The Scottish government has a tool that could pry open the finances of any wealthy, politically connected person involved in a suspicious purchase in their country. And this week, a Scottish judge heard arguments over whether the country’s first target for this new anti-money laundering tool should be one of the most elusive, wealthiest, and politically connected in the world: former President Donald Trump.
At issue is how exactly Trump paid for a golf resort there in 2014, and how the government could serve him with an “unexplained wealth order” that would force him to open his books.
On Tuesday and Wednesday, that Scottish judge, Lord Craig Sandison, listened to the government’s arguments over why it shouldn’t have to necessarily investigate Trump. And the government—the defendant in this case—went so far as to assert its right to treat the matter with the utmost security, borrowing the CIA’s infamous “Glomar response” by seeking to “neither confirm nor deny” that it would do so.
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Although, the government’s lawyer seemed to avoid every mention of the name “Trump”—at one point on Wednesday only referring to him obliquely as “DJT.”
“Maybe the Scottish government is really hesitant, because they think he's not the best person to make an example of as the first,” said David M. Long, a former U.S. Labor Department special agent who investigated money-laundering cases on the once-feared federal organized crime strike force.
“To get a big fish like Trump,” he said, “they need a case that is sure.”
The Trump Turnberry is a golf resort on the rolling green hills of the Scottish county of Ayrshire, located on the southwestern coast. Trump bought the storied property in 2014 for a reported $60 million—an odd move for a real estate mogul who always preferred borrowing other people’s money, especially at a time when it seemed that few banks were willing to take a chance on him.
Adding to the mystery, the golf course has yet to deliver a single profitable year, according to company filings. And for two years now, the American nonprofit watchdog Avaaz has pushed the Scottish government to employ their “unexplained wealth order” to force Trump to explain where he got the cash to pay for this bottomless money pit.
Meanwhile, the government led by First Minister Nicola Sturgeon took the position that the decision to seek a UWO in court is solely up to the country’s top prosecutor—but it’s also staying silent about whether that will happen.
After Avaaz filed a petition in May, it finally got its two days in court this week to make its argument.
Lord Sandison said the case was brought “effectively to determine the lawfulness of failing to make an application” for a UWO. His line of questioning to both lawyers did not offer a clear indication of which way he might rule.
Aidan O’Neill, the barrister representing the nonprofit, said the decision actually belongs to Sturgeon and her ministers, who “are obliged to exercise their power in terms of seeking UWOs in a manner that ensures the international standards to fight tax evasion and money laundering are achieved.”
“Scottish ministers have failed to understand their role and responsibilities,” he told the judge. “They’ve misdirected themselves in law... they’ve misdirected themselves in parliament... it’s a political hot potato.”
The government’s lawyer, Ruth Crawford, pushed back on the idea that ministers are required to seek a UWO.
“I'm not going to stand here and say they’re going to do nothing” to tackle money laundering in general, she said. But on seeking an actual UWO, “There is nothing to suggest there is that absolute obligation to go to the court.”
“If Scottish ministers are obliged... how does one know whether the ministers have complied with that duty? What’s the yardstick?” she said.
This investigative tool is a pre-Brexit policy. The European Union has been developing weapons to battle money laundering by giving bureaucrats the ability to more closely examine financial records.
Its “fourth money laundering directive” in 2015—adopted by the U.K. in 2017—created “unexplained wealth orders” to force rich, politically connected people to explain how they paid for suspiciously acquired assets. Government officials can use them in civil court, not criminal cases, but it’s still powerful because they can seize property from targets who refuse to answer questions.
That means that, if Trump refused to adequately explain how he paid for Turnberry, the Scottish government could reclaim the golf course.
Although the British government just recently won a legal battle over its first ever UWO, Crawford confirmed that Scotland’s government has yet to apply for one.
But, Crawford argued, preserving Scotland’s right to independently—and perhaps discreetly—seek a UWO was an important principle.
“There are sound reasons for the ‘neither confirm nor deny’ provisions prior to the order being sought,” Crawford said, noting that “there is a danger of tipping off” the target of an investigation “and that potential evidence could be destroyed or concealed.”
Lord Sandison then wondered aloud whether coming “to the conclusion that the [neither confirm nor deny] was not justified… would be a technical knockout” against the government.
The nonprofit’s lawyer laid out why the government should make its decision public, noting that “there is a duty of candor… because we’re all in this together.”
“What we get is no decision and no explanation. Now that, I submit, means that they have not shown that they have acted rationally… Avaaz is wanting the light to be shown into this. It clears up people’s concerns,” he said. “It restores confidence in the rule of law.”
The two-day hearing was heavy on matters of constitutional law, with the lawyers grappling with how anti-money laundering policies adopted from elsewhere fit within Scotland’s existing laws and government structure.
Those seeking to put further pressure on the Trump Organization hope the judge ultimately decides two things: that Scotland’s government ministers are responsible for initiating an investigation, and that they failed in their duty by not already doing so. Winning on those two counts would significantly increase pressure on Sturgeon’s government to use that anti-money laundering tool on Trump.
A ruling could come by the end of the year, but that’s not guaranteed.
“I’ll issue the judgement as soon as is reasonably practicable,” Sandison said, before ending the hearing on Wednesday.
Immediately after the hearing, Trump International Scotland’s executive vice president, Sarah Malone, issued this statement: “This sort of self-indulgent, baseless nonsense, contrived by political activists, serves only to hurt the hard-working people of Scotland who they ultimately want to put out of work by attacking legitimate businesses. Their claims are completely false. The Scottish Government righty rejected their petition, which is nothing more than a disgraceful attempt to be relevant and hit out at President Trump.”
David M. Shapiro, who investigated financial crimes as an FBI special agent and local New Jersey county prosecutor, said it’s no surprise the Scottish government is grappling with how to deploy this kind of anti-money laundering tool.
“These are the people that have an inordinate degree of power in civil society. They influence the creation of laws, enforcement of laws. Who do you think’s creating law? Who finances their campaigns? It’s not the carpenter working in Glasgow,” said Shapiro, who’s now a lecturer at John Jay College of Criminal Justice.
While this case has immediate implications in Scotland, a ruling against the government there could have ramifications in the United States. The Democratic political action committee American Bridge 21st Century, for example, submitted letters to the Manhattan District Attorney and FBI in 2020 laying out how “clearly contradictory valuations and profits of Donald Trump’s golf clubs in the U.K. and Ireland appear to pose potential civil and criminal violations.”
“We would learn a lot from a granular look at his finances and how he moves his money around,” said the group’s spokesperson, Max Steele. “It’s going to turn up a lot more dirt, and if anything it will raise a lot more questions.”
Ross Greer, a member of the Scottish Greens party in parliament, told The Daily Beast that he hopes the government will use this new investigative tool—known locally as a “McMafia order.”
“The Trump Organisation’s financial activities in Scotland are deeply suspicious,” he said. “We cannot let the suggestions of potential money laundering go unaddressed. An Unexplained Wealth Order would provide the answers the Scottish public deserve, so we await this judgement with interest.”
“Scotland shouldn’t be the kind of country where disreputable international operators, like Mr. Trump, can just turn up and buy huge swathes of land with no questions asked,” he added.
