Monday, November 18, 2019

There are 50 million reasons for Pelosi to expand the probe

So much to talk about, so little time. The most intriguing new item (which really isn't new) is summed up in this tweet by David Fahrenthold:

I did a little research into that address. It's a huge, imposing bank building where many, many "on paper" corporations are registered. Deutsche Bank seems to favor this building.

In 2012, the exact same address and suite was used by something called Bridgefield Mortgage Corp, a.k.a. ResMAE Mortgage Corps, which apparently was linked to Merrill Lynch. But time has passed, and CUA appears to be a different entity. For reasons that will soon be apparent, I think we're talking about Deutsche Bank.

This smells like either money laundering or -- more likely -- a scheme to hide money from the IRS. If Trump's taxes do come out, we will have to see how this $50 million figures into it.

(I'm not among those who presume that the Supreme Court will rule the way we hope. You know my motto: Always bet on the worst possible outcome -- that way, all of your surprises will be happy ones.)

As you ponder that $50 million, keep in mind that Trump owes a lot of money that he seems ill-disposed to pay back, not least to the states in which he held his rallies.

Mother Jones investigated a $50 million Trump mystery last September. I'm pretty sure that we're talking about the same $50 million. Here is the Mother Jones investigation; I discussed it in a previous post. From MJ:
The disclosures state that this loan is connected to Trump’s hotel and tower in Chicago, and the forms reveal puzzling details about Chicago Unit Acquisition: It earns no revenue—suggesting that Trump was not paying interest or principal on the loan—and Trump assigns virtually no value to Chicago Unit Acquisition. Something doesn’t add up. Under basic accounting principles, a firm that is owed money and has no outstanding debt should be worth at least as much as it is owed. The loan has another odd feature: It is identified as a “springing” loan, a type of loan made to borrowers who are viewed as credit risks. Known sometimes as “bad boy” loans, these agreements allow the lender to impose harsh repayment terms if certain criteria aren’t met. These are not the type of loan terms that someone is likely to impose on himself.
I've known for years that something was seriously wrong with that building. If ever Trump stages a "terror" attack to rally the country around him, the attack will probably have some link to this troubled property. (Was that an overly-paranoid prognostication? Maybe. But I'm putting it out there nonetheless.)

I'd like to offer a revised and updated version of my earlier words.

Basically, Deutsche Bank put up the bulk of the money for that building, something on the order of $640 million. A hedge fund called Fortress Investment Group also put up some of the money, a bit more than $100 million. (Here's Wikipedia's entry on Fortress. Some of their loans were downright strange: They did business with Harvey Weinstein at a time when most others were running away.)

All told, Trump had to pay back a loan that was the better part of a billion bucks. But the building has not done well. Nobody wants to rent the retail space.

After the thing turned into a boondoggle, Trump realized that he could not pay Deutsche Bank. Naturally, Deutsche Bank sued. That lawsuit spurred Trump to mount an absolutely hilarious counter-suit for three billion dollars. He blamed the bank for the 2007-08 financial crisis.

(That's sort of like blaming civic breakdown in Somalia on Yovanovich.)

Here's the freaky part -- perhaps the freakiest part of Trump's whole freaky career: Trump and Deutsche Bank soon kissed and made up. I have no idea how. I have no idea why. But through some magical operation, Trump squared things with Deutsche Bank. Where did he get the money? I don't know. Why did they forgive that insane lawsuit? I don't know.

Many people suspect that Trump pulled off this trick with the help of someone with a Russian name.

But Fortress -- the other investor -- remained a problem. Somehow, Trump talked this Fortress group into accepting just $48 million on a loan that went north of $100 million.

How the hell did he do that? Magic. Can you use the same magic to get a car loan at half price? No.

Think about this situation carefully. The vast majority of the loaned money came from Deutsche Bank. Somehow, after suit and countersuit, Trump was able to satisfy those bankers. But when it came to Fortress, all of a sudden Trump screamed "I'm poor!" He could not make scheduled payments.

And so it was that poverty-stricken Donald talked Fortress into cutting his debt in half.

Here's the thing: When you negotiate a massive debt reduction of that sort, the reduction is considered income. And income is taxable.

But Donald Trump just ain't into paying taxes.

That fifty million in taxable income is a scandal in and of itself. In a sane world, that scandal should be enough to start impeachment proceedings. Ultimately, however, the real scandal is Deutsche Bank. What the hell happened there?

Here's the Business Insider summary...
Mother Jones' investigation found that Trump was able to clear his debt with Deutsche Bank and Fortress Investment Group over the next several years but that Fortress ultimately agreed to accept just $48 million back for the loan it had made to Trump, which by that time was worth around $100 million.

That means one of two things occurred:
  • Fortress considered the loan repaid and forgave more than $50 million of debt from Trump, an action known as a discounted payoff. If that happened, the debt would be considered taxable income, and Trump would have had to pay as much as a 39% income tax on it.
  • Trump bought the remaining debt using a corporation and "parked" the money there to avoid paying income taxes on it. This practice, known as debt parking, is legal as long as the borrower plans to repay the rest of the loan. It's illegal to engage in this indefinitely.
Alan Weisselberg. Trump's money manager, could explain this. Will Nancy Pelosi ask him to testify?

Pelosi must expand the inquiry. If impeachment goes past Christmas, so be it. We need to go into the financials.

Look at how much time, effort and money went into an investigation of Whitewater. The money involved in that was, by comparison, tiny. And in the end, we learned that Clinton did nothing wrong.

How did Trump pay back Deutsche Bank? Why did Deutsche Bank continue to do business with him? Did Deutsche Bank "loan" him $50 million to pay back the other creditor, Fortress? It sure as hell looks as though Deutsche Bank is the entity using that suite at that address under the (revealing? Appropriate?) name Chicago Unit Acquisition.

Why the hell would Deutsche Bank DO that?

Trump claims that he (not Deutsche Bank) owns CUA, which means he loaned money to himself -- an explanation that makes no sense whatsoever. How could he loan money to himself when he couldn't pay back the full amount he owed Fortress?

Trump Tower Chicago is a loser. A failure. Why would DB seemingly eat three quarters of a billion dollars? I can't claim to understand what happened, but the whole thing reeks of scam.

Expand the probe! I would note that the House is finally expanding the probe to cover Trump's obvious lies to Mueller. The Stone trial proved that Trump lied about Wikileaks. Yes, I know that Trump covered his capacious hindquarters by using the phrase "I do not recall." But that phrase has to operate within the realm of credibility.

Consider: If I were to state under oath "I do not recall ever owning a dog," could I be accused of perjury? Of course I could. In the pages of this blog, I've written about my dogs on numerous occasions. A claim of faulty memory simply would not be credible.

The same can be said of Trump's claim that he does not recall talking about Wikileaks with Roger Stone. We now know that he did. Stone was Team Trump's conduit to Assange; Steve Bannon said so under oath. The release of hacked information from the Democratic National Committee is not something that any Republican candidate can plausibly claim to forget.

Write to Nancy. Write to Schiff. Write to anyone who will listen. EXPAND THE PROBE.

And if anyone argues that impeachment must be kept simple and sweet -- tell them about this mysterious $50 million dollar loan. And maybe you should mention the rest of the money that went into Trump's white elephant in Chicago.
50 Million reasons for Pelosi to expand the scope of the House impeachment investigation and one good reason it won't happen. No spine.
IDK how Nancy Pelosi got the reputation as a wise and strong Speaker but I don't see it since she leads from behind the polls.
Thank the gods Trump stepped in it highly else there'd be no impeachment hearings.
Your "Was that an overly-paranoid prognostication" reminds me of that post you made years ago about that GQ article Conde Nast shelved for a decade (i think you shamed them into publishing an edited version a year after your piece) when I read you post about with how putin went from single-digit popularity to 70% (I don't remember the numbers) and your overly-paranoid prognostication then--- i immediately thought it would be Chicago (and ideally for trump, when Obama is back home).
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