Trump's longtime lender Deutsche Bank subpoenaed over his financial records, is a major announcement coming up?
New York prosecutors who are seeking Donald Trump’s tax records subpoenaed Deutsche Bank, one of the President’s longtime lenders, as a part of their probe last year and the latter has reportedly handed over his financial records. New York Attorney General Letitia James said on Wednesday, August 5, that she was set to make a 'major national announcement' on Thursday (August 6) morning. The subject of the announcement was still not clear.
The prosecutors’ move was a sign that their criminal investigation launched against Trump’s business practices is wider than it was thought previously, reported The New York Times. The President, who has in the past overcome challenges like impeachment and the Mueller investigation, said it was a continuation of a witchhunt against him. According to the Daily Mail, James, a Democrat, also subpoenaed the bank for records related to Trump following Michael Cohen's testimony.
According to the NYT, the Manhattan district attorney’s office issued a subpoena last year to the German bank, which has served as Trump’s lender since the late 1990s, seeking financial records that he and his company gave to it. The report cited four persons who have knowledge about the inquiry. Initially, the criminal probe against Trump seemed to be focused on hush-money payments made to two women who claimed they had affairs with the President in 2016. Trump came to office that year. But this week, a court filing by the prosecutors with District Attorney Cyrus Vance Jr’s office mentioned of “public reports of possibly extensive and protracted criminal conduct at the Trump Organization” and gave a hint that they were also probing possible crimes featuring bank and insurance fraud.
Trump and Deutsche Bank
Deutsche Bank has been often targeted by lawmakers and regulators who have dug into Trump’s less-than-transparent finances because of its longstanding relationship with the President. But the subpoena looks to be the first instance of a criminal probe that involves the businessman-politician and his dealings with the bank, which has lent him an excess of $2 billion over the past couple of decades, the NYT report added.
According to David Enrich, the finance editor at the New York Times and the author of the recent book “Dark Towers: Deutsche Bank, Donald Trump, and an Epic Trail of Destruction”, the bank became a lender to Trump in the 2000s and after he failed to pay off a loan for a skyscraper in Chicago in 2008, he was removed from the lender’s commercial loan divisions. But the tycoon managed to become a client of Deutsche Bank’s private banking division, Enrich told Barry Ritholtz in a podcast on Bloomberg Radio last month. After his election in 2016, the bank started witnessing a whole lot of complications. According to Enrich, there was more than one instance when one part of the bank issued debt for Trump and was put off-limits after he defaulted but he managed to come back to another division of the bank and found a way to do business with them.
Enrich also threw light on how Kushner introduced his famous father-in-law to Vrablic after his Chicago property loan defaulted. "...he defaulted on loan to finance the Chicago Skyscraper and there’s all sorts of litigation where Trump sues the bank. And eventually, they reached a settlement that says Trump has to repay a certain portion of that loan in a couple of years and so that brings you to 2011 and Trump reached — Trump through Jerry Kushner, his son in law who had a relationship with a private banker at Deutsche Bank named Rosemary Vrablic," Enrich said.
"Kushner introduces his father in law to Rosemary Vrablic who works in the private banking division and basically Vrablic and her boss make a decision go to Baton Rouge Bradley introduces his father-in-law to grab what bank is and it basically grab look and her boss make a decision that even though the bank has been burned by Trump, even though he’s off limits to the most of the bank, they are willing to take that risk and start a new relationship with them, bring them on — bring them back on as a client," the finance editor said, adding that the bank made a couple of loans in early 2012 -- one to finance the acquisition and renovation of his Doral golf resort in Florida and another -- "a $48 million loan to reap — that’s used primarily to repay what Trump still owed as different position at Deutsche Bank for the defaulted loan on the Chicago tower".
Deutsche Bank’s compliance is significant
Deutsche Bank has decided to cooperate with the DA’s office. It has also been reported that in 2019, it gave Vance’s office detailed reports, including financial statements and other documents that the president gave them as he sought loans, two sources familiar with the probe said. The bank’s response has made the legal proceedings against Trump look even more ominous for both the incumbent, his company and family. It will be interesting to see how Trump’s legal aides respond to the development as other probes seeking Trump’s financial records have been legally challenged by the president and his family.
Earlier this week, the NYT reported that Deutsche Bank opened an internal investigation into Rosemary Vrablic, a long-time personal banker of Trump and his son-in-law and senior adviser Jared Kushner, over a 2013 real-estate transaction between her and a company partly owned by Kushner. As per NY property records, Vrablic and two of her colleagues at the German bank bought a Park Avenue apartment for about $1.5 million from a firm known as Bergel 715 Associates, the report added. It was reported that Kushner and his wife, Ivanka, also a senior presidential adviser, received $1 million and $5 million from Bergel 715 last year.
Coming back to the issue of serving a subpoena to Deutsche Bank, the investigation undertaken by DA Vance is still in the early stages, one source told the NYT. And Vance’s office has also said the probe will be crippled unless the prosecutors get the tax returns. Vance’s office is seeking eight years of Trump’s personal and corporate tax records but has not revealed the reason that prompted the move that went beyond dealing with the payoffs made to the women to allegedly silence them about reported past affairs with Trump. The president and his company have denied the charges of wrongdoing and dismissed the probe, saying it was a politically motivated game launched by Vance, a Democrat.
Both Trump and his legal challenges saw the battle evening out at the Supreme Court last month. On July 9, the apex court, on one hand, cleared the way for the NY prosecutors to seek the president’s financial records, saying the commander-in-chief lacks an absolute right to block the release of the papers. The verdict was compared to the past rulings that asked former presidents Richard Nixon and Bill Clinton to provide evidence in controversies that engulfed them (Nixon resigned before getting impeached while Clinton got saved eventually). “No citizen, not even the president, is categorically above the common duty to produce evidence when called upon in a criminal proceeding,” Chief Justice John G Roberts Jr wrote.
But in a separate decision, the court also said the Congress, at least for the time being, could not get similar documents. It said the case should be handed back to the lower courts to assess whether the Congress should further narrow down the parameters of the information it was seeking. It meant that Trump’s records will not be publicized before the November 3 elections, which would give the GOP camp a relief.