In an extraordinary piece of investigative journalism from US media at Mother Jones, Donald Trump’s business dealings are not only shown to be at risk from Covid-19, but also at the mercy of Deutsche Bank.
In the report a number of issues are uncovered that not only show his businesses in peril, they also show conflicts of interest taken to absurd new heights, even for Teflon Don.
Before the end of a theoretical second term, Donald Trump’s company will have to refinance or pay off, almost a half-billion dollars in loans linked to some of his most prized assets, including Trump Tower.
The debts are now maturing at a dangerous time for President Trump, as his hotels like most other hoteliers’ are impacted from revenues decimated by Covid-19.
Personal guarantees and liability
President Trump has reported holding 14 loans, at least six of those loans represent debt of circa $479 million due over the next four years.
Some are guaranteed by Trump himself, meaning a creditor could come after his personal—not corporate—assets if he defaults.
If he holds onto the White House, the refinancing of these debts could take his conflicts of interest to absurd new heights. How will the public know if these deals are on the up and up or whether Trump is receiving sweetheart terms from a bank that wants an in with the president?
And what might a lender desire in return for helping Trump out of a financial jam?
Trump’s biggest creditor is Deutsche Bank, which in the late 1990s took a gamble on the real estate developer whose history of corporate bankruptcies made him untouchable by most other lenders.
The piece in Mother Jones goes on to investigate the long relationship between Donald Trump and Deutsche Bank, it’s a turbulent one. It also questions Deutsche Bank’s finances and a series of scandals—involving interest-rate rigging, and money laundering.
A real estate finance professor at University of California, Berkeley’s Haas School of Business is interviewed and questions why either would get involved with each other in a toxic mix.
One former Deutsche Bank executive who was one of Trump’s bankers in the 1990s, predicts that if Trump remains in office, Deutsche will give him short-term extensions until he’s out of office. But it won’t do so happily.
Another commentator speculates that US Hedge Funds are very focused on the situation with options on all outcomes potentially creating risk markets with high returns.
In any scenario, Trump’s soon-to-be-due loans are an unprecedented ethical minefield, rife with potential conflicts of interest and the possibility of corruption. “It’s highly disconcerting,” says Virginia Canter, chief ethics counsel at the watchdog group Citizens for Responsibility and Ethics in Washington and a former ethics lawyer at the Treasury Department and Securities and Exchange Commission. “I’m sure in some ways the best thing that could happen is that he does not win re-election.”
The full article in much deeper detail can be read here, and we suggest, it is most definitely worth a read.
Donald Trump hospitality Bank – 20 June 2020