In this week’s WhoWhatWhy podcast, Martin Sheil, a retired branch chief of the IRS Criminal Investigation Division, shows how the modern history of Deutsche Bank follows a trajectory that brought the bank to the center of worldwide money laundering operations.
In its efforts to grow rapidly, Deutsche Bank threw away traditional ideas of risk management. In their pursuit of fees and earnings, bank executives got into business with some of the world’s most shady and financially needy characters. Russian oligarchs, President Donald Trump, the Kushners, the Mercers, Paul Manafort, Vladimir Putin and many other key Russiagate figures are among their customers.
Time and again, Deutsche Bank brought Trump and the Russians closer together. In fact, even when the relationship with Trump almost fell apart over a lawsuit, the financial institution just moved the real estate mogul to another part of the bank that put him in even closer proximity to Russians.
According to Sheil, the Russians were and are still the world champions of money laundering, and Deutsche Bank was the major vehicle for their manipulations. Given the financial needs of Trump and his cronies, it is hardly surprising that they became part of this worldwide dark web.
If you haven’t had the chance to read Parts 1 and 2 of Sheil’s comprehensive and arresting look at Deutsche Bank and its connection to Trump and a global array of shady characters, this is an opportunity to get a full overview of the story before Part 3 appears next week.
Click HERE to Download Mp3
Full Text Transcript:
As a service to our readers, we provide transcripts with our podcasts. We try to ensure that these transcripts do not include errors. However, due to resource constraints, we are not always able to proofread them as closely as we would like, and we hope that you will excuse any errors that slipped through.
|Jeff Schechtman:||Welcome to Radio WhoWhatWhy. I’m Jeff Schechtman. If you’re following or trying to follow the Trump-Russia story, no doubt your head is filled with dozens of threads: the Trump Tower meetings; the dossier; the names of countless Russians, mobsters, and oligarchs, and bankers; banks in Germany, in Moscow, Cyprus, and Moldavia; money laundering; real estate deals; hedge funds; indictments; bankruptcies; and a cast of characters orbiting Trump that feels more like the bar scene in the original Star Wars. How is it possible then to understand it all? Especially if, as Steve Bannon told Michael Wolff, it’s all about following the money. We could all imagine some kind of huge whiteboard or bulletin board in Mueller’s office with arrows, and pictures, and bank logos, and lines, and threads connecting them all together.|
|Over the course of the past week, WhoWhatWhy has published a multi-part series entitled Deutsche Bank: A Global Bank for Oligarchs — Americans and Russians by Martin Sheil, a retired branch chief of the IRS Criminal Investigation Division. His WhoWhatWhy series could easily be seen as part of a preamble or executive summary to the report that Mueller may ultimately deliver to Congress. It is my pleasure to be joined here by Martin Sheil to talk about this story, Deutsche Bank: A Global Bank for Oligarchs – American and Russian. Martin Sheil, thanks so much for joining us on Radio WhoWhatWhy.|
|Martin Sheil:||Thanks for having me, Jeff. It’s a real pleasure and honor to be on your podcast.|
|Jeff Schechtman:||I want to begin by talking a little bit about Deutsche Bank as the link that ties so many of these pieces together, and just a little bit about its history.|
|Martin Sheil:||Yeah, well Deutsche Bank is a huge bank. It’s a global bank, but its headquarters are in Frankfurt, Germany. Its philosophy really is, going all the way back into the 19th century, to generate foreign investment in Europe, surrounding countries, and globally. It really made its first forays into the United States around 1998. They took over a bank in New York called Bankers Trust, which was a well-known bank in the New York financial circles. The marching orders of the bankers in New York was to generate revenues and generate fees. They wanted to grow the bank quickly and they wanted to grow the profits just as fast.|
|Those were the marching orders, and so to do that in financial circles and banking circles, what that really means is that you have to take on risk. Of course, who is one of the riskiest investments you could take on if you’re in New York in the late 90s? Donald J. Trump.|
|Jeff Schechtman:||Before we get to Trump, how was the attitude, the business policy of Deutsche Bank fundamentally different from so many of the other international banks that were trying to grow during that period, whether it was banks like HSBC, or BNP, foreign banks based in European countries that in fact didn’t take the same path. What is it that the business decisions that Deutsche Bank made, that set it on the road to the reason that we’re talking about it today?|
|Martin Sheil:||The object of the company was to transact banking business of all kinds, in particular, to promote and facilitate trade relations between Germany, other European countries, and overseas markets. That’s basically what they decided to do. They decided to basically sprout their wings, spread their branches, and they did. The timing was right for them. Several other European banks also did that, but what I think differentiates Deutsche Bank was they were in hot pursuit of earnings. They wanted to grow as quickly as they could, and they did. Their risk management, let’s just say, wasn’t very good.|
|Something I wanted to point out as we get into Deutsche Bank, some of their philosophy was they didn’t believe in autonomy as an instrument of management leadership. They were very centralized. Everything was directed from Frankfurt, from the top. Their direction was go out, make money, increase earnings. They had very ambitious objectives there. It was a big challenge for them, because they … You have different cultures. You have the American culture, the New York financial scene, and then you have — the UK was growing. The financial climate there was really starting to percolate, because you had the European Union just starting to grow. Then, you had Russia coming out of the 90s, shedding the Soviet Union shackles.|
|You had capitalism just starting to take root there, but you had all sorts of things going on there, too; because you had all these state-run enterprises which were now open to private enterprise, and being sold for pennies on the dollar, in terms of their value. You had these predator plutocrats coming in and taking over, and just milking it for all it was worth. They really … didn’t really concern themselves very much with normal regulatory procedures, and they got themselves in a world of hurt with SEC, and CFTC, and … with the US Attorney’s office in Southern District of New York, New York state financial folks. They got in trouble with the United Kingdom’s financial regulators. It didn’t seem to matter to these folks.|
|They were taking on fines, multiple billions of dollars of fines for toxic mortgage loans, for manipulation of the LIBOR, which is a interest rate over in the UK. They were taking on … They were getting hit with millions of dollars of fines for not maintaining their anti-money laundering control. It just didn’t seem to matter. It was just a cost of doing business. None of the management executives ever had their feet held to the fire. They were never held accountable. The law in Germany does not allow really for the prosecution of … the criminal prosecution of banking executives. No one in Germany banking circles has ever really gone to jail for any financial skulduggery.|
|Jeff Schechtman:||Martin, talk a little bit about how Deutsche Bank continued to be impacted by the financial conditions of any given time and how in some cases, actually US policy encouraged some of the nefarious practices of Deutsche Bank.|
|Martin Sheil:||In the middle of all of that, in the early 2000s, Deutsche Bank was, as we said, got their … sunk their roots back in 1998 and started growing by leaps and bounds; taking on huge risk in all areas; their mortgage loans, their … currency manipulations. Pretty much any area that you can think of, they took on a lot of risk and went the extra mile. They really pushed the boundaries. It got themselves jammed up. The regulatory authorities in looking at them would investigate and threaten to prosecute, and then what happened was that no one would actually individually be held responsible. The corporation would just get hit with a million or billion dollar fine.|
|That didn’t inhibit anyone. They just kept going. It was the cost of doing business. The only ones that suffered from that type of approach would be the shareholder, the one who was investing in the bank. These executives didn’t care about the shareholders. They only cared about their own bonuses.|
|Jeff Schechtman:||Focus a little bit on Deutsche Bank’s connection to Russia and to Russians. They set up an office in Moscow. Talk a little bit about that connection.|
|Martin Sheil:||Deutsche Bank had a close relation with a bank called VTB, I can’t pronounce the Russian, the [Nezcsh?] Quarter Bank or something like that. VTB was … right now, is probably the second largest bank over there. Deutsche was looking to expand, and the timing was right because the Russian economy was starting to take off. The oligarchs had pretty much started to settle down. Putin had taken over. He became president in 2000. He set about attempting to get their tax authorities stabilized, and it took a while because there was a lot of corruption there.|
|The oil prices started really increasing, and Russia was very much an oil-based economy. There was a lot of money to be made over there. The economy was flourishing. Folks were doing well. Deutsche Bank was looking to cash in. They got with VTB and the head of VTB was a guy by the name of Andrey Kostin, who’s alleged to be ex-KGB.|
|As Putin once famously said, “There is no such thing as ex-KGB. Once KGB, always KGB.” The thing about Russian banks is that they’re just dominated by KGB and SSB intelligence officers. SSB took over for KGB. Anyway, Kostin was the head of VTB, very tight with Putin.|
|Deutsche approaches Kostin, says, “Look, we’d like to set up some offices here and expand, and get Deutsche rolling. What do you think?”|
|Kostin said, “Yeah, yeah. Let’s work together.” Says, “Hey, by the way, why don’t you hire my son to head up your Deutsche Bank office here in Moscow?”|
|So OK, Deutsche agreed to do that, and Andrey Kostin became the head of Deutsche Bank Moscow. Well, he brought in some folks that were closely related to Kostin and to Putin, and to … called F-O-B, Friends of Putin. Suddenly revenues for Deutsche Bank just took off. They increased two, three, four hundred percent in a short period of time. This is about the late 2000s, let’s say in 2006, 2007 area.|
|One of the things that was going on, a lot of the Russians who had made a lot of money were concerned — [it was] a little bit like the Wild West over there, in that you had some corrupt authorities and you had Russian organized crime was very prominent. Folks who had made some money and were concerned, and they also didn’t particularly like paying taxes; very similar to wealthy Americans and Europeans. They were looking to move their money out of Russia. Money laundering was a big deal over there. I must say, having investigated money laundering for decades, the Russians are the best at it.|
|Jeff Schechtman:||Explain why it was so important, given the state of the Russian economy, why was it so important to move money out of the country? Why was money laundering such a critical business with respect to Russia?|
|Martin Sheil:||These oligarchs, and there’s about, at the time, about 200 of them that really controlled most of the economy. I mean they controlled 75-80% of the economy. A lot of that is oil related or mineral related. They were concerned. They wanted to safeguard their money. They were never sure how long they were going to be and retain their oligarchical power, because so much of their power and their wealth depended on their relationship with Putin and those immediately around Putin.|
|Putin, his chief of staff was a guy by the name of Igor Sechin, who went on to become the CEO of Rosneft, which is the largest oil company in Russia. Sechin was in charge of what’s known as the siloviki. Siloviki is Russian for … Well, a little translation is ‘structured force’. Essentially what it is, in America we would refer to it in mafia terms: muscle. Siloviki equals muscle. If Putin wasn’t happy with an oligarch, he would sick “siloviki” on that particular oligarch. They would just seize the industry, or the company, and throw the oligarch in jail. This was what they did with Mikhail Khodorkovsky, who was the head of Yukos Oil, which was the largest oil company at the time. Putin viewed Khodorkovsky as a competitor, as a rival, as a threat.|
|When Putin came in power, became president in 2000, one of the first things he did was just put Khodorkovsky in his place, threw him jail, seized his company, and chopped it up; and took what he wanted from it. That set a real lesson to all the other oligarchs. They looked around and they saw ‘If he can do that to Khodorkovsky, he can do it to us.’ They started trying to get their what monies they had in their banks, … In Russia at the time, there are a lot of little banks. They were known as pocket banks, because they were in the pocket of the particular industry that the oligarchs would control; whether it was aluminum, or oil, or whatever. These banks are not real banks as we understand them. They’re more like … piggy banks, or that kind of thing. They would come and go.|
|Anyway, the Russians decided, “Well, it’s time. We need to get our … move our money out of here, because what happened to Khodorkovsky, it could happen to me.” They started doing very complex maneuvers, move it into a large Russian bank that had a correspondent bank relation with banks in Moldova and Latvia. From there, once you got it into Latvia, you could then move it into the European Union. You could move it to the UK. Once in the UK, it could go to the British Virgin Islands, Cyprus, wherever. They’d use all these shell accounts masking the identity, the source of ownership. They would buy up … make investments in restaurants, or athletic teams, like soccer teams, famous soccer teams, basketball teams, hockey teams, whatever. They’d also buy huge yachts, et cetera.|
|Ultimately, they would end up buying real estate, either commercial real estate or luxury condos in places like London and Manhattan. They would always buy them in shell company names. The anonymity of real estate purchases that American and UK laws afforded was fully taken advantage of by these oligarchs. When you get to around 2010, the Russian laundromat was basically cracked down. The Moldovan banks, that particular method of money laundering was essentially stopped; and a lot of the Latvian banks closed up.|
|Jeff Schechtman:||Once this method of laundering money was shut down, what was next? There’s always a new way that would come along to take care of this laundering. What was next?|
|Martin Sheil:||Another way of moving money had to be devised. One of those ways was the mirror trades, which emanated from the Deutsche Moscow Bank. In very simple terms, you can read the articles for the details; but essentially, you’re talking about an oligarch who has all sorts of … or a corrupt Russian official who has all sorts of accounts both in Russia and outside of Russia, and will set up … devise, or direct various brokers. There was about a dozen brokers in the Moscow area that would be directed to buy Russian stock … Let’s say four or five million dollars, buy stock in a Rosneft, or Gazprom, or Sberbank, or whatever. At the same time, the oligarch would then direct brokers in London to sell stock at almost the same exact time as they’re buying the three or four million dollars in Gazprom. There’s the London guy is selling three or four million shares of Gazprom.|
|The result of that, the simultaneous buying and selling of the same stocks at the same price was to essentially move the Russian rubles, that were in hand, to London, and at the same time as you’re moving it, you are converting it. The Russian term is “convert,” … into Euros or dollars, whatever you sold the stock for.|
|Jeff Schechtman:||As these practices went on, what specifically was Deutsche Bank’s role as all of these methods continued to evolve?|
|Martin Sheil:||Well, I mean there’s real no economic benefit of purpose to this simultaneous … Well, the oligarch has now moved his money out of Russia and converted it from rubles to Euros or dollars. Deutsche’s role was they get to collect fees on the trade. The manager who was in charge of this, a guy by the name of Tim Wiswell, who’s an American, he was also … He got paid additional bribes to make sure that no one came in and to protect the traders from this whole thing. He got three or four million dollars put into his offshore bank accounts in British Virgin Islands. This went on for about four or five years, from 2010 to 2014, ’15 area. We’re talking about maybe 10, 11 billion dollars worth of money was moved from Russia, out of Russia, to the UK and then from there, it could go anywhere. That’s what’s known as the Russian mirror trades money laundering scheme that we wrote about here.|
|Jeff Schechtman:||You touched on this before, Martin, but were there any consequences with respect to Deutsche Bank? Did anyone care, either in the US or anywhere else in the world?|
|Martin Sheil:||No. The UK financial folks hit Deutsche Bank with something like a 650 million dollar fine. The New York State Department of Financial Services hit Deutsche Bank for about a 285 million dollar fine. The Department of Justice opened up a criminal investigation in the Southern District of New York, with regard to Deutsche Bank and these money laundering activities; because a lot of these trades actually passed through the New York bank in terms of the way that the financial system was set up. That provided New York with venue and jurisdiction.|
|Now, they opened up this investigation a couple years ago and it’s basically, it’s just laying dormant. There was a recent article in December, I think CNN put out, that they had found that Department of Justice money laundering section, which is located in Washington, had joined the Southern District of New York’s prosecutor team in this investigation; but no one could find out just what is the status of it. No one really knew.|
|Jeff Schechtman:||I want to come to 1998 and the beginnings of Donald Trump’s relationship with Deutsche Bank and how that relationship evolved.|
|Martin Sheil:||Now, understand, in terms of contacts, that Donald Trump had, in the 90s, had declared bankruptcy six separate times, one half dozen financial bankruptcies; many of which related to the Trump casino in Atlantic City, the Taj Mahal. He was basically toxic in terms of the rest of the financial industry thinking about providing loans to him. He did not have a good reputation. I want to point out a couple of things there, that the casinos were well known at that time for laundering money. The casinos in fact, did get hit by the Treasury Department for money laundering penalties and fines for their lack of anti-money laundering control.|
|The other thing I wanted to point out was that as they kept declaring bankruptcy, it required them to restructure. The guy that Trump brought in to restructure his organization down there, was a guy by the name of Wilbur Ross; who is now Secretary of Commerce. It’s late 90s, Trump’s having a lot of difficulty with his casinos. He’s trying different ways and things, but he decides to get into real estate. He wants to build a building down at 40 Wall Street. He needs money. The other banks in New York are shying away from him. Deutsche Bank just takes over Bankers Trust. They direct their folks in New York to be aggressive and being aggressive, as I mentioned earlier, means taking out larger and larger risk. Risk management controls are negligible at this point.|
|The decision is made to loan Mr. Trump quite a bit of money for 40 Wall Street. That works out fairly well. They continue to loan him money. Mr. Trump builds some more. Deutsche loans more money to him. It seems to be a good relationship. They’re making money. He’s making money. The bankers involved are making money, they’re making fees. Now, understand that this is Deutsche Bank, their real estate section, they’re the ones that know real estate and what not. They’re doing well with Trump. But then, everything’s going pretty well until you get to the 2008 area when Trump Tower Chicago; which required … that was like about a 360 million dollar loan … 40 million of that was personally guaranteed by Trump.|
|Now, Trump was having difficulty making his payments. The bank started calling in the note, and said, “Hey, sorry. We’ve had a good relationship, but you need to … You got to make your payments.” He wasn’t doing it, so they sued him. They sued him for the 40 million that he had personally guaranteed. They took that 40 million. What Trump did was he counter-sued and claimed that it wasn’t his fault he couldn’t pay the loan. It was Deutsche Bank’s fault for contributing to the worldwide, global financial recession; which is just a crazy suit.|
|That really turned off the real estate executives associated with Deutsche Bank. They decided after that suit, which Trump lost — he lost his 40 million that he had personally guaranteed; which he made up real quick by selling this mansion down in Florida to this Russian oligarch called Rybolovlev, for like a 50 million dollar profit; but the bankers at Deutsche said, “Donald, we’re moving you over to the private wealth management section of Deutsche Bank, and Rosemary Vrablic will become your personal wealth manager. If you want more loans or anything, you deal with her.”|
|Vrablic had a real estate background. She hit it off well with Trump. She was eventually invited to the inauguration. She’s also the wealth manager for the Kushners, and of course, that private wealth management section of Deutsche also caters to Russian oligarchs; which isn’t real well-known. But these private wealth managers are … they’re like the guys down at … in the hotel lobby that will run around and do anything you need, run out and get you … the concierge-type service.|
|Martin Sheil:||They’ll go out and get you Broadway tickets, go park your car; or they’ll sometimes go buy the car for you, for these wealthy guys, “park the yacht,” or whatever it is. Just jumping ahead, if I was a prosecutor for a day in the Southern District of New York, or on Mueller’s team, I would be subpoenaing Rosemary Vrablic, as well as the other private wealth managers of Deutsche in New York; and ask them to see the client list, and see if any … Rosemary Vrablic had ever introduced any of the oligarchs to Trump, and back and forth like that.|
|Jeff Schechtman:||As part of your three-part series in WhoWhatWhy, you give a number of examples of some of the really shady practices and illegal practices in many cases that Deutsche Bank was involved in, so many of which touched on either Trump or the people around Trump. Talk a little bit about one or two of those specific examples.|
|Martin Sheil:||There was a tax shelter promotion done from 1998 to 2002, [due to which] Deutsche Bank was investigated by the Southern District of New York; [SDNY said] “Hey, you’ve sold over 1,000 tax shelters to several thousand people to the tune of close to six billion dollars of illegitimate tax losses.” The one percenters are looking for any reason not to pay their taxes. If Deutsche Bank didn’t provide this service, no one else would have; but in this sense, in this case, Deutsche Bank got caught. They got their wrist slapped. They entered into what’s known as an NPA, a non-prosecution agreement with Department of Justice Southern District of New York where they agreed to stop selling, stop promoting these tax shelters, … and that if they violated this NPA, they would be subject to prosecution. The door would be reopened, and they’d … this whole issue would be revisited.|
|The same time they were negotiating this, and negotiation took some time, they began to promote something called “basket options.” Basket options is basically … it’s a financial instrument on the front end where it’s a highly leveraged type of a deal — where you invest not only your money, but the bank’s money in this case. The real key to it was on the back end of the transaction is a tax shelter. It would provide for long term capital gain treatment in lieu of short term capital gain treatment, which is a savings of approximately half.|
|Now, they sold most of their basket options, I’m talking Deutsche Bank came up with these basket options. They sold most of them to Renaissance Technology, otherwise known as RenTech. The co-CEO of RenTech is probably the best known person associated with RenTech. His name is Robert Mercer. He’s what I would refer to as an American oligarch, because in 2016, he made political contributions of approximately 20 million dollars. RenTech also ran a company called Cambridge Analytica, which employed Steve Bannon, Kelly Anne Conway. They were involved in doing analytics with regard to how to sway potential voters out in the country.|
|Jeff Schechtman:||What exactly was RenTech, and how did it specifically benefit from Deutsche Bank?|
|Martin Sheil:||Renaissance Technology is a hedge fund, second largest hedge fund in this country. What they would do is a lot of their trades were computer generated based on very complex algorithms devised by their very highly educated folks. They would engage in thousands, sometimes millions of trades inside of a couple of seconds. That means buying and selling financial product inside of a couple of a seconds. Seconds, nano-seconds.|
|Well, to qualify for a long term capital gain treatment, which is much less than a short term capital gain treatment, tax-wise, you have to hold … When you buy a financial instrument, you have to hold it for at least one year before you sell it. That’s what’s called long term capital gain. Anything over a year is long term. Anything under a year is short term.|
|Well, Renaissance Technology was treating all these hundreds, thousands, sometimes millions of transactions that occurred in nano seconds, they were treating that as if they were long term … they were held long term. There couldn’t be a more gross violation of tax treatment. There’s no confusion as to that these products were held for a year. They were held for seconds. That allowed Renaissance Technology to qualify for what’s … for say a tax savings that has been … what’s publicly been announced as 6.8 billion. I’ve seen other places say seven billion dollars of tax saving were derived by RenTech through the use of these basket options.|
|Now, the US Senate Permanent Committee for Investigations headed by Ex-Senator Carl Levin investigated this. They brought in testimony. They brought in Deutsche Bank executives, et cetera. After all was said and done, Senator Levin characterized these basket options as “let’s pretend basket options.” Basically, calling them a magical device that just magically transformed a sale that occurred, a buy and sell transaction that occurred in seconds to something that took over a year; allowing them to take long term capital gain.|
|Here you have that the IRS said back in 2010: “These basket options serve no economic purpose. There is nothing to them. There is no substance to it. Do not use these basket options.” RenTech continues to use them. RenTech buys at least 29 of these basket options. Deutsche Bank was told back in the middle 2000s: “Do not sell any tax shelters. Do not engage in any more promotion of tax shelters.” Even as they’re signing that agreement, they’re selling these basket options to RenTech, in clear violation of their non-prosecution agreement. Why did they do it? There’s only one reason, and that has to do with money. They were making huge fees on the sale of these basket options.|
|The Southern District of New York prosecuted KPMG in the mid 2000s for the sale … KPMG, of course, also one of the biggest accounting firms in the country. They were selling illegal tax shelters. They got prosecuted. They entered into what’s known as deferred prosecution agreement. Of course, nobody goes to jail. If you read the DPA, the deferred prosecution agreement, KPMG could not have conducted their tax shelter scheme without interacting with a bank. As it turns out, even in the indictment, the bank that was involved was called Bank A in the indictment. Bank A, as it turns out, is Deutsche Bank.|
|My feeling is that a chief executive of Deutsche Bank should be held responsible for all these financial shenanigans; because not only were the shareholders of Deutsche Bank ripped off, American taxpayers and yeah, Russian taxpayers were ripped off. It was done at the direction of centralized management. Centralized management in this instance is the CEO of Deutsche Bank.|
|Now, for a good long period of time, the CEO was a guy by the name of Joseph Ackermann. Joseph Ackermann left in around … I don’t know, somewhere between 2012, 2014, to become the president or head of Bank of Cyprus; which … is a … It’s the largest bank in Cyprus, and Cyprus is a known tax haven, money laundering area in the world … and a place where many of the Russians, the oligarchs and corrupt officials park a lot of their money. Matter of fact, Paul Manafort had opened up something like 15 accounts at the bank that preceded Bank of Cyprus; Bank of Cyprus took it over.|
|It’s a small world here. You have wealthy folks in America, wealthy folks in UK, wealthy folks in Russia, all benefiting from the financial irregularities, if you want to say; or even the financial criminal conduct of Deutsche Bank, who’s in the pursuit of earnings and executive bonuses.|
|Jeff Schechtman:||You also have a pretty strong relationship between the Kushner family and Deutsche Bank.|
|Martin Sheil:||Oh yeah. Kushner … Even Kushner’s mother has a … account with the private wealth section of Deutsche Bank. Kushner himself has an open line of credit to the tune of, I don’t know, five to ten million dollars with Deutsche Bank; as well as Ivanka. Kushner, his company obtained loans of … to the tune of approximately 285 million dollars from Deutsche Bank, about one month prior to the November election. This was just … This was during a period of time where Deutsche Bank was negotiating how much of a fine they would pay on their … the toxic mortgage loan exposure they had. It was 14.2 billion dollars was the figure that Southern District of New York first floated. That got cut to … in literally in half to seven billion, right after the president got elected. This is … Perhaps it was coincidental that Kushner, who also had financial issues of his own, perhaps it was just coincidental that Deutsche Bank gave him such a huge loan; and that they had their seven billion dollar savings on the fine.|
|Kushner has these loans going on. It should be noted, I think I note that in the article, that Deutsche Bank and Vnesheconombank (VEB) is a bank in Russia that Putin and the oligarchs make quite a bit of use of. VEB and Deutsche had a cooperation agreement. A lot of times, Russian oligarchs particularly post right around the recession time. They got overextended, and Deutsche made some loans; and which are in peril. VEB would come in and save the day with emergency loans, bridge loans, and what not. They have a long history of working together. Eventually, Kushner met with the president of VEB, early December. The president of VEB was a guy by the name of Sergey Gorkov who is an ex-FSB; and closely tied to Vladimir Putin.|
|We don’t know what was discussed there, but we do know that a month later, Eric Prince, who is a brother of Betsy DeVos, Secretary of Education, he met with some Russians, financiers, bankers, as well as a sheik from Qatar. They all met out in the Sechelles Islands, which is another bank secrecy haven. They also met with a guy who heads the Russian development fund, which is run by … supervised by VEB. Both the Russian development fund and VEB are under sanctions. You have just one meeting after another that … between members of Kushner’s … I should say Trump’s close circle, whether it’s Flynn, Kushner, Prince; and folks who are under and institutions that are economic sanctions.|
|Jeff Schechtman:||It’s interesting, there’s the assumption with all of this that somehow Trump is the center of this universe; but in fact, Deutsche Bank really is the center of the universe and everything revolves around that. The Russians, Trump.|
|Jeff Schechtman:||All these other banks.|
|Jeff Schechtman:||I mean they really are the center of this story.|
|Martin Sheil:||Deutsche is the common thread. If you want to do anything in terms of investments, … tax maneuvers, you basically need a big financial institution. If you’re a mover and shaker financially, you’re going to have, to have … be accommodated by a bank who can facilitate movement of money worldwide. I mean it’s a global economy now. You hit a button, and you’ve moved money from one side of the globe to the other. You need banks to do that. There are banks who will do anything for a price, for a fee. Certainly Deutsche was one of those. Why wouldn’t they? I mean no one has been prosecuted.|
|Martin Sheil:||There’s no deterrent.|
|Jeff Schechtman:||With respect to Deutsche Bank, we know, we’ve certainly heard that Mueller has subpoenaed documents from Deutsche Bank. How legitimate do you think Deutsche Bank will be in providing the documentation that Mueller’s people want?|
|Martin Sheil:||That’s a great question. Don’t know. We can’t even be sure that Mueller’s people are the ones that subpoenaed Deutsche Bank records. Let me tell you why. You have … Mueller certainly has his investigation, which emanates out of Washington, DC. Okay? But the subpoenas that I’ve heard about came most recently out of the Eastern District of New York; which is Brooklyn, the Department of Justice … These attorneys offices are in the Eastern District. I don’t know that … that sounds like a separate investigation to me, looking into Kushner.|
|Jeff Schechtman:||Martin, we’re just about out of time. If you look at the totality of this story and everything that you’ve written about Deutsche Bank, how would you sum this all up?|
|Martin Sheil:||My feeling is that Deutsche Bank has engaged in, for years, the facilitation of tax evasion by wealthy people whether it’s facilitating money laundering, mirror trades for wealthy Russian oligarchs, or by engaging in the sale and promotion of tax shelters for wealthy Americans. They’ve been heavily engaged in doing that. That’s just one more service that Deutsche Bank has provided with little consideration as to the fact that they may well have entered into tax evasion or actually committing crimes in servicing their client.|
|Jeff Schechtman:||Martin Sheil, I thank you so much for spending time with us today.|
|Martin Sheil:||It was my pleasure, Jeff. Any time.|
|Jeff Schechtman:||Thank you, and thank you for listening and for joining us here on Radio WhoWhatWhy. I hope you join us next week for another Radio WhoWhatWhy podcast. I’m Jeff Schechtman.
If you liked this podcast, please feel free to share and help others find it by rating and reviewing it on iTunes. You can also support this podcast and all the work we do by going to WhoWhyWhat.org/Donate.
Where else do you see journalism of this quality and value?
Please help us do more. Make a tax-deductible contribution now.
Our Comment Policy
Keep it civilized, keep it relevant, keep it clear, keep it short. Please do not post links or promotional material. We reserve the right to edit and to delete comments where necessary.