Billionaire Alexander Shnaider and President Donald Trump had close business ties, and one of Trump’s hotels were funded by a Russian bank, a report by The Wall Street Journal said.
The article told the story of how Trump and Shnaider formed a business relationship for one of Trump’s staple hotels in Toronto, Canada.
The project encountered many hurdles since it was originally planned, but last-minute funding provided by a controversial Russian bank — which has ties to the Russian government — led to the plan going through.
Here’s what you need to know:
1. The Russian Bank Financed a Deal At a ‘Key Moment’ In the Project
Russian President Vladimir Putin, right, shakes hands with Vnesheconombank Chairman Sergei Gorkov during their meeting at the Kremlin in Moscow on August 3, 2016. (Getty)
Russian-based Vnesheconombank, better known as VEB, is a state-run bank that’s undergone intense scrutiny by investigators in the United States.
The bank is alleged to have provided money to Shnaider, which he in turn put into plans to construct a 65 story Trump International Hotel and Tower in Toronto.
A person familiar with the U.S. probe told the WSJ that investigators are “looking into any ties between Russian financial institutions, Mr. Trump and anyone in his orbit.”
The investigation is specifically looking into the ties between Trump and VEB. The bank has been viewed by some analysts as the institution used by the Russian government to fund projects that are politically motivated, such as the 2014 Winter Olympic Games in Sochi, which cost a reported $51 billion.
The bank was placed on the U.S. sanctions list in 2014 after the annexation of Crimea, and American businesses are banned from being involved with it.
But that didn’t stop Trump’s son-in-law Jared Kushner from meeting with VEB’s leaders in December.
White House Press Secretary Sean Spicer said Kushner’s visit was part of the transition and was used to establish the “primary point of contact with foreign government officials.”
2. Shnaider Sold Shares In a Ukrainian Company For Almost $1 Billion In 2010
According to the S&P Global Market Intelligence, Shnaider sold shares in a Ukrainian steelmaking company — Zaporizhstal — in 2010 for $850 million. The deal hasn’t bee made public, but the WSJ report said that Shnaider “was an entity acting for the Russian government.”
Following the sale of the shares and payout by VEB, Shnaider put forth even more money into the Trump Hotel project in Toronto. His lawyer, Symon Zucker, said that Shnaider put “about $15 million” from the sale into the Trump project. He responded back to the WSJ one day later via email, writing: “I am not able to confirm that any funds (from the stake sale) went into the Toronto project.”
Interestingly enough, when Shnaider made the deal, Russian President Vladimir Putin was the chairman of VEB’s board. That means that any deals such as Shnaiders would “have to have been approved by him,” a government official told the WSJ.
3. The Hotel Was a Joint Project Between Shnaider & Trump
Trump International Hotel and Tower in Toronto (YouTube)
Plans for the Trump International Hotel and Tower project were revealed in 2007 and considered a “joint venture” between Trump and Shnaider. It was slated to cost about 500 million Canadian dollars, or about $367.6 million USD. At the time, it was the tallest residential building in Canada.
The original plan was for Trump to manage operations at the hotel while Shnaider would be the tower’s developer.
But the project encounter funding issues and a judge approved its sale during insolvency proceedings last year.
The groundbreaking for the project happened in 2007 and a majority of the units were pre-sold. But then the financial crisis struck, and many buyers pulled out, leaving a hole in the funding.
The tower ended up being funded through Shnaider’s stake sale, but it struggled to stay financially afloat since its opening. A judge recently approved the sale of the building to an investment firm in California for $220 million.
When asked about the potential links between Trump’s business deals and Russia, a spokesperson for the Trump Organization — Trump’s real-estate company — said there has been no involvement between the two sides previously.
The spokesperson said that the only connection between Trump and the VEB is that it “merely licensed ts brand and manages the hotel and residences.”
Trump himself has also said he has no business dealings with Russia. In February, he said: “To the best of my knowledge, no person that I deal with does.”
4. Shnaider Was Born In Russia & Lived In Israel Before Moving to Canada
@GovMikeHuckabee this is cardiac arrest not @CNN Trump tower Toronto @realDonaldTrump Russian born Billionaire Alex Shnaider & Val Leviton
Schnaider was born in 1968 in Leningrad, Russia. When he was just 4-years old, he moved with his family to Israel. A few years later when he was 13, he and his family moved to Canada, where he now resides and is a citizen.
Shnaider attended York University and received his bachelor’s of arts degree in science.
He’s married to Simona Birshtein and they live in North York with their three children.
5. Shnaider Is One of the Richest People In the World
Shnaider and business partner Eduard Shifrin founded Midland Group in 1994. The company was originally a steel producer that operated in Ukraine before the steel factories in the country were privatized. The company still has interests in steel trading, real estate, retail and manufacturing and Russia, Ukraine and Siberia.
In February 2005, Shnaider got involved in auto racing. He bought Jordan Grand Prix from Eddie Jordan for about $50 million, renaming it Midland F1 Racing in 2006. The racing team was in turn sold to Spyker Cars.
That’s not the only dealing with sports that Shnaider has. He brought a soccer team in Istral — Maccabi Tel Aviv — for about 12 million euros in 2007. Two years later, he sold the team after investing $20 million into it.
In 2006, Forbes listed Shnaider on its list of the top billionaires in the world. He was ranked No. 486 on the list with a reported net worth of around $1.6 billion.
