Donald Trump, the Trump Organization, and Trump’s children with wife No. 1 have combined to sue Deutsche Bank and Capital One in an effort to force them to ignore a congressional subpoena. Among other things, the suit alleges that the subpoenas constitute “harassment” and makes the odd claim that the House Intelligence Committee failed to “negotiate” with Trump over the scope of the order. The suit is just one of several legal actions that Trump has taken, including suing Congress directly in connection with records sought from Trump’s accounting firm, and ordering the IRS not to hand over his tax forms to the Oversight Committee, to keep his financial records hidden.
As the Washington Post reports, legal experts expect courts to reject the suit filed by Trump, as long-standing precedent has demonstrated the power of such subpoenas from the House to seek this type of information. However, the filing and any appeals made by Trump could delay the Intelligence Committee from receiving the records it has demanded. A Deutsche Bank spokesperson has stated that the bank intends to comply with the subpoena, and the suit indicated that the original delivery date was May 6.
Overall, the effort by Trump seems like an extreme long shot, but it also seems almost requisite, as Trump has drawn an absolute red line not just around his finances, but around providing any information at all to the House since Democrats took control of it in January. Trump’s actions may in part represent just a desire to keep voters from seeing the not-so-wealthy businessman behind the curtain, but it seems certain that what Trump is also covering up is a swatch of big-money white collar crime.
From the testimony of Michael Cohen, it seems clear that Donald Trump committed exactly the same crime, in exactly the same way, that earned Paul Manafort a conviction on felony bank fraud. Trump exaggerated his assets, understated his debts, hugely inflated his net worth, and in every way simply lied to Deutsche Bank in order to make giving him a loan seem like a reasonable bet. Bank fraud would appear to be a given.
What’s less clear is why Deutsche Bank went along with it. At the time it was handing out billions of dollars to Trump, every other major bank had already turned him down, including those that had worked with Trump on previous real estate and casino deals. This was immediately after Trump not only failed in Atlantic City, but also convinced a group of investors to bankroll a buyout of his assets there, and then intentionally bankrupted those investors so he could buy the same assets again at pennies on the dollar—and then he went bankrupt again. Trump failed, convinced people to help him get out of that failure, cheated those people, picked up everything at a discount … and still failed again. As far as banks were concerned, he might as well have been radioactive.
Along the way, Trump stiffed banks for hundreds of millions of dollars in loans. Repeatedly. Each of his six major bankruptcies came with a price tag for investors and banks. This is the point in Trump’s career about which Ivanka relayed that riches-to-rags story about her father telling her that a homeless person on the street outside Trump Tower was richer than they were, because they were hundreds of millions in the hole. In this story, Ivanka never seemed to find it odd that they were still getting chauffeured to their golden penthouse rather than worrying about where they would sleep that night. Instead, she seemed to regard it as a sign of her father’s business acumen that he “bounced back” from this massive debt. Except that bounce came via a check from Deutsche Bank.
Both Trump’s failures and his rejections had to be visible to Deutsche Bank. His lies weren’t just supersized; they were obvious. So … why? Why did Deutsche Bank think it was a good idea to lend money to Trump even when everyone else said no? Even more mysteriously, why did it keep lending him money even after he defaulted on the first large loan from Deutsche Bank?
The long-suspected answer has been that Deutsche Bank wasn’t so much lending money to Trump as partnering with him in another crime: money laundering. The German bank has long been considered the Western go-to for post-Soviet oligarchs seeking to get their wealth out of the East. In 2017, the New York State Department of Financial Services slapped Deutsche with a $425 million fine in connection with a $10 billion money laundering scheme that saw assets flipping from Moscow to London to New York. If the size of the fine seems pretty modest relative to the size of the crime, the DOJ originally indicated that it was going to hit Deutsche Bank for $14 billion … apparently some serious negotiating went on.
The New York DFS documents in that case show the checklist of money laundering-friendly practices at Deutsche Bank, including failure to vet the identity of customers, inaccurate filings to government agencies, and a determined ignorance about money laundering practices.
At the same time Trump was receiving big loans from Deutsche Bank, he was making big real estate deals with a number of oligarch-funded companies to sell real estate at prices well above market rates. The Manafort case also showed how these schemes were used to allow Russians to quickly obtain capital in the United States both by moving payments through LLCs, many of them set up in Cyprus, and by obtaining mortgages against their inflated assets from banks cooperating with the scheme. For developers like Trump, these schemes came with the added bonus of driving up the apparent worth of their other assets.
Trump’s lawsuit states that he hasn’t seen the subpoenas and hasn’t been able to convince Congress to send him a copy. There is no reason that it should.