Deutsche Bank, the infamous multinational money-lender, is finally severing ties with U.S. President Donald Trump. At least they’d like do so just as soon as possible following Tuesday’s election.
The relationship between the German lending house and the repeatedly failed construction magnate is long and actually somewhat tortuous–beginning in the 1990s. But the close ties are now seen as “serious collateral damage,” according to one of those anonymous senior executives–a distraction that apparently is no longer worth whatever the bank was originally getting out of lending money to a family that didn’t really pay their loans back.
According to a bombshell report by Reuters, the decision was made after a steady stream of bad press related to the bank’s close and oftentimes inexplicable relationship with the 45th president.
That report, by Matt Scuffham, Tom Sims, and John O’Donnell cites three anonymous “senior bank officials with direct knowledge of the matter” and says in no uncertain terms that the bank would like to rid itself of the “last vestiges of the relationship” with Trump.
And it’s apparently not just idle chatter.
The mega-bank’s Reputational Risk Management division has reportedly held a series of meetings over the past few months gaming out how exactly the financial institution can get out from underneath the president’s huge and heavily-subsidized shadow.
One such suggestion was floated by bank executives was for the president’s outstanding loans–currently in excess of $340 million–to be sold off in the secondary loan market. That idea, however, was more or less rubbished because the bank couldn’t think of anyone who would actually want to buy the loans and shoulder the additional bad press from taking on the Trump risk–financial and otherwise.
And some of that bad press has taken on expressly scandalous dimensions–especially in recent months.
As Law&Crime previously reported, Justin Kennedy, the son of former U.S. Supreme Court justice Anthony Kennedy, once helped Trump and his family business obtain nearly $700 million in loans to develop a skyscraper in Chicago–despite the developer’s storied history of defaulting on business loans.
At the time, the younger Kennedy ran the bank’s commercial real estate team, but he was also well-connected to New York City’s moneyed elite. Close friends with Ivanka Trump and Jared Kushner, Kennedy overlooked the patriarch’s repayment foibles in part, because of “the Trump family’s commitment to the project,” which meant that Ivanka–and not Donald–would be at the helm.
That loan was eventually extended. But, perhaps unsurprising to anyone involved in the transactions, Trump was unable or unwilling to repay by the time it came due in 2008. The relationship subsequently soured to the point that a legal battle erupted between Trump and the bank over his failure to repay the original loan. That lawsuit was eventually settled–over the course of nearly two years. And, by 2010, Trump and the bank were on lending terms again.
To date, Deutsche Bank has lent Trump more than $2 billion.
According to Reuters, the bank is aiming to end its relationship with Trump, at least in part, because they believe there is currently too much legal scrutiny in the offing–largely from probes already extant or promised by members of the U.S. Congress. Executives reportedly believe that by leaving the president’s side, investigations into the bank’s dealings might take a back seat to other legislative agendas.
Another concern, those anonymous executives say, is that if Trump is out of office, they will be better able to demand repayment. But that’s mostly a speculative hope for the bank–at least for now.
The financial giant has apparently considered various scenarios for jettisoning their Trump-related baggage–including attempting to seize Trump’s assets–but many of those scenarios prompt more questions than answers in the long run. If, for example, Trump is reelected on Tuesday, the relationship might last a few more years–but the die has apparently been cast and the bank is looking for as expeditious an exit as possible.
“The question is not why are they leaving now but rather what took them so long?” federal criminal defense attorney Tor Ekeland said in an email to Law&Crime.
Famed whistleblower attorney Mark Zaid also welcomed the news.
“Not good news for you or your family Mr. Trump,” he tweeted. “Debts are coming due too!”
[image via NICHOLAS KAMM/AFP via Getty Images]
Editor’s note: this article has been amended post-publication to include an additional quote.
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