Trump moves to cancel business deals in Azerbaijan, Georgia
NEW YORK — The Trump Organization has canceled a licensing deal for a hotel in Azerbaijan and is taking steps to do the same for a project in neighboring Georgia, part of a string of recent efforts by the president-elect to extricate his business from thorny relationships five weeks before he takes office.
Trump lawyer Alan Garten said Friday that developers in both projects failed to meet terms of licensing deals. He described the moves as “normal housekeeping” and not part of a strategy to reduce potential conflicts of interests.
The moves by the Trump Organization follow a cancellation earlier this week of a licensing deal for a hotel in Brazil. The New York-based company also recently shut down four companies registered in Delaware that appear connected with a possible Saudi Arabia business venture.
President-elect Donald Trump has faced criticism for investments overseas that government ethics experts say present conflicts of interest. He has stakes in about 500 companies in more than 20 countries around the globe, though many of the foreign ventures just involve him lending his name to buildings owned by others.
Trump’s Azerbaijani partner drew the scrutiny of The Associated Press and other news outlets amid questions about corruption and the country’s status as a waypoint for money laundering. The partner, Anar Mammadov, is the son of Azerbaijan’s transportation minister who was described in leaked American diplomatic cables as “notoriously corrupt, even for Azerbaijan.”
Though the exterior of the project had been largely constructed last year, it disappeared from a list of planned Trump Organization projects on the company’s website last year amid construction delays and questions about the strength of Anar Mammadov’s finances.
Trump earned between $2.5 million and $2.8 million in hotel management fees from the unopened hotel, according to the financial disclosures filed by his campaign. Trump licensing deals generally involve the receipt of a significant minority stake in the property, too.
The Georgia project is for a tower in the Black Sea resort town of Batumi. Trump lawyer Garten said the president-elect’s company sent a “default notice” earlier this month to the developer because it had not lived up to terms of the licensing deal. He described the move as typically a first step to canceling a deal.
Just last week, Trump’s development partner told Bloomberg News that that the long-stalled project would go ahead, and that “talks are on.”
Trump Hotels said this week it will no longer operate a Rio de Janeiro luxury hotel that’s being investigated in a criminal probe. It’s also pulling its name off the property.
The decision was made because the project is behind schedule, Trump Hotels spokeswoman Christine Lin told The Associated Press in a statement. The change took effect on Thursday.
“Unfortunately, the developers of the Rio de Janeiro hotel are significantly behind on the completion of the property, and their vision for the hotel no longer aligns with the Trump Hotels brand,” said Lin, who did not answer follow-up questions on whether the investigation prompted the decision.
In Brazil, the hotel in the upscale suburb of Rio de Janeiro was supposed to be finished in time for the Rio Olympics in August. Today only a portion of it is operational.
In October, prosecutors said they were investigating millions of dollars in questionable investments in the hotel by two small Brazilian pension funds. The probe is part of a larger investigation into corruption in Brazilian pension funds.
The Rio hotel is owned by LSH Barra. The company has not responded to several requests for comments about Trump pulling its name.
When the investigation was launched, the company denied any wrongdoing.
In a statement Friday, the company said the parting was amicable, and the hotel’s new name would be LSH Barra Hotel.
AP Writers Peter Prengaman and Mauricio Savarese contributed to this report from Rio de Janeiro. Horwitz reported from Washington D.C.