(Written by David Enrich)
As President Donald Trump delivered his inaugural address in 2017, a slight woman with feathered gray hair sat listening, bundled in a hooded white parka in a fenced-off VIP section. Her name was Rosemary Vrablic. She was a managing director at Deutsche Bank and one of the reasons Trump had just taken the oath of office.
It was a moment of celebration — and a moment of worry for Vrablic’s employer.
Trump and Deutsche Bank were deeply entwined, their symbiotic bond born of necessity and ambition on both sides: a real estate mogul made toxic by polarizing rhetoric and a pattern of defaults, and a bank with intractable financial problems and a history of misconduct.
The relationship had paid off. Trump used loans from Deutsche Bank to finance skyscrapers and other high-end properties, and repeatedly cited his relationship with the bank to deflect political attacks on his business acumen. Deutsche Bank used Trump’s projects to build its investment-banking business, reaped fees from the assets he put in its custody and leveraged his celebrity to lure clients.
Then Trump won the 2016 election, and the German bank shifted into damage-control mode, bracing for an onslaught of scrutiny, according to several people involved in the internal response.
In the weeks before Vrablic attended his swearing-in, the bank commissioned reports to figure out how it had gotten in so deep with Trump. It issued an unusual edict to its Wall Street employees: Do not publicly utter the word “Trump.”
More than two years later, Trump’s financial ties with Deutsche Bank are the subject of investigations by two congressional committees and the New York attorney general. Investigators hope to use Deutsche Bank as a window into Trump’s personal and business finances.
Deutsche Bank officials have quietly argued to regulators, lawmakers and journalists that Trump was not a priority for the bank or its senior leaders and that the lending was the work of a single, obscure division. But interviews with more than 20 current and former Deutsche Bank executives and board members, most of them with direct knowledge of the Trump relationship, contradict the bank’s narrative.
Over nearly two decades, Deutsche Bank’s leaders repeatedly saw red flags surrounding Trump. There was a disastrous bond sale, a promised loan that relied on a banker’s forged signature, wild exaggerations of Trump’s wealth, even a claim of an act of God.
But Deutsche Bank had a ravenous appetite for risk and limited concern about its clients’ reputations. Time after time, with the support of two different chief executives, the bank handed money — a total of well over $2 billion — to a man whom nearly all other banks had deemed untouchable.
Kerrie McHugh, a Deutsche Bank spokeswoman, said: “We remain committed to cooperating with authorized investigations.”
The White House referred questions to the Trump Organization. A company spokeswoman, Amanda Miller, declined to comment.
‘A Great Son!’
In the late 1990s, Deutsche Bank, which is based in Germany, was trying to make a name for itself on Wall Street. Its investment-banking division went on a hiring binge.
The bank recruited a handful of Goldman Sachs traders to lead a push into commercial real estate. One was Justin Kennedy, the son of Supreme Court Justice Anthony Kennedy. Another was Mike Offit, whose father was writer Sidney Offit.
At Deutsche Bank, Offit’s mandate was to lend money to big real estate developers, package the loans into securities and sell the resulting bonds to investors. He said in an interview that one way to stand out in a crowded market was to make loans that his rivals considered too risky.
In 1998, a broker contacted him to see if he would consider lending to a Wall Street pariah: Trump, who was then a casino magnate whose bankruptcies had cost banks hundreds of millions of dollars.
Offit took the meeting.
Trump was looking for a $125 million loan to pay for gut renovations of 40 Wall Street, his art deco tower in lower Manhattan. Offit was impressed by the pitch, and the loan sailed through Deutsche Bank’s approval process.
Trump seemed giddy with gratitude, Offit recalled. He took Offit golfing. He flew him by helicopter to Atlantic City for boxing matches. He wrote a grateful note to Sidney Offit for having “a great son!”
Trump soon came looking for $300 million for the construction of a skyscraper across from the U.N. headquarters. The loan was approved. He wanted hundreds of millions more for his Trump Marina casino in Atlantic City. Offit pledged to line up cash for that, too.
Not long after, Edson Mitchell, a top bank executive, discovered that the signature of the credit officer who had approved the Trump Marina deal had been forged, Offit said. (Offit was never accused of forgery; the loan never went through.)
Offit was fired months later. He said it was because Mitchell claimed that he was reckless, a charge Offit disputed.
The Mar-a-Lago Reward
In 2003, a Deutsche Bank team led by Richard Byrne — a former casino-industry analyst who had known Trump since the 1980s — was hired to sell bonds on behalf of Trump Hotels & Casino Resorts. Bank officials escorted Trump to meet institutional investors in New York and Boston, according to an executive who attended.
The so-called roadshow seemed to go well. At every stop, Trump was greeted by large audiences of fund managers, executives and lower-level employees eager to see the famous mogul. The problem, as a Deutsche Bank executive would explain to Trump, was that few of them were willing to entrust money to him.
Trump requested an audience with the bank’s bond salesmen.
According to a Deutsche Bank executive who heard the remarks, Trump gave a pep talk. “Fellas, I know this isn’t the easiest thing you’ve had to sell,” the executive recalled Trump saying. “But if you get this done, you’ll all be my guests at Mar-a-Lago,” his private club in Palm Beach, Florida.
The sales team managed to sell hundreds of millions of dollars worth of bonds, and Trump ultimately flew about 15 salesmen to Florida on his Boeing 727.
A year later, in 2004, Trump Hotels & Casino Resorts defaulted on the bonds. Deutsche Bank’s clients suffered steep losses. This arm of the investment-banking division stopped doing business with Trump.
An Act of God
Around that time, Trump returned to Deutsche Bank’s commercial real estate unit — which was housed in a separate part of the sprawling investment-banking division — for another loan. This one was to build a 92-story skyscraper in Chicago, the Trump International Hotel and Tower.
Josef Ackermann, the bank’s chief executive, had publicly promised soaring profits, and with many of the company’s businesses sputtering, the investment-banking group was under intense pressure to grow.
As Deutsche Bank considered making the loan, Trump wooed bankers with flights on his private plane, according to a person familiar with the pitch. But there were warning signs.
Trump told Deutsche Bank his net worth was about $3 billion, but when bank employees reviewed his finances, they concluded he was worth about $788 million, according to documents produced during a lawsuit Trump brought against former New York Times journalist Timothy O’Brien. And a senior investment-banking executive said in an interview that he and others cautioned that Trump should be avoided because he had worked with people in the construction industry connected to organized crime.
Nonetheless, Deutsche Bank agreed in 2005 to lend Trump more than $500 million for the project. He personally guaranteed $40 million of it, meaning the bank could come after his personal assets if he defaulted.
By 2008, the riverside skyscraper, one of the tallest in America, was mostly built. But with the economy sagging, Trump struggled to sell hundreds of condominium units. The bulk of the loan was due that November.
Then the financial crisis hit, and Trump’s lawyers sensed an opportunity.
A provision in the loan let Trump partially off the hook in the event of a “force majeure,” essentially an act of God, like a natural disaster. Former Federal Reserve Chairman Alan Greenspan had called the financial crisis a tsunami. And what was a tsunami if not a natural disaster?
Days before the loan was due, Trump sued Deutsche Bank, citing the force majeure language and seeking $3 billion in damages. Deutsche Bank countersued and demanded payment of the $40 million that Trump had personally guaranteed.
With the suits in court, senior investment-banking executives severed ties with Trump.
‘There Is No Objection’
In 2010, Deutsche Bank and Trump settled their litigation over the Chicago loan. Trump agreed to repay most of what he owed by 2012, One of his lawyers, Steven Schlesinger,said.
Not long after Trump got the Chicago loan — but before it went south — Deutsche Bank was expanding its private-banking division, which served the superrich. Executives hired Vrablic, whom they viewed as the best private banker in New York.
One of Vrablic’s clients was Jared Kushner, who married Trump’s daughter Ivanka in 2009. Shortly after the Chicago lawsuit was settled, Kushner was told that Trump was looking for a loan and introduced him to Vrablic, according to people familiar with the relationship.
Trump flew Vrablic to Miami to show her a property he wanted to buy: the Doral Golf Resort and Spa. He needed more than $100 million for the 72-hole property.
Deutsche Bank dispatched a team to Trump Tower to inspect Trump’s personal and corporate financial records. The bankers determined he was overvaluing some of his real estate assets by as much as 70 percent, according to two former executives.
By then, though, Trump had become a reality-TV star, and he was swimming in cash from “The Apprentice.” Deutsche Bank officials also were impressed that Trump did not have much debt, according to people who reviewed his finances. Aside from his history of defaults, he was an attractive borrower.
Trump also expressed interest in another loan from the private-banking division: $48 million for the same Chicago property that had provoked the two-year court fight.
Trump told the bank he would use that loan to repay what he still owed the investment-banking division, the two former executives said. Even by Wall Street standards, borrowing money from one part of a bank to pay off a loan from another was an extraordinary act of financial chutzpah.
Vrablic and Thomas Bowers, the head of the U.S. wealth-management division, tentatively agreed to both loans.
Because these would be the private bank’s first transactions with Trump, they needed approval up the chain of command.
Investment-banking executives, including Anshu Jain, who would soon become Deutsche Bank’s co-chief executive, pushed back. Lending to Trump again would be foolish, they argued.
Executives in the private bank countered that the proposed loans had Trump’s personal guarantee and therefore were low risk. And the Chicago loan, they noted, would lead to the repayment of tens of millions of dollars that Trump still owed the investment-banking division.
A top executive with responsibility for the private bank discussed the loans with Ackermann, the chief executive, who supported them, according to two officials. A powerful committee in Frankfurt, Germany, which evaluated loans based on risks to the bank’s reputation, signed off.
“There is no objection from the bank to proceed with this client,” wrote Stuart Clarke, the chief operating officer for the Americas, in a Dec. 5, 2011, email, according to a recipient.
The CEO Meets Trump
Vrablic’s relationship with the Trumps deepened.
Deutsche Bank lent money to Donald Trump Jr. for a South Carolina manufacturing venture that would soon go bankrupt. It provided a $15 million credit line to Kushner and his mother, according to financial documents reviewed by The Times.
In early 2014, Trump and his personal lawyer, Michael Cohen, approached Vrablic about more potential loans.
The owner of the Buffalo Bills had died, and the NFL franchise was up for sale. Trump was interested, and he needed to show the league he had the financial wherewithal to pull off a transaction that could top $1 billion.
Trump asked Vrablic if the bank would be willing to make a loan and handed over bare-bones financial statements that estimated his net worth at $8.7 billion.
Cohen testified to Congress last month that the documents exaggerated Trump’s wealth. Deutsche Bank executives had reached a similar conclusion. They nonetheless agreed to vouch for Trump’s bid, according to an executive involved.
Trump’s bid did not win, but another lending opportunity soon arose.
A federal agency had selected Trump to transform the Old Post Office Building in Washington into a luxury hotel. But his financial partner — private equity firm Colony Capital, run by Thomas Barrack Jr. — pulled out. Trump needed nearly $200 million.
Because of his decadeslong pattern of defaults and his increasingly polarizing political rhetoric, Trump remained untouchable for most banks.
Vrablic was willing to help.
In a memo outlining the rationale for the Old Post Office loan, Vrablic said Trump was expected to add large sums to his brokerage account if he received the loan, according to an executive who read the document.
This time, there was less internal opposition. One reason: Jain — by then the bank’s co-chief executive — had a solid relationship with Vrablic.
In February 2013, Vrablic and Jain went to Trump Tower to meet with Trump, according to two executives with knowledge of the meeting. Vrablic’s rapport with the client was immediately clear, one executive said.
They discussed Trump’s finances over lunch, and Jain said he was surprised by his low level of debt, the executives said. After lunch, Vrablic told her colleagues that Jain had sounded upbeat about Trump’s finances.
A $170 million loan to pay for the overhaul of the Old Post Office went through in 2015, and Trump added more money to his brokerage account.
On Aug. 6, 2015, Trump participated in the first Republican presidential debate; he flew back to New York early the next morning. That evening, he called in to a CNN talk show. In the intervening hours, Trump had signed for another loan from Deutsche Bank: $19 million for the Doral resort.
Next month, Deutsche Bank is likely to start handing over internal documents to congressional committees investigating the bank’s relationship with Trump, according to people briefed on the process.
Vrablic declined to comment. People familiar with her thinking said she expected to be called to testify publicly on Capitol Hill.