Investigating Deutsche Bank: A Prompt for Quid Pro Quo and Regulatory Leniency
One of the tenets of due diligence in financial investigations is to evaluate the motives behind lending decisions that seem unusual, especially when they benefit the borrower at the expense of adverse financial circumstances. This brings us to the question of whether Deutsche Bank should be investigated for extending a 6-year loan to then-President Donald Trump's Washington Hotel, despite concerns over wrongful conduct and potential legal action against the bank.
The Potential Profitability of the Washington Hotel
The timing of the loan extension to the Washington Hotel comes into sharp focus in the backdrop of Donald Trump's presidency, which was highly contentious and often accompanied by relentless scrutiny and investigations. It is important to consider that during that period, the hotel's profitability could have been very high, given the endorsement and economic support it would receive after Trump's political rise to the White House and his subsequent term of leadership.
Furthermore, let's not overlook the recent mention by the Trump Organization of putting the hotel up for sale, a move that further highlights the hotel's perceived value. This opportunity for sale suggests that the Washington Hotel was a lucrative property, making it less likely that it was actually in dire straits at the time of the loan extension.
No Inherent Crime in Loan Modification
It is significant to note that there is no inherent criminality in modifying the terms of a loan to benefit the borrower. Therefore, the mere act of altering the loan agreement could not itself justify an investigation. However, the circumstantial evidence and the timing of the loan extension do raise questions about potential quid pro quo arrangements or regulatory leniency.
Quid Pro Quo and Barr's Alleged Influence
The possibility of a quid pro quo arrangement comes into play given the alleged pliancy of then-Attorney General William Barr to the wishes and interests of the Trump administration. This was exemplified by Barr's apparent influence in the SDNY, where cases against Trump and his associates were dropped through the appointment of conflicted US attorneys. If Deutsche Bank's loan extension to the Washington Hotel was contingent upon Barr's leniency towards the bank, an investigation becomes warranted.
Pending Enforcement Actions and Regulatory Actions
To substantiate the need for investigation, scrutiny must be directed towards any ongoing or planned regulatory enforcement actions that Deutsche Bank might be facing. For instance, the bank has been heavily fined by US and European regulatory bodies for extensive money laundering of Russian and Ukrainian funds, involving hundreds of billions of dollars. If these enforcement actions were suspended around the same time the loan extension was granted, it would provide probable cause to conduct a preliminary investigation.
Additionally, the offer of leniency in regulatory matters, even if not consummated, can constitute a criminal act. Unless this possibility is thoroughly investigated, it risks being overlooked even if it exists.
Closing Thoughts: Merits of an Investigation
Given the criminal convictions of Deutsche Bank and the record of its disreputable conduct, along with the substantial benefits derived by a financially struggling president, an investigation into these events is both justified and necessary. No one can realistically claim that Trump's financial situation would have escaped such an entreaty, especially in view of the critical importance of the loan extension to his financial standing.