Trump halts some of his international deals
But the dream of a world-class Trump Baku died this month, with Trump saying he was backing out of the deal because of delays and blown deadlines caused by the developer, a 34-year-old with close family connections to the country's government.
The demise of Trump Baku is not an isolated decision.
With Trump's inauguration less than a month away, the president-elect's company has pulled out of a few international business deals that might have created especially sticky conflicts and controversies for his administration.
In addition to Azerbaijan, the company began to back out of a deal in another former Soviet republic, Georgia. It also canceled a hotel project in Rio de Janeiro that had been mentioned in a fraud investigation. And just days after the election, the Trump Organization shut down four companies formed this year seemingly in anticipation of a hotel deal in Jiddah, Saudi Arabia.
Alan Garten, chief counsel for the Trump Organization, said the international moves were “business decisions, based purely on the status of the projects,” not because the president-elect was scrambling to clean up potential conflicts before he takes office.
Trump himself was not even involved, Garten said, only sons Donald Jr. and Eric, along with other company executives.
“His focus is solely on filling out his Cabinet and turning the country around,” Garten said of the president-elect.
Even with the recent cancellations, Trump's family company still profits from deals all over the world — a golf course in Dubai, United Arab Emirates; two hotel towers in Turkey; a luxury condo tower in the Philippines; a resort complex in the Dominican Republic.
Trump has said he will turn over operations of his company to his children. Past presidents put their assets in blind trusts, outside their control; letting the children run the company would not meet the legal requirements for a blind trust, according to the Office of Government Ethics.
“Unless the president divests himself completely from his business, even a seemingly innocuous thing can make a big difference,” said Farok Contractor, a professor of international business at Rutgers University.
For example, a move as common as a policy change that could raise the value of the U.S. dollar could hurt Trump's bottom line on overseas projects if they're tied to other currencies, he said.
Several ethics lawyers have said Trump would need to sell his holdings to someone outside the family to avoid conflicts.
“Just because the president isn't legally prohibited from financial conflicts of interest, there's going to be this cloud of doubt that follows every policy decision he makes,” said Jordan Libowitz, communications director at Citizens for Responsibility and Ethics in Washington, a group highly critical of the president-elect.
“People are going to ask, is he making this decision in the interest of the American people, or in the interests of one of his foreign companies?”
Garten would not discuss how Trump plans to turn over control of his businesses, saying that would “all be coming out in the next few weeks.”
The now-terminated Azerbaijan deal was one illustration of how Trump's business dealings could complicate foreign policy for the new administration. The oil-dependent country has a reputation for cronyism and corruption, with a small group of elite families controlling a large share of the country's economy.
“I would say corruption is a whole system in Azerbaijan,” said Thomas de Waal, a senior associate with the Carnegie Endowment for International Peace who has written extensively about the country and its neighbors.
“There is no rule of law as we know it in the U.S. or a European country,” he said. “Everything is done through personal connections. When you deal with business in Azerbaijan, you're dealing with individuals, and you're dealing with politically powerful individuals.”
Like most of his hotel deals, Trump did not develop the building but licensed his name. He entered the deal in 2014 and reported receiving $2.8 million in management fees for the hotel, housed in a gleaming 33-story curved tower in Baku — even though the hotel never opened. De Waal said the real estate market in Azerbaijan has been hammered by the drop in oil prices and devaluations of currency.