Trump And Deutsche Bank, A Long Affair : Planet Money After Donald Trump's companies declared four bankruptcies, several major banks stopped loaning him money. But Deutsche Bank didn't.

Trump And Deutsche Bank, A Long Affair

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Hello, and welcome to PLANET MONEY. I'm Ailsa Chang. When Donald Trump was a businessman, he borrowed a lot of money quite often. And that's not uncommon. But after his businesses defaulted on a bunch of those debts, it became harder and harder for him to borrow from a lot of banks. But there was one bank that did not run away. It leaned in. That bank is Deutsche Bank.

Right now, House Democrats are trying to get a bunch of records from Deutsche that are connected to Trump. It's a conflict that's been playing out in the news. And I've been really confused about all the details, which is why I was glad our friends at the podcast Trump, Inc., from WNYC and ProPublica, had put together an excellent episode about the long relationship between the Trump family and Deutsche Bank. So we decided to run an edited version of their podcast right here. It starts with Trump, Inc.'s Andrea Bernstein's talking about some of Deutsche Bank's troubles.


RAINER ESSER: Ladies and gentlemen - very welcome.

ANDREA BERNSTEIN: In January, the head of Deutsche Bank, Christian Sewing, did an interview with Uwe Heuser, the business editor at the German newspaper DIE ZEIT. The two were speaking at a reception at the World Economic Forum in Davos, Switzerland.


UWE HEUSER: You wanted to become a journalist of all professions...

BERNSTEIN: Here's Heuser, the newspaper man, asking the banker, if you were a journalist, how would you report on Deutsche Bank today?


HEUSER: So, in a nutshell, what would you write?


BERNSTEIN: The Deutsche CEO was taken aback. He fumbles for a moment.


CHRISTIAN SEWING: I would say Deutsche Bank is the most significant self-help story in the financial industry. That's how...

BERNSTEIN: A few months earlier, the German police had raided the bank's Frankfurt headquarters.


SEWING: Of course, at that point in time, it's disappointing - not disappointing, you know, personally for me. But you have...


BERNSTEIN: Being subject to investigations and regulatory actions has become the new normal for Deutsche Bank. In recent years, the bank has been fined billions of dollars for lax controls on everything from laundering Russian money to violating sanctions against Iran, Libya and Sudan.


HEUSER: Somehow, your life is tainted by Deutsche Bank's past. How do you live with the constant uncertainty that something else might pop up?


SEWING: You know, I think that makes life really interesting, right? I mean, I...


BERNSTEIN: By that standard, life has become very interesting for Deutsche Bank. In a recent court filing, Congress revealed it has been asking for detailed records of Trump family business interactions with Deutsche Bank. In the filing, Congress said, straight out, it's investigating the relationship for possible money laundering, illicit financial deals, fraud and foreign influence in the 2016 elections. By its own admission, Deutsche Bank has a history of serious compliance deficiencies when it comes to global money laundering in the very recent past.

Now comes a new revelation from The New York Times. Deutsche Bank's own anti-money-laundering experts flagged multiple suspicious transactions. They were as recent as 2016 and 2017 and involved Trump's business and the one formerly run by his son-in-law, Jared Kushner. Among the transactions - one where money had moved from Kushner companies to Russian individuals. The Times wrote that Deutsche Bank's money laundering experts were so concerned they wanted to report these transactions to the U.S. Treasury, but supervisors refused to do so.

Kerrie McHugh, a Deutsche Bank spokeswoman, said in a statement; alert dispositions by investigators undergo a higher level review by qualified staff. Transaction monitoring casts a wide net, and not all alerts will result in escalation. She added, we take our responsibility for compliance very seriously and that the bank has increased our anti-financial-crime staff and enhanced its controls in recent years. A spokesperson for the Trump Organization emailed a statement. This story is absolute nonsense. We have no knowledge of any flagged transactions with Deutsche Bank. In fact, we have no operating accounts with Deutsche Bank.


BERNSTEIN: We sent questions to the Kushner companies, the White House, Trump's private banker and lawyers for the Trumps and Jared Kushner. The White House did not have comment. The others didn't respond. Meanwhile, the investigations pile up.


SERENA MARSHALL: Those subpoenas were sent to multiple financial institutions, including Deutsche Bank. The House Intelligence and Financial Services committees are hoping to get information on loans the German bank gave to the Trump and Trump Organization....

ERIC TRUMP: This is presidential harassment. This is all these people do.

UNIDENTIFIED REPORTER: Eric Trump earlier today on "Fox & Friends," calling it harassment as the Trump family and their organization sue Deutsche Bank and Capital One to block subpoenas....

UNIDENTIFIED PERSON: So we've issued subpoenas into Deutsche Bank. And we are collecting a lot of the documents that we had requested, and we are reviewing them. I can only tell you that the investigation came about as a result of the testimony of Michael Cohen.

BERNSTEIN: Hello, and welcome to Trump, Inc., a podcast from WNYC and ProPublica that digs deep into the secrets of the Trump family business. I'm Andrea Bernstein. Today on the show, Trump and his family's relationship with Deutsche Bank; a bank with a history of problems.

DAVID ENRICH: They were laundering money for wealthy Russians and people connected to Putin and the Kremlin, in a variety of ways, for almost the exact time period that they were doing business with Donald Trump.

BERNSTEIN: This is David Enrich, the finance editor of The New York Times.

ENRICH: And all of that money through Deutsche Bank was being channeled through the same exact legal entity in the U.S. that was handling the Donald Trump relationship in the U.S., and so there are a lot of coincidences here. There's a lot of smoke. I have not found any fire. But unfortunately, I do not possess subpoena power.

BERNSTEIN: We're going to walk you through all that smoke. Trump, Inc. is an open investigation. So we're just going to say right now, we're still not sure what this all adds up to. What we do know - Trump, right now, owes about $350 million to Deutsche Bank, more than he owes to any other financial institution. And so much is happening regarding the bank so fast that we decided to lay out what we have learned by digging into Trump's financial deals with the bank and why his recent loans raise so many questions - questions raised by Congress, the New York attorney general and the bank's own employees.


BERNSTEIN: So let's go back to the beginning of Trump's relationship with Deutsche Bank. It's 1998. His life is like the Destiny's Child song.


DESTINY'S CHILD: (Singing) You'll be saying no, no, no, no, no.

BERNSTEIN: Trump's companies have declared four bankruptcies. And he's stiffed so many lenders that the big banks, like Chase and Citibank, won't go near him.

ENRICH: Well, Trump was looking for a bank. Any bank would do.

BERNSTEIN: David Enrich of the Times has an upcoming book about Deutsche, "Dark Towers: The Inside Story Of The World's Most Destructive Bank." He says when Deutsche Bank first approached Trump in 1998, both Trump and the bank needed each other.

ENRICH: He was completely frozen out of the financial system because he kept defaulting on loans. And Deutsche Bank, in the late 1990s, was very eager to make a name for itself in the United States. So they really needed to go searching on the fringes to find clients that were - that had a bunch of money but that their reputations were sufficiently scuffed up that they were not suitable clients for the big, elite Wall Street investment banks. And Donald Trump fit that bill perfectly.

BERNSTEIN: So the bank lent him money for a downtown Manhattan skyscraper and a building across from the U.N. And Trump's business came with perks. He would fly bankers to Atlantic City for boxing matches, take them to the U.S. Open tennis tournament in Queens. Then he asked the bank to sell high-risk bonds - junk bonds - to keep his casinos going. Enrich's reporting found Deutsche bankers initially didn't want to. But when Trump dangled a weekend at Mar-A-Lago, they sold $480 million in bonds.

ENRICH: Everyone is really pleased with the outcome until a few months later. Donald Trump defaults on those junk bonds, which is just what everyone had feared would happen in the first place.

BERNSTEIN: So their sort of long-term reputational risk of selling junk bonds that are going to default...

ENRICH: Irrelevant.


PRESIDENT DONALD TRUMP: Well, thank you everybody. This is quite a crowd, and...

BERNSTEIN: Not too long after, Trump was once again bound up with Deutsche Bank. They lent $640 million for a Trump Tower Chicago. To help get the loan, he assured bankers that his daughter, Ivanka, then a recent college grad, would be in charge of the development. The family was in it for the long haul.


D TRUMP: We're very, very happy with what's happened with respect to this building and how fast...

BERNSTEIN: It's now September, 2008.


D TRUMP: It's virtually impossible. The banks are shut down. But we got this one built, and we're really...

BERNSTEIN: Two months later, Trump defaulted.


BERNSTEIN: Then he did something unusual and audacious. After defaulting on the loan, Trump sued his lender, Deutsche Bank. The lawsuit began like this. This action arises out of defendant Deutsche Bank's attempt to derail the successful completion of one of the most acclaimed construction projects to be built in the United States in recent times. It went downhill from there. Trump claimed he couldn't pay back the loan because the financial crisis was a force majeure, an act of God, and that Deutsche Bank was responsible for the crisis anyway. He asked for billions of dollars in damages. Deutsche Bank sued him back. The Trumps kept selling units in Chicago.


IVANKA TRUMP: Hi. I'm Ivanka Trump. In the real estate business, the word luxury is terribly overused. And like the word beauty, it's lost much of the impact that it once had. But I'm going to risk...

BERNSTEIN: Ivanka Trump has, by now, become a key marketer for Trump properties.


I TRUMP: ...Fabulously luxurious, 92-story Trump International Hotel and Tower. It's already taking its place as one of the icons on Chicago's famous skyline.

BERNSTEIN: Finally, after a few years, the two sides settle. Trump is on the hook for $40 million, which he personally guaranteed. He needs to pay that back to Deutsche Bank. Where does he get the money? This is where their already-strange relationship gets way stranger.

ENRICH: Out of the blue, the person who comes to his rescue is his new son-in-law, Jared Kushner.

BERNSTEIN: David Enrich of The New York Times.

ENRICH: And he had - Jared Kushner had struck up a relationship with a private banker at Deutsche Bank named Rosemary Vrablic.

BERNSTEIN: Do we know how? Do we know how they met?

ENRICH: We don't. That is one of the world's greatest mysteries if you occupy my brain. I've...

BERNSTEIN: (Laughter).

ENRICH: What I know is that in - probably around the summer of 2011, Jared arranged a meeting for his father-in-law to go in to Deutsche Bank and meet with Rosemary Vrablic, who, at the time, was one of the real shining stars in Deutsche Bank's private banking business. And private banking is kind of a weird business that most people who do not obsess over this stuff have probably never heard of. And it's part of the bank that caters to the world's richest people.

BERNSTEIN: The job of a private banker is usually to help rich people protect their wealth and grow it even more, to keep tax authorities away from their investments and companies. Private bankers do not usually loan money for large, commercial real estate developments.


BERNSTEIN: Vrablic did not respond to our questions for this story. As before, Trump showers attention on all the right people. Vrablic comes to Trump Tower, gets treated like a friend. There's a favorable profile of her in one of Jared Kushner's newspapers.

ENRICH: So there's, fairly quickly, a meeting of the minds between Rosemary Vrablic and Donald Trump that maybe this arm of Deutsche Bank, the private bank, can strike up a fresh relationship with Donald Trump and do what no other bank on Wall Street, at this point, is willing to do.

BERNSTEIN: What no other bank is willing to do is loan Trump $48 million to pay off the Deutsche Bank Chicago loan because Trump has defaulted on his loan and sued the bank for billions of dollars. But with the help of Rosemary Vrablic, he's getting money from Deutsche Bank to pay off Deutsche Bank.

ENRICH: No one has ever seen anything like this. In fact, a lot of the people I've talked to at the bank and previously at the bank, had initially insisted this just hadn't even happened. This is not the way it worked at all. And it is the way it worked, and it is just so extraordinary and unusual that no one believed it to be possible.

BERNSTEIN: Deutsche bankers have told Enrich their private wealth unit made money from Trump because he opened personal accounts there, brought them business. And yet...

ENRICH: This is one of the clearest examples I've ever seen of a bank that is so dysfunctional and so careless about its risk management and so careless about the reputations of its clients and so loose with the protection of its own reputation, that it would allow a guy who has repeatedly defaulted and burned the bank and caused it huge public embarrassment to borrow tens of millions of dollars from another arm of the bank to repay the part of the bank that he is engaged in litigation with. It just - it's really mind-blowing.


BERNSTEIN: It's not just Chicago. Around the time when Deutsche Bank is getting ready to pay off Deutsche Bank in 2011, 2012, Trump starts coveting a bankrupt golf course near Miami - Doral. It has a history of hosting major tournaments. But post-financial crisis, it's not in great shape, and it's in the flight path of the Miami airport.


HEATHER VOGELL: The property itself, I was told by people involved in the bankruptcy, was kind of a dog.

BERNSTEIN: This is Heather Vogell from ProPublica. She dug into the bankruptcy records and land deeds for Doral.

VOGELL: The sellers were going to go with Trump because he was willing to close quickly with no financing - to pay cash, essentially.

BERNSTEIN: The bankruptcy filing showed that Trump agrees to pay $150 million for the whole business. Of that, 105 million is for the property and the buildings, the land records show.

VOGELL: And that's where it gets kind of interesting, I think, because he does not buy the property for all cash. He does need financing. And from what we can tell, he needs a lot of financing.

BERNSTEIN: And for that money, he again turns to Deutsche Bank. Trump flies Rosemary Vrablic, the private banker, down to Florida. And she helps him again. Deutsche Bank loans him $106 million.

VOGELL: Remember. The county records show that Trump paid 105 million for the land and buildings portion of the sale, and the sale and the loan are recorded the same week.

BERNSTEIN: So the loan he gets is for more money than he pays for the property.

VOGELL: And we also, after digging around, found out it wasn't actually the only loan that they gave on this property.

BERNSTEIN: There's another Deutsche loan also arranged by Rosemary Vrablic. This one for $19 million is also backed, at least in part, by the Doral golf course.

VOGELL: So that means he's got $125 million in loans on a property that was sold for 105 million, which is certainly not the kind of thing that anybody who's bought a home would find believable. You can't just get a bank to give you all of the money for your house.

BERNSTEIN: There could be an explanation for this - an appraisal showing Doral was worth more, or additional collateral. What we do know, what's in the public records, raises the question of whether the loan was unusually high for the property.

VOGELL: I think that there's a larger context here that's interesting because of Deutsche Bank's involvement, which has been accused of not doing enough due diligence in order to spot money laundering and to stop it. You have Trump, who has also been repeatedly accused of not doing due diligence with his partners, has been involved with people who have criminal connections for years, people with connections to Russia and people with connection to illicit activity in Russia. You've sort of had this nexus of all these different actors who have had problems in the past. And you've got, at the core, what appears to be a business decision that doesn't make sense. Why would Deutsche Bank lend this much money for this property at this point?

BERNSTEIN: The Trumps themselves spun out yet another story. Forbes wrote about it. How Ivanka Trump got the Doral resort and the Blue Monster for a bargain basement price and had a baby at the same time.


I TRUMP: We got Doral, which is a great deal. And we're so excited about...

BERNSTEIN: In 2012, Ivanka Trump released a video touting some recent accomplishments.


I TRUMP: Not only is it the third episode of "Celebrity Apprentice" - and this season has been amazing...

BERNSTEIN: The Trump Organization was also tapped for another important deal for the family. At a time when the Trumps were buying golf courses and inking foreign licensing deals, there was a development project they really wanted.


I TRUMP: ...Miami. Additionally, we were selected by the GSA - effectively the government - as the preferred developers for the old post office building in Washington, D.C. - incredibly excited. It's such...

BERNSTEIN: To widespread criticism and alarm, Donald Trump's family business gets a 60-year lease to run what is now the Trump International Hotel in Washington. Another bidder files a protest, claiming there's no way Trump can live up to his financial promises, that his history of defaults and company bankruptcies should disqualify him. Ivanka does the negotiating. And the Trumps lineup an equity partner, Colony Capital. If that name sounds familiar, it's the firm founded by Trump's friend, Tom Barrack. We recently did an episode on Barrack. He was Trump's inaugural planner.


TOM BARRACK: And what we're doing is trying to orient it towards the greatest tribute to America.

BERNSTEIN: Barrack lends Colony's name to Trump's bid for the old post office. But then Colony drops out, and Trump needs a new financial partner. He gets another generous loan - this one for $175 million - also through Rosemary Vrablic from Deutsche Bank. Ivanka Trump says the family is in it for the long haul. She wants her daughter Arabella to oversee the hotel someday. Trump now owes Deutsche Bank nearly $350 million for the Chicago debt, two loans for Doral and one for the old post office. He even tried to get another one to buy the Buffalo Bills, but the deal never went through. The New York attorney general is looking at that one. Oh, there was one more loan.

CHANG: Coming up after the break, Deutsche Bank says no to the Trumps.


CHANG: All right. We're going to pick up now with Andrea Bernstein of the podcast Trump, Inc.

BERNSTEIN: In May of 2015, Ivanka Trump's husband Jared Kushner's company buys the retail floors of the former New York Times building for just under $300 million. Then 16 months later, the Kushners go to Deutsche Bank. They get an appraisal that says the property is worth $200 million more than they paid. The Kushner companies have said the increased value was because they were going to get more lucrative tenants. But anyway, they get a big loan from Deutsche Bank. It's for more than what they first paid for the building. They walk away with $74 million in cash. In 2016, someone at Deutsche Bank finally decides to say no. Trump's running for president. He asked for money for renovations at yet another golf course. This one's in Turnberry in Scotland.

ENRICH: And this was the moment inside the bank where one senior executive after another realized just how deep and longstanding the Donald Trump relationship was. And people were stunned, and they put a stop to it.

BERNSTEIN: David Enrich.

ENRICH: The loan was initially rejected by a committee in the U.S. that's supposed to vet transactions with an eye toward protecting the bank's reputation. And then Rosemary Vrablic's team appealed that decision, which is quite unusual. And this went up to London and then Frankfurt, where there's a big fight at the top of the bank about whether or not to do this loan. And it was eventually killed by the guy who is now the CEO of the bank, Christian Sewing.

BERNSTEIN: He's the guy we heard being interviewed at the beginning of the story by the German journalist.


HEUSER: Are you sometimes mad at your predecessors?

SEWING: No. No. You know, I think also that - you learn that in sports, you never look back. I mean...

BERNSTEIN: This is setting at Davos again. He's saying the bank is trying to turn a corner, come clean, make things right.


SEWING: You know what? You just want to make this bank now again a bank which lives up to the standards and which has the reputation which is used to have. And therefore, I'm not looking back. I'm not mad at predecessors. I just want to get my job right. And at the end - you know what? We need to bring pride back to Deutsche Bank.

BERNSTEIN: Today the bank faces an array of potential traps. For instance, if Trump defaults on his loans, they'd have a choice - seize the assets of the president of the United States or let the loans slide and give an unimaginably large gift to a sitting president. Trump's relationship with Rosemary Vrablic continues. She was given VIP seats at the inaugural. And - this has not been previously reported - she was one of a select group of people who got to stay at Trump's hotel in the old post office in Washington during the inaugural, according to a person familiar with the arrangements that weekend. Other guests at the hotel included Jared Kushner's family and key inaugural personnel.


BERNSTEIN: The Doral loans come due in 2023, the old post office and the Chicago loans in 2024; all during a possible Trump second term.


CHANG: So House Democrats have subpoenaed a bunch of records from Deutsche Bank. And President Trump and his children Ivanka, Don Jr. and Eric, have sued to prevent the release of those records. And in their complaint, they allege, quote, "the subpoenas were issued to harass President Donald J. Trump, to rummage through every aspect of his personal finances, his businesses and the private information of the president and his family and to ferret about for any material that might be used to cause some political damage," end quote. Two congressional committees responded. They filed a brief opposing the lawsuit. And in it, they say they have, quote, "serious and urgent questions concerning the safety of banking practices, money laundering in the financial sector, foreign influence in the political process and the threat of foreign financial leverage, including over the president, his family and business," end quote.

Just today at a hearing, a federal judge ruled against the Trumps. Andrea Bernstein was at that hearing. And for more on that part of the story, go listen to their version of this episode on the Trump, Inc. podcast. You can find it at from WNYC and ProPublica.

Go subscribe for more stories just like this. The Trump Inc. team includes Meg Cramer, Katherine Sullivan, Alice Wilder, Bill Moss, Ilya Marritz, Charlie Herman, Eric Umansky, Nick Varchaver and Robin Fields. The original music is by Hannis Brown. This Planet Money version was produced by Darian Woods and Liza Yeager. You know, we always like to hear what you think of the show, so send us an email at We're on Facebook, Twitter and Instagram @planetmoney. I'm Ailsa Chang. Thanks for listening.


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