One resort, planned as the largest in Bali, will overlook a spectacular Hindu temple. The other, in the verdant hills of West Java, will adjoin a theme park. The properties will be so luxurious, the Trump Organisation says, that even an impressive five-star rating will not do them justice. So it will give them six stars instead.
Even as President-elect Donald Trump promises to end foreign business deals that could pose conflicts of interest — there will be “no new deals” while he is in office, he has said — his company is moving ahead with two Indonesian projects that illustrate how tricky that pledge might be.
None of the construction work to build or renovate structures at the Indonesian resorts has even begun, but Mr Trump has forged relationships with powerful political figures in Indonesia, where such connections are crucial to pushing through big projects.
That tangle of relationships includes an Indonesian business partner who aspires to high office; a powerful politician accused of trying to extort billions of dollars from a United States mining company; and Mr Trump’s new adviser on regulatory issues, Mr Carl C Icahn, a top shareholder in the mining company.
The resort projects, which a Trump spokeswoman said last week were “binding contracts”, have created a grey area of conflicting interests that could be hard to separate from an array of issues facing the US and Indonesia, including trade and contested claims over the South China Sea.
Mr Trump’s local partner on the resorts, Mr Hary Tanoesoedibjo, is a billionaire media mogul with his own political ambitions. He ran for vice-president of Indonesia in 2014 and is organising a political party for another possible run at national office in 2019. If Mr Tanoesoedibjo or his party wins a major role in government, the potential conflicts could escalate significantly.
“You could have two world leaders that are business partners,” said Professor Richard W Painter, who served as a White House ethics lawyer during the George W Bush administration. “It makes it almost impossible to conduct diplomacy in an even-handed manner. That does not work.”
Through the partnership with Mr Tanoesoedibjo, Mr Trump has gained access to some of Indonesia’s top political figures, including Mr Setya Novanto, Speaker of the House of Representatives, who was temporarily forced to surrender his leadership post because of corruption allegations in 2015. Mr Novanto was heard on an audio recording seeking a US$4 billion (S$5.8 billion) payment from the US mining giant Freeport-McMoRan.
Months before the recording came out in December 2015, Mr Trump met Mr Novanto during the presidential campaign at Trump Tower. After their lunch, Mr Trump pulled Mr Novanto before the cameras at a news conference and called him “a great man”, adding, “We will do great things for the United States.”
The knot of potential conflicts includes Mr Icahn, the billionaire investor who will serve as a special adviser to Mr Trump. He is one of the largest shareholders in Freeport, which does so much business in Indonesia that it is the country’s largest taxpayer and has been seeking to extend its mining contract with the Indonesian government.
“This stuff is so murky,” said Ms Karen Hobert Flynn, president of Common Cause, a nonprofit group that has called for Mr Trump to sell off his businesses to avert conflicts of interest. “It is not going to be clean moving forward. There are going to be complications as these projects move forward.”
Mr Trump has provided little clarity about what he means by “no new deals”, a vow made in a Twitter post he sent out in mid-December. His aides suggested in interviews last week that even if construction had not started on a project, the Trump Organisation would move ahead if it had a binding agreement.
For Mr Trump, the Indonesian deals are licensing and management agreements in which he provides the use of his name and his company manages the resorts.
Even though no structures were built, Mr Trump secured a considerable payout on the two deals, according to a financial disclosure report that listed payments ranging from US$1 million to US$5 million for each of the projects between January 2015 through May 2016. That is far more than the US$400,000 salary paid to the President, which Mr Trump has said he will decline.
Mr Trump created the corporations that manage these projects — including DT Bali Hotel Manager and DT Lido Hotel Manager — in late June 2015, just a week after he declared his intention to run for President.
His companies have operations in at least 20 countries, including the Philippines, India, Turkey and Britain, but the full extent of his foreign financial ties is unclear because he has refused to release his tax returns or disclose the identity of his lenders.
In addition to the no-new-deals pledge, Mr Trump has said that his sons, Eric and Donald Jr, along with other executives, will manage the family’s global real estate business.
The Trump Organisation has recently moved to resolve potential controversies, in part by closing family foundations. It has also dropped a number of its proposed projects, including Trump Office Buenos Aires in Argentina; Trump Towers Rio and Trump Hotel Rio de Janeiro, both in Brazil; Trump International Hotel & Tower Baku in Azerbaijan; Trump Tower Batumi in Georgia; and Trump Riverwalk in Pune, India, representatives from the Trump Organisation have said last week, in response to questions.
But other projects — including some on which construction has not started or is not well underway — are moving ahead, including Trump Tower Mumbai and a Trump tower in Gurgaon, both in India; Trump Tower Punta del Este in Uruguay; Trump International Golf Club, Dubai, and Trump World Golf Club, Dubai, both in the United Arab Emirates; and Trump International Hotel & Tower Vancouver, in Canada, the Trump Organisation confirmed.
Ms Amanda Miller, the Trump Organisation spokeswoman, said of the two Indonesian projects: “Construction is well underway and will proceed as planned.”
In fact, construction has started only on a golf course and toll road as part of the Lido Lakes resort in West Java. Separating the enterprise from politics may also be difficult because Mr Tanoesoedibjo’s MNC Group is building the road to the site as part of a government highway project.
No new structures have been built at Lido Lakes or at the resort near the stunning Tanah Lot temple in Bali. A 20-year-old hotel, the Pan Pacific Nirwana Bali Resort, stands on the Bali property and could be renovated to create a Trump hotel, but that work has not begun.
The two resorts will give the Trump brand a high profile in Indonesia — which has the world’s largest Muslim population — with the Trump name adorning two luxury hotels and premier golf courses as well as high-end villas and condominiums. Yet the US President’s name on the projects could also make them potential targets. During the campaign, Mr Trump made statements about Muslims widely viewed as inflammatory. US hotels in Jakarta have been attacked by terrorists several times.
On Wednesday, Mr Trump accused the news media of exaggerating any potential conflicts presented by his business holdings. “It’s not a big deal; you people are making it a big deal, the business,” Mr Trump said on the steps of his Mar-a-Lago resort in Florida, where he was spending the holidays. “They all knew I had big business all over the place.”
