October 19, 2018
Three weeks before journalist Jamal Khashoggi disappeared after entering the Saudi general consul in Istanbul, the Trump Organization’s business partner in Indonesia inked an agreement with a construction firm in which the Saudi government owns a large stake. The agreement advances plans for the two firms to work together on an Indonesian development that will include Trump-branded elements.
Unlike other presidents, President Trump did not divest himself of his business holdings before entering the White House, nor has he since. As a result, he stands to benefit personally from the Indonesia project, whose construction now appears to rely on a formal agreement with a firm of which the Saudi Arabian government owns more than a third.
An official with the Saudi-tied firm also said they expect to be involved in the development of a different Trump-branded project in the future.
The agreement is the most recent example of conflicts of interest President Trump has with Saudi Arabia through the Trump Organization. Many have questioned whether there is a connection between these conflicts and the president’s reluctance to hold Saudi Arabia accountable for Khashoggi’s disappearance.
On September 10, the construction firm, POSCO E&C, and the Trump Organization’s Indonesian business partner, MNC Group, signed a memorandum of agreement (MOA) for first-phase development of MNC Land’s Lido City project, valued at $120 million. The document follows through on a memorandum of understanding (MOU) signed by a member of the MNC Group, MNC Land, in November of last year. According to a foreign press report, the new document “make[s] official the terms of the final agreement among the project owner, the contractor and the creditors’ group,” whereas the MOU represented an “intention to cooperate.”
MNC Lido City will be a large development with some elements that are Trump-branded and others that are not. The Trump Organization previously defended a Chinese government-owned firm’s work on the development by saying it wasn’t involved in the Trump-branded aspects of the project. It appears that may not be true in this case.
While reports of the agreement do not mention the Trump Organization by name, POSCO E&C will reportedly build an 18-hole golf course and six-star hotel for the project, and among the parts of the developments that will bear the Trump name are an 18-hole golf course and a six-star hotel. Additionally, the report of the signed agreement references an MOU signed in November of last year, which is when the MOU for the Trump project was signed.
Saudi Arabia purchased a 38% stake in POSCO E&C through its Public Investment Fund in 2015. The South Korean government also owns a percentage of the company. And though the Trump Organization isn’t developing the project itself, it has licensed the Trump name, and the company will manage parts of the development, resulting in personal income for the president, who has not separated himself from his eponymous company since entering the White House.
President Trump has disclosed more than $1.4 million of income related to the Lido development on his financial disclosure reports.
The Saudi-backed firm expects to receive additional contracts for Trump-branded property in the future. “In addition to the new town development project in LIDO, we expect to receive orders for the Bali Trump Resort Project,” a POSCO E&C official said.