According to an explosive new report in The New York Times, financial specialists at Deutsche Bank recommended that multiple companies controlled by Donald Trump and his son-in-law Jared Kushner be reported to the Treasury Department on suspicion of money laundering. The transactions, which took place between 2016 and 2017 and involved Russian billionaires, were never reported because the bank’s upper management prevented them from being flagged. Tammy McFadden, one of the former Deutsche Bank employees who spoke to the Times for “Deutsche Bank Staff Saw Suspicious Activity in Trump and Kushner Accounts” said that she was fired for having pushed the matter within the bank.
The Real News Network’s Sharmini Peries spoke to David Cay Johnston, author of “The Making Of Donald Trump,” about Trump’s finances, the potential fallout from the Times’ reporting, and Trump’s history with Deutsche Bank.
“Deutsche Bank is absolutely central to understanding Donald Trump,” Cay Johnston said. After Trump reorganized his finances and avoided bankruptcy court, the only bank that would lend to Trump was the corrupt and conflicted Deutsche Bank.
“Deutsche Bank has already paid over $600 million in fines for laundering money for Russian oligarchs in Cyprus, Germany, and in the United States,” Cay Johnston said. “I think from an American perspective it’s perfectly reasonable to view Deutsche Bank as essentially not a bank, but a criminal enterprise.”
The Treasury Department, the main institution responsible for detecting money laundering, is responsible for looking into Trump, who, as president, oversees the Treasury. Cay Johnston explained that he hopes the Treasury will not be stopped by Trump’s corruption: “We should hope that there is enough integrity in the Treasury Department, and particularly the Financial Crimes Enforcement Network, or FCEN—which does the hunt for money laundering and is basically staffed with IRS agents—that they are not going to be stopped by the corrupt people at the head of the Trump administration.”
The only institution that can conduct an independent investigation into Trump is Congress.
“Congress absolutely must investigate this. The first hearing that’s been held on Trump’s efforts to stop turning over some of his records … and the judge basically made it clear that he doesn’t see any reason not to turn over his tax records,” Cay Johnston said. “Later this week, there will be a hearing about the Deutsche Bank and Capital One lawsuit that Trump filed. And I suspect the same thing will happen: Judges will say these are reasonable and proper subpoenas from Congress and the banks must comply.”
Cay Johnson explained that Watergate-style hearings about Trump’s finances will be most effective in exposing Trump and telling the public that “the man you saw on television in his TV shows and who Donald Trump really is are completely different human beings. Donald Trump is the third generation head of a white-collar crime family.”
“What we really need here are hearings during Watergate. What changed the views of many people who thought Richard Nixon was being railroaded was night after night of hearings describing the criminal conduct of that administration,” Cay Johnston said. “And Congress needs to stop delaying and being so polite and cautious … they need to get serious about holding hearings getting them televised and educating the American public.”
SHARMINI PERIES It’s The Real News Network. I’m Sharmini Peries coming to you from Baltimore. Financial specialists at Deutsche Bank recommended that multiple companies controlled by Donald Trump and his son-in-law, Jared Kushner, be reported to the Treasury Department on suspicion of money laundering. This is according to an explosive new report in The New York Times that was published on Monday. The transactions took place in the year 2016 and 2017 and are said to have involved Russian billionaires. However, according to The New York Times sources, the flagged transactions were ultimately never reported because the bank’s upper management prevented them from doing so. One of the former Deutsche Bank employees who spoke to The New York Times said that she was fired for having pushed the matter within the bank. President Trump immediately fired off a series of tweets on the matter, saying in one of them, “The mainstream media has never been as corrupt and deranged as it is today. FAKE NEWS,” he wrote, “is actually the biggest story of all and is the true ENEMY OF THE PEOPLE! That’s why they refuse to cover the REAL Russia Hoax. But the American people are wise to what is going on…,” he wrote.
Joining me now to discuss these latest revelations about Trump’s finances is David Cay Johnston. He is a Pulitzer Prize-winning investigative reporter and founder of DCReport.org. He is the author of the book The Making of Donald Trump. So good to have you here, David.
DAVID CAY JOHNSTON Good to be here, Sharmini.
SHARMINI PERIES David, in your investigations of Trump’s financial biography, just how important is Deutsche Bank?
DAVID CAY JOHNSTON Deutsche Bank is absolutely central to understanding Donald Trump. In 1990, when I revealed that Trump was not a billionaire and he went around, by the way, for four months calling me a liar until he had to put in the public record documents showing I was right, so his latest tweet storm is no surprise. He had borrowings from many, many banks. He even talked Chase Bank into lending him the entire cost of Mar-a-Lago and more, but not recording the mortgage, which is illegal for Chase to not have done. After his 1990 reorganization of his finances without going to bankruptcy court, no bank would lend him money in any significant sums except Deutsche Bank. Deutsche Bank has already paid over $600 million in fines for laundering money for Russian oligarchs in Cyprus, in Germany, and in the United States. When I was exposing corrupt and sham tax shelters in The New York Times 20 years ago, Deutsche Bank was one of the biggest promoters of these in the United States and I think from an American perspective, it’s perfectly reasonable to view Deutsche Bank as essentially, not a bank, but a criminal enterprise.
SHARMINI PERIES Wow. That’s quite the conclusion there, David. Now, both Trump and Jared Kushner, here, made most of their money through real estate deals. It is generally known that real estate is a business that money laundering prefers to use. Now, explain to us why they use real estate as the vehicle to launder money and why these kinds of transactions are not being flagged by, say, this bank which you say is obviously corrupt, but how else can it be monitored? Who else has the opportunity to catch these transactions?
DAVID CAY JOHNSTON Well, let’s step back a minute and understand what money laundering is. Money laundering is taking ill-got proceeds from drug dealing, from criminal enterprises, from embezzlement, and making them appear to be legitimate money— basically, put them through a washing machine called a bank. Casinos, which Trump was in the business of, by the way, are also an excellent place to launder money. And Trump’s Taj Mahal Casino was fined $10 million for years of money laundering activities. Real estate is attractive because the records in real estate are not hooked up electronically to the kinds of records that the Securities and Exchange Commission, the IRS, and other law enforcement agencies see. In many places, these records are kept separately by county governments and it’s very easy to conceal who’s really the buyer of a piece of property.
Someone comes to you and says I want to buy this piece of property and not in my name, but the name of a company called Snow, Inc. Unless you ask, well is that a ski lodge somewhere or is that a trafficking business, you’re not going to know which it is, and, of course, Donald is never a guy to ask a question like that. So, real estate allows you to move very large amounts of money this way and appears, of course, to be a solid investment. It’s one of the reasons that we have these whole neighborhoods of essentially, expensive new and empty apartment buildings in every major city in the world that has any desirability as a place to live. San Francisco, Melbourne, Australia, Paris, Dubai, Miami Beach, New York City all have this problem of warehoused apartments that are involved often with money laundering or hiding money, in some cases, from tax authorities. Donald is someone who’s repeatedly sold property to people who turned out to be bad folks. The entire floor immediately below Trump’s apartment in Trump Tower—The entire floor was for a number of years a 24-hour-a-day gambling casino run by Russian mobsters. Donald, at the time that the FBI broke up this operation went, [gasps] what? All this gambling going on? I had no idea. I had no idea, whatsoever. If you’ve ever been inside Trump Tower and seen the elevator and the way they control security in that building, that’s absurd. If he didn’t know, it’s because he said, don’t show me, don’t show me.
Then, banking authorities have sophisticated computer systems to track and look at suspicious transactions. We had a death in our family and had to send money several times, for example, to Honduras and we got flagged over sending small amounts of money, $2,500 at a time. We had to go and explain to our banker exactly what we were doing, but Deutsche Bank is notorious for looking the other way. Don’t ask, don’t tell. Through their private banking group, which is where Donald and Jared Kushner do business, they have made a fortune by simply not asking questions for all the money they are moving. Last night, 60 Minutes had a piece about Dankse Bank’s branch in Tallinn, in Estonia, where $230 billion of money was laundered. Almost all of it were Russians— $230 billion in one tiny little branch. Nobody saw anything going on? It was like, really? We had no idea we were doing that.
SHARMINI PERIES Wow. This is not just Donald Trump and Jared Kushner, but this has the potential to crack open a whole bunch of other oligarchs involved in these schemes. Clearly now, though, as far as Washington is concerned, there is a conflict of interest between the main institution responsible for detecting money laundering, the Treasury Department, but it is now under the control and the leadership of the main suspect here, Donald Trump.
DAVID CAY JOHNSTON Right.
SHARMINI PERIES Presumably, Congress is the only institution that can conduct an independent investigation, but I understand that last month Trump filed a case against Deutsche Bank himself to prevent the release of the financial records. So, do you think this will go anywhere, is the question?
DAVID CAY JOHNSTON Well, first of all, we should hope that there is enough integrity in the Treasury Department— and particularly, the Financial Crimes Enforcement Network, or FinCEN, which does the hunt for money laundering and is basically staffed with IRS agents— that they are not going to be stopped by the corrupt people at the head of the Trump administration. That’s step one. We should certainly hope that’s the case, but secondly, yes. Congress absolutely must investigate this. The first hearing that’s been held on Trump’s efforts to stop turning over some of his records involves his accounting firm, Mazars, and the judge basically made it clear that he doesn’t see any reason not to turn over his tax records.
Later this week, there will be a hearing about the Deutsche Bank and Capital One lawsuit that Trump filed, and I suspect the same thing will happen. Judges will say these are reasonable and proper subpoenas from Congress, and the banks must comply. Let’s remember, a bank is a licensed institution. It’s not like you and me. You and me, we have the right to live. A bank exists as a privilege granted by the state and the bank. In particular in this case, Deutsche Bank, has been cooperating with regulators for some time because they don’t want to lose their license. I happen to think that Deutsche Bank should be kicked out of the United States, but in the meantime, they certainly must comply and you’re not seeing the indication that they are fighting complying.
SHARMINI PERIES All right. David, so then, what are the next steps? If Congress and the investigative bodies are serious about taking some actions, what’s next?
DAVID CAY JOHNSTON Well, they will issue subpoenas and let’s remember what subpoena means. It comes from Latin and it means “under force.” They will issue subpoenas for documents and records not only of Deutsche Bank, but of Treasury, which will undoubtedly say no, we’re not going to show those to you, which would be an egregious violation of their duty and grounds on its face for impeachment. They will subpoena witnesses like the woman who was named and photographed in the Times story, and probably the other four current and former anti-money laundering employees at Deutsche Bank who spoke to The Times. They will then go to the other institutions because money going in and out has to go somewhere and come from somewhere, and issue further subpoenas.
What we really need here are hearings. During Watergate, what changed the views of many people who thought Richard Nixon was being railroaded, was night after night of hearings describing the criminal conduct of that administration. Congress needs to stop delaying and being so polite and cautious. I understand they’re being cautious because they’re concerned federal judges may interfere with their investigations, but they need to get serious about holding hearings, getting them televised, and educating the American public so that people understand the man you saw on television in his TV shows and who Donald Trump really is, are completely different human beings. Donald Trump is the third-generation head of a white-collar crime family. He has been involved with mobsters, of all kinds, in the New York real estate where people go, well everybody in real estate had to be involved with mobsters. Actually, the other big families, the really big developers in New York, all went to the FBI and said, you’ve got to get the mob guys out of our pockets. Donald Trump ran to the mob guys. This was back in the late 70s and early 80s.
SHARMINI PERIES I’ve been speaking with David Cay Johnston, Pulitzer Prize-winning investigative reporter and the author of The Making of Donald Trump. He also writes in the DCReport.org. Check it out. Thanks so much for joining us, David.
DAVID CAY JOHNSTON Take care.
SHARMINI PERIES And thank you for joining us on The Real News Network.