of the state to report its tally, had traditionally favoured Democrats.

As Trump supporters embarked on failed legal campaigns seeking to question Biden’s victory, a group of 164 business heads published a letter calling for his administration to begin the transfer of power to Biden.

“Every day that an orderly presidential transition process is delayed, our democracy grows weaker in the eyes of our own citizens and the nation’s stature on the global stage is diminished,” the letter read. “Our national interest and respect for the integrity of our democratic process requires that the administrator of the federal General Services Administration immediately ascertain that Joseph R. Biden and Kamala D. Harris are the president-elect and vice president-elect so that a proper transition can begin.”

But while James’ successor at Blackstone, Jon Gray, signed the letter, Schwarzman released a separate statement saying he was “ready to help” Biden. He also downplayed his earlier remarks initially questioning the remarks.

“In my comments three days after the election, I was trying to be a voice of reason and express why it’s in the national interest to have all Americans believe the election is being resolved correctly,” he said.

Trump’s legal issues have since spread to Mar-a-Lago, where federal agents executed a search warrant in August 2022 — a first for any former president. Officials reportedly took about twenty boxes from the property containing items including “photo binders, information about the president of France, and a variety of classified material.”

Update 8/16/2022, 2:13 a.m. PST: This article has been revamped and updated. You can review the original here. – ag