Donald Trump has had a very special relationship with the Deutsche Bank of Germany. For almost two decades, he relied on this bank for financing during a time when other banks refused to lend him money. The German bank was eager to expand its reach in the US and it felt that extending credit to Trump would actually help this course. Ever since Trump became president, a lot has been said and written about this relationship. However, for the first time lawmakers at the Capitol are investigating it. There is also an investigation on the relationship by the New York attorney general.
New details are also emerging about the torrid history between the bank and the president. For instance, some reports indicate that, right from the start, executives at Deutsche Bank recognized that Trump was a risky client. This was the reason why other banks had declined to lend him money. But even with that, the Deutsche Bank would still offer him huge loans. But it came with a cost. In 2004, for example, Trump and his company defaulted the loan with the Deutsche Bank which led to very deep losses. The default came 12 months after salesmen from the bank had helped one of Trump’s casinos sell bonds worth hundreds of millions of dollars.
After the default, it looked like the relationship had fallen apart. But a year later, Trump approached Deutsche Bank for a $640 million loan to build a skyscraper in Chicago. Surprisingly, the bank actually accepted and in 2008, he defaulted yet again. This time Trump even sued Deutsche Bank. The loan had been taken from an investment division within the bank. The lawsuit was not taken kindly and the bank decided to cut all ties with the Trump organization.
However, three years later the relationship came back, this time through a private banking division targeting the super-rich. A report on the New York Times claims that Deutsche Bank lent Trump money that was used to repay previous loans that he had already defaulted. That relationship is still intact to this date. It’s also emerging that a lot of executives at the bank wanted to keep Trump as a client. But the bank has tried to downplay the extent of this relationship ever since Trump was elected president in 2016.
It’s very hard to understand though why Deutsche Bank continued to lend to the Trump organization even after two costly defaults. The board at the bank also faulted the policy flagging Trump as a high-risk client who should have been tossed after the first default. But executives at the time defended their decision.
There was also some controversy surrounding the relationship. Trump’s point man at Deutsche Bank was Mike Offit. He had arranged a number of loans for Trump and the two became very good friends. In 1999, senior bank officials discovered that signatures on some of Trump’s loan documents had been forged. The forgery was not linked to Offit but he was fired a few days later. There could be more details coming soon after the investigation.
