A judge in Scotland will hold a two-day hearing this week that could end up forcing former President Donald Trump to go through something he dreads and has successfully avoided for years back home: a financial colonoscopy.
Lord Sandison, the judge overseeing the case, will decide whether the Scottish government can use a new anti-money laundering tool to investigate how Trump suddenly came up with $60 million in cash to buy and establish the Trump Turnberry golf resort in 2014.
The purchase aroused suspicion because the all-cash deal was part of a multi-million dollar spending spree on three golf courses in the British Isles—at a time when his 10 percent stake in the casino business bearing his name, Trump Entertainment Resorts, was in peril as the company was filing for bankruptcy.
“Do we continue to ignore the towering cloud of suspicion over Trump Turnberry?” said Nick Flynn, legal director of a watchdog group that’s pressuring the Scottish government to act.
It’s a potential move that the Trump operations there stand strongly against.
"This is political game-playing at its worst and a terrible waste of taxpayers’ money which further damages Scotland’s reputation as a serious country to invest in and do business,” Sarah Malone, executive vice president of Trump International Scotland, said in a statement to The Daily Beast. “We have developed and operate two globally acclaimed, multi-award winning, visitor destinations in Scotland and make a significant contribution to the Scottish leisure and tourism economy. This latest attempt to undermine that investment is an utter disgrace.”
The Turnberry golf course and hotel are found on a remote coastal stretch in the southwest reaches of Scotland, where the wind-swept green hills overlook the frigid waters of the Firth of Clyde. It also appears to be a bottomless money pit.
Golf Recreation Scotland Limited, which runs the operation, has suffered millions of dollars in losses every single year in operation since Trump acquired the property, according to its publicly available corporate statements filed in the United Kingdom.
In fact, the golf course has posted “financial year” losses totaling £46 million from 2014 until 2019—$63 million in today’s U.S. dollars—roughly the same Trump paid for it in the first place.
As the Scottish legislator Colin Smyth put it during a parliament meeting earlier this year: “He has been an absentee owner of Trump Turnberry since he bought it, and with the financial losses being made year-on-year, the Trump Organization has been as successful at running the resort as the founder was at being President.”
Still, Trump operations there previously claimed to have spent more than $150 million in renovations, sparking even more questions about why the family continues to pour so much money into a business venture that has yet to pan out.
Trump is a real estate tycoon who’s called himself the “king of debt” for a reason: It’s always safer to play with someone else’s money. He’s famous for being able to secure financing, particularly from Deutsche Bank, when he’s in a rut and no one else will trust him. And yet, when it came to build these golf courses in Scotland, the story was that Trump came up with hundreds of millions of dollars.
As observers have noted, the timing of these deals makes little sense. Just as Trump was defaulting on a $640 million loan from Deutsche Bank that he had only half paid off—and suing the bank claiming an inability to pay—he was also telling The Scotsman newspaper that he had more than $1 billion in cash sitting in the bank.
The purchase of the first golf course—now the Trump International Golf Links Scotland—generated some questions. But it was when Trump suddenly came up with a reported $60 million in cash to buy Turnberry in 2014 that alarm bells really started going off.
It’s that financial mystery that drove the Avaaz Foundation, a U.S. watchdog group, to issue a 2019 report, called “Donald Trump’s $60 million Scottish Question,” urging the government there to formally investigate. What’s changed in the five years that’s passed is that Scotland now has the tools to do just that.
A New Sgian-Dubh
For years, the European Union has been developing tools to counteract modern money laundering tactics, giving bureaucrats the ability to pierce corporate veils and dig into financials.
In 2015, it passed the “fourth money laundering directive,” allowing governments to employ something called an “unexplained wealth order” to force rich, politically connected people to explain how they paid for a suspiciously acquired asset. It’s a civil mechanism, not a criminal one. But the threat is real: Refuse to answer, and the government could seize your property.
The U.K. adopted the practice in 2017, and has only started to utilize it—setting off court battles. The first major case there is an ongoing probe into the riches obtained by the wife of a Azerbaijani banker jailed back home for embezzling millions from a state financial institution. The British government is forcing her to explain how she bought a golf course, spent $16.5 million on a London home, and splurged another $22 million at the luxury department store Harrods.
Scotland’s leader, First Minister Nicola Sturgeon, has held firm that politicians don’t have the power to issue unexplained wealth orders. Instead, she’s left that job to law enforcement officials like the country’s top prosecutor, Lord Advocate Dorothy Bain.
But at a parliament meeting in February this year, Scottish Parliament member Patrick Harvie, the leading political voice on this effort, called on Sturgeon’s government of ministers to use this authority. He called it “a necessary and relatively modest step towards accountability.”
But Sturgeon’s government still resisted, so Avaaz has taken the matter to the Scottish judiciary, hoping to put the ball squarely in the ministers’ court.
In May, the group filed a petition asking whether the government acted unlawfully when it failed to make a formal application to use an unexplained wealth order.
“There’s a new tool, and it’s your job to use it. The power lies with Scottish ministers,” Avaaz legal director Nick Flynn told The Daily Beast last week. “Nicola Sturgeon has said it’s nothing to do with her, but it’s everything to do with her and her ministers. They can’t abdicate responsibility for it."
Sturgeon’s government did not respond to a request for comment for this story.
The judge, Craig Sandison, issued an opinion in August opening the matter to judicial review. And starting on Tuesday, he’ll hear barristers from the government and Avaaz battling over how exactly Scotland should go about deploying this anti-money laundering tool—particularly with the Trump Organization in the crosshairs.
The judge will determine whether Scottish ministers acted unlawfully when they chose to not apply for an unexplained wealth order against Trump. And if he decides that this power does indeed belong to ministers, Sturgeon’s government would be under pressure to actually utilize it.
Lord Sandison could end up ruling by year’s end. And if he decides that it’s up to government ministers, Trump could be forced to turn over financial paperwork. In that scenario, the list of ministers conducting such a financial investigation might include Harvie—the vocal Scottish Parliament member who once led the charge on calls for this financial investigation. He was appointed a minister in Sturgeon’s government in August.
An unexplained wealth order could have far-reaching implications back in the United States. Any documents turned over to the Scottish government could make their way to Manhattan District Attorney Cyrus Vance Jr. and New York Attorney General Letitia James, who are running a joint investigation into alleged tax dodging and other financial crimes at the Trump Organization.
“The urgency over the need to act has been increasing. The attempt to steal the U.S. election and the riot at the capitol have shown the danger of failing to hold Donald Trump to account,” Flynn said.
—Jamie Ross contributed reporting