The Washington Post Book review:
A revelatory book about the rise and fall of the world’s biggest bank might hold some interest to financiers, business school professors and readers of the Economist. But what about one that also has all the elements of a page-turning mystery novel: suspicious suicides, Russian money laundering, securities and tax fraud, price fixing, $100 million bonuses, whistleblowers who are ignored and fired, and a heroin junkie peddling stolen documents to journalists and FBI agents? Add to that a big client with a sketchy financial history who suddenly becomes president of the United States, and you’ve got the makings of a blockbuster.
A new Russian subsidiary laundered tens of billions of rubles into dollars for Russian oligarchs and cronies of President Vladimir Putin. Its London traders helped organize a conspiracy to fix interest rates. Its New York investment bankers were at the front of the pack peddling collateralized debt obligations (CDOs) and mortgage-backed securities they knew would go bad. Its bankers conspired with corporate clients to evade economic sanctions against Iran and Syria, and helped giant hedge funds avoid taxes in the United States. Its enormous stash of risky derivatives was carried on its books at prices well above their market value. And its top executives repeatedly lied about all these things to investors, regulators and even their own directors.
The consequences of all this risk-taking, mismanagement and fraud are now clear. Between 2015 and 2017, the bank was forced to record losses of more than $10 billion, and it only barely returned to profitability in 2018. Since 2007, its stock price has fallen 95 percent. And as Enrich reports, the bank’s financial position was so precarious that even longtime corporate customers abandoned it. The International Monetary Fund recently singled out Deutsche Bank as the institution posing the biggest risk to the global banking system.
And when Trump was on the verge of defaulting on loans used to buy his failing hotels and casinos in Atlantic City, Deutsche Bank came to the rescue by peddling $484 million in junk bonds to investors — bonds on which Trump defaulted within a year.
Normally, such a default would have been enough to scare away even the most risk-tolerant lenders. But within months, Deutsche Bank’s real estate division was again providing Trump with a $640 million loan needed to build a new Chicago hotel, while its team in Moscow was steering Russian investors to Trump projects in Hawaii and Mexico. The relationship hit a low point in 2009 when Trump announced he had no intention of repaying his loan on the Chicago hotel, claiming that the unfolding financial crisis was an act of God that freed him of his obligation.
When Deutsche Bank sued to get its money back, Trump countersued, preposterously accusing the bank of predatory lending practices. The matter was finally settled with a two-year extension on the loan — and a vow by the bank’s real estate lenders never to do business with Trump again. But two years later, Trump somehow sweet-talked his way into Deutsche’s private banking division, which over the next several years provided him with $350 million in personal loans to cover projects in Chicago, Miami and Washington.
(click here to continue reading Book review of Dark Towers: Deutsche Bank, Donald Trump, and an Epic Trail of Destruction by David Enrich – The Washington Post.)
Sounds interesting. It always seemed odd to me that a bank would continue to lend vast sums of money to such an obvious deadbeat like Trump. Was it all money laundering? Something else? I guess I’ll have to read the book and find out.
“Enrich tells the story of how one of the world’s mightiest banks careened off the rails, threatening everything from our financial system to our democracy. Darkly fascinating. A tale that will keep you up at night.” — John Carreyrou, #1 bestselling author of Bad Blood
From New York Times finance editor David Enrich, a searing exposé of the most scandalous bank in the world, revealing its shadowy ties to Donald Trump, Putin’s Russia, and Nazi Germany
On a rainy Sunday in 2014, a senior executive at Deutsche Bank was found hanging in his London apartment. Bill Broeksmit had helped build the 150-year-old financial institution into a global colossus, and his sudden death was a mystery, made more so by the bank’s efforts to deter investigation. Broeksmit, it turned out, was a man who knew too much.
In Dark Towers, award-winning journalist David Enrich reveals the truth about Deutsche Bank and its epic path of devastation. Tracing the bank’s history back to its propping up of a default-prone American developer in the 1880s, helping the Nazis build Auschwitz, and wooing Eastern Bloc authoritarians, he shows how in the 1990s, via a succession of hard-charging executives, Deutsche made a fateful decision to pursue Wall Street riches, often at the expense of ethics and the law.
Soon, the bank was manipulating markets, violating international sanctions to aid terrorist regimes, scamming investors, defrauding regulators, and laundering money for Russian oligarchs. Ever desperate for an American foothold, Deutsche also started doing business with a self-promoting real estate magnate nearly every other bank in the world deemed too dangerous to touch: Donald Trump. Over the next twenty years, Deutsche executives loaned billions to Trump, the Kushner family, and an array of scandal-tarred clients, including convicted sex offender Jeffrey Epstein.
Dark Towers is the never-before-told saga of how Deutsche Bank became the global face of financial recklessness and criminality—the corporate equivalent of a weapon of mass destruction. It is also the story of a man who was consumed by fear of what he’d seen at the bank—and his son’s obsessive search for the secrets he kept.
(click here to continue reading Amazon.com: Dark Towers: Deutsche Bank, Donald Trump, and an Epic Trail of Destruction (9780062878816): David Enrich: Books.)