President Trump once challenged anyone who doubted his financial prowess to simply ask the German banking giant that’s lent him hundreds of millions over decades: Deutsche Bank.
“Why don’t you call the head of Deutsche Bank?” Trump boasted on the campaign trail, pushing back on claims that other Wall Street banks had grown nervous about lending him money after a string of bankruptcies.
Now, investigators from New York State and Congress are doing just that. Last Monday, the New York attorney general’s office reportedly issued a subpoena requesting a range of Trump-related financial records from the scandal-plagued German firm. Deutsche Bank said last Tuesday it plans to cooperate with “authorized investigations.”
Financial experts believe Deutsche’s records trace a map of the president’s business empire likely to be more revealing than his tax returns — including the bank’s own assessments of the true size of Trump’s fortune, and potential proof of any financial entanglements with foreign entities like Russia or Saudi Arabia.
Investigators are seeking years’ worth of details about Trump’s most sensitive dealings from a bank that’s been closer to him than any other, and which kept lending to him when others stopped.
“The bank knows exactly what he’s really worth, because they’ve gone through and verified all his properties and bank accounts.”
Deutsche’s cooperation poses a unique threat to Trump’s inner circle thanks to its intimate involvement in his family business, its controversial role in multibillion-dollar Russian money-laundering schemes, and fresh allegations of impropriety at the Trump Organization by Trump’s former personal attorney Michael Cohen.
“The bank knows exactly what he’s really worth, because they’ve gone through and verified all his properties and bank accounts,” said Duncan Levin, a former prosecutor based in New York and an expert on financial crime. “They’d have an enormous amount of information. I’d find it inconceivable that they don’t have copies of Trump’s tax returns.”
BILLIONS FOR TRUMP
Deutsche Bank emerged as Trump’s lender of last resort after a string of bankruptcies in the 1990s left other Wall Street firms considering him too risky to touch. As a result, questions have long swirled around how Trump convinced the German bank to lend him so much money when others would hardly let him through the door.
Trump’s primary point of contact with Deutsche over the past decade has been its U.S. private banking division chief, Rosemary Vrablic — a woman Trump once inaccurately described as “the head of Deutsche Bank.”
Private banking involves offering up bespoke services to ultra-rich individual clients, whom banks scrutinize to better understand their risk profile. Toward that end, Deutsche would have compiled a trove of research about Trump and his business empire while lending or participating in loans to Trump totaling $2.5 billion over 17 years, financial experts told VICE News.
“Banks do a lot of due diligence into these [private banking] clients to arrive at ongoing relationships, because it allows them to feel comfortable with the client,” said Levin. “It allows them to offer deals that ordinary customers might not be receiving.”
Now, information Deutsche carefully stored up about Trump with the goal of evaluating him as a credit risk could soon be turned over directly to New York’s aggressive new Attorney General, Letitia James, who swept into office in January warning Trump he should worry about three things: “Mueller, Cohen and Tish James.”
Deutsche Bank almost certainly has copies of Trump’s tax returns, according to Levin, along with piles of non-public information detailing the actual size of Trump’s fortune — including years of records about his bank accounts, sources of income, payments and wire transfers.
House Democrats have already attempted to get Trump’s Treasury Department to hand over Deutsche’s Suspicious Activity Reports, filings that would note any irregular or suspicious client activity in accounts linked to Trump or his associates. And in 2017, they sent Deutsche a letter asking specifically for two internal reviews: One of its own past involvement in a recent Russian money-laundering scandal, and the other of personal accounts held by Trump and his family members at the bank.
Trump’s family also banks with Deutsche, including his daughter Ivanka, son-in-law Jared Kushner, and Kushner’s mother Seryl Kushner, according to House Financial Services Committee chair Maxine Waters. Kushner’s family business reportedly received a $285 million loan from Deutsche just a month before Trump was elected.
The 2001 USA Patriot Act allowed banks to start sharing information about their clients in the name of fighting money-laundering and shedding light on complex financial trails layered through multiple institutions. As a result, Deutsche’s vaults likely also hold information sent over, by request, from banks that once lent to Trump before branding him too risky to touch.
This unique cache of records held by Deutsche could provide plenty of leads for investigators now vigorously probing Trump’s business empire.
One thing investigators will be looking for is evidence that anyone from Trump’s family business misled Deutsche while convincing the firm to grant him a loan — activity that could constitute the crime of bank fraud.
Trump’s former attorney Cohen told Congress in late February that Trump provided Deutsche Bank with an inflated financial statement while seeking a loan during his failed 2014 attempt to buy the Buffalo Bills — a deal that the New York AG’s office is now seeking more information about via subpoena, according to The New York Times.
That office reportedly also wants to know about the $69 million Deutsche lent Trump in 2014 to refinance earlier Deutsche loans on Chicago’s Trump International Hotel and Tower, and about the $170 million Deutsche offered up to help complete Trump’s Washington D.C. hotel less than a mile from the White House.
Investigators will be on the lookout for instances when the Trump Organization may have falsified business records, which is itself a crime in New York State even if the activity falls short of actual fraud.
Last Wednesday, Trump’s former campaign chairman, Paul Manafort, was charged by the Manhattan District Attorney with violating that exact statute, along with a total of 16 counts related to his mortgage loans.
Such a lesser offense could be used to try to flip lower-level Trump Org employees into testifying against those above them — including against Trump’s family members, or Trump himself.
“If investigators find something they think has been misstated, then they can try to find out who they think did it and use that to move up the chain,” said John Coffee, director of the Center on Corporate Governance at Columbia Law School. “If you falsify business records, New York State finds that to be a crime.”
The New York investigation poses a special kind of danger to Trump’s inner circle, because any criminal charges brought by state prosecutors — such as the latest indictment against Manafort — can’t be dismissed with a presidential pardon.
Congress has signaled another area of focus: money laundering.
“We're going to find out a lot about Deutsche Bank and that bank's relationship to the president,” Rep. Maxine Waters, chair of the House Financial Services Committee, said in early March. “We are very concerned about money laundering.”
The bank recently began cooperating with Congressional investigators after months of resistance, according to Waters, who said House specialists have already begun digging through the company’s books.
House Democrats are particularly interested in figuring out whether illicit money ended up in Trump’s accounts — especially if it came from Russia, including through cash purchases of pricey Trump-branded condos through shell companies, Waters said on the House floor last week.
The House Intelligence Committee launched a sweeping probe in February aimed at finding out whether deep-pocketed foreigners have managed to gain leverage over the president or won influence over his administration’s policies by offering up financial rewards. The panel’s chairman has openly questioned whether Russian money may have been funneled through Deutsche to Trump’s business.
“The concern about Deutsche Bank is that they have a history of laundering Russian money,” House Intel chair Adam Schiff, Democrat of California, said on Meet The Press. “And this, apparently, was the one bank that was willing to do business with the Trump Organization. Now, is that a coincidence?”
Questions about money laundering have long swirled around Trump, including after his Taj Mahal casino was slapped with a $10 million fine in 2015 for “significant and long standing anti-money laundering violations.” A review by The New Republic in 2017 found that “over the past three decades, at least 13 people with known or alleged links to Russian mobsters or oligarchs have owned, lived in, and even run criminal activities out of Trump Tower and other Trump properties.”
Special Counsel Robert Mueller, who is investigating Trump’s ties to Russia, recruited a top DOJ money laundering expert, Kyle Freeny, to assist his probe.
And when it comes to laundering money out of Russia, Deutsche has a dubious track record.
In January 2017, Deutsche was fined $630 million by regulators in New York and London for allowing clients of its Moscow office to launder $10 billion out of Russia through questionable stock trades. New York officials blasted the bank’s executives for laxity about compliance rules at the time.
“The bank conducted its banking business in an unsafe and unsound manner, failing to maintain an effective and compliant anti-money laundering program,” New York State’s Department of Financial Services said in a statement.
Deutsche has also been linked to an entirely separate money laundering scandal of historic proportions centered on Danish lender Danske Bank, which is being probed over almost a quarter-trillion dollars’ worth of suspicious payments that flowed through its branch in the former Soviet republic of Estonia.
In early 2017, Waters sent a letter to former Deutsche CEO John Cryan. Her committee wanted to know “whether loans Deutsche Bank made to President Trump were guaranteed by the Russian Government, or were in any way connected to Russia.”
Investigators in New York and Congress may now finally have the opportunity to find out.
Cover: President Donald Trump smiles as he walks on the South Lawn after stepping off Marine One at the White House, Sunday, March 10, 2019, in Washington. Trump is returning from a trip to Mar-a-Lago, in Palm Beach, Fla. (AP Photo/Alex Brandon)