It may turn out that Donald Trump’s biggest legal risk does not arise from the alleged connections between his 2016 presidential campaign and Russia but from his two-decades-long relationship with a scandal-prone German bank.
On Tuesday, several news outlets said U.S. Special Counsel Robert Mueller had asked Deutsche Bank for data on accounts held by Trump and his family, first the German daily Handelsblatt and later by Bloomberg, The Wall Street Journal and Reuters. Mueller sent the bank a subpoena several weeks ago asking for information on certain accounts and credit transactions. In response, the bank has turned over documents to the investigators, these stories said.
White House press secretary Sarah Huckabee Sanders said these stories were false.
“No subpoena has been issued or received. We confirmed this with the bank and other sources,” Huckabee said.
Even if a subpoena has not yet been issued, Trump’s legal team is likely on high alert over what an investigation by Mueller into Deutsche Bank might turn up
Trump has deep and long-lasting ties to the German bank. Over the last 20 years, Trump and his businesses have received more than $4 billion in loan commitments and potential bond offerings from Deutsche Bank, according to The New York Times. Despite the riskiness of some of the loans, the bank has made money from its business with Trump, according to people familiar with the matter.
Trump’s family is also tied to the bank. Son-in-law and senior adviser Jared Kushner and daughter Ivanka Trump are reportedly customers of the bank. And Kusher’s family businesses have received loans from Deutsche Bank.
The subpoena has long been expected. Deutsche Bank was already in contact with federal banking regulators who were investigating whether its loans to Trump’s businesses might expose the bank to heightened risks. As early as July, the bank had been in contact with investigators probing its relationship to Trump. The bank, however, had expressed concerns that it could violate bank privacy laws if it turned over too much information, a person familiar with the matter said. The subpoena takes away that risk and allows the bank to turn over information about Trump and his family members to Mueller’s office, the person said.
The materials could provide investigators with a roadmap to Trump’s businesses’s connections to various investors and institutions. Very likely, investigators will learn what outside investors may have purchased loans or bonds arranged by Deutsche Bank. This could reveal previously unknown conflicts of interest, some of which may be unknown even to Trump and his advisers. It may help investigators expand their already far-reaching probe into Trump’s business dealings.
It is unlikely to reveal any connection to Russia. Although Deutsche Bank itself has extensive connections to Russia, and this year paid hundreds of billions of fines to settler chargers that it helped Russian investors launder money, there is no indication that these connections stretched into its relationship with Trump.
But Deutsche Bank’s long list of misdeeds may prove troublesome for Trump. The bank has been involved in nearly every scandal that has rocked the financial world in recent years, from toxic mortgage lending to interest rate rigging to illegal tax shelters to its dealings with Enron to violating sanctions against doing countries such as Iran. Many of these scandals resulted in legal penalties. Eventually, the bank’s reputation in tatters and bank regulators unhappy with the bank’s handling of its internal investigations into allegations of wrong-doing, its top executives were forced to resign.
The bank is widely considered to have had a culture of rule-bending and rule-breaking, a culture and reputation it is now endeavoring to repair. Trump’s business dealings with Deutsche Bank, however, came largely before the bank seriously began reckoning with this culture and the installation of its new chief executive, the British businessman John Cryan. This raises the risk, at least, that misdeeds by Deutsche Bank’s could touch its relationship’s with Trump.
“For two-decades, if you turned over a dirty rock in the financial world, you found a hairy, poisonous D.B. spider with its web wrapped around the corpse of a client,” one former bank employee told Breitbart News.
In February, Cryan apologized for the bank’s history. “We would like to apologize sincerely,” he said. “Serious errors were made.”
In an interview with the New York Times in June, Trump agreed with the idea that Mueller’s investigation would be crossing a “red line” if it went into his family’s finances beyond a connection to Russia.
It’s unclear if the redline has been crossed. That would depend on how extensive Mueller’s inquiries with Deutsche Bank went. But given the bank’s history, Trump’s attorneys are no doubt wondering what, if any, “serious errors” Mueller’s team might turn up in connection with Deutsche Bank’s dealings with Trump.