Eric Trump, son of “genius”, doesn’t know much, but he knows it’s “complete nonsense” for Bloomberg to suggest that Deutsche Bank once thought about restructuring some $340 million in loans to the Trump Organization.
Earlier this month, The New York Times reported that Deutsche turned Trump down for a loan in 2016 out of concern for the bank’s “reputation”. Apparently, then-candidate Trump’s bombastic rhetoric and the prospect that he just might win the presidency unnerved senior management, who ultimately decided against allowing Trump to effectively up existing leverage on his Miami property in order to “refurbish” Trump Turnberry.
“Senior officials at the bank believed that Trump’s divisive candidacy made such a loan too risky”, The Times reported, adding that “among [the bank’s] concerns was that if 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.”
As we noted at the time, 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.
Well, according to Bloomberg’s Gavin Finch, Steven Arons, and Shahien Nasiripour, Deutsche was so concerned about the prospect of Trump defaulting once he became President that the bank considered extending the repayment dates on at least three loans until after his theoretical second term would end. Those include a $125 million loan for Doral which matures in 2023, $170 million for Trump International Hotel in Washington and a third loan against a tower in Chicago. The latter two are due in 2024 while the debt on Trump’s Miami resort matures in 2023.
“Members of the bank’s management board, including then CEO John Cryan, were leery of the public relations disaster they would face if they went after the assets of a sitting president”, Bloomberg writes, citing “people with knowledge of the discussions”.
Christian Sewing was head of the retail bank at the time and as Bloomberg reminds you, that division’s wealth management unit was still doing business with Trump despite the German lender’s investment bank having cut him off after he defaulted and sued them. At least one of Bloomberg’s sources says Sewing’s gut reaction was to approve the Turnberry loan request but after consulting with the bank’s “reputational risk committee” he eventually supported a decision to turn Trump down.
The article goes on to document Trump’s financing activities in the four years prior to the election, a time period that saw him borrow in excess of $600 million from Deutsche and Ladder Capital, with the latter deals being facilitated by the son of longtime Trump Organization moneyman Allen Weisselberg, who last year found himself wrapped up in investigations into Trump’s sprawling business dealings.
This story will doubtlessly serve as (more) fodder for House Intelligence Chairman Adam Schiff and Financial Services Chairwoman Maxine Waters, who are all set to put Trump’s relationship with Deutsche under a microscope.
“We know that Deutsche Bank is one of the biggest money laundering banks in the country, or in the world perhaps”, Waters told CNBC earlier this month. “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.”
As noted here at the outset, Eric Trump called Bloomberg’s story “complete nonsense.” “We are one of the most under-leveraged real estate companies in the country”, he added, in an email.
Meanwhile, Eric and Don Jr. have called off plans to pursue two new lines of Trump hotels, “Scion” and “American Idea”.
“We live in a climate where everything will be used against us, whether by the fake news or by Democrats who are only interested in presidential harassment and wasting everyone’s time, barraging us with nonsense letters,” Eric told the New York Times in a statement last week.
As Corey Lewandowski would say: “Womp, womp.”