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CNN LIVE EVENT/SPECIAL

CNN Special Report: The Trump Family Business; An In-Depth Look at Trump's Businesses; Promises Made, Promises Broken. Aired 10-11p ET

Aired May 27, 2019 - 22:00   ET

THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.


[22:00:00] (COMMERCIAL BREAK)

(BEGIN VIDEOTAPE)

ANNOUNCER: The following is a CNN Special Report.

ERIN BURNETT, CNN HOST (voiceover): His business practices are opaque.

(on screen) Everybody else lost; it goes bankrupt.

(UNIDENTIFIED FEMALE): Right.

BURNETT: Trump walks away with somewhere between 30 and 50 million dollars.

(voiceover) There are allegations of deception.

DONALD TRUMP, ENTREPRENEUR: That we're developing doesn't mean that we're the developer.

BURNETT (voiceover): Often, little guys get left in the lurch.

UNIDENTIFIED FEMALE: It was literally a financial catastrophe for us.

SANDRA SAPOL, OWNER, EMBROIDME IN ENCINITAS: It's hard when you feel like you've been ripped off by a big name. It's just like you start to feel like, how could this happen.

(END VIDEO CLIP)

BURNETT: There is ordinary real estate selling and then there's this.

(BEGIN VIDEO CLIP)

DONALD TRUMP, PRESIDENT OF THE UNITED STATES: I'm really rich.

(END VIDEO CLIP)

BURNETT: And now concern Donald Trump is leveraging the presidency to make money.

(BEGIN VIDEO CLIP) BURNETT: Whose interest is he working for? The American people or his own wallet?

(END VIDEO CLIP)

BURNETT: Tonight, a look inside the Trump family business.

It's the fall of 2006 and after a series of bankruptcies Donald Trump is back big league.

(BEGIN VIDEO CLIP)

TRUMP: My name's Donald Trump and I'm the largest real estate developer in New York.

(END VIDEO CLIP)

BURNETT: That's not reality. It's just reality TV. Post millennium Trump is a television star with "The Apprentice" to promote him.

(BEGIN VIDEO CLIP)

TRUMP: You're fired. You're fired. You're fired.

(END VIDEO CLIP)

BURNETT: And whatever he's selling.

(BEGIN VIDEO CLIP)

TRUMP: And turn the name Trump into the highest quality brand.

(END VIDEO CLIP)

BURNETT: Trump seems to be selling and building a lot.

(BEGIN VIDEO CLIP)

TRUMP: The Trump International Hotel and tower in Soho is the site of the latest development.

(END VIDEO CLIP)

BURNETT: That's downtown New York City. There was also Northern Mexico.

It's an escape to a place that is close to home, yet a world away.

TRUMP: Big windows. Great picture. Beautiful kitchen.

SAPOL: I said, my God, that's amazing, let's do it.

BURNETT: Sandra Sapol of suburban San Diego was immediately interested in the Trump Ocean Resort in Baja, Mexico. A big reason it didn't have a Southern California price tag. SAPOL: We don't make that kind of money where we're driving around in a Ferrari or Lamborghini. We're pretty regular normal people. So, you know, Trump Ocean Baja Resort. We met this lady who showed us brochures of what it's going to look like and they're going to have a spa, and it's go having to a pool and it's going to have a tennis court. It looks so beautiful.

BURNETT: Beautiful. And Sapol thought a great investment because she thought she was buying from a man with the Midas touch.

SAPOL: Whatever Donald Trump touches turns fantastically gold.

This is the purchase agreement.

BURNETT: Sapol and her husband signed their purchase agreement in December of 2006.

SAPOL: Twelve, eight, '06. We picked an actual room with an actual plan. Here's the purchase price of our condo, $418,900. That's how much the condo was.

BURNETT: What they could afford.

SAPOL: Here's our conformation of deposit. The letter confirmed that we're in receipt of a total deposit of $125,000.

BURNETT: They'd lose every penny.

SAPOL: It's hard when you feel like you've been ripped off by a big name. It's just -- you start to be like, how could this had happened?

BURNETT: Trump Ocean Resort Baja, Mexico was never built. Construction never got beyond this, a giant hole in the ground.

SAPOL: So, there's my hole. That's what I bought, my hole.

BURNETT: The failure of Trump Ocean Resort Baja, Mexico was among several Trump buildings that failed in the early 2000s. Two projects planned for Florida also fail. The Soho Hotel it went bankrupt. So did buildings in Panama and Toronto.

MARCO CHOWN OVED, INVESTIGATIVE REPORTER, TORONTO STAR: Most people in the city, when that tower went bankrupt, sort of chalked it up to the global financial crisis. Selling condos at bad time.

But lot of people with were building condos during the global financial crisis and none of them went bankrupt. Like 400 towers were built at the same time as this one and 399 of them made money.

BURNETT: Marco Chown Oved and Robert Cribb of the Toronto Star partnered with Columbia's journalism school to investigate what happened at the Trump building in Toronto.

ROBERT RIBB, INVESTIGATIVE & FOREIGN AFFAIRS REPORTER, TORONTO STAR: Everyone lost money except for Trump.

That is ultimately the main revelation that we walked away with.

BURNETT: Everyone lost money but Trump. It's the bottom line again and again. He gained. Others lost. Take Panama. How much did he make?

[22:04:56] HEATHER VOGELL, REPORTER, TRUMP INC. PODCAST: He made, from what we can tell, piecing together fragments of financial information from different places including the Panamanian Securities Office, probably between 30 and 55 million. Even though it's just a project that went bankrupt, remember.

BURNETT: So, everybody else lost that goes bankrupt.

VOGELL: Right.

BURNETT: Trump walks away with somewhere between 30 and $50 million. Everybody else lost. And Trump earned 30 to $50. How? A big part of the answer, licensing.

DAN ALEXANDER, SENIOR EDITOR, FORBES: Well, it works. If somebody else decides to build a building. They say hey, if I put Trump's name on this, I'm going to sell these condos more easily or get more attention to it so they say, all right, Trump, we'll pay you a fee to put your name on it.

(BEGIN VIDEO CLIP)

IVANKA TRUMP, DONALD TRUMP'S DAUGHTER: Welcome to Trump Ocean Club International Hotel and Tower Panama.

(END VIDEO CLIP)

BURNETT: Those buildings in Panama, Toronto, Soho, and Baja, Mexico all licensed properties.

DAVID CAY JOHNSTON, TRUMP BIOGRAPHER: Donald Trump started licensing his name around the turn of the century because it was easy money. He didn't have access to broad capital from banks anymore because of all the failures of businesses banks lost money on. And here was an opportunity to sign your name and get paid up front.

BURNETT: So, who made deals with Trump and what were the terms? That's where things begin to get fuzzy.

UNIDENTIFIED FEMALE: From WNYC Studios, and ProPublica, this is Trump Inc.

BURNETT: Journalist at WNYC radio and ProPublica have been investigating Trump businesses for more than a year.

ANDREA BERNSTEIN, CO-HOST, TRUMP INC. PODCAST: Trump Inc. was a podcast and reporting project to try to uncover the secrets of the Trump family business.

BURNETT: Secrets because the Trump organization fights to keep business details private. Case in point.

(BEGIN VIDEO CLIP)

D. TRUMP: The only one that cares about my tax returns are the reporters, OK?

(END VIDEO CLIP)

BURNETT: The president's battle over his tax returns.

(BEGIN VIDEO CLIP)

D. TRUMP: And no lawyer would tell you to release your tax returns while you're under audit.

(END VIDEO CLIP)

BURNETT: If the Trump organization was a public company, there would be years of detailed information available. That doesn't exist. In fact, the only financial documents Trump has released publicly are the basic financial forms required of all presidential candidates.

MIKE TANGLIS, SENIOR RESEARCHER, PUBLIC CITIZEN: The financial disclosures give you a broad but incomplete outline of Trump's business empire.

BURNETT: Incomplete. But one thing they do reveal is that the Trump organization is actually more than 500 different business including golf courses and hotels. But there's a lot missing.

WALTER SCHAUB, FORMER DIRECTOR, OFFICE OF GOVERNMENT ETHICS: What's not on the form most importantly are things like the people you're in business with or any of your customers or clients.

BURNETT: Later this hour why that is important. Up next.

SAPOL: Here's a picture of Donald Trump himself right here. It never says I'm just licensing my name. I have nothing to do with the property.

[22:10:00] (COMMERCIAL BREAK)

(BEGIN VIDEO CLIP)

D. TRUMP: One of the things I most love about this project is the fact that it's in Baja, Mexico. And Baja is one of the really hot places.

(END VIDEO CLIP)

BURNETT: So, Sandra Sapol of suburban San Diego, having a second home, especially one in Baja, was a dream.

SAPOL: Not everybody's American dream is the same. Ours was have a family, have a picket fence and have like that second property.

This is the sales office. BURNETT: It's why she bought a condo at one of those Trump-licensed properties. Trump Ocean Resort, Baja, Mexico. Only problem was she didn't know that she was buying into a property.

SAPOL: This was supposed to be my view.

BURNETT: That had licensed the Trump name.

SAPOL: These are the rest of this project. I own a franchise. I totally know the word licensor, licensee, but I had never heard it from mouth of mouths of anybody representing Trump Baja Resort. Never.

BURNETT: Look at this letter from the project's developer to buyers in August 2007. One of the two signatures at the bottom, Donald J. Trump.

Official brochures also made it seem as if he was a developer.

SAPOL: Developed by one of the most respected names in real estate, Donald J. Trump.

BURNETT: Trump said it too.

(BEGIN VIDEO CLIP)

D. TRUMP: When I build, I have investors that follow me all over. They invest in me; they invest in what I build and that's why I'm so excited about Trump Ocean Resort.

(END VIDEO CLIP)

BURNETT: When I build, what I build. But Trump was not going to build anything at Trump Ocean Resort, Baja, Mexico. He didn't develop it. The company licensing his name did that.

BERNSTEIN: He set up this international licensing business where he would realize that there was an incredible value to the name Trump and that he could sell it and he didn't have to put anything into the project.

BURNETT: He didn't put in any money. He had nothing to lose.

BERNSTEIN: He would go to places with his family, with his children, Don Jr., and Ivanka and then eventually, Eric. And they would make these representations that this is a Trump project. We're putting something in.

BURNETT: Often what they put in were themselves.

SAPOL: Ivanka got up on stage and talked about how she -- you know, purchase one of the units and that she'll be frequently visiting. She kind of mingled her way to our area and she said well, if you ever need to borrow sugar, you know, come knock on my door.

BURNETT: Sapol thought Ivanka was there as a future owner. She didn't know the appearance was required by this licensing contract. Donald J. Trump, Jr, and/or Ivanka Trump shall make one publicity visit. It helps send the message that the world's best-known real estate developer was developing.

BERNSTEIN: Now in each case it would be a little different but they would convey to people that were thinking of putting up their money that it was a Trump development.

BURNETT: It wasn't. Time after time he lied or misled about his role. Baja, Hawaii, where in a 2007 letter to the Wall Street Journal Trump wrote "this building is largely owned by me and being developed by me." False.

Tampa, where he told a local paper in 2005 that he had a substantial stake in a planned Trump building there. False. And Fort Lauderdale.

(BEGIN VIDEO CLIP)

UNIDENTIFIED FEMALE: Do you solemnly swear or affirm to tell the truth, the whole truth and nothing but the truth, so help you God?

D. TRUMP: I do.

(END VIDEO CLIP)

[22:14:58] BURNETT: This is Trump's 2013 deposition in a case where plaintiffs allege Trump misled them about his role in the Fort Lauderdale development.

Listen to Trump himself.

(BEGIN VIDEO CLIP)

UNIDENTIFIED MALE: You weren't actually developing that project, correct?

D. TRUMP: That is correct.

(END VIDEO CLIP)

BURNETT: Yet a Trump biography on this Trump web site read, "Mr. Trump is also developing the super luxurious Trump International Hotel and Tower at Fort Lauderdale.

(BEGIN VIDEO CLIP)

UNIDENTIFIED MALE: So, you would disagree with certainly with that sentence being a developer.

D. TRUMP: Well, the word developing it doesn't mean that we're the developer.

(END VIDEO CLIP)

BURNETT: There were multiple lawsuits in Fort Lauderdale. Most were settled. The terms are secret. In the two suits that went to trial, jurors were shown the prospectus which identified the developer as someone other than Donald Trump. Trump won.

BERNSTEIN: The Trumps didn't require these developments to be successful to earn money.

BURNETT: It's because Trump got a fixed fee from the developer who licensed his name plus millions more as the condo sales were completed even if the building went bankrupt.

BERNSTEIN: When they failed, which they frequently did, the Trumps would make money and then they would say we weren't -- we weren't the developers.

(BEGIN VIDEO CLIP)

I. TRUMP: We were never the developer of this project and that was made clear.

(END VIDEO CLIP)

BERNSTEIN: We were just the licensers; we are not responsible for your losses.

BURNETT: And there were big losses. Deposits lost and no buildings completed in Baja, Fort Lauderdale and Tampa. Bankruptcy in Panama, Toronto and Soho. And in those bankrupt buildings more allegations of deception. Buyers felt that Trump duped them by exaggerating sales figures to close a deal. Take Toronto.

OVED: The best way to make a sale is to convince someone that they're buying the last ticket, right?

BURNETT: In 2007, Trump told the Toronto Star the building was 70 percent sold. In 2009, his daughter told CBS it was nearly full.

(BEGIN VIDEO CLIP)

I. TRUMP: We have projects all over the world that are incredibly successful and that are virtually sold out. So, from Hawaii to Toronto to Istanbul.

(END VIDEO CLIP)

BURNETT: Bankruptcy papers filed for the Toronto property years later told a very different story.

OVED: Years after it opened, they still had three quarters of the units that had never been sold, just sitting empty.

BURNETT: The Trump organization did not respond to requests for comment from the Toronto Star or CNN.

(BEGIN VIDEO CLIP)

D. TRUMP: The Trump Soho is a very, very special building.

(END VIDEO CLIP) BURNETT: Similar story in Soho. In June 2008, Ivanka Trump told reporters that 60 percent of the units there had sold. Court documents later showed the real number was closer to 15 percent.

BERNSTEIN: There were e-mails between the younger generation of Trumps, Ivanka and Don Jr. that acknowledge that they realized that the building was not 60 percent sold. But they went ahead and said it anyway.

BURNETT: So, they lied.

BERNSTEIN: So, they lied about how many units were sold.

BURNETT: When buyers discovered the sales claims had been grossly exaggerated, they sued.

BERNSTEIN: A lot of people ask me, well, isn't that just the New York real estate, isn't that just the way it works? And the answer is there is ordinary real estate selling and then there's this, which is a persistent pattern of saying things that aren't true.

BURNETT: The civil suit by buyers was settled. The terms are secret. The Trumps have said they did nothing wrong.

Up next, when paying for a hotel room may be more than paying for a hotel room.

UNIDENTIFIED MALE: They're here to curry favor.

[22:20:00] (COMMERCIAL BREAK)

BURNETT: This building is the center of presidential power in the capital. Three blocks east, another one.

JONATHAN O'CONNELL, REPORTER, THE WASHINGTON POST: It's sort of the Republican power center in Washington.

BURNETT: The president's Washington, D.C. Hotel. From the beginning the Trumps made clear it was open for business.

JOHNSTON: On his way from taking the oath of office in the White House, they stop the motorcade, the family gets out, they take a tour on the pavement. Where? Right in front of that property.

BURNETT: Back when he was still a candidate, Trump admitted the presidency could be a boom for his D.C. hotel. Just listen to Trump himself.

(BEGIN VIDEO CLIP)

D. TRUMP: We've beaten a lot of people and I think people like that. So I think it will be great for the building in question.

(END VIDEO CLIP)

BURNETT: He was right. O'CONNELL: It's a wild thing that the Trump hotel in Washington, really, especially when Congress is in session, you have to walk in in any night and I would almost guarantee you'd see somebody that is a Republican politics or a member of Congress.

BURNETT: How much money is the president making there? His financial disclosures claim 40 million in 2018. But we only have limited information about who was choosing to stay and pay there.

O'CONNELL: We have no accounting whatsoever for keeping track of who was spending money at the properties of a sitting president.

BURNETT: Among those spending moneys at the D.C. hotel are foreign governments.

JOHNSTON: The Kuwaitis who have an annual celebration in Washington, D.C. moved it from the Four Seasons to the Trump International Hotel.

O'CONNELL: Bahrain held an event there.

BURNETT: And Jonathan O'Connell and his colleagues at the Washington Post learned a lobbying group working for the Saudi government paid the hotel close to $300,000.

O'CONNELL: I think in total we've tallied around 500 room nights that they've stayed there.

BURNETT: The Post also discovered Saudi is spending at Trump's New York hotel turned a red quarter black. And the paper uncovered that after Trump became president Saudi customers increased at his hotel in Chicago.

In D.C., the foreign guests have landed at the Trump hotel at the center of a federal lawsuit filed against the president by the attorney generals of Maryland and Washington, D.C.

KARL RACINE, ATTORNEY GENERAL, DISTRICT OF COLUMBIA: You ask them exactly why they're staying at the Trump hotel. They are very clear. They'll tell you that they're here to show the president honor. And of course, we know they're here also to act in their country's best interest.

BURNETT: Honor?

RACINE: Honor.

BURNETT: That's the word they used?

RACINE: Yes. They're here to curry favor.

[22:25:01] BURNETT: It's a violation of the Constitution for a president to receive presents or profits from foreign governments while in office.

RACINE: We know that President Trump every day is receiving moneys from foreign countries. BURNETT: The Department of Justice wants the case tossed out. The suit is working its way through the court system and Racine vows to appeal any ruling that goes against him.

Meantime, back in 2017, a Trump lawyer insisted there was no conflict.

(BEGIN VIDEO CLIP)

SHERI DILLON, TRUMP ATTORNEY: Paying for a hotel room is not gift or present and it has nothing to do with an office.

(END VIDEO CLIP)

BURNETT: But it isn't that simple and the question remains are people who are trying to curry favors getting them from the President of the United States?

Take Saudi Arabia. The president made the country his first international trip. An historic honor. A year and a half later, Washington Post journalist Jamal Khashoggi was murdered in the Saudi consulate in Istanbul. The CIA blamed Saudi Crown Prince Mohammad bin Salman, but the president took the Saudi side.

(BEGIN VIDEO CLIP)

D. TRUMP: I hate the crime, I hate what's done, I hate the cover up. And I will tell you this. The crown prince hates it more than I do. And they have vehemently denied it.

(END VIDEO CLIP)

BURNETT: Now there are many reasons the president may be hesitant to anger the Saudi government. But.

SCHAUB: We have increasing cause to be concerned that president's financial interest may be influencing government policy. Now I'll pause there and say we can't prove that. But the burden of proof is not on the American people. The burden of proof is on the president.

BURNETT: As for profits from foreign governments, the president has vowed not to take them. That's why the Trump organization says it voluntarily wrote a check to the U.S. Treasury for $191,000 claiming it represents all profits from foreign government patrons at Trump properties in 2018.

Do you buy it?

RACINE: No. What we know from President Trump and the way he runs his business and personal affairs is that they are very opaque. Nothing is transparent.

BURNETT: In other words, he suspects the president isn't telling the truth. Just like when Trump promised he was separating from his businesses.

(BEGIN VIDEO CLIP) DILLON: President-elect Trump's investments and business assets have been or will be conveyed to a trust prior to January 20th.

(END VIDEO CLIP)

BURNETT: And while the Donald J. Trump revocable trust was created and is now run by his sons, it didn't separate the president from his businesses.

BERNSTEIN: We have never had a president in modern history that has remained invested and is profiting from his company while serving as president.

(CROSSTALK)

BURNETT: Let's just -- underline. He's still profiting from the company.

BERNSTEIN: Right. Period. Correct.

BURNETT: Modern presidents have all sold off their assets or put them into blind trusts, that mean there was no way they could knowingly impact their bottom lines. President Trump didn't do either of those things.

TANGLIS: It would be even hard to describe what he did as the bare minimum because he essentially did nothing.

BURNETT: Mike Tanglis of Public Citizen figured out some of what Trump did do by digging in to those federal financial disclosures. On the 2016 disclosure he looked at who Trump listed as owner of each of his more than 500 assets. It was Trump.

TANGLIS: Trump is at the center. He owns bits and pieces and all of hundreds of corporations and LLCs.

BURNETT: He then looked at who was listed as owner on the 2017 assets. There were changes.

TANGLIS: What he did was took all of these ownership stakes and transferred them to six different corporations and LLCs. So, on paper here Trump can point to his 2017 disclosure and say I'm no longer listed as an owner. Right? And he'd be right on paper.

BURNETT: But not in reality because Tanglis traced all six entities back to the president's trusts.

TANGLIS: Which is made to benefit him. He can take money from it anytime.

BURNETT: Any time. And this document proves that. First uncovered by ProPublica the page says "The trustee shall distribute net income or principal to Donald J. Trump at his request."

And the Trump organization attorney confirmed to ProPublica that the president has been able to withdraw money since the beginning of his presidency. It means people who want to influence the president have places to try.

ILYA MARRITZ, BUSINESS REPORTER, WNYC: So, if you want to influence Trump you could go the Trump International Hotel here in New York City, you could go to the Trump International Hotel in D.C. Then he has golf clubs and hotels all over the world. Places --

(CROSSTALK)

BERNSTEIN: Condos in India.

[22:29:59] BURNETT: As for those condos in India, people are putting deposits down on them right now.

BERNSTEIN: Maybe these are people that want to buy really nice condos or maybe they are people that want to influence the president.

BURNETT: That's up next.

(COMMERCIAL BREAK)

BURNETT: Welcome to the world's most recognized address. Right now, spring of 2019, it's concrete trucks and piles of rebar. But some day, it may be twin glass towers in the sky overlooking suburban New Delhi, India. India is the biggest country for President Trump's businesses outside the United States.

ANJALI KAMAT, INVESTIGATIVE JOURNALIST: There are five active projects in India right now.

BURNETT: Five, all licensing deals. Four are actively selling condos, including this project in Kolkata. It is promising unprecedented amenities in a poor city run by the communist party until a few years ago. And this project in Mumbai, where elevators roll up and down a building being sold as ultra-luxurious.

BERNSTEIN: Right now, anybody can pay tens of thousands of dollars. Maybe these are people that want to buy really nice condos or maybe they are people that want to influence the president.

KAMAT: All we know is a few dozen names that have come up of people who have actually taken mortgages on the apartments.

BERNSTEIN: Last year, the president's son who has the same name as the president, Donald Trump, met with some of these buyers who are buying these condos.

[22:35:00] KAMAT: There were full-page ads advertising that if you put down a down payment of about $39,000 on an apartment, you could meet Donald Trump Jr. and have dinner with him. It raised a whole host of concerns about the ethics of this kind of marketing move. Don Jr. kept saying this is what real estate developers do. Yes, but this is a real estate business being run by the president of the United States's family.

BURNETT: Journalist Anjali Kamat spent more than a year investigating Trump projects in India. And what she found is deeply concerning. KAMAT: India, particularly when it comes to real estate, has this reputation for being very corrupt.

BURNETT: Which Don Jr. appeared to acknowledge at a conference there.

UNIDENTIFIED FEMALE: Are some sections of Indian industry willing to bend rules when it suits them?

DONALD TRUMP JR., SON OF PRESIDENT DONALD TRUMP: I think there's an entrepreneurial spirit here that is --

(LAUGHTER)

KAMAT: So in order to make even just simple warehouse in a city like Mumbai, you'd need 40 different permits. And each step, you know, what helps facilitate the process, what moves it along to get it to move a little bit faster so you're not waiting years is a bribe.

DONALD TRUMP, PRESIDENT OF THE UNITED STATES (voice-over): Every other country goes into these places and they do what they have to do.

BURNETT: But paying bribes in foreign countries can be a violation of the Foreign Corrupt Practices Act or FCPA. The law makes it a crime in the United States for American businesses to knowingly pay bribes to foreign government officials. Not only is Trump on record against it.

TRUMP (voice-over): It's a horrible law and it should be changed.

BURNETT: He's specifically against it in India.

TRUMP (voice-over): It's fine for India to prosecute. But for this country to prosecute because something took place in India is outrages.

BURNETT: Government reforms have cut back on corruption in India but consider this context.

UNIDENTIFIED FEMALE (voice-over): Two of the Trump Organization's largest partners in India have been under investigation for money laundering by different agencies of Indian government.

BURNETT: Both investigations stall after Trump became president.

KAMAT: It could be because Donald Trump, who was their business partner, is suddenly now president of the United States or it could be something internal within India. Both these partners have close ties to the ruling BJP, the Bharatiya Janata Party.

BURNETT: As someone who knows the FCPA, you've done a lot of cases related, does that cause concern?

HARRY SANDICK, FORMER ASSISTANT U.S. ATTORNEY, SDNY: It would cause concern if you have a relationship with what you would call a politically exposed person, someone who is in government. You want to make sure where did they get this money. BURNETT: A Trump Organization lawyer told The Washington Post that any blemishes on Trump or his India partners are not reflective of the portfolio as a whole and the allegations against the Indian partners aren't connected to business done with Trump. But India isn't the only place where Trump is involved with partners with ties to foreign governments.

DAVID CAY JOHNSTON, INVESTIGATIVE REPORTER AND AUTHOR: Conditions in Russia led to a need for a lot of Russians to be able to get their money out of the country and park it somewhere. He travelled for years with Felix Sater, a convicted felon --

BURNETT: Russian-born.

JOHNSTON: Russian-born felon.

BURNETT: Felix Sater had an office in Trump Tower. It was instrumental to the Trump Organization effort when the Trumps were trying to build a tower in Moscow. And he is the man who suggested Trump offer Russian president, Vladimir Putin, a $50 million penthouse in the building, which could be illegal under the FCPA.

So if you're going to try to get Vladimir Putin into the penthouse of a tower that you want to build in Moscow, that could be a major violation?

SANDICK: If you're doing that in order to obtain a business advantage.

BURNETT: And then there is (INAUDIBLE), the former Soviet Republican with a booming oil and gas industry post independents.

ADAM DAVIDSON, STAFF WRITER, THE NEW YORKER: The bulk of that money is flowing into the pockets of just five or six oligarchs and then a handful of former Soviet officials.

BURNETT: It was a licensing deal made with the son and brother of (INAUDIBLE) then transportation minister, according to The New Yorker. A contractor there told the magazine contractors were often paid in cash.

DAVIDSON: They were filling duffle bags filled with cash to some of the contractors. Millions of dollars in cash which is of course about as big a warning sign as it gets.

SANDICK: Those are red flags. Certainly you're dealing with a government official, you're doing business in the country that scores very poorly on the transparency international corruption index, and so you have a real reason to take extra due diligence.

BURNETT: A Trump Organization attorney told The New Yorker that the company did do due diligence for the Azari (ph) 35-455 but wouldn't provide details. Trump cancelled the deal a month after the election.

[22:40:01] The same Trump Org attorney termed it "house cleaning." Ahead, the most infamous Trump business, Trump University. Paid in full by credit card.

BETH WOOD, FORMER IT SYSTEMS ANALYST: Credit card.

(COMMERCIAL BREAK)

BURNETT: On television, Donald Trump was the king dealmaker and the kingmaker. Off screen, thousands answered ads like these, hoping to learn Trump's secrets. One was named Beth Wood.

WOOD: "The Apprentice" was on and we have been seeing him being held up and touted as this amazing real estate person. So, I thought, hey, it's a free seminar, I'm going to go across town and, you know, see what he has to say.

BURNETT: So, "The Apprentice" influenced you in the sense that -- that image that was portrayed.

WOOD: Absolutely.

BURNETT: Beth Wood spent 20 years in IT as a systems analyst.

[22:45:00] You have a graduate degree.

In 2010, she was newly retired and studying real estate for a second career.

That first time, what was the pitch?

WOOD: They showed us a video of Donald Trump --

TRUMP: At Trump University --

WOOD: -- saying that he was going to reveal the secrets of real estate, how to make you successful in real estate like he was.

UNIDENTIFIED MALE (voice-over): The world's most famous businessman.

WOOD: And he would do this with his handpicked, hand-verified, blessed, personally selected instructors.

TRUMP: These are all people that are handpicked by me.

BURNETT: That wasn't true. And it would eventually come out as lawsuits were filed.

DREW GRIFFIN, CNN SENIOR INVESTIGATIVE CORRESPONDENT: In deposition, he said, no, I might have looked at a few resumes, but he had nothing to do with picking these people.

BURNETT: But in the spring of 2010, Beth Wood didn't know that.

WOOD: I stood at this counter of people and signed up on a Trump form which said, you know, Trump University, and here's a quick start class.

BURNETT: Nearly $1,500.

Paid in full by credit card.

WOOD: Credit card.

BURNETT: Then came the gold elite membership plan, nearly 35 grand, also on a credit card.

WOOD: The gold elite membership plan was supposed to be Trump's fabulous personal mentoring of your real estate career.

UNIDENTIFIED MALE (voice-over): Put proven Donald Trump's secrets to work for you.

GRIFFIN: All it was a marketing scheme. People were signing up for this with no real means to pay for it.

BURNETT: It's estimated that Trump University brought in about $40 million and Trump got around $5 million.

GRIFFIN: It was pretty good money for Trump. It was pretty good.

BURNETT: But eventually there were multiple lawsuits and it ended up a big money loser for Trump.

TRUMP: So when they come to settle, I say I'm not going to settle. And you know the problem, when you settle, everybody sues you.

BURNETT: After he won the election, he settled for $25 million.

WOOD: We got back up around $35,000.

BURNETT: But that's just a quarter of what Wood says she lost, 70 grand on seminars and webinars and another 80 grand on rental properties recommended by her Trump University mentor.

WOOD: I hold Donald J. Trump personally responsible for this scam.

BURNETT: How has your life changed because of Trump University?

WOOD: Completely. We are now renting. We would like to buy a house. We got approved for a house but the down payment and the monthly payments are going to be too much for us when we retire. My husband is 70. He would like to retire someday.

BURNETT: At the same time, students like Beth Wood were getting soaked, Donald Trump was busy selling -- well, everything he could. He licensed his name for the dress shirts and ties that used to sell in Macy's, bottled water, blankets, games. There was even a personalized vitamin kit complete with urine tests. And of course, the steaks.

TRUMP: Trump's steaks are by far the best tasting, most flavourful beef you've ever had.

BURNETT: How did this happen? JOHNSTON: Donald is always on the hunt for cash because he's a wealth creator but a cash extractor. He needs to have cash. And once he built up his name through the celebrity "Apprentice" and very smart marketing, then all these other things are ways to make money for him that don't involve any serious effort.

BURNETT: One way he earns money right now takes no effort at all. Forbes Magazine estimates Trump makes around $175 million annually. That is in rent from commercial buildings he owns or partially owns.

Beginning in 2006, the Trump Organization spent serious effort and serios money, building up a golf empire.

TRUMP: One, two, three.

BURNETT: The bulk of his 17 courses including this one in Turnberry Scotland were purchased by the Trumps between 2006 and 2014, during a very unusual spending spree uncovered by reporters at The Washington Post.

JONATHAN O'CONNELL, REPORTER, THE WASHINGTON POST: Beginning 2006, over the next nine years, Trump spent around $400 million in cash in real estate, and 14 of those transactions were all in cash.

BURNETT: Cash, a stunning discovery for many reasons, mostly because all cash deals are rare.

DAN ALEXANDER, SENIOR EDITOR, FORBES: It's unusual in the business world and particularly in the real estate world to make purchases in all cash of that much money.

BARBARA RES, FORMER ENGINEER FOR TRUMP CONSTRUCTION PROJECTS: I never saw him use his own money to do anything, to be honest with you.

BURNETT: When it comes to real estate development, taking loans or bringing new partners spreads the risk. It's what Trump did all the time.

TRUMP: I'm the king of debt. I'm great with debt.

O'CONNELL: He didn't borrow any money. He had no other partners that we know of.

BURNETT: No partners that we know of. So where did the money come from?

O'CONNELL: Eric Trump focused (ph) on a record for the story about how proud he was that the company was in a position where it was cash heavy during the recession.

[22:50:01] BURNETT: Former Trump executive Barbara Res is highly skeptical.

RES: I don't see him having cash and using cash.

BURNETT: And a golf reporter says in 2014, Eric Trump explained the source of the money differently.

JAMES DODSON, GOLF REPORTER (voice-over): I said, Eric, who's funding? I know no banks because of the recession, the great recession have touched the golf course. He said, "We don't rely on American banks. We have all the funding we need out of Russia." I said, really?

BURNETT: On Twitter, Eric Trump responded, this story is completely fabricated. Up next --

UNIDENTIFIED FEMALE: In seven days from this letter, they needed $2,500 in their possession.

BURNETT: A letter, a lawsuit, and a decision.

(COMMERCIAL BREAK)

SANDRA SAPOL, OWNER, EMBROIDME: I don't know why I keep crying. After all these years, you'd think I'd be over it by now, but I'm not. It hurts.

BURNETT: It's been a decade since Sandra Sapol felt duped by Donald Trump. It was 2008. The international housing crisis was coming to a boil and Sapol sensed something was wrong with Trump Ocean Resort Baja Mexico.

SAPOL: We got in a car one Saturday. We drove down there. That office was closed and there was no furniture left inside. Wait, you just start getting like emotional. You're like, no, no, nothing's wrong.

[22:55:00] BURNETT: Within weeks, two letters.

SAPOL: This letter was the very first time that we heard the Trump brand name, and the Trump this and the developer that, licensed.

BURNETT: It read, Trump Marks Baja, LLC has elected to terminate the license agreement. The second letter explained, given the extreme dislocation of the financial markets, the Baja project will not be able to proceed. Sapol felt stunned.

SAPOL: What?

BURNETT: And deceived.

SAPOL: What?

BURNETT: The market sunk the project but she believed Trump. The dealmaker she saw on celebrity "Apprentice" was steering the ship. Trump Organization attorney Alan Garten defended his client to CBS saying buyers had an obligation to read the fine print.

ALAN GARTEN, ATTORNEY FOR TRUMP ORGANIZATION: They are buying luxury high-end real estate and it is incumbent upon anyone to be accountable and responsible to read the documents.

BURNETT: In the fine print, someone else is identified as the developer of the property, but the fine print is not all that matters. SANDICK: The question is what are the representations that are made? Are they true or even close to true? And are they what we would call material? Are they relevant to a decision that a buyer of the property might make? And here one would think that they are material and it seems as if they were false.

SAPOL: So then like next step is, what are we going to do now? Where's our money? Who has our money? Where did the money go? Nobody's returning e-mails or any phone calls. We're trying to get our money back.

BURNETT: Sapol and her husband began contacting lawyers.

SAPOL: And then somehow a law firm called us saying that many, many people are going together and they're going to do a lawsuit and would we like to be included. I said, well, yeah, we would like to be included. Of course, we want to be included.

BURNETT: Soon after --

SAPOL: Dear prospective client, in seven days from this letter, they needed $2,500 in their possession, so that they can proceed forward. We're just like, I keep saying, we're normal people, we didn't want to pay $2,500 to be part of the lawsuit. We didn't have that kind of money.

BURNETT: They didn't sign on, but scores of would be buyers did, filing suit against Donald Trump and the real developer, accusing them of fraud. Trump denied wrongdoing and the case was settled out of court.

SAPOL: I don't know how much everybody got.

BURNETT: That's because the settlement became with a confidentiality agreement. They are everywhere in Trump world. Settlements, licensing deals. It's one thing that makes it difficult for journalists to get answers to their questions. There are many, many questions.

What mystery about Trump's businesses do you most wish you had the answer to?

JOHNSTON: Well, we know the Russians put a lot of money into Trump and we know the Saudis and some other Middle East people put money into Trump. What I want to know is did they do it in ways that he's compromised? It could come out that these are legitimate investments if we see all the documents.

KAMAT: There's so little we do know, right? I mean, the president still hasn't released his tax returns.

BERNSTEIN: He's got developments in Indonesia, in India, in the Middle East. Who is buying in?

ALEXANDER: Who is paying money at all of the clubs and resorts?

UNIDENTIFIED MALE: I would want to know any loans to any of his businesses.

O'DONNELL: They spent a lot of cash in a nine-year period before he became president. I would love to see where all that money came from.

GRIFFIN: Is there really money behind this man or is it all just a bunch of debt?

SANDICK: I would want to know what steps he took to prevent international corruption or to prevent fraud in his business.

UNIDENTIFIED MALE: Because there's so much we don't know, we can't evaluate whether his policies are based on his stated aims or his personal financial interests. That's what keeps me up at night.

BURNETT: The way to answer all these questions is for the president to show his earnings, his partners, his debts, his tax returns. But the opposite is happening. President Trump is now suing two banks and a congressional committee to keep financial documents secret. And as long as his finances stay hidden, we will never know if the person elected to lead the United States of America is working for the people's interests or his own.

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