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Trump’s Deutsche Bank Problems Are Not Going Away

From conflicts of interest to money-laundering investigations, it’s only getting worse

Senior Advisor to US President Donald J. Trump Jared Kushner waits for President Trump (unseen) to deliver remarks in the Rose Garden of the White House in Washington, DC, USA, 25 January 2019. Trump announced a deal had been reached to end the ongoing partial shutdown of the federal government. The shutdown began when Congress and Trump failed to strike a deal on border security before a 22 December 2018 funding deadine.US President Donald J. Trump in the Rose Garden of the White House, Washington, USA - 25 Jan 2019

Trump senior adviser and son-in-law Jared Kushner. Deutsche Bank is under investigation for the way it handled transactions involving the Kushner family's real-estate company. They were flagged for suspicious transactions, but the bank failed to report it to authorities.

MICHAEL REYNOLDS/EPA-EFE/Shutter

WASHINGTON — Here’s a useful motto to bear in mind any time you read about President Trump’s personal finances: It’s not what he owns — it’s what he owes.

Trump took office in 2017 as the most indebted president in the history of America. Of his many debts, he owed the most, more than $350 million, to Deutsche Bank. And while Robert Mueller’s investigation, the crisis at the border, and the prospect of impeachment have dominated the headlines lately, there’s an equally important and potentially explosive story brewing that involves Trump, his son-in-law, Jared Kushner, and Deutsche Bank.

The New York Times — which has consistently broken major stories about Deutsche — dropped a bombshell Wednesday, reporting that the FBI was investigating the bank’s “handling of so-called suspicious activity reports that its employees prepared about possibly problematic transactions, including some linked to President Trump’s son-in-law and senior adviser, Jared Kushner, according to people close to the bank and others familiar with the matter.” (Kushner Companies, the family real-estate empire that Jared stepped down from in 2017 to serve as Trump’s senior adviser in the White House, has denied any allegations involving Deutsche Bank and money laundering. Deutsche says it’s cooperating with federal law enforcement officials.)

The Times’ latest scoop builds on a previous story that said anti-money-laundering experts inside Deutsche Bank in 2016 and 2017 flagged suspicious money flows involving entities “controlled by” Trump and Kushner. According to the Times, Deutsche employees raised questions about “transactions by the Kushner Companies involving money being sent to Russian individuals” as well as transactions involving “legal entities associated with Mr. Trump, including his now-defunct charitable foundation.” But when those experts urged the higher-ups at Deutsche to alert the Treasury Department’s financial crimes unit about the suspicious transactions, the bank’s executives allegedly overruled them.

“You present them with everything, and you give them a recommendation, and nothing happens,” a former anti-money laundering specialist at Deutsche Bank turned whistleblower named Tammy McFadden told the Times. “It’s the D.B. way. They are prone to discounting everything.”

In response to news of the FBI investigation, the watchdog group Citizens for Responsibility and Ethics in Washington asked that the Federal Reserve Board open an investigation into whether Deutsche was complying with anti-money-laundering laws and make the results of the probe public. The New York Attorney General’s office is also scrutinizing Trump’s ties to Deutsche Bank. Earlier this year, AG Letitia James sent subpoenas to Deutsche related to three large loans the bank had given to Trump’s company.

On the day he took office, Trump’s up to $364 million in active loans with Deutsche was the largest debt listed in the new president’s financial disclosure forms. Deutsche provided Trump with millions in loans to build the crown jewel of his hotel chain, the Trump International Hotel in Washington, located a few blocks from the White House, but now, as president, his massive debt to Deutsche created an equally massive conflict of interest. The bank was already under investigation by the Justice Department for an alleged $10-billion scheme to launder money out of Russia. What would happen if Deutsche wanted to renegotiate one of its loans with Trump? What would Trump do if a decision involving Deutsche landed on his desk?

“Even if there was no potential of financial scandal in all of this, it would be a problem that Trump is regulating a bank that he does business with,” says Tim O’Brien, executive editor of Bloomberg Opinion, author of TrumpNation, and an expert on Trump’s business career. “That in and of itself is a pure financial conflict of interest.”

As president, nothing seems to get under Trump’s skin quite like bad news that involves his bank of choice. Trump told The New York Times in the summer of 2017 that then-Special Counsel Robert Mueller would be crossing a red line if his investigation looked into Trump’s and his family’s personal finances. A few months later, in response to news reports (later shown to be false) that said Mueller had sent subpoenas to Deutsche Bank, Trump told advisers that the Mueller investigation should be shut down.

After the Times wrote a story about how Deutsche had become Trump’s lender of last resort during one of the lowest points in his business career, a time when no other banks would touch him, Trump responded with a furious, five-tweet response that praised Deutsche and predicted the demise of the Times after he left office:

When Democrats regained the majority in the House of Representatives, they vowed to investigate Trump’s ties to Deutsche Bank and any potential money laundering. Rep. Adam Schiff (D-CA), the new chair of the Intelligence committee, and Rep. Maxine Waters (D-CA), the new chair of the Financial Services committee, said they planned to jointly investigate Deutsche Bank. “The concern about Deutsche Bank is that they have a history of laundering Russian money,” Schiff said last December. “And this, apparently, was the one bank that was willing to do business with the Trump Organization.”

Since then, Trump has vehemently fought to block Deutsche Bank and other banks connected to him or his family from handing over documents to Congress, suing Deutsche to prevent it from cooperating with the intelligence and financial service committees’ investigations. In late May, a federal judge ruled that Deutsche and Capital One, another Trump lender, could provide the subpoenaed documents to Congress. Trump’s lawyers have said they will take their case all the way to the Supreme Court if necessary.

Bloomberg’s O’Brien is one of the few journalists to get a peek at Trump’s tax returns and knows Trump’s financial dealings as well as just about anyone. (He and his lawyers defeated a defamation lawsuit filed by Trump in the 2000s after O’Brien estimated the mogul’s wealth at $150 million to $250 million, far less than the many billions Trump claimed.) O’Brien says he believes the president’s opposition to the Mueller investigation — and now House Democrats’ various probes — is animated more by the prospect of investigators digging into his financial dealings than by any relationship he might have had with Russian officials, including President Vladimir Putin.

But O’Brien says he believes that a full investigation into Trump’s decades-long relationship with Deutsche could reveal a trove of valuable details about Trump’s business partners and his biggest deals, information the president would clearly prefer to keep out of the public eye.

“Whether it’s Michael Cohen, [longtime Trump Organization CFO] Allen Weisselberg, Trump’s taxes, or Deutsche Bank, the thread connecting all of those,” O’Brien says, “is that this is a man who has something to hide and he’s not making any bones about it.”

 

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