In recent months, Trump's multiple engagements with Deutsche Bank (ETR: DBK) have been the subject of persistent questioning and investigation. This situation for the American President is further complicated by the Bank's recent trail of ethical and procedural wrongdoings. Among these incidents includes the Bank's failure to prevent a Russian money laundering operation from passing through their organization.
As for the president, reports suggest that Preet Bharara (former US attorney for Manhattan, with a reputation for being a "crusader" prosecutor, staunch anti-corruption advocate and "swamp drainer") was fired by Trump's administration for his involvement in an ongoing investigation of the bank. The suspected collaboration between Deutsche Bank and the Russian money laundering operation underscores the long-standing suspicion that Trump (who frequents the bank for loans) is working with the Russians.
While Trump deliberately obscures much of his and his administration's dealings with Russia, one favorite example of the media illustrating his connections with the Russians is his business deal with Russian oligarch Dmitri Rybolovlev. Rybolovlev purchased a luxury estate from Trump at an unusually high price, turning Trump a significant profit, but then left the estate empty. For investigators, one telltale sign of money laundering includes the "pattern of payments and/or transactions where the client stands to lose". As the client appears to sacrifice monetary gain, the likelihood of him/her gaining in other ways from the transaction increases.
Obscurity remains a pervading theme in both the actions of Trump and those of his administration. Trump's appointment of Wilbur Ross as Commerce Secretary has unsettled many spectators for "the strange circumstances in which information about him is -- or rather, is not -- being divulged". Ross's presence in Trump's cabinet creates a further, tentative link between Trump's administration and the Russians, due to the Bank of Cyprus affair.
Ross served as vice chairman of the Bank of Cyprus, a financial institution known for its attractiveness to Russian investors. According to an article by Newsweek, Ross's official role with the Bank of Cyprus was to diversify its sources of funding. Ross was instrumental in "turning it away from Russia to face the West". Commentators claim that his period of involvement with the Bank did not coincide with any illegal activities on his part. Yet, despite these positive testimonials, the White House maintained opacity regarding Ross's involvement with the bank when public interest caused them to provide an official answer. The nature of their response raises the possibility that Ross's background contains details that would be disadvantageous to the administration's image, should they emerge. The Trump administration frequently employs the strategy of withholding information in managing its controversies, and engaging with the media.
Both Congress and the American media view the Bank of Cyprus as an institution that caters to wealthy Russians. It has come under suspicion for being instrumental to Putin's oligarchs' money laundering schemes. Wilbur Ross's involvement with the Bank of Cyprus, and the air of ambiguity surrounding it, thereby underscores the possibility that illicit collaborations are taking place between the Trump administration and the Russians.
The congressional letter from the House Financial Services Committee was addressed to Steven Ross and Leslie Kiernan of Akin Gump Strauss, two of Deutsche's attorneys. In the letter, the Committee members asserted that "if Deutsche had any lingering liability concern about handing over information about Trump's account to Congress, the bank should 'simply' ask the president and his relatives for their consent". The Committee members believe that compliance with this suggestion can only benefit the President, who frequently asserts his lack of ties with Russia in the absence of providing concrete evidence. The emergence of solid proof should, in theory, improve his reliability in the eyes of the American people.
Shortly after Trump announced his candidacy for the presidential election, Deutsche reviewed Trump's business with them, allegedly finding no link with Russia. Yet when House Democrats (led by Maxine Waters) wrote a letter to John Cryan (American CEO of Deutsche Bank) requesting to see this review, and related documents, Deutsche Bank "failed to respond" or provide details on Trump's potential ties to Russia. The Democrats became suspicious that Deutsche Bank had issued Trump loans guaranteed by the Russian government to help fund new developments to Trump's real estate empire. The Democrats lacked the power to "compel Deutsche Bank to hand over the information," due to the Republican majority in the House committee. Hence, the Democrats will be unable to ensure for the House Committee to exercise its power of subpoenaing the documents, as this requires cooperation from the Republican majority in the panel -- something that is likely to be impossible.
The "mirror trading" scheme from 2011 currently under investigation also figures into the Bank's troubles. An example of mirror trading is the purchase of stocks in one country, with one currency, by one party (Party X). Related parties (Party Y) then sell the same stocks soon after, in a bank based in another country. In Deutsche Bank's former Moscow branch, the mirror trading scheme "allegedly allowed $10bn to flow out of Russia" although it is "still unclear who benefited from the scheme."
The backdrop for the American president's controversy with Deutsche Bank is controversy surrounding the legitimacy of his election. Congressional investigations into the "alleged Russian meddling in the 2016 presidential election and potential collusion between Moscow and the Trump campaign" have taken place, although both parties under investigation have denied these charges. Furthermore, the letter from the House Financial Services Committee is only one in a "string of demands" that includes a Democratic inquiry to Jeb Hensarling, Republican chairman of the Financial Services Committee. The Democrats requested his help in directing FSC's "oversight authority to open an investigation into Deutsche's Russian money laundering operations": a request that "went unanswered".
Further complicating matters is Deutsche Bank's own failings and misdemeanors. It was fined $629 million dollars in January 2017 by New York and United Kingdom authorities for "failing to catch a group of traders" who "secretly transferred" over $10 billion dollars out of Russia by converting rubles into dollars. Yet, the connection between Deutsche Bank and Trump's business interests has been steadfast. Given the bank's recent troubles and investigations under the Department of Justice (and Trump's role as President overseeing the DOJ), Trump's business connections to Deutsche now constitute "one of his most glaring conflicts of interest". Deutsche Bank provided "at least $364 million in financing" for Trump's presidential campaign.
In early July, Deutsche Bank will begin its reviews with an "independent third-party monitor" tasked with "examining the bank's handling of any suspicious activity involving non-US banks that may have occurred in the last six months of 2016". Deutsche's systems for identifying and reporting suspicious activities have previously been inadequate in comparison with standards, and the conduct of most banks. The period to be reviewed under the third-party monitor will coincide with the US election time in 2016. The monitor's efforts are part of the bank's settlement with the US Federal Reserve. After discovering Deutsche's lack of "strong enough systems to detect suspicious transactions from the period of 2011 to 2015," the Federal Reserve took remedial measures in May 2017.