Well, it turns out Deutsche Bank made at least one good decision over the course of their long, questionable relationship with Donald Trump: they turned him down for a loan in 2016.
Trump’s dealings with the embattled G-SIB have obviously been the subject of intense scrutiny for quite a while. Over nearly two decades, the bank has loaned or participated in deals that have funneled in excess of $2.5 billion to Trump and his various enterprises.
Newly-empowered Democrats, including and especially House Intelligence Chairman Adam Schiff (or “little Adam Schitt“, as the President calls him) and Financial Services Chairwoman Maxine Waters, are all set to put Trump’s relationship with Deutsche under a microscope, presumably in hopes of discovering evidence of money laundering tied to Russia. Here’s a fun excerpt from a Friday interview CNBC’s John Harwood conducted with Waters:
John Harwood: What is your objective in the joint investigation that you plan with Congressman Schiff of Deutsche Bank?
Maxine Waters: We know that Deutsche Bank is one of the biggest money laundering banks in the country, or in the world perhaps. And we know that this is the only bank that will lend money to the president of the United States because of his past practices. He won’t show his tax returns and we have a certain information that leads us to believe that there may have been some money laundering activity that might have been connected with Mr. Manafort, with some people in his family.
“We’re going to work jointly,” Schiff told Politico a week ago, when asked about the investigations. “We think we’ll be more effective doing it that way.”
It goes without saying (or at least it should) that somebody at Deutsche probably knows where some of Trump’s bodies are buried – figuratively speaking, one hopes.
In any event, according to The New York Times, Trump tried to convince the bank to expand loans against his Miami resort so he could renovate in Scotland. As the Times writes, Trump “was lending tens of millions of dollars to his presidential campaign” at the time “and had been spending large sums to expand the Trump Organization’s roster of high-end properties.”
The idea that he was trying to effectively up existing leverage on his Miami property in order to “refurbish” Trump Turnberry is obviously hilarious and somewhat embarrassing, which is presumably why Trump Organization spokeswoman Amanda Miller vigorously denied the report. Here’s what she told the Times:
This story is absolutely false. We bought Trump Turnberry without any financing and put tens of millions of dollars of our own money into the renovation, which began in 2014. At no time was any money needed to finance the purchase or the refurbishment of Trump Turnberry.
“At no time did we try to mortgage Doral to pay for new kilts and bagpipes, ok?!”
But it gets funnier – and immeasurably so.
According to “three people familiar with the request”, Deutsche worried that (another) loan to Trump was “too risky” due to “his divisive candidacy” and also due to the fact that were he to accidentally win the election and end up defaulting, the bank would be faced with the decidedly absurd prospect of having to repo a damn hotel belonging to the President of the United States. Or at least that’s what it sounds like. Here’s the Times again:
Senior officials at the bank believed that Mr. Trump’s divisive candidacy made such a loan too risky, the people said. Among their concerns was that if Mr. Trump won the election and then defaulted, Deutsche Bank would have to choose between not collecting on the debt or seizing the assets of the president of the United States.
Who were those “senior officials”, you ask? Well, as it turns out, one of them was actually Christian Sewing who, at the time, was in charge of Deutsche wealth-management division. It was Sewing, the Times says, who made the final decision to deny Trump the loan.
Deutsche’s private-banking unit argued that because Trump already had “numerous” outstanding loans with the bank, there wasn’t any good reason not to give him another one. He is “the king of debt”, after all. Ultimately, this debate went all the way up the chain of command to Frankfurt.
The article is so chock-full of punchlines that it’s hard to choose a favorite, but the following passage, which sheds more light on how the bank viewed Trump’s campaign rhetoric, is a good candidate (get it? “good candidate”?):
Senior executives in New York balked, arguing that Mr. Trump’s candidacy made such a loan unacceptably risky, the three people said. In part, they feared the bank’s reputation could be harmed if the transaction were to become public because of the polarizing statements Mr. Trump was making on the campaign trail.
It doesn’t say much about you and your brand when Deutsche Bank is worried that its reputation might be harmed by further associating itself with you.
Of course it could well be that Deutsche was getting worried about its ties to Trump by the time he asked for the loan in question. According to the Times’ sources, “that was the first time that some senior officials realized the extent of their bank’s dealings with Trump”.
In any event, you can expect this story to come up when Schiff and Waters start digging into Trump’s relationship with Deutsche. In the meantime, we can all laugh heartily at the thought of Christian Sewing denying Trump a loan for new kilts and bagpipes at Turnberry.