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House Democrats want to see Trump’s balance sheet and now they finally have a crack at it. The House intelligence and finance committees are reportedly gearing up for an investigation into Trump’s dealings with Deutsche Bank. In addition to giving Trump a lifeline after his bankruptcies, the bank has a long history of laundering money for some pretty well-connected Russian clients. So what kinds of skeletons could be lying in the Deutsche Bank’s ledgers?
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Banker of last resort: Deutsche Bank was Trump’s savior in the 1990s when his hotel and casino businesses started going bankrupt. Other financial institutions lost big on those investments, which made Trump persona non grata at a number of major banks’ offices. Faced with a capital crunch, Deutsche Bank stepped in and helped finance Trump properties. It’s unclear how much business the bank currently has with Trump but one estimate puts his outstanding debt to the Frankfurt-based bank at around $300 million.
Money laundering: That kind of debt means Deutsche Bank could, in theory, exercise some leverage over the president, and it’s why House Democrats are particularly nervous about the bank’s other customers. In 2017, Deutsche Bank paid a $630 million fine after investigators in the U.S. and U.K. found that the bank’s Russian subsidiary helped customers there launder at least $10 billion out of Russia and into accounts in Cyprus, Latvia, and Estonia. The laundering employed one tactic known as mirror trading, where two entities representing the same person would buy and sell a security. To the outside, it would look like a normal trade but the transaction had the effect of laundering money from rubles in Russia to dollars offshore.
Reports by British and New York State authorities show that both a lack of resources and possible corruption on the part of Deutsche Bank employees in Russia were to blame. The New York investigation alleges that one supervisor “appears to have been paid a bribe or other undisclosed compensation” and had a “close relative” cash in on the scheme through shell companies. When European regulators inquired about suspicious trades at the bank, an insider at Deutsche Bank appears to have leaked regulators’ concerns to one of the suspicious parties involved in the trade.
Whose money? Bloomberg News followed the trail in Russia and found that one of Deutsche Bank’s mirror trading clients was Promsberbank, a now-defunct Russian bank whose board included none other than Igor Putin, the cousin of Russian president Vladimir Putin. But could Deutsche Bank have been laundering money for the Putin family?
Maybe. The laundering method and destinations for the money in the Deutsche Bank scheme have uncannily similar echoes to a scheme allegedly uncovered by a whistleblower at Denmark’s Danske Bank, which also implicated the Putins. Around the same time as Deutsche Bank was laundering billions for Russian customers to destinations including Estonia, a Danske Bank whistleblower claimed its Estonian chapter was laundering billions for Russian customers through mirror trades. Howard Wilkinson, the whistleblower, wrote in a memo that Dankse was laundering money for a member of the Putin family. One of the entities involved was Latana Trade LLP, a shell company linked to Promsberbank where Putin’s cousin sat on the board. Alexei Kulikov, another Promsberbank board member, also had an account at Danske (he has since been arrested for allegedly embezzling millions from Promsberbank)
Nor is this Deutsche Bank’s only brush with the law. Back in November, German authorities raided the bank’s Frankfurt offices in connection with an investigation spurred on by the Panama Papers, the leak of thousands of documents from an offshore Panamanian law firm. German law enforcement was sparse on details but they’re reportedly looking into whether Deutsche Bank employees helped launder the proceeds from crime through offshore entities.
Nepotism: We also know that Deutsche Bank is cozy with Russian officialdom. The bank launched its own internal probe about whether its hiring practices in Russia crossed an ethical line. A lawsuit suit filed by a former Deutsche Bank executive revealed that the bank launched an internal investigation into the hiring of two Russian deputy finance ministers’ children at Deutsche Bank.
Trump is testy about it: In December 2017, news outlets erroneously reported that Special Counsel Robert Mueller had subpoenaed Trump’s business records from Deutsche Bank. The story turned out to be wrong. The subpoenas came from federal prosecutors in the Eastern District of New York and weren’t targeted at Trump, but his son-in-law, Jared Kushner. The investigation reportedly focused on Kushner companies’ use of a visa program for wealthy investors.
But the initial incorrect stories made Trump flip out. According to The New York Times, the president ordered his aides to shut down the Mueller investigation because he thought, wrongly, that it had expanded into a look at his personal finances. Bob Woodward got a closer look at the incident in his book Fear. “I know what I borrowed, when I borrowed, when I paid it back. I know every goddamn one,” Woodward quoted Trump as telling his lawyer John Dowd in a furious 7 a.m. phone call. “I’m telling you, this is bullshit!”
Deutsche Bank was nervous about it: Shortly after Trump was sworn in, Deutsche Bank conducted its own internal investigation about whether Russian money ever mingled with Trump’s with help from the bank. At least according to Deutsche Bank’s investigation of itself, that answer is no. House Democrats, however, may not want to take that answer at face value and sharp legislators would likely want to subpoena any files related to that investigation.
Pump the brakes: We know that Deutsche Bank laundered money for shady Russians—one of whom may be a relative of Putin himself. We know that Deutsche Bank did significant business with both Trump and his son-in-law. And we know that Trump is particularly sensitive to anyone poking their nose into his financial dealings with the bank.
While none of these factors looks that great for the parties involved, it doesn’t necessarily mean that they’re connected. Was Deutsche Bank a place where Russian money found an outlet in Trump’s businesses? Or is it just that Deutsche Bank hasn’t much cared who they do business with, whether it’s a risky borrower (like Trump) or a potential legal liability (like Russians they laundered money for). We won’t know until the subpoenas start flying.
