Deutsche Bank and Trump's taxes

Natasha Bertrand (a thousand blessings upon her head!) offered this recent tweet concerning the congressional subpoena of Deutsche Bank records:

This was reportedly one of Trump’s red lines for Mueller—Trump was so angry over reports that Mueller had subpoenaed Deutsche Bank for records about their relationship that he sought to fire him in Dec. 2017, per NYT https://www.nytimes.com/2018/04/10/us/politics/trump-sought-to-fire-mueller-in-december.html...

Those bank records have an intimate relationship with Trump's taxes. If Trump's stated income to the IRS does not match his stated income to the bank, he has committed fraud. He lied to either the IRS or the bank -- perhaps to both.

Remember, we are talking about a man whose estimation of his net worth varies according to how he feels on any given day. He admitted as much during testimony.

It might be as well to repeat points made in previous posts about Deutsche Bank. Specifically, this post. Frankly, I had forgotten much of this material myself.

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The money. Trump's defenders keep saying that he has nothing to do with Russian money. Trump's lawyers have been making that same claim.

However, it is well-known that one of the few banks willing to lend big money to Trump after his bankruptcies was Deutsche Bank, which was fined for a $10 billion money laundering scheme benefiting Russians. The scheme involved something called "mirror trading," described in this fine New Yorker piece.

It worked like this: between 2011 and 2015, related corporate entities in Moscow and London bought and sold identical quantities of the same stock, through Deutsche Bank’s Moscow equities desk. By this alchemy, rubles in Russia were transformed into dollars in London. The process bypassed tax officials, currency regulators, and anti-money-laundering controls.

The head of Deutsche Bank, Josef Ackermann, was forced out by the scandal. Guess where he ended up? That's right: The Bank of Cypus -- the favorite bank of Vladimir Putin and his Russian oligarch pals. He was chosen for that position by Wilbur Ross, the Trump chum who just became our Commerce secretary, and by a billionaire crony of Vladimir Putin's named Viktor Vekselburg. It seems that Putin turned against Vekselburg late last year; they've since kissed and made up.

As it happens, Vekselburg has a partner named Len Blavatnik, worth $20 billion. Although Blavatnik made his money in Russian oil, he has strong American ties -- in fact, he owns Warner Music. He also made a seven figure donation to a Super PAC controlled by Mitch McConnell -- which explains why you should not expect Mitch to show any enthusiasm for any kind of probe (either independent or congressional) which might inconvenience Trump's Russian buddies.

Trump's lawyers did concede that a Russian purchased a Donald Trump property in Florida for $95 million, even though most observers agree that its actual market value was less than half that. Such a purchase is a good way to hide a "donation" or a bribe. (Paul Manafort seems to have benefited from a similar deal, albeit on a smaller scale.)

The man who bought the house was -- as most of you already know -- Dmitry Rybolovlev, who also owns the largest stake in the Bank of Cyprus. Therefore, we may say that he is part of the Putin/Vekselburg/Wilbur Ross "club." Rybolovlev also owns the private jet registered as M-Kate which has mysteriously followed Donald Trump's peregrinations the way my dog would follow me if I were carrying a BLT sandwich.

Another point. People forget that Deutsche Bank and Donald Trump were not always on good terms -- in fact, their conflict gave rise to one of the more bizarre lawsuits of Trump's career. He later got loans not from Deutsche Bank per se but from a subsidiary, which always seems to go unnamed in news accounts. See this Mother Jones investigation from last year:

Trump has four large mortgages with Deutsche Bank, borrowing against three of his most prized possessions: the Doral golf resort in Florida, his Chicago tower, and his brand new Washington luxury hotel. For the Washington hotel, Trump has a $170 million line of credit from Deutsche Bank that was granted in 2015, just as his presidential campaign was kicking off. According to a bank spokeswoman, all four of the loans were obtained from Deutsche's "private bank"—a division that caters exclusively to high-net-worth individuals and that can lend separately from the corporate side of the bank.

The corporate side of Deutsche Bank previously loaned to Trump, but the relationship fell apart around the time of the financial crisis. In 2005, Trump borrowed $640 million from Deutsche Bank and several other lenders for the construction of his Chicago hotel tower. When he failed to pay back the money on time in 2008, the banks, including Deutsche Bank, demanded he pay the $40 million he had personally guaranteed. In response, Trump sued Deutsche Bank for $3 billion, saying the project's financial troubles were the fault of the economic recession, which he claimed the bank had helped cause. He accused Deutsche Bank of undermining the project and his reputation. The lawsuit was eventually settled.

It's not clear if Trump has personally guaranteed any of the loans his businesses have with Deutsche Bank.

If Trump didn't guarantee those loans, then who did?

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This post contains further insights into the time Trump sued Deutsche Bank...

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I don't care how much money you have -- if you sue a bank for three billion, that bank won't want to do business with you ever again. And this is particularly true in the case of a man like Donald Trump, whom most other banks have long avoided like the plague.

Trump gets loans not from Deutsche Bank per se but from a subsidiary set up for "special" customers, presumably those backed by the Russians.

Last week, Deutsche Bank, the struggling financial giant that is Donald Trump’s biggest lender, anointed a new CEO, a longtime executive named Christian Sewing. He’s worked in a number of roles at the bank, but what’s significant about his résumé is the job he held prior to his promotion: He oversaw the firm’s private bank, the division that caters to high-net-worth clients and has loaned Trump’s company hundreds of millions of dollars over the years, when few lenders (including Deutsche Bank’s own commercial lending arm) would do business with the bankruptcy-prone businessman. According to Trump’s financial disclosures, he has loans with the bank totaling as much as $364 million.

Interested in learning more about what this Sewing fellow has been up to? Start with this story:
"Deutsche Bank Really Sorry For Helping Russians Legally Launder All Those Billions."