tv David Enrich Dark Towers CSPAN March 30, 2020 1:00am-2:05am EDT
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there is a skinny microphone for when we do that. after david talks. following the talk and questions there will be a signing there are books available behind the register purchase your book he will be more than happy to sign them and finally if you could pop the chairs up against a surface that would be greatly appreciated. we had the pleasure of posting david enrich who previously was a reporter and editor for the wall street journal new york and london and the journal reporter winning the 2016 award as a journalist in previous the author of spider network.
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>> and deutsche bank and the epic trail of destruction and the tragic case to illustrate the global face of the financial malfeasance please help me to welcome david enrich. [applause] >> hello. i have had the pleasure of doing a lot of book events over the past years and then see like this i am not kidding six people in the room. [laughter] so this is awesome i will take out my phone and just take a picture. [laughter] because my wife will not believe this. [laughter]
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maybe i will take a couple pictures. [laughter] so thank you all for coming it is an honor to be here. it is extremely gratifying to see a turnout like this for a book about a european bank nobody has ever heard of. [laughter] so first to the nonfiction audience people generally do not read to start but i want to read the opening section just to set the scene and then i will explain why i am setting the scene and how i got to writing the book in the first place. one american emerging the january weather the reputation during the long winter months. the man looked around slow. normally the block was
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bustling with shoppers. this sunday early 2014 it was desolate. val did not feel well he woke up groggy from the drug fueled jam session with his band then on the train he was jolted by a surge of negative energy like a dark spirit rushed past him. he went toward the entrance of the gallery his head down in the attempt to stay dry. he scheduled a brunch with his parents he saw them a month earlier december 2013 before he set off for the caribbean. he just turned 38 while a talented musician with 34 albums to his name none were charttoppers he lived off his father who spent many years as a senior executive at deutsche bank. tall skinny and scraggly telling him he resembled a
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tramp and not to get an earful from his mother but looking like a slob he wore slacks and a blue blazer and the cap at exactly 1:00 o'clock he arrived at the arch bridge wall that snaked around the gallery he was chastised never to be on time but here he was and no one could be seen he said where are you guys and no response. val wandered across the street perusing the rows of shops and came to the bookstore that specialized in coffee table books about art and culture. for the past couple of years he had been collecting rare first editions the older and more famous the author the better he was so into the hobby he had done volunteer work for an organization who wanted books from the estate stale and distribute to needy children. he was searching for hidden gems for his own little library. the bookstore is mostly empty.
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and browses shelves and then something caught his eye an enormous volume with a silver color 150 pounds a limited edition collection of the photos of the beatles including the one of the hello fight in the paris hotel room it was signed by the photographer and the pages were so luxuriously metallic he could see his reflection. he started to daydream about convincing his parents to buy it for him as a belated birthday gift. his cell phone buzzed interrupting the reverie it is from a blocked number and he answered a woman with a thick accent he was pretty sure was the parents housekeeper was on the line. emergency emergency she shouted. your father. he asked what she was talking about and could not get an answer. the only thing he could do is that he needed to get to their flat about 1 mile away in the posh neighborhood he raced
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outside and hail the cloud one - - hailed black cab. the ten minute drive felt endless the cab seem to crawl through the streets past town houses and apartment blocks and high-end restaurants and grocery stores locals hurried along the sidewalks keeping pace with the taxi. maybe his father was hurt? a family argument cracks maybe he was locked out of his computer and he did his sons help. the taxi pulled onto evelyn gardens a wide street instead of a median cars parked in the middle as well as the side. now in addition an ambulance was at the curb. he paid the cabbie and sprinted across the street. his parents lived in the flat on the third floor of a white trimmed building the heavy
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door normally open through the buzzer was ajar he galloped up two flights of stairs in the door to his parents apartment was wide open in the middle of the hallway bill was lying on his back and eyes closed a neck brace tilted his head back at an unnatural angle. paramedics in plastic tubes jutted from his belt his mother was curled in a fetal position head resting on a pillow next to her husband's face and wailing. he kneeled beside her. what the f is this he screamed he killed himself his mother gasped he hung himself with daisy's leash. obviously that is upsetting way to start the book this was january 2014 and 9 days after that i lived in london at the
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time and was a journalist working for the wall street journal i got in touch with val because i heard about bill grossman suicide the senior executive at deutsche bank and i wanted to learn more there were rumors flying all over london that he had committed suicide he was extremely close to the bank ceo at the time and i was trying to figure out what was going on and bill and his wife had three children so i a divided up the task to contact his widow and family members with my colleagues and i got val. he has a very active social media presence at the time he was in a band and it was active on twitter and facebook and he is a character i could tell right away. posting lots of pictures about doing wild and crazy stuff.
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lots of drugs. vaguely pornographic pictures with exploits with women with a completely inappropriate guy and on his website there was e-mail so i e-mailed and introduce myself and said i am looking into your father's death trying to understand more about what happened i'm hoping we can talk. i have been a journalist at that .14 years or so i have written lots of e-mails of that nature and phone calls of the nature and i have been conditioned you almost never get a response and that position may be send it you want to be respectful because there is a tragedy and they are grieving but you need to be persistent. i expected over the coming days and weeks i would be making phone calls and e-mails
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lo and behold the next day he responded and said what you want to know about my father? i said i heard rumors about what had happened with his dad and he grudgingly agreed to get on the phone with me a few days later on the condition that we stop calling and harassing the rest of his family which was fair enough. so if you weeks later i met with val and this started a journey that has led to this book because val it turns out had gotten onto his dad's computer very shortly after his death and figured out the passwords to his personal e-mail address because yahoo and gmail and inside of those accounts he would eventually find his father had been sending and receiving thousands and thousands of e-mails and documents to his work at the bank and then eventually turned them all
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over to me. wide it showed bill grossman he and val become the protagonist of this book and bill grossman is american he is from rural illinois became a banker but not your normal reckless aggressive testosterone banker much more cerebral and thoughtful and intellectual and quite conservative and he became men and that she became known when merrill lynch started and then at deutsche bank as the man with the ethical compass and the conscience of the place and he was the guy this was an industry dominated that everybody wants to go go go step on the gas. shoot first ask questions later with the super ego and
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he would say wait this looks too easy. should we ask more questions he was smart enough and respected enough that people listen to him. so what happened at deutsche bank over the years it is a parable for what happened in the banking industry at large over a long period of time. the banks went from being these companies that essentially existed to serve their customers and became entities customers and the communities and employees, government and of course shareholders and investors and owners and they went from two serving the constituencies to just one very narrow constituency which was the shareholders and that meant they went from doing what is best for the clients to shareholders and that meant maximizing profits as quickly
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as possible. so i got to know bill grossman from friends and family members and then got to know him through reading his e-mails trying to curtail people risk-taking and say you do the best for clients and if not then why are we doing it? it is quaint and old-fashioned. we really didn't write about this at the time it was 2014 and it is interesting because deutsche bank was a troubled financial institution at the time. but i was working for an american a newspaper is a german european bank despite its problems and its big presence nobody really cared. then and 2016 a certain someone started to run for president and had a very very special relationship with deutsche bank.
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donald trump was completely offs limits to the mainstream financial world because he had a tendency to default on nearly loan he ever had so they are looking for customers someone who has a well-documented pattern of stiffing lenders is generally not the first point of call. so he was just off-limits they would not return his phone call there are some crazy stories about the great lengths the banks would go to avoid doing business with donald trump even his friends were not touch him there is one story i love telling people you just see it based on what we know these days so the story goes like this it is that bear stearns used to be the largest bank but then it collapsed because it wasn't very well run. even bear stearns wouldn't touch donald trump so one of
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the top executives a screen berg he used his relationship to get his foot in the door and propose that they lend him $100 million. and he told one of the bankers donald trump was $100 million a banker it's not crazy but is not trump one - - but is trumps label not lend him they said we will call you back only make a decision and he decides he will not call him back so the lack of a return phone call does not mean we will not loan you $100 million so he does not get the message calling him back over and over in the banker didn't know how to say no so would not return the phone calls. trump went to the boss out to breakfast one day and said why can i get my phone calls returned? it is so rude so a scum stomping back in and says why
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are you not returning his phone calls? the banker says we can solve the problem by letting him $100 million otherwise i don't know what you want him to do and he said we are not doing that so solve the problem so the banker thinks about it and finally decides he has a plan so he calls back donald trump and says i'm so sorry i have been dodging your phone call it's really rude but we cannot make the loan. trump says why cracks he says a screen berg doesn't want to. [laughter] an ace or trump says what are you talking about? in fact i had breakfast with him this morning and the banker says that is the problem he came back and said there are four people we can do business with we don't want to be on the other side of the loan henry kravitz, bill gates, warren buffett and donald trump. and trump pauses and says i
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can see that. it makes sense. [laughter] i hear that story sometimes i discount the value of the investment bankers so this gave me a whole new appreciation. so anyway deutsche bank did not have the scruples of bear stearns when it came to deciding whom to lend to and it was so igor to get a foothold in america and had to pick up the scraps and donald trump was one of those starting in the late 19 nineties the bank started to make $2 billion of loans to trump over the next 20 years. by the time he was elected president, he still owed
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$350 million deutsche bank was a largest creditor they financed all of his marquee projects including here in washington what used to be the old post office building now is the trump something hotel. so looking back at this relationship everything i have learned about his father his father's career and conservativism and this reckless out of control bank maybe this was the vehicle to tell the story of how this random obscure german bank with the funny name no one has heard of became not only synonymous with financial destruction and economic doom and mayhem but also help to propel donald trump to the white house. i spent the last two years reporting and writing about this for the new york times primarily focusing on the trump relationship because
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they already use the deutsche bank story so i had spent a lot of time focusing and assessing about deutsche bank why nobody would pay attention so it is such a pleasure to actually have a way to tell the story now and away amazingly that people care. so that's it i would be happy to answer questions sure you have lots of questions about trump and i have lots of answers. [laughter] [applause] >> please use microphone. >> given in your research of origins and history of
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deutsche bank, do you think the banks financing of auschwitz as i have seen included in the crematorium's , did they know what they were doing? >> yes. it's not quite that simple but first of all it is much more extensive than just financing the construction of auschwitz they also financed right next door to a chemical factory that supplied the poison gas. you know this. deutsche bank was the company that conducted the area nations of the jewish owned businesses all over europe as germany conquered those countries and stopped lending at the local banks to help jews get out of the companies
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and took the role that the not seas had taken and then provide the nazis with hard currency. but in fairness to the bank this is what large german companies were doing to survive at the time so it is not unique that it has done something evil. it is clearly a party to genocide and i think it has been easy for the bank with the ben if one --dash many decades a way to explain that away but the reality is we don't know for a fact they knew what was happening inside auschwitz or what the gas would be used for or what they were selling and is stemple i think we can apply a reasonable standard looking back to say come on.
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>> one of the board members of the chemical company basically was the ceo of deutsche bank. so if he didn't know, he had to know something i don't approve of it. but we are safe to operate under the assumption deutsche bank knew about it and did it anyway. i think it's dangerous to put historical comparisons to something that is comparable in human history but it is true that over and over again deutsche bank and its 150 year history it is the 150th birthday by the way. happy birthday. over and over they have done the expedient thing in order to increase profits, sometimes to survive and that has led them to commit many many
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crimes particularly genocide is uniquely evil but they have done a lot of bad stuff and generally it is because they are rushing to make as much money as possible and consequences be damned. >> thank you. [laughter] >> that's probably more than you are looking for. >>. >> first of all for writing the book i am a financial regulator i think somebody has been eating to tell the story for far too long. i would like to ask a question i am sure you are aware that al is very active on social media the are not active one - - accurately portraying his version of events but what he says is much more direct with the connections
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money-laundering through deutsche bank to pay off trump is the nuts and bolts of it. >> i haven't finished your book i have not got into the nuts and bolts of that can you comment on that quick. >> i was hoping someone would bring this up because i will answer your question i promise but step back first. bell and i go back about six years and one of the things i'm good at is a journalist a really good working with sources and those people who are not supposed to talk, to talk that's one of the things i am good at i have had a lot of relationships with complicated sources over my years and val far and away no close competitors is the hardest and most complicated and intense source relationship i have ever had. partly because i have known him for so long partly because i've known them in the context
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and the awful tragedy of his father's death and also partly val is complicated. he was shoved into the foster care system at a very young age basically left there by his family even though they were there and took care of him it was during his formative years between five and nine and subsequent to that had a lot of problems with substance abuse and addiction those are issues that he continues to deal with. he is a troubled, complicated person who i care about and a tremendous amount of respect and sympathy for. we are not getting along that will right now. i will be honest that is an understatement. back in october i wrote a story for the new york times that described a very complicated and intense
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relationship i just alluded to and in that i mention the fact that he had a history of substance abuse and credit card theft and i noted that one of the things that was motivating him as he tried to share his father secret documents with me that he really wanted to make a name for himself he's trying to get a film deal, he wanted to become famous on - - famous i was just out visiting him last week for a podcast and i said i actually regret what i wrote and the tone that i took in the article i think it was accurate and honest from my perspective written in the first person but a little too hard and a little too mean. i said i am sorry. im. so i say that all not to have you be my therapist but because in the right context to why he is so angry.
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after that article ran early october has been waging a war against me online with very tricky things and he has been talking to other news outlets and a say this with respect that are not the new york times or "washington post" or bloomberg or roared on - - reuters or financial times or cnn. or pbs or npr. [laughter] again, they are scrappy and run by younger people with lesser experience. i say this with respect. some of the stuff that has been appearing really oversimplifies things. there is not, everyone in business journals they have spent the past four or five years searching for proof of
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this elusive rumor that deutsche bank that is not financially supporting trump it is russia with a tremendous amount of smoke and tons of circumstantial evidence and everybody is looking for the fire. and me more than anyone i wish i could stand here right now and say i found it but i didn't. neither did val. neither did the news outlets he has talking to a tremendous amount of circumstantial evidence i think we give the most comprehensive and accurate description of what it is and what it means and how to interpret it. but if you are reading things like this kremlin paying secretly financing the loans may be true but there is not proof and val does not approve i wish i had proof but i
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don't. >> i didn't get all the way through the book yet either that there is a lot of news around his tax return and deutsche bank has been subpoenaed. so what is your take if they will produce them or if they have them? they probably don't have them. >> this is another weird one where my reporting and life has intersected. so first of all as backgroun background, there are a couple of congressional committees here the financial services committee and house intelligence that are both conducting investigations involving deutsche bank and their relationship with donald trump. both committees have subpoena deutsche bank as a last spring basically seeking everything they have on donald trump not
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only his him but his companies and family as well including tax returns, any financial statements related to businesses or himself, any documentation about loans or other services, documentation of every transactions. so as soon as i heard about this i started to talk to my sources who have been at the bank during the period of these were made. and then to decide whether to make the loans and to review the financial documents and two of those people told me that not only did they have , not a full tax return but the first several pages come i cannot even remember the form but going back from 2011 through 2014.
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but these people had seen them in the banks possession. then in a court hearing trump sued deutsche bank to prevent it from complying with congressional subpoenas. he sued them to block them from complying. so in a court hearing deutsche bank's lawyers said we do have some tax returns but we don't have president trumps personal tax returns. this left me scratching my head because i talk to people who had said they had seen them. i texted one of these people and said you will not believe what just happened in court they said they don't have them i will say it because we have cameras but he used some of seen words and said they are lying. i have seen it with my own eyes. i don't they returned them or destroy them but they had them.
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it sounds like they gave them back to trump. i don't know exactly what happens in these circumstances but usually a client has a request to one - - a right to request the material he has i of that pre- or post states. i imagine before the subpoenas were issued. because i don't think even reckless criminal deutsche bank would do that after they receive a federal subpoena but i don't know. the point is it sounds like they do not have his personal tax returns. the duo some of those from the subpoena which include family members. but the tax returns i want to see them as much as anyone but the new york times on this time but it is a little bit of a red herring.
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if they ever become public they will not show the most important things we want to know about his finances. not his sources of income, business partners and countries outside the united states. >> but those my understanding is they have very detailed those businesses they have with each other. they have the documents or a lot of them. and the documents that show about the specific. it isn't getting as much attention as they thought it would. but the employees and the compliance officers that raised the repeatedly about
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red flag that should be. the concerns were overruled and in one case the employer was fired. >> that is amazing and banks always struggle with compliance issues and when and how to file the suspicious activity report with the government. most banks air on overreporting rather than underreporting but actually that is a problem they flood the treasury department with these reports to you cannot make heads or tails.
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and that is just holding back and in particular with these trump and kushner transactions they still do not do it. >> they do have oral arguments t and the decision is expected in june so it is entirely possible the court will order deutsche bank to comply and then hand over his documents to congressional democrats over the summer. and then it continues. [laughter] can you give examples of when deutsche bank but the clear
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examples and just good business sense and a good businessman he was on the so imagine being called deutsche bank trust companies of america so what they were doing there is an entity at any given time tens of billions of dollars of assets come through and only very few employees no accounting staff, staff, and to raise a huge internally part of the bank under intense scrutiny from our friends at the fed. why on earth? they have no cfo. you were trying to conduct but
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he was one of the few people inside the bank pushing the bank to take more seriously what the fed would ask and clean up its act. and he did not succeed. >> i look forward to reading the book can we talk about justice kennedy son and the role he may have played and deutsche bank? >> yes. everybody is interested. those deutsche bank for ten years from 98 or 99 through 2009. and then called the commercial real estate business of the investment bank.
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his job was to make big commercial real estate loans with the construction of high rises and hotels and then package them into bonds and kennedy's role was the second half of that process so he say i will then to you but if we lend to you this is how we can package and sell it and our expectation affects how much money we can afford to lend you and the interest rate. it sounds technical and complicated but it is the most important part of the lending process. kennedy had a strong personal relationship with donald trump and ivanka trump as well and one of the people in a number
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they gave a loan to trump to build a huge skyscraper in chicago and kennedy was a lead point man in this was a stable loan for trump and deutsche bank because may 2005 and a few years later the financial crisis happens and trump is having trouble selling the luxury condos and then to ask deutsche bank with that six-month exemption and they granted in november at the financial crisis and doesn't have the desire to repay and that is in addition to defaulting on the loans sues deutsche bank that because the financial crisis is an act of
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god to void the contract i want $3 million of damages. that led to a bunch of litigation around kennedy's role for all of this but trump sues the bank is is you got to be kidding me this is not the first time he has done done something aggressive so finally says seriously and they are not but that is the temporary thinking for kennedy as one of his important clients was gone for the bank and kennedy bumped in to trump after that lawsuit was filed no hard feelings. [laughter] and kennedy thinking about his long-term future no problem
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were pals then he left in 2009 and went on to have a long-term and successful and lucrative business relationship with trump and his children and kushner's even after he left deutsche bank. now i cannot even remember your question but the relationship between justin kennedy was long and multifaceted and anthony kennedy would come by and talk to kennedy and his colleagues and give people hugs so i don't want to spoil the ending of the book but and then it comes back to this at the and because kennedy leaves the supreme court so that is not entirely unrelated to the work he has done at the bank many years earlier.
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>>. >> this reminds me of a conversation i had with my husband ten years ago when trump had a more high profile bankruptcy case that we had one - - we were worth more than trump was at the time. so what has the german banking regulators with the recklessness that was trump but the man with the business? >> american regulators a number describe the german regulators that they were the
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representatives of deutsche bank the name german bank regulator and it plays defense for the home town company that's the biggest one there is. and with those british agencies launch all sorts of criminal and civil investigations and with those inquiries did not go straight to the bank they had to be routed through the local regulator technically the way it is supposed to work but not enforced but they were die in the maze of german bureaucracy. more recently and to get the message they need to be more
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serious. and now there is a euro zone regulator that regulates deutsche bank. but the us and british have been more aggressive. so i don't come across looking good either but to your colleagues in new york and the fed was aware of and had an opportunity to stop money laundering involving russians going back 15 years and took a very soft rich and penalty you better not do it again approach which now we know did not work but even at the time there is a scene in the book where deutsche bank gets the compliance for those about
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as those that were financed. >> profits for trump or deutsche bank? >> the loans have not been profitable they allow him to do things that are profitable but because deutsche bank was so desperate to do business with anyone and then charging ridiculously interest rates that we cannot get 1 million years like to percent on $100 million which is fabulous. so that in a sense is to leave profitable it is still much cheaper everywhere else.
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and for those for the income at much higher than 2 percent. that despite his faults and record so it is not as if deutsche bank lost money on this relationship they were charging him huge fees also from other services whether managing his money but playing national service in those wealthy russians who wanted to invest into real estate and his resort. but the financial respective it probably was but that has
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been a good one between the two and then to start 1998 with a loan to renovated building. they did get paid back over and over the 350 million i think are four or five loans made since 2011. the others have to pay back to deutsche bank for those who ended up lending it. >> is in their irony the germans are supposed to be the so prudent? and now all of a sudden deutsche bank is there a national bank is loaning money
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this way to trump and others. does this come from those prudent german savers? >> deutsche bank is most of the money it is lending is but it has borrowed to the international investors but thel irony to me is the whole reason deutsche bank felt it was necessary to get into doing the wild and crazy stuff it did on wall street with characters like trump it turns out being the bank to a bunch of savers and do not want to borrow money is not lucrative so in the eighties and nineties watching the rivals in america and london were minting money on wall street activities and people burning desire to get in debt and
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institutions. so deutsche bank serving primarily the clientele they did not want to go into debt. they are scarred by their own historical legacies so deutsche bank really trying to boost the profitability and to track international investors so they had to make money and making more people in debt. so really it went all over the world but including america where found people like trump. this is unrelated but it isn't just trump they were doing business with. obviously he is the most famous and marquis client but this is a bank so desperate to get in bed with anyone it could it was really open for business for the worse of the worst of capitalism jeffrey epstein is the clearest
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example he lied to everyone and said he was a billionaire and a financier but by 2012 after he was convicted of sex crime crimes, people realized he was full of it and morally reprehensible so he gets kicked out of the bank the final was j.p. morgan which finally wash their hands of epstein the end of 2012 and epstein who at this point had a lot of money he had from some people and still trying to keep up a façade of this international businessman had nowhere to go he probably would have to shut down his dirty little operation if not for a certain bank that decided even when every other bank and cut him off they were willing to get in bed with him and that was deutsche bank and they continue to do business
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with epstein up until the time of his arrest last summer even after multiple employees in the compliance division elsewhere raise concerns not only about ethics and morality that only a convicted sex criminal also well known to have done more bad stuff than what he was charged with but also they were seeing signs internally of him laundering money and bribery. but yet the bank overruled those concerns and continue doing business with epstein because it seemed lucrative to do so. >> so i was wondering what the net worth of deutsche bank is in roughly the total amount of fines to be associated with conduct related to the financial crisis?
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>> the metric that i had it was the world's biggest bank as of a couple months ago the market value had declined by 95 percent. it has gone up because people or investors are getting a little more confident they have been find well over $10 billion which sounds like a ton and it is not that they have received the biggest fines but and very badly and has the distinction to be the world's most destructive bank and in part of money if you look at that and the market
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value which is pretty impressive but also every financial scandal deutsche bank has been at or near the center whether laundering money bribing officials or currencies or evading taxes and violating sanctions. laundering money, ripping off governments, i could go on. >> have a clean house and got new management? >> they have several times in the past now they seem serious and the bank is shrinking a lot and trying to turn over a new leaf. and they said late last year
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that finally we made a ton of mistakes the last several decades we are going back to our roots like we were in the olden days. i remember thinking he needs to brush up on the history before he says that. [laughter] may have a long, tough road ahead it will be interesting to see if they survive. >> thank you very much iam enthralled. my question is it is obvious deutsche bank play the intra- goal role to get that financially but dawn junior when he was asked quite a few years ago how is it your father god this financially if the traditional banks turned him down?
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he foolishly said the russians. we get our money from the russians. so fundamentally what is the connection between the russians and deutsche bank? but obviously it doesn't take a lot to connect the dots. >> actually eric trump who made the comment and it's even better than you said. the russians have been financing our golf courses in right at the time he said that they just bought one called the doral and paid who the finances it was deutsche bank so he said publicly it was the russians but it was deutsche bank so it is very confusing if the russians are deutsche bank. [laughter] but deutsche bank has been in
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russia for more than a century. it has extraordinarily close ties with russian companies and the russian government. and joe ackerman when he steps down and to offer him a job in the kremlin and vt be which is known as a spy bank because it has officers all over the world as an outpost for russian intelligence financing the kgb during the cold war now run by a close pal of putin. the or the sun was running the operations until he died of a mysterious accident. [laughter] vt b and deutsche bank have the entire team that started the investment bank business accrue higher directly from
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deutsche bank. they lend each other tens of millions of dollars it's hundreds of millions of dollars not tens of millions. so of that explanation why deutsche bank would take risks. may be those loans were guaranteed by vt be so therefore the kremlin financing trump not deutsche bank. that is the delicious and entirely plausible rumor. i and so many other journalist have said i am particular have devoted my last several years of my life to this. i have been looking and
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