He claims no ties to Russia. Here’s how he made millions from one of its wealthiest men.
The house wasn’t built for a Russian oligarch, although it looked the part. The 62,000-square-foot, 17-bedroom mansion is a palace of new-money flash, featuring Greek fountains, tennis courts, trompe l’oeil murals, underground parking for dozens of cars, and a 100-foot swimming pool and hot tub overlooking the ocean. It even had a faux-aristocratic name: “Maison de l’Amitie,” or the House of Friendship. It was the trophy of a Boston-area nursing home magnate, until he lost his fortune in 2004. That’s when Donald Trump scooped it up.
After paying $41 million for the place in November 2004, Trump called it “the finest piece of land in Florida, and probably the U.S.” He vowed to upgrade the structure into “the second-greatest house in America.” (Second, of course, to his nearby Mar-a-Lago resort.) But Trump had no intention of living there. He intended to flip it for a quick—and huge—profit. His initial asking price, less than two years after buying it, was $125 million. By the time Trump listed the property, in early 2006, the real estate market was already cooling off. The property sat on the market for about two years as a frustrated Trump churned through real estate brokers and slashed his price 20 percent. It wasn’t at all clear who might pay Trump three times his buying price for a neoclassical palace amid a looming recession.
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In the summer of 2008, Trump found a solution to his problem in the form of one of the world’s hundred richest men: a 41-year-old Russian billionaire named Dmitry Rybolovlev. Then with a net worth that Forbes estimated at $13 billion, Rybolovlev had made his fortune in the wild west of 1990s post-Soviet Russia. He’d spent a year in prison on murder charges (he was later cleared) and wore a bulletproof vest when his own life was threatened. He would pay Trump $95 million for Maison L’Amitie in what was widely described as the most expensive U.S. residential property sale ever.
“People were shocked” at Trump’s coup, said Jose Lambiet, a local reporter-turned-blogger who knows Trump and once toured the property with him. “They couldn’t believe that he did it.”
“It was a great deal,” Trump told POLITICO in a mid-July telephone interview. “I’m good at real estate.”
That’s hard to deny. Trump more than doubled the property’s sale price in less than four years. All it took was a signature Trumpian combination of bravado and exaggeration, along with something more controversial: Russian money.
The nature of Trump’s connection to Russia has exploded recently as a campaign issue, thanks to his friendly comments about Russian President Vladimir Putin; the ties that several of his advisers have to Moscow; his contrarian views on NATO and Ukraine, which happen to echo Putin’s; and his startling call on Wednesday for Moscow to find and release Hillary Clinton’s deleted private emails.
But the connection isn’t just political. Trump has repeatedly explored business ventures in Russia, partnered with Russians on projects elsewhere, and benefited from Russian largesse in his business ventures. “Russians make up a pretty disproportionate cross-section of a lot of our assets,” Donald Trump Jr. said at a real estate conference in 2008.
On Wednesday, Trump angrily insisted that he has “nothing to do with Russia,” and said that he has no investments in the country.
He did, however, grant one pointed exception: Maison de l’Amitie. “The closest I came to Russia, I bought a house a number of years ago in Palm Beach, Florida,” Trump told reporters. “I bought the house for $40 million and I sold it to a Russian for $100 million including commissions.”
It is also a story of a classic Trump deal: a lucrative flip, figures on both sides that don’t really add up, and at the center, a house that may not have been what either party claimed.
Why did a Russian billionaire pay Trump so much money for a house the new owner is believed never to have set foot in, which he has denied owning, and which he now intends to tear down? The answer offers an important window into Trump’s kinship with Russia’s oligarchs, and what he likely sees in them as business allies. It is also a story of a classic Trump deal: a lucrative flip, figures on both sides that don’t really add up, and at the center, a house that may not have been what either party claimed.
Even by Palm Beach’s standards of splendor and excess, the French Regency-style estate at 515 N. County Road, with its spectacular ocean views and hundreds of feet of private beach, stood out. A butler employed there once encountered tourists with cameras outside the house’s front gates, ogling the modernist statues outside. “When does the museum open?” they asked.
In an interview, Trump shrugged off the Maison de l’Amitie sale as a “small deal,” compared to his other ventures, the way some people might refer to a summer cabin in the woods. “That was a house I bought for fun,” Trump said. He also downplayed his personal investment in the place, saying that he only made minor improvements to the property. “I cleaned it up a little bit, but not too much,” Trump told POLITICO. “The primary thing was, I painted it.” The implication, of course, would be that the price differential between his purchase and sale was almost entirely profit.
Back when Trump was trying to flip the house at a dizzying price, however, he claimed to have done far more. “I bought the land and gutted the house,” Trump told a reporter in late 2005. After the property went on the market, Shawn McCabe, vice president of Trump Properties in Florida, told Forbes that Trump had put in at least $25 million of his own money. Kendra Todd, a former contestant on Trump’s hit NBC show, The Apprentice, who went to work for Trump and helped to oversee the property’s renovation, said in an interview that Trump had done extensive work, from redoing a pool house to landscaping. “He was really involved with the project. He made the selections for the stone and the fixtures,” Todd said.
Documents submitted in March to Palm Beach’s architectural commission by a private firm retained by the buyer suggest that the actual work was modest. They say Trump had the main house’s interior “remodeled, updating with a new kitchen and dividing a large room to create additional bedrooms and bathrooms,” along with “some minor interior alterations of doors, frames & windows.”
Whatever improvements Trump actually made, they weren’t enough to quickly attract a buyer. As the house went unsold for months, according to a 2008 account in the New York Observer, Trump churned through three real estate brokers.
Some thought his asking price ludicrous. Lambiet, a former Palm Beach Post reporter who now publishes the local blog GossipExtra, noticed flaws and shortcuts during a personal tour Trump gave of the property in 2007. Trump, for instance, boasted that he’d installed gold fixtures in the bathrooms. But when Lambiet scratched a faucet, he found gold paint under his fingernails. And when Trump pointed out hurricane windows, which he also claimed were bulletproof, Lambiet found them suspiciously thin. “You knew in a hurricane the first wave was going to come right in,” he recalled in an interview.
In March 2008, Trump slashed the price to $100 million.
Trump rejected at least one offer for less than his asking price, one of his former brokers, Dolly Lenz, told the Observer in 2008. Lenz described the would-be buyer as an American socialite. Perhaps Trump understood that the payoff he was demanding would have to come from outside the U.S. A new generation of ultra-wealthy foreigners had emerged in the previous decade, many of them Russians who had reaped mind-boggling wealth as formerly state-controlled industries were privatized, the spoils mostly shared among political cronies. By then, Trump had pursued or completed multiple deals with Russian partners. “We see a lot of money pouring in from Russia,” Donald Jr., said at that 2008 real estate conference. Lenz told the Observer that she also believed a Russian might be Trump’s savior: “If you didn’t target the Russian billionaires, then you shouldn’t be in business.”
Enter Dmitry Rybolovlev. Barely over 40 and worth a Forbes-estimated $12.5 billion in 2008, Rybolovlev was not exactly a familiar name on the Palm Beach social circuit. A former medical student who became a stock broker as the country transitioned from socialism to a market economy in the 1990s, he invested in heavy industry. In 1995, then just 29 years old, he was chairman of the Russian fertilizer giant Uralkali. Dubbed “the fertilizer king,” he would become one of the world’s wealthiest men, peaking at No. 59 on the Forbes 500 list. (Today, he’s listed as the 148th wealthiest man.) Like many Russian oligarchs, his success unfolded in the shadow of violence. Caught up in the dangerous world of 1990s Russian industry, he began wearing a bulletproof vest and moved his family to Switzerland. In 1996, he was jailed for almost a year, accused of plotting the murder of a rival businessman. (Rybolovlev has said he was pressured in jail to sell shares of his company for his freedom, suggesting possible extortion; he was later acquitted.)
Today, Rybolovlev is better known for other things. There was his record-setting purchase of an $88 million Manhattan apartment for his 22-year-old daughter; his ownership of Monaco’s pro soccer team; and recent accounts in the New York Times and The New Yorker of claims that an art broker who helped him purchase works by the likes of Picasso and da Vinci overcharged him by hundreds of millions of dollars.
Back then, Rybolovlev was just starting to collect the treasures for which he is now famous. He and his wife, Elena, whom he married in 1987, were developing an appetite for grand properties, and planned to build a replica in Geneva of Marie Antoinette’s chateau at Versailles. But they also hunted for estates overseas, and in early 2008, a broker led them to Maison de l’Amitie.
By then Trump had lowered his asking price, but he was determined to make a nine-figure sale sure to draw national headlines. “He wanted to break $100 million,” said David Newman, a lawyer at Day Pitney who represented Elena Rybolovleva. Trump clearly felt competitive about the final price. When the Saudi Prince Bandar bin Sultan listed his home in Aspen, Colorado, for $135 million a few months earlier, Trump publicly complained that “some character [is] putting on a price just to try to top Trump.”
Ultra high-end real estate sales are often detached from normal market forces. An ego-driven buyer might have a perverse incentive to pay more, not less. “People are happy to say, ‘I got the most expensive house in the U.S.,’” Newman said. This is particularly true of Russian oligarchs, he added: “They like to buy the biggest and the best.” In this sense, Trump and Rybolovlev had something fundamental in common.
But as the deal took shape, the Florida real estate market began to crash. And for all of Trump’s talk of renovations, sources close to the Rybolovlevs would later tell reporters that the house was uninhabitable. (Lambiet says it’s hard to air condition and has persistent mold.) Perhaps fearing they were being played, the Rybolovlevs pressed Trump for a $25 million discount, an undisclosed source close to the family told the New York Times in 2012.
But Trump wanted his magic number. If he really did put $25 million into the house, a $75 million sale wouldn’t leave much profit. Trump also said in the interview that he could tell Rybolovlev was hooked: “He wanted it very badly.” Trump held firm.
And Rybolovlev caved. It may be that the Russian decided the extra $25 million was breadcrumbs from his $13 billion fortune. It’s also possible that Rybolovlev’s wealth far exceeds his financial acumen. Last year, the Russian accused a Geneva-based art dealer of swindling him out of $500 million to $1 billion through huge markups on fine art purchases. In one case, Rybolovlev paid $118 million for a nude portrait by Modigliani, which he now believes the dealer bought for just $93.5 million on his behalf.
In July 2008, a family trust established by Rybolovlev paid Trump $95 million, according to a warranty deed recorded by Palm Beach County. Trump, for whom appearances are everything, continues to state the price as $100 million (“plus commissions,” as he put it Wednesday; he has previous said that total included a $5 million credit for broker fees).
Five years after the sale, Palm Beach County appraised the house for just $59.8 million. It has since rebounded to a healthier $81.8 million, still nearly 15 percent less than Rybolovlev paid.
“I got a good price,” Trump said, dismissing skeptics who say he took advantage of Rybolovlev. “People don’t want to see that big a profit being made.”
But the drama around what had become Palm Beach’s most famous trophy house had only begun.
Within months, the Rybolovlev marriage broke apart in ugly fashion. Elena accused her husband of serial infidelity, charging in her divorce petition that, during parties on his yacht, he shared his “young conquests with his friends, and other oligarchs.” Among her demands on his assets was a claim to half the value of Maison de L’Amitie, which she accused Dmitry of buying with a trust to keep it from her. Her lawsuit charged that her husband had “a history of secreting and transferring assets in order to avoid his obligations.” The Panama Papers leaked in April showed that, around the time the couple split up, Rybolovev used offshore companies to move luxury assets like real estate and fine art out of Switzerland, where they would have been exposed to her divorce claims, according to the International Consortium for Investigative Journalists, which acquired the documents. (Rybolovlev has denied trying to hide assets from his wife, and in an April statement, a lawyer for his family’s trust said his offshore holdings had been set up “completely legitimately.”)
The divorce took on an action-movie flavor as Rybolovlev tried to dodge legal papers staking Elena’s claim to his assets. In 2011, a process server stalked Rybolovlev in Hawaii, where the Russian had purchased a $20 million house from the actor Will Smith. As the Russian tried to escape, the server jumped on the mogul’s moving black Cadillac Escalade to slap legal documents on the windshield, according to affidavits described by the Palm Beach Post. Another incident, filmed and posted on YouTube, shows a server sprinting toward Rybolovlev’s SUV shouting, “Dmitry!” as the driver guns the engine and speeds off.
With Maison de L’Amitie in a legal tug of war, Dmitry Rybolovlev distanced himself from the property. In one 2011 deposition, he denied owning the house, “directly or indirectly.” (The actual owner was a family trust created to secure the financial future of his two daughters, he said.)
A Palm Beach Post reporter asked Trump about the confusion: Did he know exactly who had bought his house? “Somebody paid me $100 million,” Trump joked.
Trump has much in common with Russia’s oligarchs—billions in wealth, supreme self-confidence, a taste for trophies and a love of flaunting riches—and in recent years, he has gravitated toward them. In 2013, he partnered with the Russian real estate mogul Aras Agalarov to bring the Miss Universe pageant, which Trump owned at the time, to Moscow. Trump later boasted that “all the oligarchs” had attended the event. While in Moscow, Trump discussed plans for real estate projects there.
It is hard to verify the claim Trump made this week that he has no investments in Russia and that his dealings with Russians are very limited. His company is private and is not required to disclose its finances. In a break from modern presidential norms, Trump refuses to release his personal tax returns.
“The big question is whether any hard evidence comes out about whether Trump has any financial interests linked to Russia,” says Democratic consultant Jeremy Rosner, who served on Bill Clinton’s national security council staff. “And that’s why it’s so important that he release his tax records. Otherwise, we could have a Manchurian Candidate with the keys to the Oval Office who is under the control of a foreign power. And voters deserve very clear evidence that that is not the case.”
A close look at the case of Maison de L’Amitie doesn’t suggest any connection to Putin. Rybolovlev is not usually described in media accounts as a close ally of the Russian leader, and Kremlin officials have publicly criticized him over a 2006 industrial accident at a Uralkrali mine. “He’s not very well received here in Russia,” an unnamed adviser to the Russian government told the New York Times in 2013.
Trump says he’s never so much as shaken hands with Rybolovlev, his nearly $100 million man. “I never met him. He was represented by a broker,” Trump said in the interview. “I heard good things about him in many ways, and about his family.” Trump added that Rybolovlev’s nationality was not relevant to him. “He just happened to be from Russia. He’s a rich guy from Russia.”
Asked whether Trump and Rybolovlev had ever spoken, a spokesman for the Russian said he “would [not] comment on a private, personal relationship.”
The dust is now settling on Rybolovlev’s divorce. In 2014, a Swiss court ordered Rybolovlev to pay Elena $4.5 billion, a sum later slashed to $600 million. The couple finally settled on undisclosed terms last fall. Forbes currently estimates Rybolovlev’s net worth at $7.7 billion. He now lives in Monte Carlo, residing in a penthouse apartment, overlooking its famous harbor and attending games of his AC Monaco soccer club with Prince Albert.
But dust clouds may soon rise over Maison L’Amitie. In April, Palm Beach’s architectural commission approved a plan to demolish the home. The House of Friendship, having faced bankruptcy and bitter divorce, will likely be torn down. Rybolovlev may never set foot in it.
Trump speculated that the property will be subdivided. Which is fine by him, he says, unsentimental about a home he once envisioned as America’s second-greatest.
“I have no emotion,” Trump said, “other than it was a great deal.”
That’s hard to dispute. Even with the work Trump did on the house, Lambiet still marvels at the quick profit he turned.
“This is what he does with everything. He puts a little veneer on things and he doubles the price, and people buy it,” Lambiet said. “He’s all smoke and mirrors—and that house was the proof.”