ANDREA BERNSTEIN: Remember this moment from Trump's press conference just before he was inaugurated? We mentioned it in our first episode. 

CNN REPORTER: Since you’re attacking us, can you give us a question? 

PRESIDENT-ELECT DONALD TRUMP: Go ahead. 

CNN REPORTER: Since you’re — no. Mr. President-elect? 

PRESIDENT-ELECT TRUMP: Go ahead, go ahead. 

CNN REPORTER: Since you are attacking our news organization, can you give us a chance — ? 

PRESIDENT-ELECT TRUMP: No. Not you. Not you. Your organization’s terrible.

CNN REPORTER: You are attacking our news organization.

PRESIDENT-ELECT TRUMP: Your organization is terrible.

CNN REPORTER: Can you give us a chance to ask a question, sir? Sir?

BERNSTEIN: What he was so worked up about was the release of what's become known as “the Dossier.” It's a collection of raw private intelligence that lays out a broad conspiracy between the Russian government and the Trump campaign to interfere with the election. Its most memorable allegation — which is unverified — is that Trump had a pee party with prostitutes in a Moscow hotel.

The Dossier was put together by a guy named Chris Steele. He's a former British spy who used to be stationed in Moscow and he was hired by someone you might not have heard of, unless you've heard him attacked: Glenn Simpson.

NEWS ANNOUNCER 1: The co-founder of Fusion GPS, Glenn Simpson, refused to answer key questions. 

INTERVIEWER: Who paid you to go after Trump, to build this case against him?

NEWS ANNOUNCER 2: That the Dossier itself could have been part of a ginormous — a huge disinformation cam— by the — by — by the Russians. 

BERNSTEIN: What we’re gonna do today is not talk about the Dossier — not really. We’re going to retrace the steps that led Glenn Simpson to hire the spy who compiled the Dossier. Simpson has remained largely quiet in the past year, but in January he co-wrote a New York Times op-ed and said, quote, “The public still has much to learn about a man with the most troubling business past of any United States president. Now, thanks to Simpson's testimony before Congress, we know a lot more about what he knew. 

[TRUMP, INC. THEME STRINGS START TO PLAY]

KELLY AUCOIN: [SPEAKING THE WORDS OF GLENN SIMPSON] I investigate business stuff and financial crime and corruption and those kinds of things. That's my gig. So people came to us with stories that we never pursued. And we were recently asked by some reporter, “Did you read a memo in 2015 about … ?” I had no idea what they were talking about. You know, we threw a line in the water, and Moby Dick came back, and we didn't know what to do with it at first.

[THEME MUSIC RAMPS UP, QUIETLY]

BERNSTEIN: Those are Glenn Simpson's words, but not his voice. we’ll explain. Hello, and welcome to Trump, Inc., a podcast from WNYC and ProPublica that digs deep into the mysteries of Donald Trump's businesses. I'm Andrea Bernstein from WNYC. 

The Friday before Presidents Day weekend, Special Counsel Robert Mueller indicted 13 Russian individuals and three Russian companies for setting up an elaborate, expensive, and labor-intensive effort to interfere with the 2016 elections. We still don't know what — if anything — the Trump campaign knew about the operation.

[MUSIC OUT]

BERNSTEIN: What we do know is that Trump has a long history of business ties to Russia. Today on the show, we’re going to try to understand that business relationship better because it may — just may — help explain Trump's persistent, well, weirdness when it comes to Russia. Joining me are two journalists who've been reporting on this issue for a long time.

ADAM DAVIDSON: I’m Adam Davidson of the New Yorker. 

JESSE EISINGER: And I'm Jesse Eisinger from ProPublica. 

BERNSTEIN: We’re going to explore a theory from two perspectives: one is from Glenn Simpson, and another one from a guy named Abraham Wallach. 

ABRAHAM WALLACH: First of all, Donald has no sense of obligation, even if somebody is investing money with him. 

BERNSTEIN: Wallach worked for Trump for 12 years. He and Simpson don't agree on everything, but there's one central point the two both make: Trump has engaged in some serious ‘alternative financing.’

[A BEAT FOR A MODERN WESTERN-STYLE BASS LINE THAT CONTINUES UNDER NARRATION]

BERNSTEIN: Let’s start with Simpson. For years, as a reporter at the Wall Street Journal, he covered financial crimes, money laundering, Russian oligarchs. In 2009, he leaves the paper to start his own firm: Fusion GPS. He continues to do journalistic investigations, but for law firms, companies who want to understand their competitors, that sort of thing. He's called it “journalism for rent.” And then, in 2015, he gets some new clients: one backed by Republicans, and then, later, one linked to Hillary Clinton. The clients want them to investigate Trump's businesses, find out everything he can. So Simpson and a bunch of staffers get to work on the investigation. 

[MUSIC OUT]

BERNSTEIN: But they want to know more, so they hire the former British spy, Chris Steele, and that's the origin of the Dossier. All of this information basically remained secret until BuzzFeed posted the Dossier online just before Trump is inaugurated. It causes a year of controversy, becoming a central part of the Trump collusion investigations.

Congress calls Simpson to testify. Republicans accused him of being the one who was doing the colluding with the Russians. 

REPORTER: A key figure behind the controversial Dossier detailing unsubstantiated allegations about the Trump team's ties to Russia is set to speak with investigators on Capitol Hill today.

NEWS ANNOUNCER: Republicans in Congress today will step up first to find out who and what was behind that controversial so-called Dossier. 

BERNSTEIN: Since the Dossier was published, Simpson's been sued by Russian bankers and the President's attorney for defamation. Simpson isn't making further public comments. And his testimony to Congress? It was behind closed doors. There are no recordings, no photos, no videos. 

KELLY AUCOIN: Hi, I'm Kelly AuCoin. 

BERNSTEIN: So we got someone else to read Simpson's testimony. 

AUCOIN: I played “Dollar” Bill Stern on the Showtime series Billions. 

BERNSTEIN: He’s got his own Russia connections. 

AUCOIN: And also Pastor Tim on The Americans, a Cold War drama about Soviet sleeper spies trying to access the highest levels of the American government.

BERNSTEIN: Kelly AuCoin is going to read Simpson's exact words from the transcript. Think of this as a historical reenactment. So he's playing a guy in a hearing room in the U.S. Capitol facing a panel of legislators and their staff. People are told to leave all their electronics outside: Blackberries, iPhones, pagers, recording devices, Bluetooth wristbands.

The Republicans are pretty hostile. They're trying to show that Simpson and the Hillary Clinton campaign set up the Russia conspiracy to entrap the Trump campaign. So they asked Simpson what he was doing all that time investigating Trump’s business.

AUCOIN: [AS SIMPSON] I think I can speak more broadly and say that it was an open-ended look at Donald Trump's business career and his litigation history and his relationships with questionable people. How much he was really worth, how he ran his casinos, what kind of performance he had in other lines of work. 

BERNSTEIN: Simpson hadn't really known anything about Trump's business. His assignment? To learn everything there was to know.

AUCOIN: [AS SIMPSON] It was a very broad, unfocused look, which is the way we do our business.

BERNSTEIN: Simpson tells Congress, as part of his research, he read everything he could: books, court records, financial documents from around the globe. What we are going to do is listen to Simpson's testimony, and then Jesse, Adam, and I are going to break it down. First Adam.

DAVIDSON: I really feel for Glenn Simpson when he talks about this moment of, “We're just looking at Trump business, we don't really know anything.“ And, you know, Glenn Simpson, like me and Jesse — we’re longtime business reporters, which is to say, we have never thought about the Trump business before recently. [LAUGHTER] It's just not an important business. 

EISINGER: When I started calling around — when I started really being interested in this, and I started calling around to people in — on Wall Street, in commercial real estate. Uh, none of them knew anything about the Trump Organization either because it was such an irrelevancy — such a minor operation.

Um, you really suddenly got this sense that it was [PAUSE] just a mom and pop shop, um, operating in the fringes — 

BERNSTEIN: Or a — or a “pop and kids”? 

EISINGER: Pop and kids shop. Exactly.

DAVIDSON: Pop and kids. 

BERNSTEIN: In his testimony, Simpson tells how it just took a Google search to find Russian businessmen working with Trump. 

AUCOIN: [AS SIMPSON] As we've got deeper and deeper into understanding, you know, Donald Trump's business career and his history, it gradually reached the point where it seemed like most of the people around Trump had a connection to Russian organized crime or Russia in one way or another.

BERNSTEIN: But Simpson points out something strange, which is, in spite of having all these connections to Russia. 

AUCOIN: [AS SIMPSON] So there was all that — 

BERNSTEIN: Trump never built anything there. 

AUCOIN: [AS SIMPSON] We also increasingly saw that Mr. Trump's business career had evolved over the prior decade into a lot of projects in overseas places, particularly in the Soviet Union, that were very opaque. And that he'd made a number of trips to Russia, but said he'd never done a business deal there. I found that mysterious. 

DAVIDSON: This is a puzzle for many reasons. 

BERNSTEIN: That’s Adam Davidson speaking. 

DAVIDSON: One thing is, over this period of time, if you think about, you know — Trump first went there when it was still the Soviet Union. He claimed to be negotiating for a Trump Tower Kremlin Square. There was a lot of money made by a lot of [PAUSE] not-very-impressive people in Russia in the ‘80s, ‘90s, 2000s. And someone who had that many ties, and that much of a relationship — to make no money, according to what he says — to have no deals there, that's very puzzling. 

EISINGER: So why? What's going on? Well, maybe he's completely incompetent. With Trump, you can’t ever, uh, eliminate that possibility. But Glenn starts thinking that there's something else going on — that he is successful in these trips. 

DAVIDSON: The most fundamental question is, does this make normal business sense? And I think Glenn Simpson’s strong suspicion is, these trips were very profitable.

BERNSTEIN: Simpson has a theory about Trump's Russia connection. The theory is rooted in two things we know were happening around this time. The first is that Trump was having a harder and harder time getting traditional kinds of bank financing for his projects. 

EISINGER: Right. And why is he having that difficulty? Because he's had a series of catastrophic failures. Over and over again, his casinos have gone bust. His buildings keep going into receivership. He's not a good credit anymore. And so major Western banks don't want to give him money, but that doesn't stop his need for money. And so he's got to find alternative ways, and he starts going around the world, seeking capital. 

BERNSTEIN: The second thing is that, in the early 2000s, there was a lot of money being made in Russia, and really rich Russians did not want to keep it there. 

DAVIDSON: There’s huge amounts of capital piling up in oil-rich countries, like Russia and Arab countries and Venezuela and other places. And a lot of this is illegal money. Trillions of dollars [CHUCKLES] of illegal money. And, um — and that money needs to find a place to go. It needs to find a place to go because there's just … If you want to actually invest in Russia, there's not that much to invest in.

BERNSTEIN: And these are the two things we know were happening: Trump had a problem getting traditional bank financing for his projects and Russians were trying to get money out of Russia. 

AUCOIN: [AS SIMPSON] What I later came to believe was that he was, in fact, developing different kinds of business relationships with the Russians and, you know, the sort of marquee thing that he always talked about, which was building a tower in Moscow. And that, in fact, you know, he'd found other ways to profit from his relationship with that. 

BERNSTEIN: So this is the point of the testimony where I really got interested, because what Glenn says is, he realizes he's been looking for a tall tower in Moscow, and he's been looking for the wrong thing. 

AUCOIN: [AS SIMPSON] And what we, you know, gradually began to understand which, you know, I suppose I should kick myself for not figuring out earlier, but … By 2003, 2004, Donald Trump was not able to get bank credit for it. And if you're a real estate developer and you can't get bank loans, you know, you've got a problem.

BERNSTEIN: Simpson comes to believe Trump has a work-around: he and his partners can't get straight-up financing to build Trump Towers around the world. But if they can sell enough units when the projects are just a pitch — say 60%, 65% — Trump and his partners can use those early sales to convince banks to give them money. Simpson calls this ‘alternative financing.’

AUCOIN: [AS SIMPSON] So the real trick is to get people who say they bought those units. And that's where the Russians are to be found, in some of those pre-sales, is what they're called. And that's how, for instance, in Panama, they got credit of, they got a — Bear Stearns to issue a bond, by telling Bear Stearns that they'd sold a bunch of units to a bunch of Russian gangsters.

And, of course, they didn't put that in the underwriting information. They just said, “We sold a bunch of units and here's who bought them.” And that's how they got the credit. So that's sort of an example of the alternative financing.

BERNSTEIN: This is such an important point. We've been struck as we've looked at deals the world over that the Trump Organization, at the early stages of a project, often puts out a statement that the building is around 60% sold.

That number pops up with remarkable frequency. And what Glenn Simpson is saying is, it's a business model: ‘alternative financing.’ 

DAVIDSON: It was just a very clear and simple idea, which, you know, he — he says, “Oh, I could, you know, I could’ve kicked myself for not figuring it out earlier,” which is just — yeah! He — [LAUGHS] Trump was going to a place that had a lot of money. It was trying to get into the West illegally. Trump wanted a lot of money to get into the West, and was not particularly persnickety [LAUGHS] about the legality of it. And the two met and worked out a bunch of deals. Like, that feels like that makes sense of the facts of the case with utter clarity. They explain, to me, everything — and the alternative explanation that Trump was in earnest, trying to do successful, good, fully legitimate projects and just, for whatever reason, it never worked, I find very hard to believe. 

BERNSTEIN: Simpson’s theory explains not only what Trump might have gotten out of his business dealings with Russians, but also what Russians got out of it: a place to put their money. Take golf courses. Simpson noticed some large and — what he found — unexplained infusions of cash into Trump's golf courses, which nowadays tend to be money losers: unattractive investments.

[TRUMP, INC. MIDROLL MUSIC BEGINS TO PLAY]

AUCOIN: [AS SIMPSON] We saw what Eric Trump said about Russian money being available for his golf — for the golf course projects, making remarks about having unlimited sums available. 

BERNSTEIN: Eric Trump has disavowed these remarks, but here's what golf reporter James Dodson quoted him as saying: “We don't rely on American banks. We have all the funding we need out of Russia.”

AUCOIN: [AS SIMPSON] So we were able to get the financial statements. 

BERNSTEIN: Because UK disclosure law is different from in the U.S., Simpson did get to review records for the golf courses.

AUCOIN: [AS SIMPSON] And they don’t, on their face, show Russian involvement. But what they do show is enormous amounts of capital flowing into these projects from unknown sources and — or, at least on paper, it says it's from the Trump Organization, but it's hundreds of millions of dollars.

So, you know, if you're familiar with Donald Trump's finances and the litigation over whether he's really a billionaire, you know, there's good reason to believe that he doesn't have enough money to do this. 

BERNSTEIN: An important note, neither Donald Trump,nor his business has ever been charged with money laundering.

So now let's remember the last presidential campaign. It's July of 2016. Glenn Simpson has unearthed reams of documents about Trump's businesses and Russia. And he's getting raw intelligence from the former spy he's hired, Chris Steele, about Trump and the Russians. Taken together, these two streams of data suggest to him that Trump is somehow beholden to Russians and Russian businessmen. And Simpson knows that in Russia, all business ties ultimately connect to the Kremlin. 

[SLIGHTLY INTRIGUE-LADEN MUSIC PLAYS]

BERNSTEIN: So he's processing all of this. And then, like the rest of us, he sees Trump go on TV and invite the Russians — a foreign, hostile power — to get their hands on his opponent Hillary Clinton's emails.

DONALD TRUMP: Russia, if you're listening, I hope you're able to find the 30,000 emails that are missing. I think you will probably be rewarded mightily by our press.

[MUSIC OUT]

BERNSTEIN: Simpson tells the House investigators all this frightened him. It's why Chris Steele, the spy he hired, felt compelled to report his findings to the FBI. “A crime in progress” is how Simpson described it. We'll be right back. 

[MIDROLL]

BERNSTEIN: We're back. It's Andrea. To better understand Simpson's theory, we went to talk to a guy whose knowledge of Trump's financing methods comes from personal experience. 

WALLACH: Um, my name is Abraham Wallach and I was the, uh, Executive Vice President for Acquisitions and Finance. 

BERNSTEIN: Abe Wallach worked for Trump from 1990 to 2002.

WALLACH: And I also called myself the Chief Cook and Bottle-Washer because, as Donald and I were close … [FADES UNDER]

BERNSTEIN: Wallach is retired now. We drove out to the east end of Long Island to speak with him. He's got short, bristly, red hair, intense blue eyes set off by a blue cable sweater. Something else about Wallach — he's been convicted on multiple occasions of shoplifting and forgery. Spent some time in jail. He says it's all behind him now. 

He has some pretty good stories about what it took to drum up deals for a businessman who, in the 1990s, already had a bad reputation among the big banks. For example, Trump needed money for a development on Manhattan's West side, on the Hudson River. So Wallach had to look elsewhere to find people who would lend to Trump.

WALLACH: And the irony is, um, I found the people's names in Donald's Rolodexes. And I asked him, “Who are these people?” And he said, “Oh, they’re people. I was going to do a — a casino in Macau with, but nothing ever happened with it.” 

BERNSTEIN: The operation Wallach describes is pretty seat-of-the-pants. 

WALLACH: And I said, “Well, who are they?” And he said, “They're very, very wealthy Hong Kong real estate developers. I said, “I'm going to contact them.” He said, “Sure, go ahead.” 

BERNSTEIN: Wallach flies to Hong Kong to meet the developers with Trump's blessing — and, good news, they’re ready to lend money! 

WALLACH: Especially because Hong Kong was reverting to China, and they wanted to get as much cash as they could out of the — out of Hong Kong. Unbeknownst to me, while I was in Hong Kong, meeting these people, Donald signs a brokerage agreement to introduce him to the same people I am meeting with in Hong Kong. And he doesn't tell me about it. He tells me about it when they sued for $10 million saying that they were owed a commission. 

BERNSTEIN: So Trump has hired someone to introduce him to someone his financing guy has already met.

WALLACH: And I said, “Donald, you know, these people were in your Rolodex. I talked to you about them. You knew I went to Hong Kong. They've come to New York! Uh, they signed partnership papers with you.” And I said, “Why would you do this?” And, you know, he doesn't really give you an answer for anything, but that was the nature of what went on.

BERNSTEIN: This is the Trump Wallach knew: disorganized, distractible, eager to be in the public eye and to put his name on big buildings — and to get paid. Wallach moved heaven and earth to find financing for new buildings and to buy and renovate older ones. Most of these were in New York: Wall Street, across from the U.N., places like that. 

After Wallach left in 2002, he noticed the Trump Organization went in a different direction, licensing deals overseas in places like Uruguay. 

WALLACH: They found a project in Montevideo, but Montevideo was like a — you know, it's not a primary city. Well, take the Panama project — the Panama City project.

BERNSTEIN: It’s the Trump Ocean Club International Hotel and Tower, a 70-story building. An investigation last fall by Global Witness with Reuters and NBC found scores of buyers there with links to the drug trade, organized crime, and human smuggling.

WALLACH: There is no demand — high demand — for super-luxury condos in — in Panama City. Somebody proposed developing one and also proposed bringing in Trump for the sales, marketing, and construction management. So, he could have easily have seen it, that people were laundering money through these projects. 

BERNSTEIN: Why do you think he didn’t? Did he — did he not know? Did he not want to know? 

WALLACH: He didn’t wanna know! 

BERNSTEIN: We asked the Trump Organization and the White House about what Wallach had to say. Neither responded. So Simpson and Wallach both see the same thing: Trump needed money badly. He didn't much care where he got it from. Glenn Simpson's theory is that all of this is the perfect setup for the Russians to turn Trump into an asset. Wallach doesn't go there. 

WALLACH: I’m a liberal Democrat, but I don't think this whole Russia thing is — has any value. It's — it’s all supposition and whatnot. 

BERNSTEIN: Trump doesn't have the attention span for a vast conspiracy with Moscow, he says. And Wallach knows something about Russia. He offered to help Trump make contacts there. The two men had a phone call, Wallach says, in 2013.

WALLACH: And he said, “Well, I'm going to Russia for the Miss Universe contest. I'm going to be in Moscow. See if you can set something up. 

BERNSTEIN: That was the trip where the alleged pee party happened.

WALLACH: I said, “The Ritz-Carlton is the only place he can stay.” 

BERNSTEIN: And that’s where he stayed.

WALLACH: So he comes into Moscow, goes to the beauty pageant, goes to the hotel to sleep, and then leaves immediately. If the man had contacts in Russia, most likely, he would have stayed to meet them. And I had even suggested he go visit Red Square and various other things that are really interesting. “No, I don't want to, I don't want to. I’m — I'm going in and I'm leaving immediately.”

BERNSTEIN: In Wallach’s eyes, there's another problem with the Simpson theory. It depends on the idea of a sense of obligation: allies of the Kremlin help Trump, and Trump repays the favor — or that the Kremlin has something on him, so Trump plays ball. But Wallach isn't so sure. 

WALLACH: He’ll abide by the contracts, but he doesn't feel any, you know, uh — he won't lose sleep over the fact that he isn't living up to an agreement if he so desires.

Plus Donald’s smart enough to know that you don't want to get in bed with people who are more powerful than you are, and who might have something on you after and blackmail you. So, I don't think Donald — that there is any of this Russian stuff. 

[CREDITS MUSIC BEGINS TO PLAY]

BERNSTEIN: Abe Wallach worked with Donald Trump for 12 years — but, remember, he left in 2002. That's when streams of Russia-connected money really began finding their way into the Trump family business, and when Donald Trump starts doing deals in places like Panama and Azerbaijan with a whole new host of questionable characters. We asked the Trump Organization and the White House about all of this. They didn't comment. So we're asking you for help. 

Did you buy or try to buy a unit in a Trump property overseas in a place such as Panama, Toronto Baja, or the Dominican Republic? Do you know anything about — or have you worked at — any of these properties? We'd love to talk to you. You can call us or text us by a Signal or WhatsApp at (347) 244-2134 or head over to TrumpIncPodcast.org.

Next week, the weird ways the Trump Organization is making money: 

DAVID FAHRENTHOLD: It looks informed like a — like a typical charity dinner at Mar-a-Lago. There’s, uh, cocktails and a program and dinner and everything. But it's not — there's no charity. The money just goes to Trump. It's $300, and they just give the money to Donald Trump.

BERNSTEIN: David Fahrenthold of The Washington Post — yes, David Fahrenthold! — will be speaking with us. He'll be taking your questions on Trump business. So if you have one for him, send it in now.

Trump, Inc. by Meg Cramer. Our associate producer is Alice Wilder. The engineers are Wayne Schulmeister and Ethan Donaldson. The editors are Charlie Herman and Eric Umansky. Terry Paris Jr. Is ProPublica's Deputy Editor of Engagement. Jim Schachter is the Vice President for News at WNYC. And Steve Engelberg is the Editor-in-Chief of ProPublica.

Original music is by Hannis Brown. And huge thanks to Kelly AuCoin, AKA Pastor Tim from the FX Series The Americans. 

[MUSIC OUT]

[CLIP FROM THE AMERICANS]

ELIZABETH JENNINGS: What we do isn't so different from what you do. 

PASTOR TIM: I know what spies do.

[CLIP ENDS]

 

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