After a string of bankruptcies—including a scheme where Trump talked investors into banding together to buy out a bankrupt casino, then purposely bankrupted the investor group—no one wanted to touch a Trump project. But while he was radioactive elsewhere, Trump found a friend in Deutsche Bank. During the past two decades, the bank has channeled more than $2 billion to Trump. Just why the German bank was willing to loan Trump huge sums when everyone else was breaking out the 20-foot poles is already the subject of twin congressional probes and another investigation by the New York attorney general. And, as the New York Times reports, there may be plenty of fire lurking behind the smoke.
Deutsche Bank continued to lend Trump money despite a stack of potential red flags, but at least part of their willingness came from a simple cause: Trump lied to them. He repeatedly misstated his net worth, misrepresented his financial status, and overestimated the value of his assets. Deutsche Bank appears to have eventually seen through many of Trump’s lies—such as his claiming to be worth $3 billion in 2005 when he was worth something more like $780 million. But by then they had sunk more than $1 billion into Trump-related investments.
But that’s not the biggest mystery. Two years before the bank caught Trump more than tripling his worth in order to scam another loan, there was a much better reason for it to walk away from any further dealings. Because in 2003, shortly after it first started to get involved with Trump, Deutsche Bank hit the same issue as previous banks: Trump defaulted on loans for hundreds of millions. But still, the bank gave him more.
That wasn’t the last time Trump walked away and left Deutsche Bank holding worthless paper. Trump also defaulted on a loan in 2008. At the same time he was publicly talking about what a great time it was to be an investor and how he was going to pick up lots of real estate while it was cheap, he was telling Deutsche Bank that he couldn’t pay back his loan “because of the financial crisis.”
All of this leads to one big question: Why? Why would any bank continue to give someone not just small loans, but billions, when they knew they were being lied to and had already been burned to the tune of hundreds of millions of dollars?
The suspicion of many is that Deutsche Bank officials gave money to Trump because they were told to give money to Trump by people who had a big say at the bank. People like Russian oligarchs whose funds were not only purchasing apartments at Trump buildings, but were flowing through the bank in money-laundering schemes. As NPR reported in 2018, German police raided the offices of Deutsche Bank in November as part of a probe to investigate how the bank was helping keep “money offshore to elude tax collectors and government regulators.”
Deutsche Bank states that it’s now cooperating with investigations both in Germany and in the United States, and in April, the bank is scheduled to provide congressional committees with “internal documents and communications” related to the loans provided to the Trump Organization. Bank officers who dealt with Trump are also likely to appear before those committees.
Providing false financial statements to a bank in order to obtain a loan is felony bank fraud. Trump campaign chairman Paul Manafort was convicted on the same charge. And now it’s Trump’s turn.