The Bizarre Relationship Between Trump and Deutsche Bank

The Bizarre Relationship Between Trump and Deutsche Bank March 19, 2019

The New York Times has a long expose on Donald Trump’s very weird relationship with Deutsche Bank, the only bank in the world who would still loan him money after a string of defaults and lawsuits on his loans and bond offerings. Deutsche Bank consistently found that Trump was wildly overstating the value of his assets — and then loaned him the money anyway on multiple projects.

Over nearly two decades, Deutsche Bank’s leaders repeatedly saw red flags surrounding Mr. Trump. There was a disastrous bond sale, a promised loan that relied on a banker’s forged signature, wild exaggerations of Mr. Trump’s wealth, even a claim of an act of God.

But Deutsche Bank had a ravenous appetite for risk and limited concern about its clients’ reputations. Time after time, with the support of two different chief executives, the bank handed money — a total of well over $2 billion — to a man whom nearly all other banks had deemed untouchable.

This is what they found when vetting a potential loan to Trump to build the Trump Tower hotel in Chicago:

Mr. Trump told Deutsche Bank his net worth was about $3 billion, but when bank employees reviewed his finances, they concluded he was worth about $788 million, according to documents produced during a lawsuit Mr. Trump brought against the former New York Times journalist Timothy O’Brien. And a senior investment-banking executive said in an interview that he and others cautioned that Mr. Trump should be avoided because he had worked with people in the construction industry connected to organized crime.

Nonetheless, Deutsche Bank agreed in 2005 to lend Mr. Trump more than $500 million for the project. He personally guaranteed $40 million of it, meaning the bank could come after his personal assets if he defaulted.

Then get this: Trump then tried to avoid paying the $40 million he had personally guaranteed by suing the bank, claiming that the 2008 recession was the cause of his inability to sell the condos in the building to pay off the loan, and he claimed this was an “act of God” and therefore they could not collect the money. The bank countersued Trump and the case dragged on for years until it was settled. And after all of that, they STILL loaned him money. In fact, one department of the bank then loaned him money to pay back the $40 million. Seriously.

Mr. Trump flew Ms. Vrablic to Miami to show her a property he wanted to buy: the Doral Golf Resort and Spa. He needed more than $100 million for the 72-hole property.

Deutsche Bank dispatched a team to Trump Tower to inspect Mr. Trump’s personal and corporate financial records. The bankers determined he was overvaluing some of his real estate assets by as much as 70 percent, according to two former executives.

By then, though, Mr. Trump had become a reality-TV star, and he was swimming in cash from “The Apprentice.” Deutsche Bank officials also were impressed that Mr. Trump did not have much debt, according to people who reviewed his finances. Aside from his history of defaults, he was an attractive borrower.

Mr. Trump also expressed interest in another loan from the private-banking division: $48 million for the same Chicago property that had provoked the two-year court fight.

Mr. Trump told the bank he would use that loan to repay what he still owed the investment-banking division, the two former executives said. Even by Wall Street standards, borrowing money from one part of a bank to pay off a loan from another was an extraordinary act of financial chutzpah…

“There is no objection from the bank to proceed with this client,” wrote Stuart Clarke, the chief operating officer for the Americas, in a Dec. 5, 2011, email, according to a recipient.

Deutsche Bank wired the money to Mr. Trump.

This is truly bizarre. I mean, it’s the bank’s money and they can loan it to whomever they please, but I can’t imagine this all happened without some serious bribery going on. Hopefully between Mueller, the Southern District of New York and the NY Attorney General investigations, they can uncover the truth about it all. And then some people need to go to jail. Overstating your assets to get loans is bank fraud and it’s now clear that Trump did this routinely, then turned around and undervalued those same assets to keep his taxes lower. That’s tax fraud.

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