Someone Did Get to Look at Trump's Tax Returns: Deutsche Bankers
The story of how a team from Deutsche Bank got to review Trump’s tax records begins with the president’s daughter, Ivanka Trump.
(Bloomberg) -- Donald Trump doesn’t want anyone to see his tax returns. Not the public. Not Congress.
But at least one group has peered into the carefully guarded trove and could provide some insight -- a team from Deutsche Bank AG.
The bankers got a look before agreeing to lend to the Trump Organization in 2012 -- access that was described by two people familiar with the interaction. It was all part of a fresh start on a banking relationship that had soured after the financial crisis, descending into litigation over a Chicago project.
After a recent subpoena, Deutsche Bank was prepared to begin on May 6 turning over details to Congress about that relationship and its loans to Trump family businesses. Now, Trump and his family have sued to stop the flow of information. That follows an earlier lawsuit against Democrats and Trump’s outside accounting firm to prevent similar subpoena responses. Meanwhile, the Treasury Department has balked at supplying Trump’s tax filings from the Internal Revenue Service, a standoff that could fuel protracted court battles over the extent of congressional oversight.
For its part, the president’s legal team contends that Democrats are pursuing overly broad requests purely for political purposes and that those efforts impinge on his right to privacy. Deutsche Bank spokesman Troy Gravitt declined to comment on the matter, as did representatives for the Trump Organization.
The story of how a team from Deutsche Bank got to review Trump’s tax records begins with the president’s daughter, Ivanka Trump, according to the people familiar with the interactions.
She served as the primary contact between the Trump Organization and Deutsche Bank in early discussions ahead of 2012 loans for the Trump International Hotel and Tower in Chicago, which had spurred the lawsuits, as well as for the Trump National Doral Golf Club in Florida, the people said. She provided the bank with a tabulation of the Trump Organization assets and their values to support the initial request for more than $100 million, one of the people said.
When the bank balked, Ivanka offered to guarantee the loans with Trump’s personal assets, the person said.
The bank was willing but needed to do due diligence on Trump and his net worth. To that end, Deutsche Bank sent a team to the office of Trump Organization’s chief financial officer, Allen Weisselberg, the two people said.
Weisselberg allowed the bankers to see relevant parts of Trump’s tax returns and take notes, the people said. They weren’t allowed to make copies of the documents, they said. Having seen enough to justify moving forward, Deutsche Bank structured the subsequent funding as recourse loans, meaning that the bank could come after Trump’s personal assets in the event of default.
In all, Deutsche Bank extended more than $300 million in loans to Trump from 2012 to 2015, including $170 million for construction of a hotel on the site of Washington’s Old Post Office. That would suggest the president’s finances were judged to be strong, whatever his net worth.
The loans didn’t attract attention until after Trump won the presidential election in 2016, when Deutsche Bank was thrust into the unusual position of having financial leverage over the president of the United States.
Even if the IRS is not forthcoming with the presidential tax returns, House Democrats might get key information from bankers’ notes if their subpoena of Deutsche Bank is ultimately successful.
Trump’s tax returns have been a focus for Democrats since they took control of the House of Representatives. Trump’s refusal to release his returns during the campaign, along with the suggestion that even his ex-wives never saw them, has only added to the allure over the last couple of years.
The author Tim O’Brien, who now writes for Bloomberg Opinion, saw some of Trump’s returns more than a decade ago. They were produced in discovery as part of a lawsuit filed by the real estate mogul over the publication of O’Brien’s book, “Trump Nation.” The court ordered O’Brien not to disclose them publicly, and the returns were subsequently sealed by the court.
--With assistance from Shahien Nasiripour.
To contact the reporter on this story: Greg Farrell in New York at gregfarrell@bloomberg.net
To contact the editors responsible for this story: Winnie O'Kelley at wokelley@bloomberg.net, ;Jeffrey D Grocott at jgrocott2@bloomberg.net, David S. Joachim
©2019 Bloomberg L.P.