Deutsche Bank (DB) executives were furious at Donald Trump in 2008 for refusing to pay back the $334 million he owed them for a construction loan to build a luxury apartment building in Chicago. They had loaned Trump over two billion dollars, including hundreds of millions for his casino empire. The most lavish was the Taj Mahal, a palatial casino in Atlantic City completed in 1990. Taj Mahal, owned by Trump Hotels and Casino Resorts, was an infamous den for gangsters, money laundering, narcotics, prostitution, and other crimes. It teetered on the brink of bankruptcy.
Taj Mahal management pleaded guilty to ” willfully violating” anti-money laundering regulations and paid a $10 million fine, the largest fine ever imposed on a casino in the U.S.
Taj Mahal management imposed a vicious cutback on their thousands of workers represented by Unite-Here that stripped them of their healthcare benefits and pensions. After the COVID-19 pandemic, the workers voted overwhelmingly to strike if the Taj Mahal and other Atlantic City casinos refused their demand for a wage increase to offset losses they incurred during the pandemic. Renamed Trump Entertainment Resorts, the outfit filed for bankruptcy on Sept. 10, 2014. Taj Mahal closed on Oct. 10, 2016. Later, it was bought by Hard Rock International and reopened.
It is one of six Trump-owned enterprises that defaulted on their loans and declared bankruptcy. Trump’s reputation as a deadbeat who lost other people’s money was so toxic that no bank other than Deutsche Bank would float loans to him. At last, DB bankers ran out of patience. They filed a lawsuit seeking payment of the $334 million Trump owed. Yet when DB lawyers showed up in court, Trump’s legal team handed them a document. It was a counter lawsuit citing a clause in the loan that forgave Trump repayment if the nation’s economy had been struck by a “force majeure,” a crisis from God almighty that could not be foreseen.
The nation had just been hit by the housing crisis in which millions of mortgage holders were losing their homes in foreclosure. Trump’s counter-lawsuit accused Deutsche Bank of being a major factor in causing this economic “tsunami.”
Besides, Trump had written a book, “Think Big and Kick Ass in Business and Life.” He wrote, “I turned it back on the banks….I figured it was the bank’s problem, not mine. What the hell do I care? I actually told one bank….You shouldn’t have loaned me that money. I told you that goddamn deal was no good.”
In effect, Trump’s lawsuit was telling Deutsche Bank, “You know I am a deadbeat, a liar. I have a proven record of defaulting on my loans. You are guilty of gross negligence in lending me money. To pay for your criminal negligence, the court must order you to compensate me by paying $3 billion in damages plus court costs and the cost of bringing this lawsuit.”
Trump is like a serial killer shouting, “Help! Stop me before I kill again.”
The whole sordid tale is told in Dark Towers: Deutsche Bank, Donald Trump, And An Epic Tale of Destruction. Written by David Enrich, Finance Editor of the New York Times, the book paints a picture of Deutsche Bank, based in Frankfurt, Germany, as an out-of-control financial monster driven by reckless greed.
Founded in 1870, Deutsche Bank provided capital for German industry to expand into a worldwide economic and financial empire, initially in the United States. But in the 1990s, DB—cautious and conservative in its investment strategy—was taken over by American and British financiers driven by irresponsible greed.
Decision-making and investment strategy was moved to London but especially Wall Street. The brash young American financiers eagerly embraced “derivatives,” a financial instrument for unregulated market speculation. Deutsche Bank grew to be one of the biggest banks in the world. Heedless of risk, it gambled with other people’s money, investing in risky markets like Russia.
Deutsche Bank connected with Charlie Ryan, an American who moved to Moscow and set up United Financial Group (UFG), where Russian oligarchs deposited billions of rubles looted from socialized wealth stolen from the now-defunct Soviet Union. Ultimately, Deutsche Bank bought out UFG and became Vladimir Putin’s favorite European bank—and Donald Trump’s favorite bank, too.
But Deutsche Bank assets were trillions of dollars in “derivatives” swollen by the enormous profits then pouring into bank coffers. If the economy suddenly tanked, the value of these derivatives, once worth $100 or more per share, would plunge to pennies. And it has happened more than once. For decades, Deutsche Bank itself has teetered on the brink of bankruptcy, kept afloat by the largesse of top German, Russian, British, and U.S. politicians such as Putin and Trump.
Bending the knee to mighty political tyrants is nothing new to Deutsche Bank. David Enrich describes in detail how top executives of the bank embraced Adolph Hitler, pouring millions of Reichsmarks into the coffers of the Nazi Party starting in 1932. Deutsche Bank immediately embraced Nazi “Aryanization,” firing all Jewish directors of the bank. They invested millions of Reichsmarks in Heinrich Himmler’s S.S. and Deutsche Bank money built Auschwitz—the Nazi concentration camp where millions of communists, Jews, Slavs, Roma people, gays, and disabled people were starved to death as slaves in German factories, mines, and mills.
Deutsche Bank money funded the giant German chemical trust, I.G. Farben, that manufactured Zyklon-B, the poison gas used to murder millions of Jews and other victims of the holocaust.
After the war, the anti-fascist allies found Deutsche Bank guilty of war crimes and ordered it broken up. A year or so later, the U.S. and Britain forgave Deutsche Bank and handed back all the DB assets it had seized, including gold stolen from the mouths of murdered Jews.
A few decades later, another would-be dictator strutted onto the scene, snarling and sneering as mean as Adolph Hitler. Deutsche Bank recognized the type immediately and started lending him money, promoting his bid for President of the United States. Trump still owes Deutsche Bank hundreds of millions in defaulted loans.
DARK TOWERS: DEUTSCHE BANK, DONALD TRUMP, AND AN EPIC TRAIL OF DESTRUCTION
By David Enrich
Finance Editor, The New York Times
Custom House, 2020
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