Book Review – Deutsche Bank & Trump Debts

Dark Towers: Deutsche Bank, Donald Trump and an Epic Trail of Destruction by David Enrich (2020)

This Wall Street Journal Bestseller and New York Times Bestseller deserves being a bestseller. Its author, David Enrich, has been a reporter for both papers.

This book does not start out to be about the Trump Family. It covers the entire history of the bank from March 10, 1870 in Berlin. That’s why the book is over 400 pages long, (the last 100 pages being endnotes).

The lens David Enrich uses to tell a really compelling story from the 19th century to the present year is shown through the stories of several top executives of Deutsche Bank.

In this book it is clear that the type of banker portrayed in the the American classic movie “A Wonderful LIfe” has been buried deep in their graves for centuries.

For those conspiracy lovers who have decided banks, and Deutsche Bank in particular are a run by Jewish cabal, this book will be a disappointment.

Dark Towers skims over the Nazi period and follows the all-German Board that runs the Bank its branches with secret meetings in the top of one of its Berlin buildings’ towers.

According to Wikipedia, Deutsche Bank dumped three of its Board members in 1993 and confiscated Jew’s belongings, provided funds for the Gestapo, and loaned the funds for building  Auschwitz.

From the start Deutsche Bank was run by a group of all German Bankers who met in secret in the top of one of the banks’ two towers and plotted to open branches all over the globe.

Throughout its long lifetime, outsiders were not let into this cabal until very recently when an Indian fellow was named CEO and an American added to the Board.

Incidently, these German bankers had a sense of whimsey. the two towers, that rose above the main bank Frankfurt were named “Credit” and Debit”.

And These Bankers are Not Boring

Now, you might think banking would be boring, but not in this book. There are bombs, suicides, possible murders, and scandals galore. Not only that, characters in the book include Neil Young’s wife, two FBI agents, and Adam Schiff, of course, Donald Trump and family, along with Putin.

There are stories of power struggles, hatred of this bank, and even more chaos than is currently rocking the United States government. It’s how human beings are in large institutions. And Deutsche Bank at one time, a long time ago, was the Biggest Bank in the World.

Deutsche Bank didn’t get that way by operating as a normal bank that was looking out for their customers.

The author points out repeatedly that what brought down this bank and nearly destroyed it was something that Gillian Tett Editor of the U.S. version of the London Financial Times called “silos”.

By silos Gillian was evoking those grain towers that are attached to farmer’s barns all over this country and elsewhere.

Deutsche Bank had silos all over the globe and it also had silos within its infrastructure in Germany. There were no communication channels between each of the silos in the bank or between the bank branches that were opened in nearly every country in the world.

When the Internet was born, Deutsche Bank had only ancient equipment even decades later. The computers they used for calculations had different types of software that gave different results when the numbers were run for clients’ activities.

Deutsche had no way to keep track of their customers within each of the silos. Departments in the bank did not have communications with each other about customers other than rumors that flowed freely within the banking system.

poThe German top executives knew what was going on, but they did not understand how the new kinds of derivative products such as collateralized debt obligations and mortgage-backed derivatives worked. As a result, Americans, British and even an Indian CEO were brought in to manage derivatives.

Just as with American and London Big Banks, Deutsche’s derivatives mangers were out to get every penny they could get, regardless of the consequences for their customers.

In this century their troubles started when Deutsche Bank in Germany began to deal with Russia, and Russian banks and oligarchs.

Mirror Trades – How The Rich Got Richer

Russian oligarchs had money laundering problems. Russians wanted American dollars so they could buy things outside of Russia. But sanctions by the United States made that difficult for them.

To get dollars, Deutsche Bank traders in Berlin would sell blue chip stocks to a Russian person who paid for the stocks with rubles.

The Russian person then had a partner in London who would simulitaneouly sell his blue chip shares those blue chip stocks for American dollars.

In this way, Russian rubles, possibly gained from illegal activities, were laundered so the oligarchs in Russia could buy property or other things in the U.S. and Europe using U.S. dollars.

(Recall if you’ve read it, that U.S. Intelligence agents wrote a report in 2016 that said Russians who tried to game the 2016 elections in favor of Donald Trump did not have American dollars to work with! They had to use illegal ways of raising money for their activities.)

Mirror trades were essentially a much larger and more complicated form of a con game called shell games. That’s where a pea under a cup is moved around by the con man and spectators try to guess where the pea winds up.

The Russian mirror games were even bigger and more complicated in that the American dollars often wound up in Cypress, an off shore haven for laundered funds. There the Hellenic Bank caught on to the mirror game scam, and Deutsche paid dearly in fines.

The reason I mention these mirror trades are they are similar to the pattern that Donald Trump used in order to inveigle millions of dollars out of Deutsche Bank. Here is an example:

Don Trump Junior’s Four Million Dollar Loan

When Donald Trump first was forced to seek loans from Deutsche Bank because of non-payment of his huge debts and failures of his casino businesses, Donald’s children also sought loans from the bank and were given them freely in exchange for fees the Trumps were billed.

in 2008 Don Junior borrowed four million dollars from Deutsche bank to buy a warehouse used by for a company named Titan Atlas Manufacturing that used it for making prefab housing. Trump Sr. knew his son wouldn’t be able to pay back that loan.

So, Trump, to save the Trump family brand from Don Junior’s failure, bought Don Juniors’ loan from Deutsche Bank by setting up an entity called Trump DB Pace Acquisitions LLC. (DB short for Deutsche Bank)

Next, Trump Senior in name of Trump DB Pace Acquisitions LLC foreclosed on Titan Atlas Manufacturing. The result? Titan’s investors were soaked and so were its customers. And Don Junior didn’t look like the failed businessman we was.

We then heard Eric Trump covering up by saying that his family got all they needed from Russian Banks. This was not true. Several members of the Trump family were supported by Deutsche Bank loans.

Donald Trump’s Family Loans

After Donald Senior got loans for his Doral golf course in 2012, he got a loan for buying the Buffalo Bills team but he was outbid by someone who paid 1.4 billion dollars for the team, and Donald’s loan was not given to him.

Donald next got $170 million to renovate his hotel in the Old Post Office in D.C. Donald claimed that he paid his daughter Ivanka out of this amount for consulting services for her “designing the hotel. Politico said that in 2017 Ivanka profited from her consultancy earning $3.9 million.

Donald Trump had a go-to bank officer, Rosemary Vrablic, who would go to bat for him, even though Deutsche Bank, in spite of their messed up computer system managed to pull together a family tree of all the Trump family loans the bank had made, made—and not repaid.

Rosemary Vrablic loaned Jared Kushner and his mom a $15 million line of credit. Donald also gave $370 million to Jared to rent space in the former NY Times newspaper building for Jared’s newspaper. All the while even until recently Jared was doing business with Russians.

By 2016 when Trump was running for President he was deeply in debt. Donald owed Deutsche Bank $350 million—half of his outstanding debt that year.

Trump wasn’t able to pay even that paltry amount back in spite of his generous salary in the hundreds of millions of dollars he received for his TV show, The Apprentice over the years from 2004 to 2017.

In 2016 Donald Trump’s 2012 loan for Doral golf club came due. Trump’s losses in Doral which was managed by Eric Trump totaled a little over 150 million dollars and were half of all of Donald’s golf resort’s losses of $315 million dollars over the last 20 years.

Nevertheless, in 2016 Deutsche Bank loaned another Trump LLC called “Endeavor12” $19 million dollars to pay back his 2012 loan in Doral. Donald truly earned the moniker of “The King of Debt” thanks to Deutsche Bank.

There was no expectation that Donald would pay that amount back, but Deutsche Bank gave its traders huge bonuses for the fees Donald paid for these loans.

Deutsche Bank bent over backwards to accommodate Trump. They gave him low fees, forgave debt payments, and made new loans to him so he could pay for his old loans.

Ivanka Trump was ecstatic at the money she got from Deutsche Bank and praised the bankers for making it so easy for her. Her father too, crowed about the 2 percent fee he had to pay for borrowing money at Deutsche Bank.

But through his loyal “enabler” in Deutsche Bank, Rosemary Vrablic, Donald Trump finally hit his wall.

The End of Largess and Scramble to Pay

In March 2016, Rosemary Vrablic asked the German CEOs for a loan to Donald for this Turnberry Scottish golf resort. Shockingly she was turned down, leaving Trump in arrears after having spent his own money on his Presidential campaign.

The German Board that ran Deutsche Bank was in deep trouble itself after its traders led the Libor rate scam. This scam broke open back in 2012, and brought down tons of outside scrutiny to the bank. Through its Libor rate rigging traders were cheating its own customers.

After that there were a lot of investigations by investigators of how Deutsche Bank sold its derivative products. As a result, In 2015 a new CEO named John Cryan had been brought on board to clean house. And the Board tried to clean up things with the Trumps.

Perhaps you’ll recall Turnberry golf course scheme in Scotland.

In 2018, Trump asked U.S. Ambassador Robert Wood Johnson to get the British government to hold the British Open golf tournament at Trump Turnberry. Democrats started raising cries of a second impeachment and the matter was dropped. Donald’s plan to bring in money to his Scottish golf club was a no-go.

Trump’s Taxes Article in the NY Times

The Times indicates that Donald Trump will have millions of dollars in personal loans for his golf courses coming up, and that he may be in serious trouble with the IRS over his taxes.

We don’t know at what price Donald Senior bought back Donald Junior’s $400 million loan, but it was probably less than $400 million.

However, by 2016 we are told by David Enrich that Donald owed $350 million to the bank, half of what his total debt was that year.

That would have included $170 million dollar loan he paid Ivanka out of for her DC hotel design consultancy. Donald had had a whole decade to pay this loan back, and Donald was personally on the hook for most of that money.

In addition, there was the $200 million that Trump’s billionaire partner in the Post Office remoldel owed when that investor bowed out of the project.

In a quid pro quid deal, Rosemary Vrablic got Trump to store tens of millions of borrowed dollars into a Deutsche Bank accounts to generate fees for the bank in return for that 200 million dollar loan Trump owed.

Rosemary then gave $19 million to Donald for the Doral Golf Club via his LLC.

In May 15, 2019 two reporters at The Washington Post newspaper revealed the Trump Doral’s finances in an article titled, “Trump’s prized Doral resort is in steep decline according to company documents, showing his business problems are mounting”.

On October 17, 2019 BBC News, with a photo of Mick Mulvaney announced that “Trump’s Doral Miami golf course to host G7 summit. The ensuing uproar ended with the Doral summit being cancelled. Donald’s third attempt at making money with his golf courses was thwarted.

The Act of a Big Shot is Fast Failing

Donald Trump has been desperate to get money now that his TV show is gone. He is milking every chance to make money while being President, but that is not so that he can pay his debts. It is so that he can keep on not paying other people he does business with who give him money to burn.

The more Trump loses the more the IRS lets him off the hook, giving him tax credits. For decades Trump has been enabled by Deutsche Bank and his share of taxes paid for by all other American taxpayers. Trump has made huge profits off of being the biggest loser in the U.S. for years.

The recent New York Times article about Trump’s taxes asserts that Trump has been battling with the IRS for a decade over the legitimacy of a paltry $72.9 million tax refund that the President claimed, and received, after declaring huge losses. An adverse ruling could cost him more than $100 million.

In the past Trump has blamed hedge fund managers for his losses, hoping that Americans would be as envious as he was over the huge fees hedge fund managers charged truly wealthy clients.

Donald Trump acts and talks like he’s a billionaire, but he is a merely “King of Debt,” desperately looking for deals and wallowing in tens of millions of dollars of debt from all his business failures thanks to Deutsche Bank’s loans.

According to Dark Towers, only a favor from someone high up in government kept Deutsche Bank from being wiped out by the Financial Crisis in 2007-2009. The bank’s relationship with the Trump family may yet bring that bank down, or bring the entire Trump family down.

One thing is clear to me from this book – Deutsche Bank has shrunk to being just an ordinary big bank, one that is perhaps on the way out of existence if it cannot finally manage reform itself.

The other thing that is clear to me from Dark Towers and the recent New York Times article is that Donald Trump is running a giant Ponzi scheme, one that is going to leave a lot of people holding the empty bag when he runs out of steam.

The people who will probably pay will be Deutsche Bank and the American taxpayers who have already been paying for Donald Trump’s losses for decades.

On the upside, maybe Donald Trump’s irresponsible borrowing will provoke Congress and the IRS to really crack down on tax breaks for the very wealthy who do not pay their fair share of our taxes. Call me hopeful, but these days I have to hope to stay sane!

 

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