Bank’s ties to terror
U.S. sanctions against Iran date back to the Iranian Revolution in 1979, when Islamic fundamentalists seized power and held more than 50 Americans hostage for more than a year. After briefly lifting restrictions when the hostages were released, President Ronald Reagan designated Iran as a state sponsor of terrorism and imposed new sanctions in 1984 and 1987.
At the time, Donald Trump called for the U.S. take a tougher line against the Iranian regime.
In 1987, he suggested in a speech in New Hampshire that the U.S. should attack Iran and seize some of its oil fields to hit back for what he described as Iran’s bullying of America.
“I’d be harsh on Iran. They've been beating us psychologically, making us look a bunch of fools,” Trump told The Guardian in 1988. “It’d be good for the world to take them on.”
In the years that followed, Iran stepped up its support for international terrorist attacks, according to authorities in the U.S. and other Western nations.
In 1994, a suicide bomber killed 85 people at a Jewish center in Buenos Aires, an attack that Argentine prosecutors later charged was coordinated by the Iranian government.
In 1996, a truck bomb killed 19 American servicemen at the Khobar Towers apartment complex in Saudi Arabia. A U.S. court later held that the bombing had been “planned, funded, and sponsored by senior leadership in the government of the Islamic Republic of Iran.”
As Iran supported terror attacks abroad, the U.S. moved to punish the regime economically. President Bill Clinton approved a sweeping embargo in 1995 that banned Americans from conducting trade with Iranian businesses.
Bank Melli, one of Iran’s largest state-owned banks, had long had an office in the GM Building in midtown Manhattan. In 1998, Trump’s real estate organization bought the building and inherited Bank Melli as a tenant.
It is not clear if Trump knew personally that Bank Melli was renting an office from his company, but he was the Trump Organization’s chairman and president, and has described himself as a hands-on manager who pays attention to details.
Nephew, who worked on sanctions and nuclear nonproliferation issues for the U.S. government from 2003 to 2015, said there was less awareness in the 1990s about Iran’s nuclear program and the role of banks in financing terrorism. But he said that accepting payments from Bank Melli should have raised a red flag, even in 1998.
“Should someone in America have known better than to do business with Iran? Yeah,” Nephew said.
George Ross, the longtime executive vice-president of the Trump Organization, said he was not aware that Bank Melli had been a Trump tenant.
“We had any number of tenants in the GM Building,” Ross said in a brief telephone interview. “They might have been in there, but I have no knowledge of them.”
Emanuele Ottolenghi, an expert on Iran at the Foundation for the Defense of Democracies, said that it was “remarkable” that the Trump Organization had kept Bank Melli as a tenant for four years after the Treasury Department had listed the bank as an Iran-controlled entity.
“I just don’t think that a company of that size and means should be able to hide behind a ‘we didn’t know’ kind of argument,” Ottolenghi said.
In 2007, U.S. authorities charged that Bank Melli had facilitated purchases for Iran’s nuclear program, and that it had been used to send at least $100 million to the Quds Force, the feared special operations unit of Iran’s Revolutionary Guards.
The Quds Force was designated as a supporter of terrorism by President George W. Bush weeks after the attacks of Sept. 11, 2001, for providing support to the Taliban, Hamas and Hezbollah, groups that the U.S. has labeled as terrorist organizations.
Bank Melli played an important role in Iran’s nuclear program and support for international terrorism in the years before it was singled out by Treasury in 2007, experts told ICIJ.
“It was allowing the entities that were shopping for the regime to make payments,” said Ottolenghi, who described Bank Melli as “critical” to Iran’s past nuclear and terrorist activities.
A representative for Glodow Nead Communications, a public relations firm representing the Trump Organization, told an ICIJ reporter that the Trump Organization would only comment if the story was positive. She declined as a matter of policy to provide contact information for any of its employees.
The Trump Organization continued renting office space to Bank Melli until the insurance company Conseco, which had provided financing for the 1998 purchase, took control of the GM Building in 2003 and sold it to the Macklowe Organization, a New York City real estate developer.