Ahval By Ian J. Lynch Sep 30 2020 President Donald Trump’s business ties in Turkey have drawn ongoing speculation, particularly given the context of his repeated willingness to accede to his Turkish counterpart’s policy priorities to the bipartisan consternation of the U.S. Congress and the American intelligence and diplomatic communities. New reporting on Trump’s tax returns by The New York Times provides the greatest detail yet on the scale of Trump’s financial interests in Turkey, but important questions remain unanswered. Central to questions surrounding the U.S. president’s potential conflicts of interest in Turkey is a licensing deal for two Trump towers and a shopping mall in Istanbul. Trump himself admitted in 2015 that the towers posed “a little conflict of interest”. The tax records obtained by the NYT show that the deal has earned Trump at least $13 million, substantially more than previously known, including more than $1 million since becoming president. Trump had claimed he would not pursue foreign deals while in office, but NYT reporting shows he earned $73 million from abroad, including from authoritarian-leaning countries. The licensing deal for the Istanbul towers was negotiated in 2008 by Mehmet Ali Yalçındağ on behalf of his father-in-law’s company, Doğan Holding. Yalçındağ has since become a key conduit between the Trump and Erdoğan administrations. Trump, his daughter Ivanka Trump and her husband Jared Kushner all attended the 2012 opening of Trump Towers Istanbul with Yalçındağ. Since then, the Turkish businessman has reportedly socialised with Trump three or four times a year. When Trump won the 2016 election, it was Yalçındağ, who was with Trump on election night, that the Turkish Embassy relied on to connect with the new president-elect. On the strength of his close relationship with the Trump family, President Recep Tayyip Erdoğan soon appointed Yalçındağ as the chairman of the Turkey-U.S. Business Council (TAIK), a state-run organisation that lobbies the United States government on Ankara’s behalf. TAIK has since held its annual conferences at Trump International Hotel in Washington, generating hundreds of thousands of dollars of revenue for Trump’s business. Last year, the event also provided the setting for the informal diplomacy that Yalçındağ facilitates between Trump’s son-in-law and advisor, Jared Kushner, and Erdoğan’s son-in-law and Treasury and Finance Minister, Berat Albayrak. During the April 2019 conference, Kushner arranged an Oval Office meeting with Trump and Albayrak, in which the latter reportedly convinced the America president not to impose sanctions on Turkey for its purchase of Russian-made S-400 missile systems. After Turkey accepted delivery of the Russian military hardware in July 2019, the U.S. removed the country from the joint F-35 stealth fighter programme, but Trump has repeatedly blocked the imposition of sanctions despite bipartisan demands from U.S. legislators for such action. The tax returns obtained by the NYT raise further questions about consulting fees associated with the Trump Towers Istanbul deal that initiated Yalçındağ’s relationship with the Trumps. The records reveal that between 2010 and 2018, Trump deducted $26 million from his taxes for unexplained “consulting fees”. The NYT speculates that, “Trump reduced his taxable income by treating a family member as a consultant, and then deducting the fee as a cost of doing business”. By comparing Trump’s tax returns to his daughter Ivanka’s financial disclosure, the NYT found that some payments that her consulting company received exactly match the consulting fees Trump claimed as deductions. Such an arrangement, in which Ivanka was treated as a consultant on projects she helped manage for the Trump Organization, would raise legal red flags. The NYT found that in some cases involving millions of dollars in consulting fees foreign partners reported no knowledge of any outside consultants: “In Turkey, a person directly involved in developing two Trump towers in Istanbul expressed bafflement when asked about consultants on the project, telling The Times there was never any consultant or other third party in Turkey paid by the Trump Organization. But tax records show regular deductions for consulting fees over seven years totalling $2 million.” Executives involved in another hotel deal in Azerbaijan, Turkey’s ally, told The New Yorker in 2017 that Ivanka Trump was heavily involved in that project. A lawyer for the Trump Organization argued, however, that the Trumps could not be connected to the suspicions of corruption surrounding the project because Trump was “merely a licensor” and had no substantive role in the development. However, according to the new NYT reporting, “the tax records for three Trump L.L.C.s involved in that project show deductions for consulting fees totalling $1.1 million that were paid to someone”. Trump’s tax returns alone cannot prove that Ivanka Trump is collecting lavish consulting fees that reduce her father’s tax burden in legally dubious ways, but they do beget the question. Still, the greater detail the records provide regarding the millions of dollars involved in the Trump Towers in Istanbul do reinforce the argument that money lubricates the informal diplomacy conducted between the families of President Trump and President Erdoğan.