Deutsche Bank

Deutsche Bank Headquarters, Frankfurt
Deutsche Bank Headquarters, Frankfurt

A series of bankruptcies of his casinos and hotels in the 1990s left Donald Trump with a poor reputation. While most banks were unwilling to do business with him at the time, in 1998, Deutsche Bank nevertheless began a series of large loans to the Trump Organization. Source

In early 2005, Deutsche Bank loaned Donald Trump $640 million to finance a hotel and building tower in Chicago. In late 2008, Deutsche sued Trump for failing to pay the debt. Trump claimed that he was not liable under the loan’s force majeure clause, due to the 2008 financial crash. Further, Trump countersued for $3 billion, alleging damages because Deutsche was in part responsible for the financial crash. In a motion for summary judgment, Deutsche quoted from a 2007 book naming Trump as the author, where Trump mocked banks that had lost money by lending to him. “I figured it was the bank’s problem, not mine. What the hell did I care? I actually told one bank, ‘I told you you shouldn’t have loaned me that money. I told you the goddamn deal was no good.'” The parties settled the lawsuit in 2010, restructuring the debt. Nevertheless, Deutsche bank oddly continued to lend Trump more money for future endeavors. Source1 Source2

In October 2016, Deutsche Bank loaned Jared Kushner $370 million to refinance his company’s commercial property in Manhattan. Kushner and his brother Joshua both agreed to personally guarantee the debt. Kushner did not disclose the loan or his personal guarantee in his financial disclosure form filed with the Office of Government Ethics (although it’s unclear if disclosure would have been required). Source1 Source2

On January 31, 2017, Deutsche Bank paid $630 million to settle claims against the bank for “mirror trades” used to launder $10 billion out of Russia in a scheme operating from 2011–2015. In the mirror trading scheme, Russian clients would buy securities in rubles through Deutsche’s Moscow office, and then (through a shell company) sell identical securities through Deutsche’s London office for foreign currency (including US dollars). Source1 Source2

In February 2017, news reported that after the US election, Deutsche Bank, to whom Donald Trump owed about $300 million, had secretly reviewed multiple loans it had made to Trump and his family members to look for connections to Russia or if they were backed by guarantees from Moscow, because the loans were allegedly made in “highly unusual circumstances.” Deutsche refused to comment on its investigation, but anonymous sources said the bank discovered no evidence of a Moscow link. US Congress has made unsuccessful attempts to obtain materials from this review. Source

In March 2017, Journalists published information about another Deutsche Bank–Russian money laundering scheme. The “Russian Laundromat,” “Global Laundromat,” or “Modovan Scheme” ran from about 2010–2015, where wealthy Russians laundered between $20–80 billion of criminal origin out of Russia, using fake debt agreements in Moldova and shell companies around the world. Deutsche Bank officials involved in this scheme had also been involved in the Mirror Trading scheme. Source

Discussion

Trump had been blacklisted by most other banks for poor business practices and serial bankruptcies before he received this loan from Deutsche. Trump decided not to pay his debt, and filed a blatantly frivolous countersuit against his lender. Without some undisclosed, salient relationship between Trump and Deutsche Bank (e.g., relating to laundering Russian money), it is virtually inconceivable that Deutsche would continue to lend Trump money.

 Furthermore, Trump currently owes hundreds of millions to Deutsche. If a sitting president defaults (which based on past behavior seems likely), would the lender be willing to sue? Would Trump retaliate?

 

Deutsche Bank, essentially the only non-Russian bank that will lend Trump money anymore, participated in the “mirror trading” scheme and the “Global Laundromat” scheme, both of which enabled tens of billions of dollars of money with criminal origins to be laundered out of Russia.

 These are only some of the schemes Deutsche Bank has been discovered to have undertaken, for which they have paid billions in settlements and fines – e.g., LIBOR rate rigging, and illegal dealings with toxic mortgage-backed securities.