Court told over 'real and substantial concerns' about finances of Trump Organisation

There remain “real and substantial concerns” about the financial arrangements of the Trump Organisation, a court has heard.

Kay Springham QC said there would be substantial prejudice to the public interest if the Court of Session refused a petition for judicial review, which is seeking to overturn the Scottish Government’s refusal to pursue an Unexplained Wealth Order (UWO) against former US president Donald Trump.

Ms Springham, who is representing Avaaz, the non-profit human rights group, appeared at a virtual permission hearing before Lord Sandison on Thursday, arguing for an extension to a three month time limit for the proceedings to be brought.

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Lord Sandison told the court that so far as the substantive issues raised by the petition were concerned, they passed the test set out in the statute, which meant he was persuaded “there is enough to have a sensible argument” about the matters set out in the petition.

He noted, however, that prima facie, the petition had been brought outwith the three month time bar period, and the purpose of the hearing was whether he can, and should, exercise the power to extend that period. He is expected to issue his decision shortly.

First Minister Nicola Sturgeon has been accused of misunderstanding the law and misleading Holyrood when insisting the Scottish Government could not pursue a UWO against the former US president.

The government has since set out its position that any decision to apply for a UWO is a matter for ministers, with the Civil Recovery Unit (CRU) dealing with any applications in practice.

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Questions have long been asked over how Donald Trump financed his 2014 acquisition of the Turnberry resort in South Ayrshire. Picture: John Devlin

Neither the government nor the CRU has confirmed or denied the existence of any ongoing investigation into Mr Trump, but lawyers for Avaaz argue that ministers have a duty to seek a UWO where the relevant requirements under the Proceeds of Crime Act 2002 are met.

The so-called ‘McMafia’ order is a relatively new – and rarely used – power with which authorities can target suspected corrupt foreign officials who have potentially laundered stolen money through the UK.

The mechanism is designed to force the owners of assets to disclose their wealth. If a suspected corrupt foreign official, or their family, cannot show a legitimate source for their riches, authorities can go to court to seize the property.

Avaaz, as well as MSPs from across Scotland’s political spectrum, have repeatedly raised questions over how Mr Trump obtained the financing to purchase his inaugural Scottish resort in Aberdeenshire, and later, the prestigious Turnberry resort in South Ayrshire.

At Thursday’s hearing, Ms Springham asked the court to exercise its equitable discretion to extend the three month time period for bringing the petition for judicial review, stating there was a “substantial prejudice” to the petitioners and the public interest if such an extension was not granted.

The issues raised by the petition, she said, were of “considerable importance”, noting: “It is about giving proper effect to anti money laundering and anti corruption legislation.

“The approach which Scottish ministers take to the legislation has continuing effect, affecting as it does not just the decisions relating to Mr Trump, but to any other individual who might potentially be subject to an UWO.”

She later added: “It’s evident from the matters set out in the petition that there are real and substantial concerns about financial arrangements of the Trump Organisation, of which Mr Trump is the sole or principal owner.

“There are investigations by US authorities. In May, the New York attorney general announced that criminal as well as civil investigations had been commenced in relation to financial conduct, including fraud, at the Trump Organisation.

“Since the petition has been lodged, there have been further developments … the charges laid against the Trump Organisation’s chief financial officer [Allen] Weisselberg.”

Earlier this month, Mr Weisselberg, one of the Trump Organisation’s longest serving senior executives, was charged by US prosecutors with concealing £1.2 million worth of income. The 73-year-old, the firm’s chief financial officer, has pleaded not guilty to tax fraud.

He was subsequently terminated as a director of Trump International Golf Club Scotland, the entity behind Mr Trump’s Aberdeenshire hotel and golf resort.

However, Companies House records show he is still listed, alongside Donald Trump Jr, as a person with “significant control” over Golf Recreation Scotland, the parent company of Mr Trump’s Turnberry resort in South Ayrshire.

Appearing for the Scottish Government at the permission hearing, Ruth Crawford QC, said it was important to distinguish between “what is in the public interest and what interests the public,” adding: “Indeed, one should also distinguish what is in the private interests of the petitioner.”

She went on: “No issue is taken with the standing of the petitioners by the ministers, but while they have standing, they require, in coming to this court, to observe the rules of court, primary legislation and raise proceedings timeously.

“One also has to bear in mind that they’re coming to the court, it is said, to vindicate public rights and matters which are in the public interest, rather than their own private interests. In my respectful submission, it is clear that in substance and in effect, the petitioner is using the current judicial review proceedings to serve its own political and private interests.”

In February, MSPs rejected a motion at Holyrood urging ministers to apply for an UWO. The opposition debate was brought by Patrick Harvie, co-convenor of the Scottish Greens, who said the Trump Organisation would have "no problem" if it could provide "reasonable answers to reasonable questions.”

But then justice secretary Humza Yousaf argued the government’s pursuit of an UWO would “fatally undermine” the justice system.

Concluding the hearing, Lord Sandison said: “I’ll obviously need to think a little bit more about the matter and read some of the documents, which unfortunately weren’t immediately available on screen. I’ll need to make a decision just as soon as possible and I don’t expect that will be very long.”

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