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Friday, September 16, 2016 4:40:06 PM
Trump’s ties to an informant and FBI agent reveal his mode of operation
By Robert O'Harrow Jr. September 16 at 10:08 AM
Daniel Sullivan, a longtime union activist seen at right in 1984, worked as a labor consultant at construction sites of projects for Donald Trump, left. At the same time, Sullivan consorted with organized crime figures and served as an informant to the FBI. (Tom Allen/The Washington Post; Bucks County Courier Times)
Donald Trump listened skeptically as his labor consultant bragged in early 1981 about connections to New York’s underworld.
Daniel Sullivan, who dealt with labor problems at Trump’s construction sites, was a 42-year-old giant of a man with great charm and a criminal record. He told Trump he was tight not only with leaders of unions, some of them fronts for the mob, but also with the FBI.
Trump was dubious.
“He was .?.?. a big storyteller,” Trump recently told The Washington Post. “He portrayed himself to be the closest person on earth to the FBI.”
It turned out Sullivan was telling the truth. One day in April 1981 he walked into Trump’s Manhattan office with two men in suits. They were FBI agents, and they wanted to talk to Trump about organized crime.
Trump welcomed them in.
That meeting came at a pivotal time early in Trump’s career, when he was trying to establish himself as a Manhattan developer and Atlantic City casino operator.
Trump soon deepened his interactions with Sullivan, who turned out to be an FBI informant, and cultivated a friendship with one of the FBI agents, a young investigator named Walt Stowe, who was one of Sullivan’s handlers at the agency.
[A key tip on a story about Donald Trump’s underworld connections came from Trump himself]
https://medium.com/thewashingtonpost/a-key-tip-on-a-story-about-donald-trumps-underworld-connections-came-from-trump-himself-32042df6fd2e#.apq5jm2yi
Over the next few years, Trump, Sullivan and Stowe forged a triangle of mutually beneficial interests as Trump sought to grow a casino and real estate empire.
The story of the entrepreneur, the informant and the FBI offers new insights into the man who would be president.
“It tells people he’s a tough, tough, tough businessman,” said Stowe, long retired from the FBI, who recently sat for two days of interviews with a Washington Post reporter at his vacation home in Utah. “New York was so totally corrupt and so controlled by the mob in the ’80s, that in order to be a successful businessman, you had to have some way to work that world.”
During his run for the White House, Trump has maintained he always operated aboveboard as a real estate developer and casino operator, at a time when corruption and organized crime were rampant in New York and Atlantic City. But the details of Trump’s relationships with Sullivan and Stowe show that he worked with men with underworld connections to further and protect his business interests. In doing so, Trump risked his reputation and his dream of becoming a tycoon.
He entered into a land deal with Sullivan and an organized crime figure who was later targeted for a hit. He agreed to finance Sullivan’s purchase of a company under FBI investigation for racketeering. And he collaborated on a plan with Stowe and other FBI agents to allow an undercover operation at his first casino.
[Trump swam in mob-infested waters in early years as an NYC developer]
https://www.washingtonpost.com/investigations/trump-swam-in-mob-infested-waters-in-early-years-as-an-nyc-developer/2015/10/16/3c75b918-60a3-11e5-b38e-06883aacba64_story.html?tid=a_inl
In speaking in court and to journalists over the years, Trump has minimized his relationship with Sullivan, who died of a heart attack in 1993, saying he briefly used him as an unpaid consultant and playing down his role.
Trump did not respond to detailed questions from The Post about his interactions with Sullivan.
In an earlier interview with The Post, Trump said he continued working with Sullivan only after Stowe and another agent vouched for him as “100 percent clean.”
“You know, that solves a lot of problems for me,” Trump told The Post. “I mean, it’s hard to say, ‘Gee whiz, you shouldn’t have been working with him.’ ”
But FBI reports at the time along with recent statements by Stowe contradict that assertion.
A report from Sept. 22, 1981, said that agents “have repeatedly told TRUMP that they were not references for [Sullivan] and cannot speak for source’s business dealings.”
Though Sullivan once described Trump as “an old friend,” the two had a falling-out in the mid-1980s. Sullivan later testified in a civil case that Trump used illegal immigrants as laborers in Manhattan. Trump denied Sullivan’s claims.
Trump has spoken little about his interactions with the FBI or his friendship with Stowe. Trump told The Post that Stowe was a “high-quality guy” but “not a pal.”
Stowe said he remains fond of Trump and never saw him do anything illegal. He said he considered both Trump and Sullivan to be “professional friends.”
***
For this account, The Post examined thousands of pages of legal documents from the National Archives, casino regulatory reports obtained through open records laws, news articles and books, along with previously undisclosed FBI records obtained and shared by journalist William Bastone, co-founder of the Smoking Gun website.
The Post also conducted interviews with lawyers, former federal investigators, gaming regulators and others who knew Trump, Sullivan and Stowe.
The paths of Sullivan and Trump crossed in 1979, when Sullivan worked as the chief labor negotiator on the construction site of the Grand Hyatt Hotel in Midtown Manhattan. The hotel project was a partnership between Trump and the Hyatt Corporation.
Trump, then 33, was a brash, wealthy scion of a family real estate empire based in New York’s outer boroughs. He was intent on making a name for himself as a developer in Manhattan.
One of the challenges facing him was the mob’s stranglehold on the city’s construction unions. This was Sullivan’s purview. A longtime union member and activist, Sullivan represented three different contractors at the Hyatt. He was responsible for striking deals between management and the unions — including their masters in organized crime.
Sullivan always stood out. At 6 feet 5 inches tall and closing in on 300 pounds, he was by turns loud, outspoken and boastful. Friends and associates recall Sullivan as the embodiment of a gregarious Irishman. He portrayed himself as a labor crusader and testified in court he had been a member of dozens of different union locals and had once advised Congress on labor legislation.
But Sullivan had a shady side. He was arrested on weapons and assault charges, and served time for larceny, court records show. Behind the police record were ominous rumors, some fueled by Sullivan himself. He told stories about his early career as a truck driver and union activist, working on the docks of New York. One day, after a milk delivery man declined to follow union rules, an irate Sullivan decided to send a message. He drove the man’s truck into the river.
Sullivan earned dark renown as the last person to see a labor lawyer named Abraham Bauman before he disappeared off the streets of New York in 1966. Sullivan declined to cooperate with police in the sweeping investigation that followed, according to a 1967 account in the New York Times. Later, he openly discussed his ties to Teamsters president Jimmy Hoffa, who disappeared in 1975. He told friends he knew where Hoffa was buried.
One day in late 1979 or early 1980, while working on Trump’s Hyatt project, Sullivan visited Theodore Maritas, president of the District Council of Carpenters, a union that represented some 25,000 laborers in the New York region.
At the time, Maritas and the owners of drywall companies across in the region were under investigation by the FBI for racketeering, including bid-rigging and extortion.
As part of the investigation, the FBI had placed bugs in Maritas’s office. One of the agents reviewing the transcripts was a young, undercover specialist named Walt Stowe. He wondered about the identity of the man with the big personality on the other end of the wire. Stowe and his partner soon made the ID, Stowe told The Post.
When they checked FBI’s internal records, they found that Sullivan had been a bureau informant in the 1960s and early 1970s. The records said he was intimately familiar with LCN, better known as La Cosa Nostra, or Our Thing. It was the name some Italian mobsters used for themselves.
Stowe and his partner decided to drive to Sullivan’s home early one morning.
They knocked on the door.
“Can we talk to you?” Stowe asked, according to the account he gave to The Post.
Sullivan opened the door wide.
“Come on in, guys,” Sullivan said. “Whatever you want to know.”
***
Stowe began meeting with Sullivan at all hours in obscure bars and diners in Manhattan. Sullivan proved himself to be a fountain of information about unions, the mob and, before long, Donald Trump. In confidential internal FBI reports, Stowe and his partner referred to Sullivan by a code number, NY18904.
Stowe, 31, was a tough guy himself, a former rugby player with a bushy mustache, a law degree from William and Mary and big ambitions. He had arrived in New York in 1975 and began working as an undercover agent. It was an era notable for mob investigations and corruption stings. Sources and informants were crucial to such cases — and to an agent’s career.
In February 1980, Sullivan told Stowe about a pending property deal in the middle of a proposed casino site near the boardwalk in Atlantic City.
Sullivan knew the property owner through a trash-hauling business that Sullivan owned. He told the FBI that the financially beleaguered owner of the property, which was $800,000 in arrears, wanted Sullivan’s help to stave off foreclosure.
Reputed organized crime boss Nicodemo “Little Nicky” Scarfo makes his way through Common Pleas Court in Philadelphia on April 6, 1989. A jury convicted Scarfo and seven associates of murdering a fellow gangster. (Bill Cramer/AP)
Sullivan said he had given the owner $325,000 for a share of the property, and he told Stowe he planned to buy it outright, in partnership with two others. One was Kenneth Shapiro, a man later publicly identified by authorities as a financier and agent in Atlantic City for a Philadelphia mobster named Nicodemo “Little Nicky” Scarfo.
Trump also happened to be interested in the property for the location for his first casino. In April, Trump’s lawyer contacted Shapiro and soon entered into lease negotiations with him, Sullivan and their partner, even though they did not yet have title to the property.
On June 26, the three partners closed on the property sale, paying about $2.7 million. Just days later, Trump signed off on a 98-year lease with the partners that could cost him tens of millions. The transaction was one of several Trump had to make to cobble together parcels of land for the casino.
The deal put Trump in contact with a mob associate, who would later play a central role in a mob scheme to secretly influence Atlantic City’s mayor. And it also put him close to an FBI informant whose shady past would imperil Trump’s casino plans.
After the lease was signed, Sullivan celebrated it as a business triumph. With typical bluster, he told the Bucks County Courier Times, which published an article about the transaction, that Trump was “an old friend from New York.”
“It’s nice being friends with a billionaire,” Sullivan told the Pennsylvania newspaper.
Trump’s relationship with Sullivan seemed odd to some observers.
“I have always wondered, why did Trump get involved with Sullivan in the first place?” Susan Singer, one of Sullivan’s lawyers at the time, recently told The Post. “It was just a puzzle to me, given the rumors about Dan’s underworld connections.”
***
Trump and Sullivan quickly became better acquainted. As the land deal progressed, Trump recommended Sullivan to business associates who needed to negotiate with hotel workers.
“I was always satisfied with Dan,” Trump would later say in the late 1980s under oath in a civil lawsuit. “I was always satisfied with his services as a consultant.”
In June 1980, Trump confided in Sullivan about a problem he was having at a construction site on Manhattan’s East Side. Trump was tearing down the iconic Bonwit Teller building to make way for Trump Tower, his most ambitious project up to then.
Trump told Sullivan that his demolition subcontractor was relying on illegal Polish workers and that the workers were unhappy about their nonunion wages and hours, according to testimony Sullivan gave later in the lawsuit. Trump worried that the building was not coming down quickly enough, according to Sullivan, and said he faced heavy real estate taxes if the demolition was not finished soon.
Several days later, Trump called Sullivan at his home and asked him to come to New York immediately to help tamp down growing trouble at the Bonwit Teller site, court and FBI documents show. The Polish immigrant workers were now threatening to harm the Trump organization’s construction manager.
Sullivan rushed to Trump’s office and began looking into the problem. Scores of Polish men were getting paid only $4 per hour, far below union wages, and they were working seven days a week in 12-hour shifts, sometimes longer, court documents show.
The Polish immigrants were required to use jackhammers and wheelbarrows to take down the building by hand, in “almost a Stone Age fashion,” as Sullivan described it.
Sullivan testified during the lawsuit that he could not have been more direct with Trump about the implications of using illegal immigrants and flouting the union contract. Sullivan testified that he had told Trump, “Don’t exploit them like that. .?.?. Don’t try to f--- these poor souls over.”
Trump has disputed Sullivan’s account and said under oath that he did not know that any illegal Polish immigrants were used for the demolition work. He said a subordinate and a demolition subcontractor mismanaged the project and testified he did not even visit the worksite. “I was no different than anybody walking up and down the sidewalk,” Trump said.
Trump portrayed Sullivan as a rogue who got involved in the demolition without his permission. “He would do things that I wouldn’t even know about, that, frankly, were not authorized by me or anybody else,” Trump testified in the civil lawsuit, which was brought by union workers against the subcontractor, Trump and others.
***
Trump thought Sullivan “looked like a little bit of shady character” and wondered whether he should keep working with him, Trump recently said in his interview with The Post. But Sullivan began telling Trump he had friends at the FBI. Trump was incredulous but intrigued, he said.
“I just want to tell you I’d like to bring FBI agents up just to give me a reference,” Sullivan said, according to Trump.
One day early in April 1981, Sullivan arrived at Trump’s office, accompanied by FBI agents Stowe and Damon Taylor, a supervisor of organized crime investigations.
“They were legitimately FBI agents,” Trump told The Post. “And I say, ‘Well, what do you think of him?’
“They say, ‘Mr. Trump, he’s 100 percent. He’s working with the FBI. He’s a tremendous guy, et cetera, et cetera.’?”
But Trump knew that Sullivan operated in a murky world. At the time, Trump told the FBI agents that he understood Sullivan was “in a very rough business” and “knows people,” some of whom “may be unsavory,” the report said.
Trump told the visiting agents about his casino plans and his concerns about Atlantic City, according to an internal FBI report posted at the Smoking Gun website. Stowe and his colleague told Trump he “should carefully think over his decision to build in Atlantic City, and carefully prepare not only methods of securing employees’ honesty, but also corporate integrity,” their internal report said.
[Trump’s bad bet: How too much debt drove his biggest casino aground]
https://www.washingtonpost.com/investigations/trumps-bad-bet-how-too-much-debt-drove-his-biggest-casino-aground/2016/01/18/f67cedc2-9ac8-11e5-8917-653b65c809eb_story.html
Trump said he wanted to “cooperate with the FBI” if his casino plans came to fruition. Before long, Trump met with them again and said he was moving forward.
“TRUMP stated in order to show that he was willing to fully cooperate with the FBI, he suggested that they use undercover Agents within the casino,” an FBI report said.
It is clear that the agents and Trump were courting each other.
FBI agent Walt Stowe in the early 1980s. (Courtesy of Walt Stowe)
Trump invited Stowe to play golf at a private club in Westchester and took him to lunch at the famed 21 Club in a chauffeur-driven limousine, Stowe said. Trump broached the possibility of hiring Stowe.
“Here I am, like I said, I’m 31 years old or so, and I can see people looking all around to see who is this guy having lunch with Donald,” Stowe said. “It’s not like we became really good friends, but whenever I saw him, he was pleasant.”
Stowe welcomed the attention, but it was not primarily a friendship he was seeking at that time. Having a contact like Trump was a valuable asset for a rising star at the FBI. Trump was “a guy who knew people,” Stowe said.
On May 1, 1981, Trump applied for his first casino license. Gaming authorities began scrutinizing his background, in part to look for any links to organized crime figures.
Around that time, Trump took a step that would complicate the gaming review. He agreed to finance Sullivan’s purchase of Circle Industries, a drywall manufacturer that employed Sullivan.
Sullivan told Stowe and another agent about the Circle acquisition plans, according to a report they wrote on May 7, 1981. It said that Sullivan, Trump and a third man, then president of Circle, “will be equal, one-third partners,” with “Sullivan overseeing labor relations and Trump financing the enterprise.”
Circle Industries was among a group of some 20 drywall makers that secretly referred to themselves as “the club.” The companies held significant power in New York’s construction industry because of the importance of their product in so many projects.
Trump’s decision to invest in that industry came at an extraordinary time.
The industry was under FBI investigation, and in two years, Circle, was among the firms implicated in a racketeering scheme involving the carpenters’ union and the Genovese crime family. One of those indicted was union president, Theodore Maritas, who disappeared and was presumed murdered. As it happened, Trump’s attorney, Roy Cohn, also represented Genovese leaders.
***
On Sept. 21, 1981, the FBI got a strange call from Trump. He said he had traveled to Trenton the previous week to meet with Mickey Brown, the director of New Jersey’s Division of Gaming Enforcement. Trump was worried about the status of his application for a casino license. Brown told Trump that everything was on track except for “one problem” that might draw out the investigation — his ties to Sullivan, according to an FBI report.
Brown said that Sullivan had not been candid with investigators about his background and his business activities.
To defend himself and “nip things in the bud,” Trump said he told Brown that Sullivan had introduced him to two FBI agents and was close to the agency.
“TRUMP stated that he talked with BROWN about nothing of a substantive nature, particularly involving any proposed undercover activity,” the report states.
In a call with Sullivan that same day, Stowe and Taylor learned that Sullivan had been asked by gaming investigators specifically about his association with the FBI. “Source declined to answer this question,” the report said.
Trump’s meeting with Brown put into peril the undercover operation to ferret out organize crime proposed at Trump’s planned casino, documents and interviews show.
By late September, the FBI proposal was in a “thoroughly finished state,” but, Stowe said, it apparently never came to fruition.
[Trump’s financial records, depositions and interview transcripts: The documents behind ‘Trump Revealed’ ]
https://www.washingtonpost.com/graphics/politics/trump-revealed-book-reporting-archive/
Three weeks later, investigators with the Division of Gaming Enforcement spelled out their findings about Trump in a 97-page report. It provided an overview of Trump’s biography, his business activity and financial circumstances.
The report devoted more than 10 pages to Sullivan, underscoring his arrest record and recounting questionable episodes from his past, including the disappearances of Bauman, the labor lawyer, and Hoffa, the Teamsters leader.
Under pressure from regulators, Trump “advised the Division that he would not have any future personal, social or business dealings with Sullivan other than in the context of their Atlantic City lessor-lessee relationship.”
Trump would eventually pay $8 million to cancel the lease and buy the property outright from Sullivan and his partners. He also backed out of his investment in the drywall company, Circle Industries.
Sullivan felt betrayed and thought that gaming enforcement officials had mischaracterized his past. Sullivan privately threatened to sue both Trump and the Division of Gaming Enforcement and even make his FBI role public, FBI reports show.
This troubled Stowe. Sullivan was advised “that his life might well be endangered by revealing his relationship with the FBI to LCN figures and other members of the criminal element.”
***
Despite what he told gaming officials, Trump stayed in touch with Sullivan. In early 1982, he tentatively offered Sullivan a job as his organization’s chief labor negotiator, with a $75,000 salary, according to a civil lawsuit Sullivan filed against New Jersey authorities in 1983.
Trump also used Sullivan as a labor consultant in an aborted effort to buy the New York Daily News, according to the lawsuit and Stowe’s account.
The continuing relationship with Sullivan and his land partner, Shapiro, now put Trump uncomfortably close to a mob plot to rig the 1982 mayoral election in Atlantic City and take control of city hall.
Candidate Michael Matthews had made a deal with Scarfo, the Philadelphia crime boss, and corrupt union officials associated with him, to provide favors in exchange for secret financial support, $125,000. Matthews was directed to communicate through Shapiro, Scarfo’s financial agent in Atlantic City, who raised an additional $65,000 in cash and checks, court records show.
Throughout this time, Trump was pushing forward with his casino and meeting with Sullivan, Shapiro and Matthews on issues related to its construction and parking. Trump also discussed the election with them, according to investigative journalist Wayne Barrett in his 1992 book “Trump: The Deals and the Downfall.”
“According to Shapiro and Sullivan, Trump then suggested that Shapiro put up the $10,000 and indicated that he would eventually pay him back,” Barrett wrote. “Shapiro made the contribution, according to the two, but was never reimbursed.”
Trump has denied those claims.
Under New Jersey’s Casino Control Act, casino operators and those seeking licenses are prohibited from giving political donations to candidates.
The scheme between Matthews and Scarfo exploded into public after Matthews was caught on tape accepting payments from an undercover FBI agent. A federal grand jury investigating the case wanted Shapiro to testify. But he balked because he was worried about being killed, Stowe told The Post. He was right to worry.
“When Scarfo feared that Shapiro was going to cooperate with the federal government, he plotted his murder,” a New Jersey State Commission on Investigation report said.
At Sullivan’s urging, Stowe called Shapiro and persuaded him to testify.
“I said, ‘Kenny, look. If you’re subpoenaed and you don’t testify, they’re going to put you in jail,’?” Stowe told The Post.
Shapiro became a key witness, and Matthews was indicted on charges of extortion, bribery and conspiracy. Matthews pleaded guilty to accepting a $10,000 bribe and was sentenced to 15 years.
Trump was questioned by FBI agents about whether he made campaign contributions through Shapiro, according to Barrett’s book. Trump denied it and was not implicated in any wrongdoing.
***
Donald Trump, owner of the New Jersey Generals, sits in a meeting in New York on Feb. 19, 1986. The owners of the eight teams of the United States Football League met to discuss the future plans of the USFL. (Joel Landau/AP)
In the coming years, the paths of Trump, Sullivan and Stowe continued crossing. But the unusual triangle they had formed would never be the same.
Trump and Stowe stayed in touch, even after Stowe moved on to other assignments. Trump invited Stowe to a New Jersey Generals football game and called Stowe now and then to chat or announce his latest endeavor, such as the purchase of a yacht. He attended Stowe’s bachelor party, at a favorite FBI haunt on Manhattan’s East Side. Later, Trump and his wife, Ivana, hosted Stowe and others at a Michael Jackson concert, introducing them to celebrities.
Sullivan, for his part, ran into legal troubles. Federal prosecutors in Philadelphia claimed he had evaded taxes for several years. He was convicted, and on Aug. 1, 1985, Sullivan was sentenced to two years in prison for tax evasion.
Sullivan filed lawsuits against the New Jersey Division of Gaming Enforcement, officials in the state attorney generals office, Donald Trump and others. In a tangle of claims — some relating to the division’s report about him and Trump’s decision to back out of the Circle Industries deal — Sullivan said he lost millions of dollars in potential income. The suits were eventually dismissed or settled.
In the late 1980s, Sullivan and Trump found themselves at odds one more time.
At issue was a lawsuit related to the demolition of the Bonwit Teller building. Workers from Local 95 of the Housewreckers Union alleged that Trump and his subcontractor, in conjunction with union leadership, had failed to submit payments to the union’s pension and welfare funds for each worker — union members and Polish laborers alike.
In a deposition on April 12, 1988, Trump said he did not oversee the demolition. He repeatedly said he could not recall the details. “The only thing I did was sign checks when they were sent to me,” he said under oath.
Trump said he could not recall asking Sullivan for help in June 1980. “I know that Mr. Sullivan was somebody that would constantly try and ingratiate himself. I know that I didn’t pay him anything for this,” Trump said. “But I think there was some kind of involvement in this.”
Sullivan was a witness and gave damning testimony.
He said Trump had reached out to him in anticipation of the 1990 trial.
“Donald called me up and asked me to help him settle his case, so I told him that he should settle this case by paying these people what they should have gotten in 1980, and I was quite direct about it. And I told him, ‘Donald, your mother’s an immigrant, your wife’s an immigrant, mine is, about 60 percent of the American public is.’ ”
Sullivan went on.
“And I said, ‘Donald, if you don’t pay these people you are going to piss everybody in the world off.’ You cannot allow the public to have an attitude that you don’t give a s--- about this.”
In 1991, a federal judge in Manhattan ruled that Trump and others conspired with Local 95’s president to withhold $325,000 from the union funds. Both sides appealed, and the case ended with a sealed settlement in 1999.
In October 1993, Sullivan, 54, died of a heart attack. In an obituary, one of his Bucks County political pals was quoted describing “the source of Sullivan’s strength.”
“Excitement makes him tick; a challenge makes him tick; being in the thick of things makes him tick,” the man told the Bucks County Courier Times.
Stowe, now retired, became a gaming executive after rising through the ranks of the FBI. He said Daniel Sullivan remains an enigma to him.
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“Donald would say to me, ‘What do you think about Dan?’ ”
“And I’m like, ‘I don’t know.’ ”
But Stowe said he understood why Trump turned to Sullivan in the first place.
“So, if you’re going to be dealing with very tough, somewhat corrupt mob-dog guys on the labor side, you’re going to want a junkyard dog on your side. Now, I never sat in negotiations with Dan, but he was a physically imposing guy. I don’t think he was afraid of anybody.”
Alice Crites contributed to this report.
https://www.washingtonpost.com/investigations/trumps-ties-to-an-informant-and-fbi-agent-reveal-his-modes-of-operation/2016/09/16/6e65522e-6f9f-11e6-9705-23e51a2f424d_story.html?hpid=hp_hp-top-table-main_trumpunderworld-1035am%3Ahomepage%2Fstory
By Robert O'Harrow Jr. September 16 at 10:08 AM
Daniel Sullivan, a longtime union activist seen at right in 1984, worked as a labor consultant at construction sites of projects for Donald Trump, left. At the same time, Sullivan consorted with organized crime figures and served as an informant to the FBI. (Tom Allen/The Washington Post; Bucks County Courier Times)
Donald Trump listened skeptically as his labor consultant bragged in early 1981 about connections to New York’s underworld.
Daniel Sullivan, who dealt with labor problems at Trump’s construction sites, was a 42-year-old giant of a man with great charm and a criminal record. He told Trump he was tight not only with leaders of unions, some of them fronts for the mob, but also with the FBI.
Trump was dubious.
“He was .?.?. a big storyteller,” Trump recently told The Washington Post. “He portrayed himself to be the closest person on earth to the FBI.”
It turned out Sullivan was telling the truth. One day in April 1981 he walked into Trump’s Manhattan office with two men in suits. They were FBI agents, and they wanted to talk to Trump about organized crime.
Trump welcomed them in.
That meeting came at a pivotal time early in Trump’s career, when he was trying to establish himself as a Manhattan developer and Atlantic City casino operator.
Trump soon deepened his interactions with Sullivan, who turned out to be an FBI informant, and cultivated a friendship with one of the FBI agents, a young investigator named Walt Stowe, who was one of Sullivan’s handlers at the agency.
[A key tip on a story about Donald Trump’s underworld connections came from Trump himself]
https://medium.com/thewashingtonpost/a-key-tip-on-a-story-about-donald-trumps-underworld-connections-came-from-trump-himself-32042df6fd2e#.apq5jm2yi
Over the next few years, Trump, Sullivan and Stowe forged a triangle of mutually beneficial interests as Trump sought to grow a casino and real estate empire.
The story of the entrepreneur, the informant and the FBI offers new insights into the man who would be president.
“It tells people he’s a tough, tough, tough businessman,” said Stowe, long retired from the FBI, who recently sat for two days of interviews with a Washington Post reporter at his vacation home in Utah. “New York was so totally corrupt and so controlled by the mob in the ’80s, that in order to be a successful businessman, you had to have some way to work that world.”
During his run for the White House, Trump has maintained he always operated aboveboard as a real estate developer and casino operator, at a time when corruption and organized crime were rampant in New York and Atlantic City. But the details of Trump’s relationships with Sullivan and Stowe show that he worked with men with underworld connections to further and protect his business interests. In doing so, Trump risked his reputation and his dream of becoming a tycoon.
He entered into a land deal with Sullivan and an organized crime figure who was later targeted for a hit. He agreed to finance Sullivan’s purchase of a company under FBI investigation for racketeering. And he collaborated on a plan with Stowe and other FBI agents to allow an undercover operation at his first casino.
[Trump swam in mob-infested waters in early years as an NYC developer]
https://www.washingtonpost.com/investigations/trump-swam-in-mob-infested-waters-in-early-years-as-an-nyc-developer/2015/10/16/3c75b918-60a3-11e5-b38e-06883aacba64_story.html?tid=a_inl
In speaking in court and to journalists over the years, Trump has minimized his relationship with Sullivan, who died of a heart attack in 1993, saying he briefly used him as an unpaid consultant and playing down his role.
Trump did not respond to detailed questions from The Post about his interactions with Sullivan.
In an earlier interview with The Post, Trump said he continued working with Sullivan only after Stowe and another agent vouched for him as “100 percent clean.”
“You know, that solves a lot of problems for me,” Trump told The Post. “I mean, it’s hard to say, ‘Gee whiz, you shouldn’t have been working with him.’ ”
But FBI reports at the time along with recent statements by Stowe contradict that assertion.
A report from Sept. 22, 1981, said that agents “have repeatedly told TRUMP that they were not references for [Sullivan] and cannot speak for source’s business dealings.”
Though Sullivan once described Trump as “an old friend,” the two had a falling-out in the mid-1980s. Sullivan later testified in a civil case that Trump used illegal immigrants as laborers in Manhattan. Trump denied Sullivan’s claims.
Trump has spoken little about his interactions with the FBI or his friendship with Stowe. Trump told The Post that Stowe was a “high-quality guy” but “not a pal.”
Stowe said he remains fond of Trump and never saw him do anything illegal. He said he considered both Trump and Sullivan to be “professional friends.”
***
For this account, The Post examined thousands of pages of legal documents from the National Archives, casino regulatory reports obtained through open records laws, news articles and books, along with previously undisclosed FBI records obtained and shared by journalist William Bastone, co-founder of the Smoking Gun website.
The Post also conducted interviews with lawyers, former federal investigators, gaming regulators and others who knew Trump, Sullivan and Stowe.
The paths of Sullivan and Trump crossed in 1979, when Sullivan worked as the chief labor negotiator on the construction site of the Grand Hyatt Hotel in Midtown Manhattan. The hotel project was a partnership between Trump and the Hyatt Corporation.
Trump, then 33, was a brash, wealthy scion of a family real estate empire based in New York’s outer boroughs. He was intent on making a name for himself as a developer in Manhattan.
One of the challenges facing him was the mob’s stranglehold on the city’s construction unions. This was Sullivan’s purview. A longtime union member and activist, Sullivan represented three different contractors at the Hyatt. He was responsible for striking deals between management and the unions — including their masters in organized crime.
Sullivan always stood out. At 6 feet 5 inches tall and closing in on 300 pounds, he was by turns loud, outspoken and boastful. Friends and associates recall Sullivan as the embodiment of a gregarious Irishman. He portrayed himself as a labor crusader and testified in court he had been a member of dozens of different union locals and had once advised Congress on labor legislation.
But Sullivan had a shady side. He was arrested on weapons and assault charges, and served time for larceny, court records show. Behind the police record were ominous rumors, some fueled by Sullivan himself. He told stories about his early career as a truck driver and union activist, working on the docks of New York. One day, after a milk delivery man declined to follow union rules, an irate Sullivan decided to send a message. He drove the man’s truck into the river.
Sullivan earned dark renown as the last person to see a labor lawyer named Abraham Bauman before he disappeared off the streets of New York in 1966. Sullivan declined to cooperate with police in the sweeping investigation that followed, according to a 1967 account in the New York Times. Later, he openly discussed his ties to Teamsters president Jimmy Hoffa, who disappeared in 1975. He told friends he knew where Hoffa was buried.
One day in late 1979 or early 1980, while working on Trump’s Hyatt project, Sullivan visited Theodore Maritas, president of the District Council of Carpenters, a union that represented some 25,000 laborers in the New York region.
At the time, Maritas and the owners of drywall companies across in the region were under investigation by the FBI for racketeering, including bid-rigging and extortion.
As part of the investigation, the FBI had placed bugs in Maritas’s office. One of the agents reviewing the transcripts was a young, undercover specialist named Walt Stowe. He wondered about the identity of the man with the big personality on the other end of the wire. Stowe and his partner soon made the ID, Stowe told The Post.
When they checked FBI’s internal records, they found that Sullivan had been a bureau informant in the 1960s and early 1970s. The records said he was intimately familiar with LCN, better known as La Cosa Nostra, or Our Thing. It was the name some Italian mobsters used for themselves.
Stowe and his partner decided to drive to Sullivan’s home early one morning.
They knocked on the door.
“Can we talk to you?” Stowe asked, according to the account he gave to The Post.
Sullivan opened the door wide.
“Come on in, guys,” Sullivan said. “Whatever you want to know.”
***
Stowe began meeting with Sullivan at all hours in obscure bars and diners in Manhattan. Sullivan proved himself to be a fountain of information about unions, the mob and, before long, Donald Trump. In confidential internal FBI reports, Stowe and his partner referred to Sullivan by a code number, NY18904.
Stowe, 31, was a tough guy himself, a former rugby player with a bushy mustache, a law degree from William and Mary and big ambitions. He had arrived in New York in 1975 and began working as an undercover agent. It was an era notable for mob investigations and corruption stings. Sources and informants were crucial to such cases — and to an agent’s career.
In February 1980, Sullivan told Stowe about a pending property deal in the middle of a proposed casino site near the boardwalk in Atlantic City.
Sullivan knew the property owner through a trash-hauling business that Sullivan owned. He told the FBI that the financially beleaguered owner of the property, which was $800,000 in arrears, wanted Sullivan’s help to stave off foreclosure.
Reputed organized crime boss Nicodemo “Little Nicky” Scarfo makes his way through Common Pleas Court in Philadelphia on April 6, 1989. A jury convicted Scarfo and seven associates of murdering a fellow gangster. (Bill Cramer/AP)
Sullivan said he had given the owner $325,000 for a share of the property, and he told Stowe he planned to buy it outright, in partnership with two others. One was Kenneth Shapiro, a man later publicly identified by authorities as a financier and agent in Atlantic City for a Philadelphia mobster named Nicodemo “Little Nicky” Scarfo.
Trump also happened to be interested in the property for the location for his first casino. In April, Trump’s lawyer contacted Shapiro and soon entered into lease negotiations with him, Sullivan and their partner, even though they did not yet have title to the property.
On June 26, the three partners closed on the property sale, paying about $2.7 million. Just days later, Trump signed off on a 98-year lease with the partners that could cost him tens of millions. The transaction was one of several Trump had to make to cobble together parcels of land for the casino.
The deal put Trump in contact with a mob associate, who would later play a central role in a mob scheme to secretly influence Atlantic City’s mayor. And it also put him close to an FBI informant whose shady past would imperil Trump’s casino plans.
After the lease was signed, Sullivan celebrated it as a business triumph. With typical bluster, he told the Bucks County Courier Times, which published an article about the transaction, that Trump was “an old friend from New York.”
“It’s nice being friends with a billionaire,” Sullivan told the Pennsylvania newspaper.
Trump’s relationship with Sullivan seemed odd to some observers.
“I have always wondered, why did Trump get involved with Sullivan in the first place?” Susan Singer, one of Sullivan’s lawyers at the time, recently told The Post. “It was just a puzzle to me, given the rumors about Dan’s underworld connections.”
***
Trump and Sullivan quickly became better acquainted. As the land deal progressed, Trump recommended Sullivan to business associates who needed to negotiate with hotel workers.
“I was always satisfied with Dan,” Trump would later say in the late 1980s under oath in a civil lawsuit. “I was always satisfied with his services as a consultant.”
In June 1980, Trump confided in Sullivan about a problem he was having at a construction site on Manhattan’s East Side. Trump was tearing down the iconic Bonwit Teller building to make way for Trump Tower, his most ambitious project up to then.
Trump told Sullivan that his demolition subcontractor was relying on illegal Polish workers and that the workers were unhappy about their nonunion wages and hours, according to testimony Sullivan gave later in the lawsuit. Trump worried that the building was not coming down quickly enough, according to Sullivan, and said he faced heavy real estate taxes if the demolition was not finished soon.
Several days later, Trump called Sullivan at his home and asked him to come to New York immediately to help tamp down growing trouble at the Bonwit Teller site, court and FBI documents show. The Polish immigrant workers were now threatening to harm the Trump organization’s construction manager.
Sullivan rushed to Trump’s office and began looking into the problem. Scores of Polish men were getting paid only $4 per hour, far below union wages, and they were working seven days a week in 12-hour shifts, sometimes longer, court documents show.
The Polish immigrants were required to use jackhammers and wheelbarrows to take down the building by hand, in “almost a Stone Age fashion,” as Sullivan described it.
Sullivan testified during the lawsuit that he could not have been more direct with Trump about the implications of using illegal immigrants and flouting the union contract. Sullivan testified that he had told Trump, “Don’t exploit them like that. .?.?. Don’t try to f--- these poor souls over.”
Trump has disputed Sullivan’s account and said under oath that he did not know that any illegal Polish immigrants were used for the demolition work. He said a subordinate and a demolition subcontractor mismanaged the project and testified he did not even visit the worksite. “I was no different than anybody walking up and down the sidewalk,” Trump said.
Trump portrayed Sullivan as a rogue who got involved in the demolition without his permission. “He would do things that I wouldn’t even know about, that, frankly, were not authorized by me or anybody else,” Trump testified in the civil lawsuit, which was brought by union workers against the subcontractor, Trump and others.
***
Trump thought Sullivan “looked like a little bit of shady character” and wondered whether he should keep working with him, Trump recently said in his interview with The Post. But Sullivan began telling Trump he had friends at the FBI. Trump was incredulous but intrigued, he said.
“I just want to tell you I’d like to bring FBI agents up just to give me a reference,” Sullivan said, according to Trump.
One day early in April 1981, Sullivan arrived at Trump’s office, accompanied by FBI agents Stowe and Damon Taylor, a supervisor of organized crime investigations.
“They were legitimately FBI agents,” Trump told The Post. “And I say, ‘Well, what do you think of him?’
“They say, ‘Mr. Trump, he’s 100 percent. He’s working with the FBI. He’s a tremendous guy, et cetera, et cetera.’?”
But Trump knew that Sullivan operated in a murky world. At the time, Trump told the FBI agents that he understood Sullivan was “in a very rough business” and “knows people,” some of whom “may be unsavory,” the report said.
Trump told the visiting agents about his casino plans and his concerns about Atlantic City, according to an internal FBI report posted at the Smoking Gun website. Stowe and his colleague told Trump he “should carefully think over his decision to build in Atlantic City, and carefully prepare not only methods of securing employees’ honesty, but also corporate integrity,” their internal report said.
[Trump’s bad bet: How too much debt drove his biggest casino aground]
https://www.washingtonpost.com/investigations/trumps-bad-bet-how-too-much-debt-drove-his-biggest-casino-aground/2016/01/18/f67cedc2-9ac8-11e5-8917-653b65c809eb_story.html
Trump said he wanted to “cooperate with the FBI” if his casino plans came to fruition. Before long, Trump met with them again and said he was moving forward.
“TRUMP stated in order to show that he was willing to fully cooperate with the FBI, he suggested that they use undercover Agents within the casino,” an FBI report said.
It is clear that the agents and Trump were courting each other.
FBI agent Walt Stowe in the early 1980s. (Courtesy of Walt Stowe)
Trump invited Stowe to play golf at a private club in Westchester and took him to lunch at the famed 21 Club in a chauffeur-driven limousine, Stowe said. Trump broached the possibility of hiring Stowe.
“Here I am, like I said, I’m 31 years old or so, and I can see people looking all around to see who is this guy having lunch with Donald,” Stowe said. “It’s not like we became really good friends, but whenever I saw him, he was pleasant.”
Stowe welcomed the attention, but it was not primarily a friendship he was seeking at that time. Having a contact like Trump was a valuable asset for a rising star at the FBI. Trump was “a guy who knew people,” Stowe said.
On May 1, 1981, Trump applied for his first casino license. Gaming authorities began scrutinizing his background, in part to look for any links to organized crime figures.
Around that time, Trump took a step that would complicate the gaming review. He agreed to finance Sullivan’s purchase of Circle Industries, a drywall manufacturer that employed Sullivan.
Sullivan told Stowe and another agent about the Circle acquisition plans, according to a report they wrote on May 7, 1981. It said that Sullivan, Trump and a third man, then president of Circle, “will be equal, one-third partners,” with “Sullivan overseeing labor relations and Trump financing the enterprise.”
Circle Industries was among a group of some 20 drywall makers that secretly referred to themselves as “the club.” The companies held significant power in New York’s construction industry because of the importance of their product in so many projects.
Trump’s decision to invest in that industry came at an extraordinary time.
The industry was under FBI investigation, and in two years, Circle, was among the firms implicated in a racketeering scheme involving the carpenters’ union and the Genovese crime family. One of those indicted was union president, Theodore Maritas, who disappeared and was presumed murdered. As it happened, Trump’s attorney, Roy Cohn, also represented Genovese leaders.
***
On Sept. 21, 1981, the FBI got a strange call from Trump. He said he had traveled to Trenton the previous week to meet with Mickey Brown, the director of New Jersey’s Division of Gaming Enforcement. Trump was worried about the status of his application for a casino license. Brown told Trump that everything was on track except for “one problem” that might draw out the investigation — his ties to Sullivan, according to an FBI report.
Brown said that Sullivan had not been candid with investigators about his background and his business activities.
To defend himself and “nip things in the bud,” Trump said he told Brown that Sullivan had introduced him to two FBI agents and was close to the agency.
“TRUMP stated that he talked with BROWN about nothing of a substantive nature, particularly involving any proposed undercover activity,” the report states.
In a call with Sullivan that same day, Stowe and Taylor learned that Sullivan had been asked by gaming investigators specifically about his association with the FBI. “Source declined to answer this question,” the report said.
Trump’s meeting with Brown put into peril the undercover operation to ferret out organize crime proposed at Trump’s planned casino, documents and interviews show.
By late September, the FBI proposal was in a “thoroughly finished state,” but, Stowe said, it apparently never came to fruition.
[Trump’s financial records, depositions and interview transcripts: The documents behind ‘Trump Revealed’ ]
https://www.washingtonpost.com/graphics/politics/trump-revealed-book-reporting-archive/
Three weeks later, investigators with the Division of Gaming Enforcement spelled out their findings about Trump in a 97-page report. It provided an overview of Trump’s biography, his business activity and financial circumstances.
The report devoted more than 10 pages to Sullivan, underscoring his arrest record and recounting questionable episodes from his past, including the disappearances of Bauman, the labor lawyer, and Hoffa, the Teamsters leader.
Under pressure from regulators, Trump “advised the Division that he would not have any future personal, social or business dealings with Sullivan other than in the context of their Atlantic City lessor-lessee relationship.”
Trump would eventually pay $8 million to cancel the lease and buy the property outright from Sullivan and his partners. He also backed out of his investment in the drywall company, Circle Industries.
Sullivan felt betrayed and thought that gaming enforcement officials had mischaracterized his past. Sullivan privately threatened to sue both Trump and the Division of Gaming Enforcement and even make his FBI role public, FBI reports show.
This troubled Stowe. Sullivan was advised “that his life might well be endangered by revealing his relationship with the FBI to LCN figures and other members of the criminal element.”
***
Despite what he told gaming officials, Trump stayed in touch with Sullivan. In early 1982, he tentatively offered Sullivan a job as his organization’s chief labor negotiator, with a $75,000 salary, according to a civil lawsuit Sullivan filed against New Jersey authorities in 1983.
Trump also used Sullivan as a labor consultant in an aborted effort to buy the New York Daily News, according to the lawsuit and Stowe’s account.
The continuing relationship with Sullivan and his land partner, Shapiro, now put Trump uncomfortably close to a mob plot to rig the 1982 mayoral election in Atlantic City and take control of city hall.
Candidate Michael Matthews had made a deal with Scarfo, the Philadelphia crime boss, and corrupt union officials associated with him, to provide favors in exchange for secret financial support, $125,000. Matthews was directed to communicate through Shapiro, Scarfo’s financial agent in Atlantic City, who raised an additional $65,000 in cash and checks, court records show.
Throughout this time, Trump was pushing forward with his casino and meeting with Sullivan, Shapiro and Matthews on issues related to its construction and parking. Trump also discussed the election with them, according to investigative journalist Wayne Barrett in his 1992 book “Trump: The Deals and the Downfall.”
“According to Shapiro and Sullivan, Trump then suggested that Shapiro put up the $10,000 and indicated that he would eventually pay him back,” Barrett wrote. “Shapiro made the contribution, according to the two, but was never reimbursed.”
Trump has denied those claims.
Under New Jersey’s Casino Control Act, casino operators and those seeking licenses are prohibited from giving political donations to candidates.
The scheme between Matthews and Scarfo exploded into public after Matthews was caught on tape accepting payments from an undercover FBI agent. A federal grand jury investigating the case wanted Shapiro to testify. But he balked because he was worried about being killed, Stowe told The Post. He was right to worry.
“When Scarfo feared that Shapiro was going to cooperate with the federal government, he plotted his murder,” a New Jersey State Commission on Investigation report said.
At Sullivan’s urging, Stowe called Shapiro and persuaded him to testify.
“I said, ‘Kenny, look. If you’re subpoenaed and you don’t testify, they’re going to put you in jail,’?” Stowe told The Post.
Shapiro became a key witness, and Matthews was indicted on charges of extortion, bribery and conspiracy. Matthews pleaded guilty to accepting a $10,000 bribe and was sentenced to 15 years.
Trump was questioned by FBI agents about whether he made campaign contributions through Shapiro, according to Barrett’s book. Trump denied it and was not implicated in any wrongdoing.
***
Donald Trump, owner of the New Jersey Generals, sits in a meeting in New York on Feb. 19, 1986. The owners of the eight teams of the United States Football League met to discuss the future plans of the USFL. (Joel Landau/AP)
In the coming years, the paths of Trump, Sullivan and Stowe continued crossing. But the unusual triangle they had formed would never be the same.
Trump and Stowe stayed in touch, even after Stowe moved on to other assignments. Trump invited Stowe to a New Jersey Generals football game and called Stowe now and then to chat or announce his latest endeavor, such as the purchase of a yacht. He attended Stowe’s bachelor party, at a favorite FBI haunt on Manhattan’s East Side. Later, Trump and his wife, Ivana, hosted Stowe and others at a Michael Jackson concert, introducing them to celebrities.
Sullivan, for his part, ran into legal troubles. Federal prosecutors in Philadelphia claimed he had evaded taxes for several years. He was convicted, and on Aug. 1, 1985, Sullivan was sentenced to two years in prison for tax evasion.
Sullivan filed lawsuits against the New Jersey Division of Gaming Enforcement, officials in the state attorney generals office, Donald Trump and others. In a tangle of claims — some relating to the division’s report about him and Trump’s decision to back out of the Circle Industries deal — Sullivan said he lost millions of dollars in potential income. The suits were eventually dismissed or settled.
In the late 1980s, Sullivan and Trump found themselves at odds one more time.
At issue was a lawsuit related to the demolition of the Bonwit Teller building. Workers from Local 95 of the Housewreckers Union alleged that Trump and his subcontractor, in conjunction with union leadership, had failed to submit payments to the union’s pension and welfare funds for each worker — union members and Polish laborers alike.
In a deposition on April 12, 1988, Trump said he did not oversee the demolition. He repeatedly said he could not recall the details. “The only thing I did was sign checks when they were sent to me,” he said under oath.
Trump said he could not recall asking Sullivan for help in June 1980. “I know that Mr. Sullivan was somebody that would constantly try and ingratiate himself. I know that I didn’t pay him anything for this,” Trump said. “But I think there was some kind of involvement in this.”
Sullivan was a witness and gave damning testimony.
He said Trump had reached out to him in anticipation of the 1990 trial.
“Donald called me up and asked me to help him settle his case, so I told him that he should settle this case by paying these people what they should have gotten in 1980, and I was quite direct about it. And I told him, ‘Donald, your mother’s an immigrant, your wife’s an immigrant, mine is, about 60 percent of the American public is.’ ”
Sullivan went on.
“And I said, ‘Donald, if you don’t pay these people you are going to piss everybody in the world off.’ You cannot allow the public to have an attitude that you don’t give a s--- about this.”
In 1991, a federal judge in Manhattan ruled that Trump and others conspired with Local 95’s president to withhold $325,000 from the union funds. Both sides appealed, and the case ended with a sealed settlement in 1999.
In October 1993, Sullivan, 54, died of a heart attack. In an obituary, one of his Bucks County political pals was quoted describing “the source of Sullivan’s strength.”
“Excitement makes him tick; a challenge makes him tick; being in the thick of things makes him tick,” the man told the Bucks County Courier Times.
Stowe, now retired, became a gaming executive after rising through the ranks of the FBI. He said Daniel Sullivan remains an enigma to him.
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“Donald would say to me, ‘What do you think about Dan?’ ”
“And I’m like, ‘I don’t know.’ ”
But Stowe said he understood why Trump turned to Sullivan in the first place.
“So, if you’re going to be dealing with very tough, somewhat corrupt mob-dog guys on the labor side, you’re going to want a junkyard dog on your side. Now, I never sat in negotiations with Dan, but he was a physically imposing guy. I don’t think he was afraid of anybody.”
Alice Crites contributed to this report.
https://www.washingtonpost.com/investigations/trumps-ties-to-an-informant-and-fbi-agent-reveal-his-modes-of-operation/2016/09/16/6e65522e-6f9f-11e6-9705-23e51a2f424d_story.html?hpid=hp_hp-top-table-main_trumpunderworld-1035am%3Ahomepage%2Fstory
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