ARI SHAPIRO, HOST:
The Trump Organization has property holdings around the world, and President Trump stands to profit from the sale of them. An investigation by USA Today shows a surprising change in who is buying these properties. Before Trump was nominated to be president, 4 percent of Trump Organization property sales went to secretive shell companies called LLCs. Now that figure is up to 70 percent. Nick Penzenstadler is one of the reporters on the story and joins us now. Welcome.
NICK PENZENSTADLER: Thank you.
SHAPIRO: What were the properties that you were looking at in your reporting here?
PENZENSTADLER: So these are oceanfront view properties in California. These are penthouses and condos in Las Vegas. And they're properties in New York near his tower.
SHAPIRO: And since the nomination, 70 percent of these sales have gone to these secretive shell companies. Explain what they are.
PENZENSTADLER: Yeah, so anybody who wants either shield their identity or partner with someone in a property sale or purchase can set up a company to hold that asset. So that's who we're finding is buying these properties. When you look at the deed it's not a real person on the deed. It's a company, an LLC.
SHAPIRO: It's a huge jump from 4 percent to 70 percent. Should that be a reason for people to be concerned?
PENZENSTADLER: Well, we raised this real estate issue in general as a - kind of a blind spot, perhaps, in the ethics of owning all this property as president still. And when you add into that that we don't know who's buying the property, ethics people we spoke to said it's definitely cause for concern.
SHAPIRO: Remind us what actually happens to profits from the Trump Organization and how it ultimately reaches the president.
PENZENSTADLER: So when someone buys a property or purchases anything in the business it goes into the Trump Organization, which is held by a trust. And Trump is the sole beneficiary of that trust. So the money goes into a pool of money, and the president can draw from that whenever he'd like.
SHAPIRO: What's the worst case scenario here?
PENZENSTADLER: I mean, I think the concern is that someone could purposefully overpay for this property in an effort to either get the president's attention or to sway the president, or could purchase a series of properties and we wouldn't know necessarily who it is.
SHAPIRO: Your reporting found for the most part that these sales were not above market value.
PENZENSTADLER: Yes. We did some analysis looking at both comparable properties and previous sales to try to check on that. That was one of the questions we had.
SHAPIRO: And so why might this number have jumped so dramatically?
PENZENSTADLER: Well, I think there are people who don't necessarily want to hitch their wagon to the campaign or with politics at all, or, you know, we don't really know. We spoke to people who said they did it on the advice of their attorneys. There was nothing - you know, they have nothing to hide. Definitely some benign reasons from our perspective. But we don't know. We don't know. We don't know because there are LLCs that have been basically dead ends and ghosts where we couldn't find who the real people are behind them.
SHAPIRO: After the election, the Trump Organization appointed an ethics adviser. You spoke to him. What did he tell you about this arrangement?
PENZENSTADLER: It was interesting. I mean, very much stressed that it's not as simple as you write a check for a property and the president gets it at the White House. So, you know, they argue that it's set up to try to separate him from these assets. But for many people that's not enough. They want to see a full either blind trust or something that completely separates the president from the business.
SHAPIRO: Was there a question you were really hoping to answer in this reporting that you just were not able to uncover?
PENZENSTADLER: Well, certainly for the ethics officer we wanted to know how they're checking on these sales. You know, he's looking for anything that would embarrass or raise a conflict, but we don't know how they're tracking it or what their standards are. So I know I certainly was interested in learning more about that because it is - it was difficult for us to find these actual people. And I think the American people would be interested, too.
SHAPIRO: That's Nick Penzenstadler, a reporter for USA Today. Thanks for joining us.
PENZENSTADLER: You're welcome.
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