If anyone was going to be the Forrest Gump of the Russia investigation, we’re lucky it was Guardian reporter Luke Harding. Harding has spent years reporting on Russia, a career that’s meant he’s happened to be in certain important places at certain critical times, during which he’s happened to interview central figures in the still-unfolding political drama gripping the United States.
For instance, weeks before news broke of a salacious dossier detailing alleged leverage Russia may hold over then President-elect Donald Trump, Harding and a colleague were in a London pub meeting with an ex-British intelligence officer named Christopher Steele about a story they were working on. And a few years earlier, Harding happened to be on assignment in Ukraine, where he happened to interview an American political consultant named Paul Manafort about the work he was doing for Russia’s preferred presidential candidate. Then there was the day he spent driving around with Aras Agalarov – the Russian oligarch who connected Donald Trump Jr. with a Russian lawyer promising dirt on Hillary Clinton.
Now Harding has incorporated those stories, along with other relevant experiences – such as the time the FSB broke into his home in Moscow, presumably to bug it, and left a book on sex and relationships on his bedside table – into a book, Collusion: Secret Meetings, Dirty Money and How Russian Helped Donald Trump Win. Among its most interesting chapters is one relating to Tuesday’s news that Special Counsel Robert Mueller has subpoenaed Trump’s records with Deutsche Bank.
In Collusion, Harding details Trump’s attempts in 2008 to default on some $330 million he owed Deutsche Bank for its help financing the construction of the Trump International Hotel and Tower in Chicago. The bank sued to force Trump to pay a portion of the debt: $40 million plus legal fees and interest. This was the middle of the financial crisis, a fact Trump tried to leverage in court, arguing he should not have to repay money he owed Deutsche Bank because it was “one of the banks primarily responsible for the economic dysfunction we are currently facing.” In fact, Trump went on, because of the bank’s role in creating this “once-in-a-century credit tsunami,” Deutsche Bank owed him money, to the tune of $3 billion in damages.
Trump’s case, of course, was thrown out. But that’s where this story gets interesting: After a judge ordered Trump to repay the money he owed Deutsche Bank, Trump did it using money he borrowed from… Deutsche Bank. He paid the bank’s real estate division back with money borrowed from its personal wealth division.
“The decision to keep lending to Trump was unusual, bizarre even. Deutsche Bank employees in New York were surprised. Asked whether it was normal to give money to a customer who was a bad credit risk and a litigant, one former senior Deutsche Bank staff member said: ‘Are you fucking kidding me?'”
After the original loan, the same division of the bank continued to lend to Trump: “He took out two mortgages against Trump National Doral resort in Miami. And a $170 million loan to finish his hotel in Washington in the old post office tower.” Bloomberg estimates that upon his inauguration, Trump owed Deutsche Bank $300 million, loans that were due in 2023 and 2024, respectively.
Most interesting of all, though, is what Harding goes on to detail: Around the same time Deutsche Bank’s private wealth division was granting these extraordinary loans to Trump, business in the bank’s new Moscow branch was booming, thanks to the fact that it owned basically all of the business of Vneshtorgbank, or VTB – the Kremlin bank. (The then CEO of Goldman Sachs Moscow told Harding, “the nature and concentration of their business with VTB [was] quite galling. Nobody else could touch VTB.”) It would later emerge that during this time, Deutsche Bank Moscow was laundering billions of dollars for friends of the Kremlin, money that ultimately flowed through the bank’s New York and London branches.
It’s clear, Harding tells Rolling Stone, that Deutsche Bank Moscow “was compromised” and did this “unseemly, Faust-like deal with VTB to make very big profits, very quickly and to stun its rivals in Moscow, other investment banks, just by having the right people with the right FSB connections.”
Deutsche Bank would ultimately be fined $475 million by the New York State Department of Financial Services, and an additional £163 million by London’s Financial Conduct Authority, over the money-laundering scheme.
“There are these two parallel lines,” Harding says. “One is the capture of Deutsche Bank Moscow by VTB – which is basically the FSB, the Russian spy agency. [VTB] practically took over Deutsche Bank Moscow. And the other line is Deutsche New York’s extraordinary lending to Trump.
“Deutsche Bank New York, even though he sued them, even though he wrote them one of the most ridiculous writs in legal history, continued to lend very large sums to Trump, while simultaneously its Moscow division was running a – I was going to say elaborate, but in fact it was actually quite crude – large-scale money laundering scheme for Kremlin VIPs, who are still anonymous, from which Deutsche Bank London and Deutsche Bank New York made big profits,” he says.
The lines, Harding says, don’t converge – at least not yet. But that point of convergence is no doubt what Robert Mueller is after with his Tuesday subpoena request.