Senior executives at Deutsche Bank AG were so worried after the 2016 U.S. election that the Trump Organization could default on about $ 340 million in loans while President Trump was in office that they discussed extending the dates of reimbursement until after the end of a potential second term in 2025, according to people familiar with the discussions.
Members of the bank’s board of directors, including then-chief executive John Cryan, were wary of the public relations disaster they would face if they preyed on the assets of a sitting president, said the people, who requested anonymity because the discussions were private. The talks focused on the reputational risks of the bank and were not related to heightened concerns about the creditworthiness of Trump or his company, people said.
The bank ultimately decided not to restructure loans to the Trump Organization, which mature in 2023 and 2024, and instead chose not to do new business with Trump while he is president, one said. people.
A spokesperson for Deutsche Bank declined to comment, and those familiar with the talks said they were unsure why the bank ultimately decided not to extend the loans. The White House did not respond to requests for comment.
“This story is complete nonsense,” Eric Trump, son of the president and executive vice president of the Trump Organization, said in an email. “We are one of the least indebted real estate companies in the country. Virtually all of our assets are held with full deductibility, and the very few who have mortgages are a small fraction of the value of the asset. These are traditional loans, no different than any other real estate developer would have in a comparable portfolio.
Deutsche Bank had been Trump’s lender of choice for decades, even as other commercial banks ceased doing business with him due to several bankruptcies. Although the German lender’s investment bank severed ties with Trump during the financial crisis, after defaulting on a loan and then suing the bank, its wealth management unit continued to extend credit to it.
But, as the New York Times first reported, Deutsche Bank previously turned down a loan request from the Trump Organization for work on a Scottish golf course in early 2016, during the campaign, in part. because she was afraid of having to collect from a sitting president.
The head of retail banking at the time, which includes the wealth management unit, was Christian Sewing, who replaced Cryan as CEO in April. Sewing was initially in favor of approving the loan application, but submitted it to Deutsche Bank’s reputational risk committee, which recommended denying it, according to a person familiar with the matter. Couture supported the decision, the person said. The Trump Organization said it had never applied for such a loan.
Deutsche Bank’s outstanding debt includes $ 125 million for the Trump National Doral Miami complex, which matures in 2023, according to federal records and mortgage documents. The company also owes $ 170 million for the Trump International Hotel in Washington and has another Chicago tower loan, both maturing in 2024.
Trump’s relationship with Deutsche Bank is under scrutiny now that Democrats control the House of Representatives and two party members – Californians Maxine Waters and Adam Schiff – sit atop powerful committees.
Democrats on the House Intelligence Committee have already described in detail what they expect from Deutsche Bank. In a March report, they said they would seek to interview senior executives in the bank’s risk division who could talk to them about the due diligence carried out on Trump after the 2016 election. They also want documents on the bankruptcy. the bank’s previous transactions with Trump and would like to interview his personal banker, Rosemary Vrablic.
In the four years before his election, Trump borrowed more than $ 620 million from Deutsche Bank and a separate lender, Ladder Capital, to fund projects in Manhattan, Chicago, Washington and a suburb of Miami, according to the documents. federal and real estate records.
Jack Weisselberg, a top executive in Ladder’s lending organization, is the son of Allen Weisselberg, longtime chief financial officer of the Trump Organization who previously worked for President Trump’s father, Fred. Ladder loaned Trump $ 282 million for four Manhattan properties, according to records. Jack Weisselberg declined to comment.
The loans are divided between variable rate mortgages and fixed rate mortgages. Some are interest-only loans, with lump sum payments due at maturity, according to real estate records and securities deposits.
The timelines for Trump’s loans to Deutsche Bank have not changed since his pre-election financial disclosure, the documents show. Government-run databases of local property filings for New York, Washington, Chicago, and Miami-Dade County show no change in terms of Trump’s mortgages.
Finch, Arons and Nasiripour write for Bloomberg
