One of the great mysteries of the business world is why Deutsche Bank lent financial pariah Donald Trump $2 billion over two decades, when other firms treated him like an infectious disease capable of wiping out entire populations. Thanks to Democrats’ newly obtained subpoena power, the answer may be revealed through the “extensive internal documents and communications about Mr. Trump” the bank is expected to start handing over to congressional committees next month. In the meantime, however, a report from The New York Times detailing the president’s relationship with the German lender has shed some light on the matter. For one thing, Deutsche had a “ravenous appetite for risk,” including the risk of doing business with a guy whose name was synonymous in some quarters with bankruptcy. As a result, reporter David Enrich writes, bank executives were happy not only to ignore repeated, glaring red flags, but to go along with Trump’s cornucopia of financial lies.
For instance, in 2004, shortly after Trump Hotels & Casino Resorts defaulted on hundreds of millions of bonds, causing steep losses for Deutsche clients, Trump asked the bank’s commercial real-estate group to lend him more than $500 million to build a 92-story skyscraper in Chicago. It did, but not before employees determined, among other things, that Trump was full of shit about his net worth.
Mr. Trump told Deutsche Bank his net worth was about $3 billion, but when bank employees reviewed his finances, they concluded he was worth about $788 million, according to documents produced during a lawsuit Mr. Trump brought against the former New York Times journalist Timothy O’Brien. And a senior investment-banking executive said in an interview that he and others cautioned that Mr. Trump should be avoided because he had worked with people in the construction industry connected to organized crime.
In patented Trump fashion, shortly before the bulk of the loan was due in November 2008, he sued the bank to get out of repaying, demanding $3 billion in damages and arguing that Deutsche had, in part, caused the financial crisis and was therefore to blame for his inability to sell hundreds of condo units. The firm countersued, and investment-banking executives severed ties with the real-estate developer. However, other divisions of the company were more than happy to go back for more.
Shortly after the Chicago lawsuit was settled, Jared Kushner was told that Mr. Trump was looking for a loan and introduced him to [private banker] Rosemary Vrablic, according to people familiar with the relationship. Mr. Trump flew Ms. Vrablic to Miami to show her a property he wanted to buy: the Doral Golf Resort and Spa. He needed more than $100 million for the 72-hole property. Deutsche Bank dispatched a team to Trump Tower to inspect Mr. Trump’s personal and corporate financial records. The bankers determined he was overvaluing some of his real-estate assets by as much as 70 percent, according to two former executives.
But hey, what’s a few wildly inflated assets among friends? And speaking of friends, if Deutsche really wanted to show it was Trump’s friend . . .
Mr. Trump also expressed interest in another loan from the private-banking division: $48 million for the same Chicago property that had provoked the two-year court fight. Mr. Trump told the bank he would use that loan to repay what he still owed the investment-banking division, the two former executives said. Even by Wall Street standards, borrowing money from one part of a bank to pay off a loan from another was an extraordinary act of financial chutzpah. . . . A powerful committee in Frankfurt, which evaluated loans based on risks to the bank’s reputation, signed off.
By 2014, according to the Times, Deutsche was not only happy to go along with Trump’s alternative truths about his assets, but helped to aid and abet them:
In early 2014, Mr. Trump and his personal lawyer, Michael Cohen, approached Ms. Vrablic about more potential loans. The owner of the Buffalo Bills had died, and the N.F.L. franchise was up for sale. Mr. Trump was interested, and he needed to show the league he had the financial wherewithal to pull off a transaction that could top $1 billion. Mr. Trump asked Ms. Vrablic if the bank would be willing to make a loan and handed over bare-bones financial statements that estimated his net worth at $8.7 billion. Mr. Cohen testified to Congress last month that the documents exaggerated Mr. Trump’s wealth. Deutsche Bank executives had reached a similar conclusion. They nonetheless agreed to vouch for Mr. Trump’s bid, according to an executive involved.
Trump’s bid did not win, but shortly thereafter, the bank lent him $170 million to renovate the Old Post Office building that would become the Trump International Hotel Washington, where foreign governments and other parties looking to kiss the ring are known to book rooms. Shortly after that,Trump was elected president, and the bank, realizing it had somehow “become the biggest lender to the president-elect,” reportedly uttered a collective dear god, what have we done?
A report prepared by the board’s integrity committee concluded that executives in the private-banking division were so determined to win business from big-name clients that they had ignored Mr. Trump’s reputation for demagogy and defaults, according to a person who read the report. The review also found that Deutsche Bank had produced a number of “exposure reports” that flagged the growing business with Mr. Trump, but that they had not been adequately reviewed by senior executives.
According to the Times, managers started telling employees not to mention the word “Trump” to people outside the bank, out of fear of “stoking public interest in its ties to the new president.” Unfortunately, as the old saying goes, it was a little fucking late for that.
Two years after Mr. Trump was sworn in, Democrats took control of the House of Representatives. The chamber’s financial services and intelligence committees opened investigations into Deutsche Bank’s relationship with Mr. Trump. Those inquiries, as well as the New York attorney general’s investigation, come at a perilous time for Deutsche Bank, which is negotiating to merge with another large German lender
Trump doesn’t appreciate people pointing out he’s an unhinged lunatic
There are many people who believe the president of the United States is a certifiable lunatic, a number of whom regularly say so on Twitter, on TV, and through various other mediums. To date, though, only one person who actively disparages Donald Trump online also has the distinction of being married to one of the most prominent employees in the White House: George Conway, husband to presidential adviser Kellyanne. Unlike his wife, Conway is known for questioning the president’s competence and mental state, a habit he continued over the weekend, tweeting screenshots from the Diagnostic and Statistical Manual of Mental Disorder, including an entry for Narcissistic Personality Disorder, and warning that “all Americans should be thinking seriously now about Trump’s mental condition and psychological state, including and especially the media, Congress—and the Vice President and Cabinet.” According to The Washington Post, Trump has “wanted to attack George Conway on Twitter before” but was talked down by aides. This time, he couldn’t resist. George’s tweets didn’t sit right with the president, and on Tuesday he responded the only way he knows how.
“A total loser!” Trump tweeted, retweeting a claim by his 2020 campaign manager, Brad Parscale, that the president “doesn’t even know” his senior advisor’s husband, and that the only reason Conway attacks Trump is out of bitterness over losing out on a job and jealousy of his wife’s success. Unfortunately, like so many statements that come out of Trump’s mouth, this one doesn’t hold up in the face of reality:
George Conway said in an interview with The Washington Post Tuesday that he has had a number of notable interactions with Trump over the past decade, often concerning legal representation and sensitive legal matters since Trump became president. He described the president as “mendacious” and “incompetent” and predicted he would not win reelection.
Conway said that contrary to Parscale’s tweet, he opted against working at the Justice Department after Trump offered him a position heading the civil division because he watched Trump attack the department’s leaders and then fire James B. Comey, the F.B.I. director, in early 2017. Conway said he remembered riding down the West Side Highway in Manhattan and hearing on the radio that special counsel Robert S. Mueller III had been appointed to lead an investigation of possible connections between Russian election interference and the Trump campaign. “I’m thinking to myself, this guy is going to be at war with the Justice Department for the next two years,” Conway said. “I’m not doing this.”
As for the assertion that George is jealous of Kellyanne, Conway told the Post he is “proud” of his wife’s ability to get this stain on U.S. history elected—though he wishes she didn’t work in the White House—, and harbors no envy about her success. The senior adviser to the president, however, apparently feels otherwise:
Kellyanne Conway went on a lengthy rant about her husband to several guests at a British Embassy party for members of Congress last month, including New York Times columnist Maureen Dowd, NBC anchor Andrea Mitchell, and former Post journalist Sally Quinn, according to two attendees, who spoke on the condition of anonymity to describe a private conversation.
Conway told the group that she and the president think her husband is jealous of her, and that the president has kept her at a prominent place in the administration because he trusts her and wants to “protect her,” the attendees said.
While the greatest marriage counselors on earth probably couldn’t unpack the psychosexual drama that is the Conway union, according to George, his tweets attacking his wife’s boss aren’t a slight against her, as Eric Trump has suggested, but for her. “The tweeting is just the way to get it out of the way, so I can get it off my chest and move on with my life that day,” he told the Post “That’s basically it. Frankly, it’s so I don’t end up screaming at her about it.”
Trump is living in an economic fantasy world, says Trump’s economics team
When Donald Trump was running for office, he regularly claimed he would preside over a rate of “tremendous” economic growth as high as 6 percent. When he actually became president, that goalpost moved to 3 percent annually. Now, as he gears up for reelection, he’ll undoubtedly tell supporters that the sky’s the limit, and hey, 6, 7, or even 8 percent might be possible. Yet one group of people is cautioning that even expectations of 3 percent a year for the next decade won’t be achievable without a long list of legislation that has little chance of actually happening: his own economic advisers.
According to the 2019 Economic Report of the President, released Tuesday, 3 percent growth over the next 10 years would require a massive infrastructure bill, more tax cuts, and more deregulation, among other things.
Growth would be about 2.5 percent in 2022 if no additional policies are implemented, according to White House calculations. By 2026, growth could fall to about 2 percent, the model suggests. To achieve the higher growth rate, the White House assumes that the individual tax cuts will be made permanent (they’re currently slated to expire after 2025) and that Congress will pass an infrastructure bill “commencing in 2019 with observable effects beginning in 2020,” the report says. While there’s widespread agreement that the United States needs a major infrastructure upgrade, there’s a big gap between the Democratic and Republican visions of what to do. The 3 percent White House growth prediction . . . also assumes more deregulation, especially in the finance industry, and a push for “improving self-sufficiency” by placing more work requirements on recipients of government aid.
So far, Trump has taken only modest steps toward any of the items on the report’s to-do list. Though he claimed during the 2016 election that he would spend $1 trillion on infrastructure, so far we’ve gotten little more than a series of “Infrastructure Week(s)” that consisted of little more than light prop comedy. (Meanwhile, the budget he proposed last month would cut infrastructure spending.) And while Trump may be able to act unilaterally in some areas, like work-requirements, in others he’ll almost certainly need Democratic support.
National Economic Council chair Kevin Hassett—who wrote the report noting that a perfect storm would have to occur for Trump’s predicted growth to pan out—insists anyone doubting the president is nothing more than a naysayer, noting that predictions for 2017 and 2018 were nearly dead on. “Everyone said we wouldn’t get 3.1 percent,” Hassett said. “We’re relying on the same analysis because nothing has come up which suggests to us it’s not going to happen.”
Economists, however, believe Trump’s economy is nothing more than a giant tax cut-induced sugar high that will ultimately fade. “We’ve always said 3 percent growth for one year was possible after we gave the economy a lot of stimulus. But you can’t keep giving the economy more stimulus every year,” Marc Goldwein, senior policy director at a Committee for a Responsible Federal Budget, told The Washington Post. “There’s nobody that thinks we’re going to be anywhere close to 3 percent growth a year over the next decade.” Including, it would seem, Trump’s own economic team.