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{UAH} Russian bank whose CEO met secretly with Jared Kushner helped finance Trump's Toronto hotel

Russian bank whose CEO met secretly with Jared Kushner helped finance Trump's Toronto hotel
Natasha Bertrand
Business Insider
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, or VEB, bought $850 million of stock in a Ukrainian steelmaker from the billionaire Russian-Canadian developer Alexander Shnaider, 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 used to help finance the construction of the Toronto hotel "at a key moment for the project."

"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.'"

Zucker, Shnaider's lawyer, told The Journal that Midland Resources "has never had any relationship with VEB" and "does not dictate where their purchasers borrow funds." He told Business Insider that the Journal " got their facts all wrong."

trump toronto

(Toronto police place construction cones around the Trump International Hotel and Tower in Toronto, Ontario, in March 2012.Hyungwon Kang/Reuters)

"Trump was never a partner," Zucker said. "He never had an equity interest. We licensed his name and there was a contract for him to manage the hotel."

The Trump Organization has distanced itself from the Toronto project, which faced financial difficulties last year. The organization "merely licensed its brand and manages the hotel and residences," it told The Journal in a statement.

The project was initially a joint venture between Trump and Shnaider, 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, would focus on the development.

Additionally, Zucker claimed, "we had nothing to do with VEB... the infusion of cash [into the hotel] didn't come from the Russians -- Alex [Shnaider] borrowed $350 million from an Austrian bank and invested some of his own" into the project.

Jared Kushner, Trump's son-in-law and a top White House adviser, met with the Vnesheconombank CEO Sergey Gorkov in December, The New York Times reported in late March. Putin appointed Gorkov in January 2016 as part of a restructuring of the bank's management team, according to Bloomberg.

At the time, Kushner was trying to find investors for an office building on Fifth Avenue in Manhattan.

trump toronto

(Members of the Trump family at the hotel's ribbon-cutting ceremony in April 2012.Mike Cassese/Reuters)

Hope Hicks, a White House spokeswoman, told The Times that Gorkov and Kushner didn't discuss the Kushner Tower project, and a White House official said in a statement that Kushner met with Gorkov as part of his role as "the official primary point of contact with foreign governments and officials."

Gwokto La'Kitgum
"Even a small dog can piss on a tall building" Jim Hightower

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