Trump’s Man in the Middle East: A 'Slumlord' Real Estate Investor who Owns Neverland Ranch and Speaks Fluent Arabic

Published March 4th, 2019 - 01:51 GMT
Thomas Barrack (Shutterstock)
Thomas Barrack (Shutterstock)

 

 

Thomas Barrack has been outed as a central figure in the U.S.’ foreign policy dealings with the Middle East. While his name has yet to attain the kind of international notoriety that Jared Kushner, Michael Flynn or Ivanka Trump has acquired, his sway and closeness with Donald Trump is now deeply influencing Trump’s Middle East policy.

A recent U.S. oversight committee report revealed that Tom Barrack is leading secret negotiations to sell sensitive nuclear technology to Saudi Arabia, possibly forgoing congressional approval and binding non-proliferation agreements in the process. Nothing in Barrack’s official professional career qualifies him to lead such a deal, but his vast, personal ties to both Middle East leadership and the Trump family made his selection possible.

So who is Tom Barrack, and exactly how did he get those personal ties that helped him land a powerful position in the Trump administration?

Barrack is a real-estate investor whose outlandish portfolio includes buying Michael Jackson’s Neverland Ranch, vacuuming up foreclosed homes at the height of the recession in attempts to flip them, bailing out Jared Kushner from a debt-riddled property, defending the assassination of Washington Post journal Jamal Khashoggi and leading Trump’s inaugural committee, which has been under investigation by the U.S. government. Many of these feats were accomplished with the help of his rich Emirati and Qatari friends.

With most other presidencies, Tom Barrack would be known as an opportunistic, if amoral, businessman. But under Trump, he is a powerful political figure with the ability to shape the landscape of the Middle East.

Rich figures with Trump family connections like Barrack are becoming important to understanding the inner-workings of the U.S. national government now, as Trump is increasingly relying on them to draft and enact his policies.

Jared Kushner, Trump’s own 38 year-old son-in-law, is the U.S.’ special envoy to the Middle East in charge of ending the Israel-Palestine conflict. Trump reportedly ordered his staff to grant Jared top secret security clearance in spite of warnings from intelligence officials. Trump’s daughter, Ivanka, is a senior advisor to Trump. Many of his economic advisors are billionaire donors to his campaign efforts. Two years of investigations, controversies and in-fighting has thinned the herd of Trump’s policy team, leaving a cadre of loyalist friends to take up more dominant roles.

Barrack is part of what some have called Trump’s "shadow cabinet"

 

Tom Barrack, the “Opportunistic” Investor

Thomas Barrack (Shutterstock)

Born in 1947 to Lebanese immigrants, Barrack received his JD from the University of San Diego in 1972 and immediately began cultivating business ties with royal families in Gulf states.

One of his first employers deployed Barrack to Saudi Arabia to buddy-up with members of the al-Saud royal family who rules over the country. In his own words, Barrack befriended “a local Saudi” with whom he played squash. That ‘local Saudi” happened to be the son of the king at the time. Barrack then friended an executive at Saudi Aramco, the country’s state-owned oil enterprise, and helped negotiate some of its business dealings.

Barrack also cultivated ties with powerful Emiratis. In one deal, he helped negotiate drilling rights with the Emirati oil minister, whose son. U.A.E. Ambassador to the U.S. Yousef al-Otaiba, eventually poured millions from official U.A.E. investment funds into various real estate ventures led by Barrack.

In the Middle East, where pesonal relationships often determine who has access to power and riches, Barrack was situating himself as a rising star, complete with personal contacts in some of the most powerful families.

At the same time he was solidifying powerful friends in the Middle East, he was also courting the Trump family.

 

 

In 1985, Barrack sold Donald Trump a 20 percent stakes in the Alexander’s department store chain and total ownership of the famed Plaza Hotel for $410 million. Trump was later forced to give up his stakes in both buys when he declared bankruptcy.

By the time global markets collapsed in 2007-08, Barrack had access to billions in investment funds, some of which were drawn from his contacts in the Gulf, to begin sucking up foreclosed and imperiled assets.

Armed with a fund that included $1 million from Ambassador Otaiba, Barrack bought approximately 31,500 single-family homes and renovated them to be rented out at premium prices.

Though Barrack called this move “the greatest thing I’ve ever done,” his tenants felt otherwise. Barrack’s firm spent thousands on each house’s exterior to ensure they looked marketable, but inside, many homes were neglected. Renters complained of leaky ceilings and pipes, mold, flooding, collapsed interiors and even infestations of nesting snakes.

“When consumers attempt to reach the business [owned by Barrack] regarding repair issues, a report from the Better Business Bureau explains, “they report that the business is unresponsive.”

Barrack’s eviction policy was even more neglectful. 62 year-odd Evelyn Knights rented her Los Angeles home from Barrack, but was $49.33 short on her rent one month. Barrack’s company gave her three days to leave the house.

“It’s hard,” Knights said. “I’m on a fixed income and so I have to keep moving money around. Let this go to pay the light bill, let that go to pay the telephone bill... At that time, I didn’t even have $49.33.”

Barrack once explained his investment philosophy in a speech at the University of Chicago in 2012. “You walk into a jungle where no one else wants to be and you swing and you fight and you bite and eventually, if you’re successful, they’re all swinging with you and then you’ve got to move to another jungle,” he said.

“He who can sustain the most pain wins.”

This business practice and mentality, which appropriated foreclosed, broken homes only to raise their rents, gave Barrack the esteemed title of “modern-day slumlord.”

Homes weren’t the only things he was buying in the wake of the Great Recession.

In 2010, Barrack teamed up with the Qatar Investment Authority, the Gulf state’s own investment fund, to buy Miramax, one of the world’s largest entertainment companies, from The Weinstein Company.

 

666 Fth Avenue (AFP/FILE)

In that same year, Barrack purchased a $70 million stake in 666 5th Avenue, a New York property that was purchased by Jared Kushner only to become a black hole threatening to force Kushner into bankruptcy. Donald Trump himself reportedly called Barrack and convinced him to bail his son-in-law, Kushner, out of the debt.

Kushner paid $1.8 billion for the building, making it one of the most expensive real estate buys in history, in 2007 at the height of the real estate bubble. When it burst, the value of the building collapsed. Kushner struggled with its down and mortgage payments. Fortunately, the Qatar Investment Authority bailed him out of the property in Aug 2018 with a 99 year-lease.

At the time, Kushner was touring the Middle East as both the Middle East special envoy from the Trump administration and a businessman desperate for help.

Another opportunity Barrack saw was the death of Michael Jackson in 2009. A little before Jackson died, Barrack purchased Jackson’s estate, called Neverland Ranch and began renovating it. After the singer’s death and allegations of sexual misconduct with children resurfaced with more victims speaking out, the value of the property plummeted and has since remained unsellable in Barrack’s hands.

Barrack’s real estate exploits placed him squarely in between rich Gulf business interests and the Trump family. His dealings with Donald Trump blossomed into a close friendship, which in turn gained potent political power when Trump won the 2016 presidential election.

Barrack stood to gain more than just money, he looked to gain a seat at the table of international diplomacy.

 

Tom Barrack, the Trump Loyalist Deal-Maker

Tom Barrack at the Republican National Convention in 2016 (Shutterstock)

Barrack raised $23 million for Trump’s presidential campaign via PACs. He then chaired Trump’s inaugural committee, which raised an addition $100 million.

Barrack was the man who hired Rick Gates to help with Trump’s inauguration and recommended to hire Paul Manafort as Trump’s campaign manager. According to the New York Times, Barrack tried to arrange a secret meeting between Manafort and Saudi crown prince Mohammed bin Salman.

Gates and Manafort were both found guilty by a special U.S. investigation into Trump’s campaign: Gates admitted to “conspiracy against the United States,” while Manafort was found guilty on a laundry list of charges including fraud, money laundering and obstruction of justice.

The first problem Barrack faced after Trump won was with Barrack’s ties with Gulf royals, who were terrified of a Trump presidency. They did not see a viable diplomatic ally in the man who campaigned on promises including the banning individuals from Muslim-majority countries.

“Confusion about your friend Donald Trump is VERY high,” U.A.E. Ambassador Otaiba emailed Barrack in April 2016, when Trump was on his way to becoming the Republican presidential candidate. Trump’s Islamophobic style “has many people extremely worried,” Otaiba continued.

 

 

Seeking to assure Otaiba about his friend Trump, Barrack simply responded “He also has joint ventures in the U.A.E.!” in an apparent attempt to say ‘don’t worry, Trump may have won this election off of stoking xenophobic sentiments, but he still seeks to flood you with cash.’

Barrack may not have agreed with Trump’s political positions on Muslims, but he did sense an opportunity to make untold sums of money using his political connections to both the Middle East and the Trump family.

Since Trump’s election, around $7 billion in investment money from Gulf States have flooded the pockets of Barrack’s own firm, Colony Northstar.

A secret plan to exchange nuclear tech for billions of dollars has also been in the works since Trump’s election.

 

Thomas Barrack (left), Michael Flynn (center), and Jared Kushner (right) (Shutterstock/AFP, edited by Rami Khoury/Al Bawaba)

A group of CEOs and former Generals designed a scheme to sell Saudi Arabia lucrative but sensitive nuclear technology. A whistleblower inside the U.S. National Security Council who helped revealed the plan said it is merely “a scheme for these generals to make some money.”

Naturally, as a man accustomed to being an interlocutor between the Trump family and the Middle East, they picked Tom Barrack to lead the implementation of the deal. Trump has signed off on the deal and is reportedly supportive of the technology transfer, which is estimated to net the dealmakers, including Barrack, as much as $80 billion.

Despite grave concerns from inside the National Security Council that Barrack and others involved in the deal are compromised by potentially illegal conflicts of interest, it is ongoing.

Barrack deemed the nuclear transfer to be part of a broader plan to solidify a U.S.-aligned Middle East bloc. To signify this vision’s broad scope, Barracked called it the “The Trump Middle East Marshall Plan” in a 2017 memo sent to Trump.

While the plan was being internally approved, Saudi authorities assassinated Washington Post journalist and American resident Jamal Khashoggi. U.S. intelligence presented their findings that Saudi’s crown prince Mohammed bin Salman was to blame. But Barrack, busy as he was with delivering nuclear tech to them, defended their killing of Khashoggi.

"Whatever happened in Saudi Arabia [with regards to the killing of Jamal Khashoggi], the atrocities in America are equal, or worse, to the atrocities in Saudi Arabia,” Barrack declared. A few days later, he apologized. “I feel strongly that the bad acts of a few should not be interpreted as the failure of an entire sovereign kingdom,” he added as a caveat to the apology.

Arms experts raised red flags about the deal as well, explaining that it has serious ethical shortcomings: congress must approve nuclear deals and a non-proliferation agreement between the U.S. and recipient country must be signed for the transfer to be legal. Neither has happened.

Experts further raised the prospect that the nuclear tech transfer could deal a major blow to international norms regarding arms control in general. This could have serious, long-term geopolitical implications for the Middle East and beyond; consequences that would be ultimately pinned back to Trump and Barrack.

 

 

Barrack wields power that most elected officials inside the U.S. do not. He even holds more power than most politicians in the rest of the world do, since he is so close to Trump.

With one foot inside the Middle East as a businessman and the other inside the White House as a trusted ally, Barrack has placed himself to be Trump’s de facto problem solver and diplomatic deal-maker in the Middle East along with Jared Kushner.

He has not been elected, nor confirmed by Congress or even formally placed within the White House. It is not clear whether he has security clearance, nor is it clear that there are any plans to clarify his role in Trump’s administration.

Rather than trusting a vetted diplomatic professional to negotiate on behalf of U.S. interests, Trump is opting for an ally with whom he holds court; a man Trump has trusted since their initial contacts in the world of 1980s New York real estate.

As a decades-long family friend who stands to make a fortune from Trump’s dealings in the Middle East, Barrack is also likely to dig in for the long haul of Trump’s presidency.

The sheer amount of power Barrack holds, in stark contrast to the opaqueness of his dealings and formal role in directing and implementing U.S. policy, is a testament to the personalist nature of Trump’s governance style. Trump has surrounded himself with friends like Barrack, and seamlessly blended corporate and state interests in the process.

Thomas Barrack is an emerging embodiment of this trend and thus stands as one of the most crucial people to know, not just in order to gain access to Trump if you are a foreign power, but in order to understand the priorities and driving forces behind U.S. foreign policy in the Middle East.

Sitting at the diplomatic table, foreign powers are increasingly aware of the overriding, unspoken rule by which Trump and Barrack operate: money talks.


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