Revealed: What Donald Trump has really been up to in Latin America

The New York tycoon has extensive business ties to a region whose people he has often offended 

Martn Sivak
Argentina, Brazil
,Thiago Domenici,Ariel Riera,Sandra Crucianelli
Friday 09 September 2016 16:34 BST
Trump Tower Panama was his first investment in the region
Trump Tower Panama was his first investment in the region (Wikipedia)

He wants to build a wall to keep Mexicans out of the USA and has blamed Latin American immigrants for bringing crime into the country.

But US presidential candidate Donald Trump enjoys considerable business interests in the region, with an empire which is only set to grow, despite business practices which have at times angered locals.

In Rio de Janeiro, the 13-floor Trump Hotel Rio, complete with Mr Trump’s name resplendent in huge gold letters, was inaugurated just before the Olympic Games. It was built by developers and only managed by the tycoon after the inauguration.

Donald Trump has drawn level with Hillary Clinton in the US presidential race in recent weeks(Getty Images) (Getty)

The hotel is promoted on the Trump Collection website for being close to the Village Mall, an exclusive shopping centre with brands such as Louis Vuitton and Gucci. There are now plans for another company to build five Trump Towers on top worth a staggering $1.8 billion, for which Trump licenses only the name.

From the calculations of Brazilian magazine IstoE, based on conversations with Mr Trump’s partner in Brazil, Paulo Renato de Oliveira Figueiredo, the son of a former military dictator in the country, Mr Trump will make 80 million reals per year out of Trump Hotel Rio ($25m).

During the games, all of the 170 rooms were reserved for members of the International Olympic Committee (IOC).

Mr Trump tried for tax breaks from the Brazilian authorities after the IOC insisted that the Rio de Janeiro had to provide 10,000 more hotel rooms as a condition of hosting the games, and the city created a package of incentives for the sector. He even went to court to try to secure them, but was unsuccessful. Finally, he got around it by being hired directly by the IOC, a move which guaranteed some exemptions on federal import charges on goods, merchandise or services for the Olympics.

Trump Towers Rio is also in the pipeline, in the port zone of Rio regenerated in time for the Games. At the time the project was announced, the city’s mayor Eduardo Paes as “the biggest real estate investment in the city.”

The project has stalled, but not before 70 families were evicted from property where it will be built. Although they were removed in 2012 and promised government housing, the former residents of the building complain they are still waiting.

Maria Evanilde de Morais, 45, is one of them. She lived there for six years and brought three children up in the building, which had been left abandoned by the previous owners for 20 years. “We fought so much for that place and to see the state give it up for real estate speculation is revolting,” she said.

The hotel was built by developers and only managed by Mr Trump (Getty)

Mr Trump himself admits that 85% of his business deals are done outside the US. When the Panama Papers were leaked in April this year, revealing secret financial information for 214,448 offshore companies, the Republican candidate was cited 3,540 times.

Mr Trump’s empire is linked to 32 offshore companies, including the Trump Ocean Club Panama, a development which includes a building, hotel and casino.

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In the US, Mr Trump refuses to release his tax returns and told supporters in Iowa in January, regarding tax: “I mean, I pay as little as possible. I use every single thing in the book.”

It appears to be a philosophy shared by his business partners in Latin America. The British Salamanca group, an investor in Trump Towers Rio, was also listed in the Panama Papers with offshore companies in the British Virgin Islands.

Mr Trump’s first investment in the region was the Trump Tower Panama, also known locally as the “El Trom”. The tycoon had the idea during a Miss Universe contest in the country - Miss Universe is another part of the Trump empire – back in 2003.

Paulo Renato de Oliveiro Figueiredo, the son of a former military dictator in the country, was Mr Trump's partner (Wikipedia)

It was built thanks to an investment by a company called Newland International Properties, mostly made up of Colombian shareholders, after they made an initial payment of $1.2 million.

Mr Trump himself attended the grand opening in 2011, for what was at the time the highest building in Latin America at 284 metres.

But it was not all plain sailing for El Trom, with its spa, suspended pool and cocktail bar featuring waiters in uniforms which were designed by his daughter, Ivanka.

Before he even landed in Panama, Mr Trump was officially declared “persona non grata” by the local authority after he said in March that year that the United States had “stupidly” given back the Panama Canal “in exchange for nothing".

He was referring to the Panama Canal Treaty of 1977 signed by then US president Jimmy Carter and Panama’s Omar Torrijos, guaranteeing that Panama would gain control of the canal after 1999.

Then in 2013, Newland International Properties was declared bankrupt, though documents reveal that Trump still received between $32 million and $55 million from the project.

Between January 2014 and July 2015 alone, the Mr Trump organisation received $5m in royalties and $896,000 in “management payments” from the enterprise.

It is an example of how in Latin America, even when one of his local businesses fails, Mr Trump still ends up making money out of it.

In 2015, the owners of the apartments in El Trom voted to boot out Donald Trump’s company from managing the properties.

Represented by a consortium of directors, they claimed Mr Trump’s company made a series of errors, such as paying bonuses without permission, putting expenses of the hotel against costs of the building, and hiding information from the consortium.

Mr Trump’s model in the region is to get local developers to pay a fee to use the Mr Trump brand. The corporation receives this initial payment and commission from sales which ranges from 5% to 13%. He then seeks concessions from local governments, such as tax exemptions or other benefits.

The 13-floor Trump Hotel Rio was opened just before the Olympics (Getty)

It has worked so well that Mr Trump is now building another Trump Tower in Uruguay, in Punta del Este. It will contain 157 apartments and a helipad, for which Trump won another concession after developers requested a series of them – this time, allowing the building to be taller than the planning regulations usually permit.

In an interview with Uruguayan newspaper La Nacion in 2012, Trump said: “When I go to Uruguay or any other place to buy land, I need governmental approval and they give it to me, knowing that I do a great job and build beautiful buildings.”

The Trump Organisation hasn’t invested at all in the project, but it has sent a manual with all the requirements to be fulfilled by anyone using the Trump brand. These include that employees must know by memory the names of all the 157 apartment owners.

Felipe Yaryura, who represents the group of mainly Argentine investors in the project, said that Mr Trump has made suggestions for the common areas, including a wine cellar for each resident, an 800 square metre pool and an indoor golf centre.

He said clients have asked if the rumours are true that Mr Trump himself will have an apartment there. Meanwhile, sales have been slow so far. In January, three units were sold, in March, four, and in April, May and July, one per month. The company says it has sold 50%.

In 2017, Yaryura and architect Moises Yellati hope to bring another Mr Trump Tower to Buenos Aires, where it is hoped investors will swarm once Argentina’s troubled economy begins to recover.

Donald Trump’s friendship with conservative Argentine president Mauricio Macri goes back many years, and the New Yorker visited Macri many times after his famous kidnapping in 1991. His son Eric Trump publically celebrated Macri’s election victory last year.

* Translated and edited by Beth McLoughlin @betty_de_brazil

The story was first published by Agencia Publica and Chequeado.

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