A judicial review into the Scottish Government’s refusal to pursue an Unexplained Wealth Order (UWO) into the former US president’s business was told the money for Mr Trump’s golf resorts was being “funnelled in from elsewhere outside the UK from apparently unlimited funds”.
The review has been brought by Avaaz, a US-based non-profit activism organisation, which petitioned Scotland's highest court after MSPs rejected calls to pursue an UWO.
The so-called ‘McMafia’ order allows authorities to target suspected corrupt foreign officials who have potentially laundered stolen money through the UK.
The civil power is designed to force the owners of assets to disclose their wealth. If an official, or their family, cannot prove a legitimate source for their riches, authorities can go to court to seize property.
The Scottish Government’s position is that any decision to seek an UWO is a matter for ministers, with the Civil Recovery Unit (CRU), which reports to the Lord Advocate, handling applications to the courts in practice.
Neither the government nor the CRU has confirmed or denied the existence of any ongoing investigation into Mr Trump or his Scottish businesses.
But addressing the review, Aidan O’Neill QC, representing Avaaz, said such a stance was “contrary to good governance”.
In its petition to the court, Avaaz states there are "no reasonable grounds" to suspect that known sources of lawfully obtained income would have been sufficient to bankroll Mr Trump's acquisition of his Scottish properties at Turnberry and Aberdeenshire.
It argues that ministers have a duty to pursue an UWO where the relevant requirements under the Proceeds of Crime Act 2002 (POCA) are met.
Addressing the Court of Session, Mr O’Neill noted the money for Mr Trump’s Scottish assets is being “funnelled in from elsewhere outside the UK from apparently unlimited funds”.
He said there was no doubt Mr Trump was a “politically exposed person” and there was a “complicated corporate structure” underpinning how his Scottish properties are held.
“The most recent accounts of the company which apparently owns Turnberry shows it made a consolidated loss of £2.3m in 2019 and £10.7m the previous year,” he said.
"The notes on the accounts state the group is dependent on continuing financing being made by its ultimate owner to enable it to continue operating.”
Mr O’Neill said the questions around the finances of the Trump properties were not just related to how they were purchased, but maintenance costs and the “ongoing loss” registered.
He went on: “There have been more details as to precisely how the Trump Organisation has been operating since , which casts light on the issue as to whether or not it could ever be said to have reputable sources, known sources, of lawfully obtained income at the time.”
In August, the court granted Avaaz permission to challenge the ministers’ decision to reject calls for them to pursue a UWO, with Lord Sandison stating in his ruling that he believed the Avaaz case “had real prospects of success [and that] there was a sensible legal argument to be had on the matters raised by the petition”.
It came after MSPs voted against a February motion for ministers to go to court to obtain an UWO against Mr Trump.
The motion, brought by Patrick Harvie MSP, now a junior minister in the government, argued that if the Trump Organisation could provide “reasonable answers to reasonable questions”, it would have no problem.
However, then justice secretary Humza Yousaf said the pursuit of an UWO would constitute an "abuse of power" that would "fatally undermine our justice system.”
Mr Yousaf said it would not be right or proper for any minister other than the Lord Advocate to become “personally involved in the pursuit of a particular investigation.”
But addressing the hearing before Lord Sandison, Mr O’Neill argued that failure on the part of ministers to seek a UWO in relation to Mr Trump’s assets would be “unlawful,” and they had a duty to act.
“We’ve vouched throughout the materials produced why it is that reasonable questions can be raised about the source of the wealth and the continuing source of the wealth for financing these particular golf courses in Scotland,” he said.
“When we have that background, good governance and the principle of the maintenance of standards of money laundering requires there to be openness in terms of what one is doing about it.”
Earlier, Mr O’Neill told the court that ministers had “misdirected” Parliament and “failed to understand” their roles and responsibilities around the use of UWOs.
“Why have they misdirected themselves?” he asked. “That’s a matter for speculation, but clearly at some level this issue – the issue of seeking UWOs against politically exposed persons – is a political hot potato.”
He added: “The very terms give you that idea. Foreign politically exposed persons being asked to explain to the court in Scotland the sources of their wealth, which allowed them to purchase property in Scotland is clearly always going to be, at some levels, a politically controverted issue.
“Sometimes, politically controverted issues are too hot to handle for politicians, and it’d be nice if they could be, as it were, hived off to the non-political, purely legal prosecutorial functions of the Lord Advocate. That seems to be what’s impelling some of the answers which have come out in this case, particularly in parliament.”
The hearing continues.