Not long afterward, Edson Mitchell, a top bank executive, discovered that the signature of the loan official who had approved the Trump Marina deal had been forged-- the credit officer whose signature was on the paperwork said that he'd never approved the loan commitment, much less signed it. Bank officials had extensive internal discussions about the potential pitfalls of the bank's Trump relationship, and they were worried. They talked about Trump's well-documented ties to the organized crime world. Eventually, Deutsche began steering very rich Russians into the Trump ventures, according to people who were involved in the deals.
When Trump partnered in 2006 with a Los Angeles developer to build a Trump-branded resort in Hawaii, Deutsche organized get-togethers in London and elsewhere to connect Trump and his partners with wealthy clients who used anonymous shell companies to buy blocks of units in the sprawling Waikiki hotel complex. The bank played the same behind-the-scenes matchmaking role when Trump sought to drum up interest in a planned resort in Baja, Mexico. In both cases, Deutsche steered very rich Russians into the Trump ventures, according to people who were involved in the deals-- just a couple of years after American regulators had punished the bank for whisking Russian money into the U.S. financial system via Latvia.
Senior executives at Deutsche Bank had long discussed the potential pitfalls of the Trump relationship, and they were worried. It wasn't only the not-insignificant risk that Trump would default on loans. The bankers also knew how filthy the New York real estate industry could be. They talked about Trump's well-documented ties to the organized crime world, and the possibility that Trump's real estate projects were laundromats for illicit funds from countries like Russia.
And then along came Tammy McFadden. Ms. McFadden had worked in Deutsche's Jacksonville offices for eight years when, in the summer of 2016, some suspicious Jared Kushner transactions landed in her inspection queue. Deutsche's computer systems automatically scanned thousands of transactions every day, looking for any hints of impropriety, and then sent those flagged transactions to experts for review. McFadden, a veteran anti-money laundering compliance officer attached to Deutsche's private banking division, was one of those experts.
Earlier that year (2016) McFadden had noticed that many customers of the bank (including a few super-rich clients of Rosemary Vrablic, a New York private banker hired by Deutsche ten years earlier) didn't have the proper documentation attached to their accounts. This was especially problematic for customers who were classified as "politically exposed persons"-- a designation that is supposed to subject them to extra vetting because of the heightened risk that they could be involved in bribery or other public corruption.
McFadden did a broader review and found more than a hundred politically exposed clients who didn't have the requisite documentation showing things like where their money came from. Among those customers, she realized, were Donald Trump and his family members. When McFadden altered her superiors, they told her not to worry about it. Now, in the summer of 2016, with Trump having clinched the Republican nomination and Kushner serving as his advisor, McFadden was assigned the task of reviewing a number of transactions in the Kushner companies' accounts that had triggered alerts in Deutsche's computer system. Right off the bat, she could see why the transactions tripped up the software: Kushner's real estate company was moving money to a number of Russian individuals.
McFadden did some research, looked into the recipients of the money and into the Kushner Companies' history of moving funds overseas and concluded that the appropriate response was for Deutsche to file a "suspicious activity report" with FinCEN, the arm of the Treasury Department responsible for policing financial crimes. This didn't strike McFadden as an especially close call-- she typed up the report and sent it to her superiors. Word traveled back to McFadden that her report was being killed-- by managers in the bank. McFadden was pretty sure this was an example of the bank trying to preserve its lucrative relationship with the Kushners (and therefore the Trumps), at the cost of not adhering to anti-money laundering laws. Soon, she was transferred to another division and then, in April 2018, fired.
McFadden had found something important. The Kushners-- with their long-standing ties to Deutsche-- were moving money to Russians at the same time that Russia was interfering in the American presidential election, trying to tilt it in favor of Jared Kushner's father-in-law. It was hard not to be a little suspicious. What exactly were the purposes of the transactions that McFadden had spotted? What did they show about the interests of Kushner, Trump, or his presidential campaign in Russia? With McFadden gone and her suspicious activity report deleted, the answers to those questions vanished inside Deutsche's computer systems.
There was no doubt that Deutsche Bank had extensive dealings with Russia, and those dealings included acting as a conduit for dirty money to get out of Russia and into the Western financial system. Perhaps this was more than a coincidence. Maybe Deutsche was what connected Trump to Russia. The rumor that had been ricocheting around Washington, New York and London was that VTB (one of leading global banks in Russia) had in the recent past funneled dirty Russian money to Trump via Deutsche. VTB certainly seemed connected to Trump. Russian-American mobster Felix Slater had already claimed that VTB was facilitating travel and other arrangements for Trump's team in 2016 as they discussed a possible Trump Tower project in Moscow. And there was no doubt that VTB had deep, long-standing ties to Deutsche.
Now the theory was that one of the reasons Deutsche had been willing to take such risks on loans to Trump was that it wasn't actually taking the risks at all: VTB had agreed to secure the loans-- and if Trump defaulted, Deutsche could collects whatever it was owed from the Russian bank. In effect, that meant that VTB was the one lending to Trump-- a direct financial connection between the Russian government and the American president. Deutsche executives insisted this was false.
Nevertheless, David Enrich's book lays out a plethora of storylines and tantalizing clues as to just how deeply entangled Deutsche was with Russian and-- despite everything that is already public (thanks to Deutsche's repeated scrapes with Western law enforcement and regulatory agencies)-- just how little was really known about what the bank was up to. Those answers lay hidden deep inside Deutsche. Short of theft or a very lucky break with a disgruntled employee, the only way to crowbar open those electronic vaults is for a government body to issue a subpoena. Such a subpoena will be argued in the Supreme Court on March 31-- stay tuned.
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