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Deutsche Bank Is The 'Rosetta Stone' To Unlock Trump Finances, Journalist Says

May 9, 2019
Originally published on May 10, 2019 11:04 am
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TERRY GROSS, HOST:

This is FRESH AIR. I'm Terry Gross. Congressional Democrats determined to investigate President Trump's personal finances are encountering a wall of resistance from the White House. But leaders of two House committees have identified another rich source of information about Trump's businesses - Deutsche Bank, which was a lending partner on many Trump projects over a period of more than a decade, providing over $2 billion in financing. The relationship included some successes but also loan defaults and one contentious lawsuit.

In the process, Deutsche Bank amassed a wealth of information about Trump's business dealings. And the House Intelligence Committee and the Financial Services Committee have subpoenaed those records from the bank. Trump has sued to prevent Deutsche Bank and another financial company, Capital One, from providing those records.

Our guest today is David Enrich, finance editor of The New York Times. He's written and edited many stories about Trump and Deutsche Bank. And he's working on a book that's slated for publication next year called "Dark Towers: The Inside Story Of The World's Most Destructive Bank." He spoke with FRESH AIR's Dave Davies.

DAVE DAVIES, BYLINE: Well, David Enrich, welcome to FRESH AIR. Donald Trump and Deutsche Bank had a very special relationship, which you've written a lot about. Let's talk about this. It was, I guess, rooted initially in his need to find financing from new sources when a lot of traditional banks were wary of lending to him. Tell us what happened, why he had this need for Deutsche Bank.

DAVID ENRICH: Yeah. Well, as you said, Donald Trump was poison, basically, in the banking community. And he was poison because he had this annoying tendency of, one time after another, defaulting on the loans that a number of banks provided him. And banks understandably do not like when borrowers default. And it costs them and their clients hundreds and hundreds of millions of dollars over a period of a number of years. And so by the late 1990s, Donald Trump's only source of borrowing really was from his father Fred.

And he needed to re-establish access to the mainstream financial system. And how could he do that? He had really worn out his welcome over Wall Street. And he went looking for some other banks that might be willing to do business with him. And it just so happened that there was a new arrival on Wall Street. And it was Deutsche Bank, which is a big German lender, which at the time was 128 years old. And it was embarking on this mission to really increase the amount of business it did in the United States and to make itself a household name in America. And one way to do that was to try to line up some marquee clients - people with big names, splashy personalities and - to get some buzz going.

And they also just needed to win customers. They needed to find customers who were not already receiving banking services from all of their better-established competitors. And so they were willing to take risks that certain other banks - that most other banks, in fact, were generally not willing to take. And Donald Trump fit that bill. This is a guy who, despite all of his financial troubles at the time, remained very well known in the United States. He also was someone who embodied risk - had a very clearly established pattern of stiffing his lenders over and over and over again. And the fact that Deutsche Bank was willing to do business with a guy like that was very appealing to Donald Trump, who was in the market for a new favorite bank.

DAVIES: OK. So this relationship really gets going, you know - I guess the late '90s. What was one - an early project that he borrowed for? And how did it go?

ENRICH: Yeah. So the first project that Trump came to Deutsche Bank on was 40 Wall Street, which was a large art deco skyscraper in lower Manhattan. And Trump had purchased it several years earlier, and it was a very small price because it needed massive renovation. There had been a number of attempts at refurbishing the building that had just gotten nowhere.

And so Trump was looking from Deutsche Bank for a couple hundred million dollars initially. And Deutsche Bank looked into the project and was frankly impressed that Trump knew - he'd kind of priced everything out already; he knew how much the steel would cost, how much the windows would cost, things like that - and realized that this was their opportunity to get a really big deal in the U.S. So they agreed to lend him about $125 million at the time. And Trump was just giddy with gratitude. Frankly, the bank was giddy with gratitude, too. This is a very symbiotic relationship right from the start.

And Trump immediately realized that he had a new friend on Wall Street, essentially, and started really cozying up to the bankers who had gotten this initial deal done - flying them to boxing matches in Atlantic City, writing letters to them, praising them for being great friends, in one case even sending a note to the banker's father thanking him for having such a wonderful son.

And at the same time - and this is kind of a pattern you'll see with Trump over the decades. At the same time that he's lavishing these guys with praise and really trying to cement his relationship, he's also coming back to them with requests for more loans. So before the ink was even dry on this initial loan for 40 Wall Street, Trump had come back to Deutsche Bank with another request, which was that he wanted to build, from the ground up, a residential skyscraper right across from the United Nations building on the East Side of Manhattan.

And this was a much riskier loan because, first of all, it was larger. And second of all, building something from the ground up entails much more risk. I mean, you know, the product can just fail, whereas a renovation, which was what 40 Wall Street was, is considerably less risky. And Deutsche Bank took a look at this and once again pulled the trigger.

DAVIES: And how did it go?

ENRICH: You know, it actually went well. These initial projects went reasonably well for Deutsche Bank and for Donald Trump. So through the late '90s and right into early 2000s, the project succeeded for the most part. Trump actually got these deals done. He got 40 Wall Street refurbished. He got the building across from the U.N. built. And this was - things seemed to be going pretty well at the start.

It didn't last forever, though. In the early 2000s, Trump, realizing that he had this kind of nascent but very strong relationship with Deutsche Bank, decided to double down, essentially. And his Atlantic City casinos, which were still hemorrhaging cash - he needed to raise money to keep them afloat. And so he went to another team at Deutsche Bank that was specialized in selling high-risk bonds, known as junk bonds, to investors. And he said to them, look; I would love to do a deal with you where you guys sell hundreds of millions of junk bonds for this casino company I've got that is taking on water really fast. And he gets Deutsche Bank officials to take him on what's known as a road show - so traveling all around New York and Boston, meeting with big institutional investors and trying to get them to buy the bonds.

And it seems like it's going really well. There are crowds at these meetings. And these meetings are normally - I've been to these in the past, and they're normally extraordinarily dry and boring. And you have these very kind of buttoned-up finance executives talking about just the cash flow projections and things like that about - their expectations for how this - why these bonds are financially attractive. And that was not the case with Donald Trump. He would go to these road shows and just put on a show. He was wheeling and dealing and ranting and raving, and it drew - they drew crowds. One day after another, there would be people - even the secretaries were coming into these road show meetings to see the Donald Trump show.

And so Trump, at the end of this process, thinks, wow, that went really, really well. How much money did we raise? And the Deutsche Bank guys come back to him and have to break the news to him that, alas, it raised almost zero - that everyone wanted to see Donald Trump talk and they wanted to experience the Donald Trump show, but that did not mean they were willing to entrust him with any of their money and so it had fallen flat.

DAVIES: We're talking about meetings with people, like, who represent big pension funds, people who have a lot of money to invest, guys in suits in conference rooms - guys and women in suits in conference rooms - and yeah, they want to see the hard numbers, not just some flash.

ENRICH: Right. In fact, I think in this case, they didn't even really want to see the hard numbers. They knew they were not about to loan money to Donald Trump because - for the same reason that no one other than Deutsche Bank was willing to lend money to Donald Trump, which is that he keeps defaulting. And in fact, he's kind of boastful about default. And he would - he made a show of kind of strong-arming banks and other lenders, trying to show that he was a tough guy, that he was in charge. And, you know, sometimes that would work, but it created this effect where no one wanted to touch the guy.

So at this point, Donald Trump's really needing this money. Goes to Deutsche Bank, goes to his relationship manager there, and says, listen, let me come into your offices. Let me kind of give a pep talk to the traders and the sales guys and hopefully, we can get this done. And so he comes in and does just what he says. He gives a pep talk. And he says, listen, guys, I understand this is a really hard sell. I understand that I haven't always made the best impressions on Wall Street, but I'll make you a deal. If you can get this bond sale done for me, you will all be my guests at Mar-a-Lago for the weekend.

And that was just the incentive that these sales guys needed, apparently. That sounded like a lot of fun. And so they redoubled their efforts. They no longer took Donald Trump on a roadshow, but they worked with big clients. They had managed to sell nearly $500 million of Trump's junk bonds, which is an extraordinarily large number, especially at the time. And afterwards, the relationship manager calls Donald Trump and says, Donald, we've got great news. We got this done for you. And Trump says, great. He's very excited. And the relationship manager comes back to him and says, listen, just don't forget about what you promised our guys. And Trump says, what? What did I promise?

And the banker is - you know, I've talked to this guy. And he was just blown away that Trump would have the hutzpah to just pretend that he didn't remember the Mar-a-Lago trip. And so he says, the Mar-a-Lago trip - you promised you'd fly them all down there. And Trump says, oh, come on - no one really believed that. They're not going to remember that. And the banker responds, Donald, this is all they've been talking about the past two weeks. You've got to come through on this. And so he does. He sends up his private Boeing jet to New York and flies all the guys down to Mar-a-Lago. He comes with them on the plane ride, and spends the weekend golfing with them, wining them, dining them.

And they have a great time. And they feel like this is a kind of a turning point in the relationship with Donald Trump and Wall Street, and maybe he's really, actually going to make good on the commitments he made to his creditors, the people who bought all these junk bonds. And that impression lasts for a period of months. And Donald Trump then defaults on the junk bonds and - burning Deutsche Bank, burning the clients who its sales guys had just staked their credibility on getting them to buy these bonds.

DAVIES: David Enrich is the finance editor for The New York Times. He's writing a book about Donald Trump's relationship with Deutsche Bank. We'll be back after a break. This is FRESH AIR.

(SOUNDBITE OF MUSIC)

DAVIES: This is FRESH AIR, and we're speaking with New York Times finance editor David Enrich. He's written and edited many stories about Donald Trump and Deutsche Bank and is working on a book about the bank, called, "Dark Towers: The Inside Story Of The World's Most Destructive Bank." It'll be out next year.

So Deutsche Bank, having, you know, engaged this guy with a history of risk, finds itself burned and its clients burned. It's kind of remarkable that the dance continued. Why?

ENRICH: It's a combination of recklessness and greed and disorganization at the bank. And it's unclear to me whether it was even fully communicated to other parts of the bank that this one arm of the bank had said no more to Donald Trump. What we know is that within a couple of years of this default on the junk bonds that destroyed the relationship with one part of the bank, the commercial real estate division of the bank is back doing loans with Trump. And one loan in particular, which would come to define the relationship between Trump and Deutsche Bank over the years, which was to build an enormous skyscraper in downtown Chicago - it was going to be called the Trump International Hotel and Tower in Chicago. And it was - Trump was hoping that it would be the world's tallest residential building. And Deutsche Bank agreed to make loans totaling about $600 million on this project.

And the world was kind of - the financial world, anyone who was paying attention to this at the time, was kind of aghast at the size and the terms of this loan. Because it was an enormous risk, just even for a normal client. But Trump, of course, was not a normal client. This is someone who just had a well-documented pattern of financial irresponsibility and recklessness.

DAVIES: Right. So a couple of years go by, and sales for the condos at the tower aren't going so well. And it looks as if he's going to - he's heading toward default again. Then a remarkable, (laughter), lawsuit emerges to resolve that. What happened?

ENRICH: Yeah. So just as the financial crisis hits in 2008, Trump is struggling to sell all these hundreds and hundreds of condos in this building. And his loan is coming due to Deutsche Bank in November of 2008. And Trump realizes that he probably could pay back the loan, but it would be much easier if he didn't have to. And so he asks his lawyers to research ways that he can wriggle out of the loan. And so the lawyers start going through the fine print of all the loan contracts. And they realize that in the contracts is a provision called a force majeure provision, which means an act of God, which is kind of banking jargon for, if something happens - if an unanticipatable (ph) natural disaster, say, were to happen, that can void portions of the contract and give you more time to pay back your loan, or maybe even void the loan entirely. And it just so happened that the former Federal Reserve chairman Alan Greenspan, just days earlier, had described the financial crisis as a credit tsunami.

And his lawyers looked at each other and said, well, what is a tsunami, if not a natural disaster? And what's a natural disaster, if not an act of God? And so they went to Trump and said, look. I think we've got, basically, an escape hatch for you here. You declare the financial crisis to be an unanticipatable act of God. We can argue that your loan does not need to be paid back right now. And Trump claps his hands and says, that is fabulous. That is a great, brilliant idea. He's got a big smile on his face, and the lawyers feel really good about themselves. And so Donald Trump stops paying back the loan. And days later, they file a lawsuit in New York, arguing that not only does Donald Trump not have to repay the hundreds of millions of dollars that he owes the bank, but the bank actually owes him billions of dollars because they are the ones that caused the financial crisis, he says.

And this, in the history of legal disputes on Wall Street, probably takes the cake for the most flagrant and aggressive ploy ever devised, I would say. The bank initially just kind of laughed and said, this is crazy. What is Donald doing? But they realized they were going to need to actually fight this in court and spend an enormous amount of time and energy litigating this, essentially. And so once again, Deutsche Bank says, we are done with Donald Trump. We are not going to do business with him anymore.

DAVIES: Right. So the investment banking division wrote him off. They had trouble. Now the commercial real estate division says, no, we've been burned. We aren't going to deal with him anymore. But he wasn't finished. There was yet another division that he could develop a relationship with.

ENRICH: Yeah. And this is where the story really gets wacky. So this lawsuit works its way through the legal system for a couple of years. Eventually, around 2010, Deutsche Bank and Donald Trump reach a settlement, which says that Trump does need to repay most of the loan. And in particular, he needs to repay the $40 million portion of the loan that he had personally guaranteed to Deutsche Bank. And so he has a couple of years of kind of wiggle room to repay that amount of money.

And Trump, at this point, is completely iced out of the financial system. And he needs to not only figure out a way to repay the $40 million that he is now contractually obligated to repay, but if he has any hopes of continuing to expand his business empire and continue to do these big, splashy deals, he is going to need to find someone else who is willing to lend him money. And who on Earth could that be? He's already torched his relationship with every single bank in the world. And where is he to go?

And lo and behold, his daughter Ivanka Trump comes up with the answer because she had just married Jared Kushner in 2009. And Jared Kushner had a relationship with someone else at Deutsche Bank. And her name was Rosemary Vrablic. And she worked in what's called the private banking division at Deutsche Bank. And this is part of the bank that's completely separate from the investment bank or the commercial real estate divisions. It's even located in a different part of the city. It's in midtown Manhattan rather than downtown, where the rest of Deutsche Bank's employees are.

And the private bank caters to the world's wealthiest individuals. It provides banking services, wealth management services, even kind of concierge-like services - hooking up clients with hard-to-get concert tickets or dinner reservations, things like that. And Jared Kushner had a relationship with Rosemary Vrablic, who is one of the better-established private bankers at Deutsche Bank - in fact, one of the better-established private bankers in New York City at the time.

And Jared introduces his father-in-law to Rosemary Vrablic. And this becomes Donald Trump's lifeline going forward. This is enough to get him back in the door at Deutsche Bank and back in the door, therefore, on Wall Street and in the financial system.

DAVIES: So Donald Trump, remarkably, having defaulted on several loans involving Deutsche Bank, has a relationship with this private banking division and this woman Rosemary Vrablic, who he got connected to through his daughter and her husband, Jared Kushner. What kinds of loans did he seek from her, from Deutsche Bank through this division?

ENRICH: The first thing he does, actually, is not even to seek any loans. The first thing he does is try to kind of ingratiate himself to the bank. And so he opens up a number of wealth management accounts at the bank, where he is just investing - putting money in the bank, and they invest it in lots of blue chip stock. So this is something that generates fees for Deutsche Bank. It entails virtually zero risk for them. And it just makes them happy that he's their client.

But in 2011, Trump and Kushner and Rosemary Vrablic come up with an idea, which is that Trump has this loan from Deutsche Bank - this $40 million that he still owes Deutsche Bank on the Chicago skyscraper that he previously defaulted on. And that loan - that $40 million payment - is coming due. And so he and Vrablic come up with a plan, which is that the private banking division will loan Donald Trump about $50 million with the Chicago skyscraper as collateral that can then be used to repay the money that Donald Trump owes the commercial real estate division of Deutsche Bank.

So that sounds kind of complicated. It's actually quite simple, ultimately. It means that one arm of Deutsche Bank is providing money to Donald Trump so he can pay back another arm of Deutsche Bank. And again, I've been writing about banking and finance for going on 20 years now. And I have never in my life seen anything like this. It's - and no one else in Wall Street has either because I don't think it's ever happened. And the bank is taking money from one pocket, moving it to Donald Trump to put money back in another pocket of the bank.

GROSS: We're listening to the interview FRESH AIR's Dave Davies recorded with David Enrich, The New York Times finance editor. They'll pick up where they left off after a break and talk about the attempts of two congressional committees to obtain Trump's financial records from Deutsche Bank. I'm Terry Gross, and this is FRESH AIR.

(SOUNDBITE OF BOB WILBER AND KENNY DAVERN'S "ROSETTA")

GROSS: This is FRESH AIR. I'm Terry Gross. Let's get back to the interview FRESH AIR's Dave Davies recorded with The New York Times finance editor, David Enrich, about Donald Trump's long relationship with Deutsche Bank. Deutsche Bank became Trump's primary lender for many years, after other Wall Street banks concluded he was a bad credit risk. As a result, Deutsche Bank acquired a large trove of information about Trump's personal finances and business practices. Two congressional committees have subpoenaed those records, and Trump has sued to prevent the bank from providing that information.

Earlier in the interview, Enrich explained that Deutsche Bank's investment banking and commercial real estate divisions eventually stopped lending to Trump because he defaulted on loans. But another part of the bank - the private banking division - started financing his projects and even loaned him money to repay one of his debts to the commercial real estate division, something Enrich said he'd never seen in 20 years of financial reporting.

DAVIES: So did the loans that he got through the private banking division - were they repaid?

ENRICH: That's a good question. The short answer is that we don't know. These loans - at the time that Trump became president, he owed about $350 million to Deutsche Bank. Deutsche Bank was his largest creditor, by far, and it - and Donald Trump, in turn, was one of Deutsche Bank's biggest clients. We do not know the status of those loans right now. They're still outstanding, for the most part, and in some cases, Deutsche Bank has refinanced them. We have no way of knowing right now whether those loans remain current, whether Donald Trump had stopped paying back those loans or what the status is. There's just not a whole lot of transparency on that right now.

DAVIES: Rosemary Vrablic was close enough to Donald Trump that she got a VIP seat at his inauguration. As he became a presidential candidate and became - saying controversial things, did that affect his relationship with Deutsche Bank?

ENRICH: Not in any discernible way. And even before Trump declared his candidacy for president, he was engaging in all sorts of unusual and arguably offensive behavior, certainly all sorts of racial demagoguery. And he's a leading proponent of the birther movement with President Obama.

And it - this was something that, for most banks on Wall Street at the time - this is after the financial crisis - and they had - many banks had realized that the reputation of their customers is essentially the reputation of the bank itself. So banks were very wary about - of doing business with people who were saying outrageous things or doing outrageous things. And that certainly included what Donald Trump was saying. And this is - it - if Donald Trump's extensive financial baggage wasn't enough to scare away other banks, his racial demagoguery certainly was, based on conversations I've had with a lot of people in the banking industry.

This is not something that seemed to matter at all to Deutsche Bank. They were fully aware of the - of what he was saying in public and the polarizing, at times racist, rhetoric he was using. And they just did not care. It was not enough - that did not matter to them enough to get in the way of their efforts to just increase profits and expand their presence in the United States. They were willing and, in fact, happy, I think, to look the other way.

DAVIES: And yet, in 2016, at some point, the senior management of Deutsche Bank decides they need to launch an internal investigation into how this relationship got so close and lasted so long. Why did that happen?

ENRICH: Well, at this point, Donald Trump has been - spent five years, just about, borrowing gobs of money from Deutsche Bank. So he did the - he borrowed money for - to repay Deutsche Bank on the Chicago loan. He borrowed money for the Doral golf course. He borrowed money for - to the - renovate and turn into a hotel the Old Post Office building in Washington. And he had, in fact - and sought loans to buy the Buffalo Bills NFL team, which never actually transpired.

And in early 2016, Trump came to Rosemary Vrablic, looking for one more loan, and this one was going to be to help finance some work on the Turnberry golf course that he owned in Scotland. And once again, Rosemary Vrablic said, sure, we'll do the loan.

This time, though, the loan started - went up through the hierarchy at Deutsche Bank. And at this point, he had already been - he was fully a presidential candidate. And he had been - he had, in fact, started to win some presidential primaries, and it was looking like he was really the front-runner to win the Republican nomination. And so this loan got a bit more scrutiny than others had in the past.

And as the loan proposal that Rosemary Vrablic had signed off on to provide money to the Turnberry golf resort worked its way up through the food chain, Deutsche Bank executives realized that there is a whole depth to this relationship that they had not even realized existed. No one had paid a whole lot of attention to the fact that there had been hundreds of millions of dollars already doled out to Donald Trump. This had somehow not registered at the highest levels of the bank, which I think is largely a reflection of the company's disorganization and lack of savvy risk management.

And when this did get up to the highest levels of the bank - this latest 2016 loan - bank executives really freaked out, and they, first of all, killed the loan. They said, absolutely no way are we making a - another large loan to a guy who's the front-runner for a major party's presidential nomination. But they also started initiating a series of internal reviews to look at how the bank had gotten into this mess in the first place.

And it wasn't clear this would be that big a mess because everyone assumed - no one thought that Donald Trump would actually get elected president. But the bank realized at this point that they had, potentially, a very large risk on their hands, which was that they were the biggest lender to a guy that no one else would touch and who was a leading contender to become the most powerful person in the world.

And at that point - this is when they kind of slam on the brakes and really start trying to figure out what was happening. And it's remarkable that it took this long because this is a guy who, over the years, at this point - they had loaned, as an institution, about $2.5 billion to him. And the fact that no one at a senior level had been paying a tremendous amount of attention that the risks that that entails is crazy.

DAVIES: You know, it's interesting. You were saying that when Donald Trump was saying controversial things and embracing the birther movement, that didn't bother Deutsche Bank. They continued to do business with him. But they didn't want to make this big loan to the Turnberry course in Scotland because he might be - about to become the president, or at least a presidential nominee. Why would that concern them? And wouldn't that, you know - wouldn't that even - that would give them an even more prestigious claim, wouldn't it? Why did one thing not bother them, the other did?

ENRICH: Well, I think part of it is - I think at the private banking level, at the Rosemary Vrablic level - I think she actually probably did view it as a good thing. This is - talk about a prestigious client, right? This is a guy who might become president of the United States, the most powerful person in the world. And what better client could you possibly have than that? The problem is that having someone that powerful as your client introduces all these other challenges and potential problems.

So, for example, if Donald Trump as president were to stop paying back a loan to Deutsche Bank, what does Deutsche Bank do? You - the bank can seize his - it can - if he defaults, they can seize his assets. But that's seizing the assets of the president of the United States. They could look the other way. But that's, essentially, dispensing an extremely lucrative gift to the president of the United States, which is clearly improper, especially since the bank is heavily regulated by what would become the Trump administration.

And so it exposes the bank to all of these just liabilities that are not necessarily financial liabilities. They're reputational liabilities, though, and political liabilities because you're so far in bed with a guy who's not only the president of the United States but one of the most polarizing public figures of recent times. And that's something that - and we've seen this happen in the past couple of years. Deutsche Bank has been dragged through the mud because, in large part, the fact that it had made these decisions that, at the time, seemed to make financial sense and seemed to be lucrative but, really, were just much riskier than the bank had begun to understand.

DAVIES: David Enrich is finance editor for The New York Times. He's working on a book about Deutsche Bank and its relationship with Donald Trump. We'll talk more after a short break. This is FRESH AIR.

(SOUNDBITE OF RUDY ROYSTON'S "BED BOBBIN'")

DAVIES: This is FRESH AIR. And we're speaking with New York Times finance editor David Enrich. He's written and edited many stories about Donald Trump and Deutsche Bank and the congressional investigations into that relationship. He's also working on a book called "Dark Towers: The Inside Story Of The World's Most Destructive Bank." That will be out later next year.

So this is a fascinating series of curious and kind of probably really ill-advised business arrangements between Donald Trump and Deutsche Bank. But it's, obviously, more than that because, you know, two congressional committees are subpoenaing records from Deutsche Bank about their dealings with Donald Trump. What are they after?

ENRICH: They're after all sorts of stuff. And Deutsche Bank has become kind of the Rosetta Stone for congressional and state investigators who are trying to better understand and get information about Donald Trump's network of businesses and his own personal finances. And the information they're trying - they're looking for a kind of falls into two broad categories, I would say. The first category is just as much information as they can about Donald Trump's personal finances, so that includes the amount of money he was making, where he was getting money from, the taxes he was paying or not paying - things like that. The second category they're looking for is any evidence they can find of Trump or his company engaging in illegal activity or of having - or being entangled with foreign governments or anyone else for that matter who has the power, right now with him as president, to kind of have leverage over him.

And so the subpoenas that have been sent out are very broad. They're seeking a tremendous amount of granular information from the bank. And the bank is sitting on this information that, if it provides it to Congress, has the potential to shed an unprecedented amount of light on the inner workings of Donald Trump's company and his personal finances. They have years of his tax returns. They have years of his corporate records, and they've kind of mapped out all - the way of his different companies interact with each other, how much money they've made, where that money has come from. So they are sitting on a treasure trove of information. And Congress now wants to get its hands on it.

DAVIES: Right. And, of course, Donald Trump has sued Deutsche Bank and another bank, Capital One, to prevent them from providing these records to Congress. And the argument his lawyers are making is that this is - you know, that this isn't legitimate legislative oversight, that they just want to go rummaging through his finances. So I think it's worth looking into what kinds of potential wrongdoing might be at issue here. And there seem to be two broad categories, one of them dealing with foreign governments. Another one's just basic potential, you know, fraud or misrepresentation in business practices. What's the evidence - or what reason is there to believe that Deutsche Bank might have evidence of illegal or improper business activities by Donald Trump?

ENRICH: Well, Trump's former lawyer, Michael Cohen, testified before Congress earlier this year and said explicitly that Trump had misled banks and other financial institutions in order to get loans from them and by, basically, overstating the value of some of his assets. And we know this to be true.

There's - Deutsche Bank executives have told me that when Donald Trump would come in for loans, he would present these financial statements, some of which Michael Cohen has shared with the world, that just portrayed his business and his assets in these completely ridiculously optimistic ways - so valuing assets that are maybe worth 10- or $20 million at, say, $300 million or assessing his own brand value - the value of the Trump brand name at $4 billion. Those are just preposterous numbers that are kind of coming out of thin air. But - so Congress and the New York attorney general are looking for evidence that Trump, in kind of overstating the value of his assets and kind of portraying his finances in this very rosy way, committed bank fraud by, basically, lying to the Deutsche Bank and others about how much he was worth. That's thing one.

Thing two is the bank has his tax returns. And this is, obviously, an extremely high-value target for investigators and for Congress right now because Donald Trump has broken with decades of precedent and refused to release his tax returns, first as a presidential candidate and now as president. And that's ignited all sorts of speculation about what he may be hiding in - or what his tax returns may be hiding and whether that's simply that he doesn't have nearly as much money as he's led people to believe or maybe there are sources of that money - sources of money flowing into his bank accounts that are things that he would prefer the world not to see.

DAVIES: So Congress is also interested in whether, you know, foreign influence can be found in its - his relationships with Deutsche Bank. What reason is there to believe that there might be some untoward dealings with foreign entities?

ENRICH: Well, I don't know that there's been anything untoward. What I do know is the rumor that has swirled around Donald Trump and Deutsche Bank since before he was even elected president. And this is something that has been publicly mentioned by members of Congress and publicly written about, in some cases. And that's that there was a clear effort by Trump and his associates to be getting into Russia. There was discussions well into the presidential campaign about his efforts to build a Trump Tower in Moscow. And one of the things that's curious about this is that we now know that Russia, on the one hand, was trying to influence the presidential election in Trump's favor. And on the other hand, Trump seemed to be trying to get into Russia as a business opportunity.

And the rumor that has been circulating for a few years now is that Deutsche Bank was serving, essentially, as a conduit to get money from Russia or Russian oligarchs or people associated with the Kremlin and - or through some of their state-owned banks, through Deutsche Bank into the pockets of Donald Trump. And there is not evidence that I've seen that supports this. In fact, every senior bank executive who's been involved in the relationship over the years with Donald Trump says this is just nonsense.

But there is a lot of smoke there. And we know that Deutsche Bank had a very close relationship with a number of the state-owned banks in Russia. We know that those relationships existed at the same time that Deutsche Bank was doing what no other bank would do, which was, essentially, throwing a lot of money at Donald Trump. And we also know that at the time, Deutsche Bank was engaged in an enormous money laundering scheme in Russia that was, essentially, whisking out rubles from oligarchs and people close to Vladimir Putin and moving that into the U.S. through the same parts of the bank that were handling the Donald Trump lending relationship.

And so this is just purely circumstantial evidence at this point. There's a lot of rumor and innuendo around it. I have not seen evidence to indicate that it's true. In fact, everything I've been told is that it's not true. But that is definitely something that investigators on Capitol Hill and elsewhere are really trying to understand and figure out - if there is something more than just a lot of smoke.

DAVIES: Just so we understand this, this money laundering scandal - this was money that had to be moved out of Russia because it was acquired through illegal means and needed to be moved into...

ENRICH: That's right.

DAVIES: And so this was done through a whole series of shell companies. And has that been established by regulators? Has the bank been fined?

ENRICH: Yeah. That - yeah. That's something even the bank has admitted that it was doing. It says that it didn't really mean to do it. But there is - yeah. The bank has been punished numerous times by numerous regulators. It's paid hundreds of millions of dollars in financial penalties for this. And this is part of a pattern of - at Deutsche Bank of being kind of the money launderers' bank of choice all over the world and - which is, again, a reflection of the bank's absolutely awful internal controls and risk management and anti-money laundering programs.

DAVIES: Right. Well, Robert Mueller had subpoena power. Wouldn't he - if there were a question of Russian money getting into Trump at a time when he was investigating Russian interference in the election, wouldn't he have sought this information from Deutsche Bank? Did his report shed any light on this?

ENRICH: His report did not shed any light on this. From what I understand, Mueller did not subpoena Deutsche Bank for any of Trump's records. And I don't know why he did not do that, but he does not appear to have done it. And I think, in part, that's because Trump was very vocal, as the Mueller investigation got under way, that he would consider any investigation of his personal finances or his relationship with Deutsche Bank to be off-limits, to be crossing a red line.

DAVIES: David Enrich is the finance editor for The New York Times. He's writing a book about Donald Trump's relationship with Deutsche Bank. We'll be back after a break. This is FRESH AIR.

(SOUNDBITE OF JIM FARMER'S "STOLEN DOG JAM")

DAVIES: This is FRESH AIR, and we're speaking with New York Times finance editor David Enrich. He's written and edited many stories about Donald Trump and Deutsche Bank and is working on a book about the bank called "Dark Towers: The Inside Story Of The World's Most Destructive Bank." It'll be out next year.

Has Deutsche Bank cooperated with the congressional inquiry so far in any way?

ENRICH: Yeah. They've been cooperating pretty extensively for a period of months now. And they - basically, as soon as the Democrats won control of Congress last fall, the bank has been really trying to do everything it can to help the Democratic lawmakers, who are now in control of these committees, and to really show the world or at least Congress that the bank has nothing to hide.

The bank is trying to come clean about the entirety of its relationship with Trump and is really trying to turn over a new leaf with government authorities all over the world, which is completely, you know, self-serving for the bank because they've been in the penalty box in many countries. And they're really trying to use the Trump situation now to show that they are co-operative, friendly, helpful. And so they've spent months now working with investigators in Congress to help them better understand the types of information they have on Trump.

They've, in fact, helped investigators craft the language in the subpoenas that were going to be sent to the bank to help them kind of tailor them in a way that would make it relatively easy for the bank to - relatively easy and quick for the bank to be able to comply and hand over those documents. And my understanding is that even before the subpoenas were sent to the bank, Deutsche Bank had prepared reams of information that it was ready, basically, at a moment's notice, to fork over to the investigators.

DAVIES: Right. It has not provided this information yet because it just got the subpoena. And now that's on hold because Trump has sued to intervene. How quickly might this be resolved?

ENRICH: I don't know, is the short answer. The subpoena said that the documents had to be produced by this week. And before they could do that, Trump sued and sought an injunction against the bank cooperating. That injunction has not been granted, but there is a temporary hold on them complying with the subpoena, at least until the end of this month when there will be some hearings about whether the injunction is actually issued.

DAVIES: And what's the future of the bank? I mean, are they - do they still have a chance to become a power in the United States? Are they...

ENRICH: No.

DAVIES: ...Working out the - no? (Laughter).

ENRICH: They are a colossal mess. I would say their actual future as a company is in doubt. They have been - they've suffered devastating losses over a period of about a decade. They have no clear strategy for how to clean up the mess that they're currently in. And the thing I find fascinating about the Donald Trump relationship that Deutsche Bank has is that it really is a microcosm for all these other problems the bank has, whether it's all the trouble they've gotten in for money laundering, or bad loans that they've made to customers all over the world.

It all derives from these same forces, which is that the bank was under - the bank's employees, anyway, were under this extreme pressure from a succession of top executives over the years to do anything they could to make money at any costs. And they were incentivized in terms of kind of the compensation they received at the bank, they were incentivized by shareholders, to just go blindly into anything that even smelled of possible profits and just, consequences be damned.

DAVIES: This bank is called Deutsche Bank. Does it have any official relationship with the German government?

ENRICH: The bank has nothing - is not officially part of the German government. But it's taken on this mantle as not only Germany's largest bank and most important bank, but it's, over the years, been an essential part of Germany's economy and deeply linked to the German government. And the bank was founded in 1870 as a way to help German companies expand overseas. And it became synonymous with the kind of imperial aims of Germany over the years. It was - during World War II, it was an essential ingredient in the Nazi military machine. It financed the construction of Auschwitz. It financed the construction of - or the finance work for the chemical company that made the gas for Auschwitz. It took over banks all over Europe as Germany laid waste to Europe and participated in the Aryanization of Jewish businesses. And in the post-World War II era, it also played a key role in financing the reconstruction of Europe.

And so this is the bank that is synonymous with Germany in many ways. And the German government is very eager to protect it and to ensure that it has a strong, safe future and, in fact, over the past several months have been trying - with, given all of its deep financial problems and all the messes it's in all over the world, has been trying to kind of engineer a future for the bank by merging it with Germany's second-largest bank, which is Commerce Bank. And those merger talks actually just collapsed in the past few weeks, which is raising even more doubts about the future that Deutsche Bank has - in Germany, or in the world, for that matter.

DAVIES: Well, David Enrich, thanks so much for speaking with us.

ENRICH: It's my pleasure.

GROSS: David Enrich is the New York Times' finance editor. His book about Deutsche Bank, "Dark Towers: The Inside Story Of The World's Most Destructive Bank," is scheduled to be published next year. He spoke with FRESH AIR'S Dave Davies, who's also WHYY's senior reporter.

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