Page 14 - Bloomberg Businessweek-October 29, 2018
P. 14

Bloomberg Businessweek                                                                         October 29, 2018
 He got Trump right,                                      For Fourth of July weekend 2015, Patrice de Colmont, the


                                                          owner of Le Club 55 near St. Tropez, decorated his restau-
                                                          rant with U.S. and French flags. Among the wealthy Americans
                                                          there nibbling  crudités and sipping Domaines Ott was finan-
                                                          cier Tom Barrack, who’d brought employees from his invest-
                                                          ment firm, Colony Capital. Fellow titans stopped by his table to
 then things went                                         say hello, including Blackstone Group LP co-founder Stephen
                                                          Schwarzman, former Citigroup Inc. Chairman Sandy Weill, and
                                                          hedge fund manager Dan Loeb.
                                                            Barrack had invited his deputies to the French Riviera to
                                                          lay the groundwork for the Los Angeles-based firm’s new-
                                                          est fund. Building on a history of dealmaking that included
                                                          Fairmont Hotels; the Miramax film studio, co-founded by
                                                          Harvey Weinstein; and Michael Jackson’s Neverland Ranch,
                                   wrong                  Barrack aimed to raise $2.5 billion to buy distressed European
                                                          real estate assets and generate returns greater than 15 per-
                                                          cent, a confidential investor pitch obtained by Bloomberg
                                                          Businessweek shows. The conversations that weekend bub-
                                                          bled with optimism.
                                                            A few weeks earlier, Donald Trump, one of Barrack’s oldest
                                                          friends, had announced he was running for president. The two
                                                          real estate investors met in the mid-1980s, and Barrack enter-
                                                          tained the crowd with war stories of deals they’d done together.
                                                          While the campaign was the butt of many jokes at Le Club
                                                          55, according to two people who were there, Barrack  startled
                                                          guests with a different take. He said he thought Trump’s brash,   57
      Tom Barrack’s Colony Capital                        authentic style would take him to the White House—and that
                                                          he’d make a better president than candidate. Even employees
      is struggling. His royal allies                     who’d spent decades helping their boss place counter intuitive
                                                          bets called the prediction crazy.
      in the Middle East are boxed out.                     For Barrack, the tanned, bald, charismatic son of a
                                                          Lebanese-American grocer from California, Trump’s can-
      And his old friend Paul Manafort                    didacy became an obsession. In the months that followed,
                                                          he would devote himself to Trump’s campaign, all but dis-
      is behind bars                                      appearing from the company he’d founded in 1991 and built
                                                          into one of the world’s highest- profile real estate investment
                                                          firms. While Barrack’s fundraising and TV appearances have
                                  By Caleb Melby          been well- documented, he also assisted in ways that haven’t

                                                          been reported. According to people familiar with the matter,
                                                          he allowed Colony’s New York office, kitty-corner from Trump
                                                          Tower, to be used for sensitive transition-team meetings. As a
                                                          favor to Paul Manafort, a longtime friend he’d helped install
                                                          as head of Trump’s campaign, he hired a woman whose duties
                                                          included scheduling his campaign appearances. And he sug-
                                                          gested that an investor familiar with Colony donate to a super
                                                          PAC led by an ally of Manafort’s.
                                                            Helping a fading reality-TV star with no political expe-
                                                          rience capture the White House might have led to a role
                                                          in the administration or made Colony a magnet for money
                                                          from around the world. But mixing business and politics
                                                          hasn’t worked out for Colony’s 71-year-old executive chair-
                                                          man. Instead, he damaged relations with the Qatari royal
                                                          family, his best business partner in the Middle East, by help-
                                                          ing orchestrate a relationship between the White House and
                                                          the Saudis. Meanwhile, Colony hemorrhaged talent, raised
   9   10   11   12   13   14   15   16   17   18   19