BAKU, Azerbaijan — In the center of downtown, an unfinished five-star hotel sits locked and empty, a ghostly shell completely dark at night except for the glowing white letters at its elegant, sail-shaped peak: TRUMP TOWER.
Construction on the Trump International Hotel & Tower here in Azerbaijan’s capital stopped last year when the country’s oil-driven economy crashed amid plummeting oil prices. The local owner and developer, facing potentially huge losses, is scrambling to renegotiate contracts and get the building open.
But Donald Trump, who invested virtually no money in the project while selling the rights to use his name and holding the contract to manage the property, has made millions. The presumptive Republican presidential nominee reported $2.5 million in income from the project between January 2014 and July 2015 and an additional $323,000 in management fees in the months since, according to his financial disclosure report.
If elected, Trump would be the first U.S. president to preside over a global business empire, one that includes seven resorts, hotels and other projects in foreign countries, 11 more under construction and plans for many more. Among them are properties in nations where the United States has important economic and national security concerns — such as Turkey, Indonesia, the United Arab Emirates and Azerbaijan — that could put Trump’s personal business interests on a collision course with the duty of a president to act solely in the best interest of the United States.
Here, in an oil-producing nation wedged between Russia and Iran on the strategically important Caspian Sea, Trump has partnered with a young billionaire, Anar Mammadov, 35, whose family is part of a longtime ruling regime that the U.S. State Department and others say is plagued by endemic corruption and human rights abuses.
Much of Mammadov’s fortune has come from construction contracts awarded through the Transportation Ministry run by his father, according to journalists who have investigated him.
Trump’s contract includes licensing his name and managing the hotel if it ultimately opens. Critics of the Azerbaijani regime see Mammadov’s role as a tacit approval from the government, and they argue that the future success of the property hinges in part on good relations with the country’s top officials.
Trump has not said precisely how he would separate his personal financial interests overseas from his administration’s policies. But his general counsel, Alan Garten, said Trump and his company would take steps to ensure that there would be no conflicts of interest if he were elected.
“Mr. Trump would no longer be involved in the business of the company, and the company would implement strict policies to avoid the appearance of any conflict or impropriety,” Garten said. “This all could be done quite easily and efficiently.”
Garten said that Trump’s organization did extensive due diligence on Mammadov before it signed its deal for the hotel project in 2012 and that its investigation did not raise any red flags.
Asked to review several news reports raising questions about the sources of Mammadov’s wealth, Garten noted they were all from 2013 and 2014. “All of this came to light after the deal had been signed,” he said.
Now that the Trump Organization is aware of those reports, Garten said, “these are things that are going to have to be discussed.”
Mammadov did not respond to repeated requests for comment made over many weeks through his company, friends and business associates, via email and on Facebook.
Critics say Trump, if elected, would face challenges here in drawing a distinction between the interests of his business and those of his country.
Azerbaijan has been dominated for decades, stretching back to the 1960s Soviet Union era, by the Aliyev family, which, according to the State Department and human rights groups, has a poor record on human rights and free speech, including the jailing of journalists who investigate it.
President Ilham Aliyev, 54, has ruled since 2003, when he took over from his father, Heydar Aliyev.
Although the president’s annual salary is just over $200,000, he and his family have an opulent string of properties and businesses, according to reports by the independent Organized Crime and Corruption Reporting Project.
A 2009 U.S. diplomatic cable disclosed by WikiLeaks and reported by Foreign Policy magazine compared President Aliyev’s administration with the Corleones, the Mafia family from the “Godfather” movies.
In 2010, The Washington Post reported that Aliyev’s three children owned $75 million worth of Dubai real estate, including nine waterfront mansions purchased in a two-week period in 2009 in the name of the president’s then-11-year-old son. The recently disclosed Panama Papers revealed the Aliyevs’ ownership of a wider array of companies and real estate, and even a huge gold mine.
Journalists who dug into the wealth of the Aliyevs and their powerful allies found themselves harassed and imprisoned. The most recent State Department report on Azerbaijan’s human rights record notes “a continuing crackdown on civil society, including intimidation, arrest, and conviction on charges widely considered politically motivated.”
“It’s a mafia,” said Ganimat Zahid, editor of an opposition newspaper, Azadliq, who lives in exile in Paris after being jailed in Azerbaijan for 2 1/2 years on what rights groups called bogus assault charges.
Zahid said Trump’s partnership with Mammadov was deeply troubling but probably a shrewd business move by Trump.
“In the best case, we can say that Donald Trump had to work with one of these guys,” he said. “But in the worst case, he knew these people were [corrupt] and he didn’t care.”
Rebecca Vincent, a London-based human rights activist and former U.S. diplomat at the U.S. Embassy in Baku, the capital, described Trump’s business interests here as a clear conflict for a U.S. president.
“The corruption of this regime and the oligarchs associated with it is very well documented,” she said. “It is definitely problematic for someone seeking the highest office in the United States, which values democracy and human rights, which are not being respected in Azerbaijan, to have business ties with this regime.”
Azerbaijani officials dispute the allegations of rampant corruption.
“Azerbaijan is on the right path towards its development, and we are looking into the future,” said Hikmat Hajiyev, spokesman for the Ministry of Foreign Affairs. “In such a geopolitically tough neighborhood, majority Muslim society Azerbaijan has managed to build in true sense of this word an island of peace and stability.”
Trump’s entry into Azerbaijan came as the country was actively positioning itself as a pro-Western counterweight to Tehran and Moscow, supporting U.S.-led counterterrorism efforts and contributing troops to U.S. democracy-building efforts in Iraq and Afghanistan. The country, with a secular, predominantly Muslim population, has also been an ally and business partner with Israel.
It is also a major oil- and gas-producing nation and a crucial link in the $45 billion Southern Gas Corridor, a 2,100-mile pipeline from Baku to Italy that will bring Caspian Sea gas to Europe. Vice President Biden and Secretary of State John F. Kerry both met with Aliyev and discussed the pipeline when he visited Washington in April for the Nuclear Security Summit.
The Mammadovs are one of the richest families in the country, thanks largely to a system that the State Department has said relies in part on “corruption and predatory behavior by politically-connected elites.”
Anar Mammadov’s father, Ziya Mammadov, is not just the country’s longtime transportation minister but also a confidant of Aliyev.
“All of our government ministers are rich,” Rauf Arifoglu, editor of Yeni Musavat, an opposition newspaper, said in his Baku office. “We got used to this during Soviet times.”
The younger Mammadov attended American Intercontinental University in London, where he earned a bachelor’s degree in 2003 and an MBA in 2005.
A person who knows Mammadov, speaking on the condition of anonymity because Mammadov had not authorized him to comment, said Mammadov has done a lot of charitable work in Azerbaijan and enhanced his country’s image. For instance, he struck a deal with National Geographic to publish the iconic American magazine in the Azeri language.
“He’s a very bright man,” the person said.
Mammadov, a fluent English speaker who is comfortable in Europe and the United States, also was emerging as the fresh face his country needed to project modernity and vitality to the world.
He became the founder of the Azerbaijan America Alliance, which blew into Washington in 2011 like a hurricane of cash.
In the next four years, the alliance spent more than $12 million lobbying, records show, wining and dining Washington policymakers in an effort that Baku’s critics called “caviar diplomacy.”
The alliance held large annual gala dinners in Washington, in 2012, 2013 and 2014, to showcase Azerbaijani culture. The first drew almost 700 people, including then-House Speaker John A. Boehner (R-Ohio). Lobbying records show that Mammadov met privately with dozens of lawmakers, including Boehner, House Minority Leader Nancy Pelosi (D-Calif.) and Sen. John McCain (R-Ariz.).
Former congressman Dan Burton (R-Ind.) signed up to be the U.S. chairman of the alliance, giving it immediate gravitas.
Mammadov’s alliance was also a large contributor to the Flight 93 National Memorial in Shanksville, Pa., giving $2 million to the installation that honors those who died on that flight on Sept. 11, 2001, according to a person who knows the details of the donation.
To Trump, Azerbaijan looked ripe for a business deal.
Garten, Trump’s attorney, said Trump was approached by “an intermediary known to both sides” to propose the hotel deal with Mammadov’s company, but he said he could not remember that person’s name.
Trump was “intrigued” by Azerbaijan, Garten said, because it was in “a region that was trying to establish itself.”
Garten noted that Marriott, Hilton, Four Seasons and other luxury hotel chains were investing there, so “that’s something that’s going to be on your radar.”
The licensing agreement between Trump and Mammadov’s company, Garant Holding, was signed on May 25, 2012, Garten said.
The project would not be publicly announced for two years.
In the meantime, human rights advocates and journalists documented more problems in the country and allegations against Mammadov.
Radio Free Europe/Radio Liberty, in partnership with the Organized Crime and Corruption Reporting Project, reported in 2013 that Mammadov’s companies and companies he is connected to have profited from more than $1 billion worth of transportation contracts related to his father’s ministry.
Khadija Ismayilova, a U.S.-trained journalist for Radio Free Europe/Radio Liberty, wrote articles alleging that the Aliyev family had amassed fortunes through corrupt government dealings. She was arrested in 2014 and sentenced to 7 1/2 years in prison. Human rights and journalist groups around the globe condemned her detention.
Ismayilova was released from prison last week, following Aliyev’s pardoning of 14 others considered political prisoners just before his recent trip to Washington. Those steps have been applauded by rights groups, but Freedom House, a D.C.-based human rights group, noted that at least 80 other journalists and political activists remain behind bars.
When Trump announced his hotel deal with Mammadov in 2014, Baku was a blazing center of development. Across the modern seafront city, buildings were popping up as fast as developers could build them, all driven by sky-high oil prices that just kept rising.
Concerts in Baku by pop stars Jennifer Lopez, Rihanna and others had helped solidify the image of a U.S.-friendly nation eager to annoy the Iranian mullahs just across the Caspian.
Burton wrote last year in the Washington Times that Azerbaijan had made remarkable progress in areas such as religious tolerance and gender equality in its quarter-century as a country following the collapse of the Soviet Union and “stands out as a friend to America and a stabilizing force in the region.”
In his announcement, Trump said that Garant Holding would build and own the sail-shaped tower with 72 “ultra-luxury residences” and 189 hotel rooms. Trump would license his name to the project, which had been under construction for several years, and eventually his organization would manage the hotel.
“When we open in 2015, visitors and residents will experience a luxurious property unlike anything else in Baku — it will be among the finest in the world,” Trump said in the 2014 news release. He called Garant “one of the paramount companies in burgeoning Azerbaijan.”
Mammadov said then that his company was “thrilled to work with the Trump Organization, the most renowned luxury developer in the world.”
During a visit to the building site, Trump’s daughter Ivanka gushed that the building “reflects the highest level of luxury and refinement.”
“We are looking forward to bringing our unparalleled Trump services and amenities to Azerbaijan,” she said.
The Baku hotel went up on the Trump website. The 2015 opening was promised.
In December, the hotel disappeared from the Trump site.
The general manager hired by Trump left for a job in Prague.
Construction crews were sent home, and the hotel was locked up tight.
Today, a couple of security guards and a sleepy caretaker keep an eye on the place, which is overgrown with weeds. A huge globe that says “TRUMP” sits in a fountain filled with sand and litter, near the locked-up front entrance.
The caretaker gave a recent tour using the flashlight app on his phone to navigate a basement passageway, stepping around loose wires hanging from unfinished fixtures; there is virtually no electricity and no water in the building.
In the lobby, all-but-finished reception desks are sealed under plastic, and a huge circular staircase is wrapped in plastic and cardboard, all beneath mirrored ceilings and a chandelier made of a dreamy ribbon of golden bulbs.
On the second floor, a swimming pool finished in copper-colored tiles looks ready except for water. The gym is crammed with exercise equipment still in cardboard boxes, next to a sauna that smells of fresh cedar and an empty, dusty, Turkish-style hammam steam bath finished in shiny white marble.
“We have had an interruption in the construction,” Khalid Karimli, chief financial officer for Garant Holding, said in an interview at his company’s Baku headquarters.
Karimli noted that Azerbaijan’s economy was devastated when oil dropped from more than $100 a barrel in 2014 to as little as $26 last year. The Azerbaijani currency was devalued by the government and is now worth about half its previous value.
The once-booming city skyline is now blighted with half-finished buildings topped by idle cranes. Businesses have shut, and thousands have lost jobs.
Karimli said Garant is renegotiating contracts with its builders that are all denominated in U.S. dollars. With Azerbaijani currency worth half its old value, that means the price of the Trump project has effectively doubled for Garant.
Karimli said construction was about 90 percent complete and that he hoped it would resume in the next “one or two months.” He said the hotel, which had been scheduled to open last December, would open “maybe next year.”
The only key player who has not lost money on the project is Trump. Trump’s deal is not being renegotiated and his fees will not be reduced, said Karimli and Garten, neither of whom would disclose how much Trump was being paid.
Garten said the Baku project was hit by economic factors beyond Trump’s control. He said the global recession that started in 2008 forced the cancellation of many other projects — for Trump and for developers throughout the world.
“A lot of developers lost their entire portfolios and fortunes,” he said. “Mr. Trump came through that as well as anyone.”
At about the same time that the Trump hotel project in Baku came to an abrupt halt, Mammadov virtually disappeared.
He stopped paying his bills.
The Azerbaijan America Alliance did not hold its annual gala in Washington last fall.
In March, Burton resigned, saying he had not been paid in a year.
“I am disappointed that they did not honor their agreement,” Burton said.
The last issue of National Geographic in Azeri appeared in December.
“They abruptly ceased publication and owe us money,” said Laura Nichols, National Geographic’s chief communications officer.
In April, after queries from The Post, the alliance’s website was quietly taken down.
“It’s on hold,” Garten said of the hotel project. “We don’t know what the future is going to hold for the project. Hopefully it will restart, but we don’t know.”
Mammadov now lives much of the time in London, according to people who know him.
“He just went off the radar,” said his friend who asked not to be identified. “Totally off the radar.”
Karimli said Mammadov initially wanted to license Trump’s name because it was known among political and business leaders in Azerbaijan, as well as international businessmen who would be attracted to a five-star hotel in Baku.
But now that Trump is running for president, Karimli said, Trump’s name is worth far more for the Baku hotel project. “It was a good investment and unexpected,” he said with a laugh. “We hope Trump will be elected president.”