[inaudible conversations] welcome to politics - - politics and prose so we will jump right in. please silence your cell phones we will be recording audio and video. to ask the same questions there will be a signing behind the register and then he will sign them and just prop them against the surface when we're

done thank you. >> finance editor from the new york times reporter and editor at the wall street journal david enrich before that and a reporter in new york winning numerous journalism awards previously the author of the spider network how the scheming bankers pulled off in history which was the book of the year so his newest book "dark towers" donald trump and the epic trail of deception and its relationship with us president and then to demonstrate the evolution and character to become the global face of financial malfeasance

please welcome david enrich to politics and prose. [applause] >> hello. i've had a lot of book events i'm not kidding six people in the room this is awesome so i will take a picture because my wife will not believe this. [laughter] so thank you all for coming. it is extremely gratifying to see a turnout like this for a book about a european bank nobody has ever heard of. [laughter]

for those books people do not read to start that will just take a couple of minutes just to set the scene and i will explain why and how i got to writing this book in the first place. little before 1:00 p.m. into a drizzle the type that earns the reputation during the long winter months the man looked around sloan square this sunday 2014 he did not feel well he had woken up groggy and with that on his way to chelsea jilted by a surge of negative energy.

and head down in a futile attempt to stay dry the last time he saw's parents was a month earlier before they set off for the caribbean. he just turned 38 while a talented musician with 34 albums to his name then charttoppers but his father was a senior executive at deutsche bank one of the largest financial institutions tall and skinny and scraggly and to be determined not to get in your full not to look like a slob he wore a blue blazer and slacks and a black cap at exactly 1:00 o'clock he arrived at the wall that snaked around the gallery and was notorious for never being on time but here he was with

is obsessively punctual parents are nowhere to be seen. where are you. she did not respond with the boutiques over by shops to come across the bookstore with the coffee table books about art and culture for the past couple years with those rare first editions and was so into the hobby to do volunteer work to gather unwanted books from the estate sales from ed children. searching for hidden gems the bookstore is mostly empty. and then something caught his eye priced at 650 pounds a limited edition iconic photos of the be those including the

paris hotel room and was so metallic he could see the reflection he started to daydream about his parents buying it for him as a belated birthday gift but the call was from a blocked number pretty sure the housekeeper was on the line emergency emergency she shouted. your father. he could not get a coherent answer though i thank you could think at his parents flat was a mile away so he went outside and hailed black cap the ten minute drive felt endless they seem to crawl through the streets with the locals that hurried along the

sidewalks to keep pace with the taxi. val went through the scenes maybe the father was hurt maybe it was locked out of his computer. and then allow cars to park on the side no addition to the bmws and mopeds he paid the cabbie and sprinted across the street his parents lived on a flat on the third floor and then went up two flights of stairs the door to his parents apartment was wide open in the middle of the hallway bill brooks was lying on his back and neck brace tilted his head back at an unnatural angle.

and for the dark wooden floor head resting on the pillow next to her husband's face she was wailing what the f is this he screamed? he killed himself. he hung himself with daisies leash. >> that is the upsetting way to start the talk nine days after that i lived in london at the time and was a journalist working for the wall street journal and i got in touch with with val because i heard about the suicide as a senior executive at deutsche bank there were rumors flying that he had committed suicide in part in to be extremely

close to the bank ceo at the time and i wanted to figure out what was going on. they had three children but val was his step one - - the stepson so we divide up the task of calling the widow and the colleagues with my colleagues fell had a very heavy social media presence was in a band and the band that i was active on twitter and val was a character he was posting a lot of pictures about doing wild and crazy stuff like drugs and vaguely pornographic pictures and was completely inappropriate there was an e-mail address so i e-mailed and introduce myself i am looking into your father's death of trying to understand what happened we

had been a journalist for about 14 years and i had written a lot of e-mails of that nature and i have been conditioned to never get a response in that situation to send that initial because the tragedy but that was my opening salvo to make additional phone calls and send e-mails. and low and behold he responded and said what is it you want to know about my father? i said i heard rumors about what happened with his dad and then agreed to get on the phone with me a few days later

and said that i had to stop resting the family and that was fair but that started a journey that led to this book because it turned out val had gotten on his dad's computer very shortly after to figure out the passwords to his personal e-mail address and inside of those would eventually find his father was sending and receiving thousands of e-mails in so doing research into who bill grossman was and to become the protagonist of this book he was american a minister's son

and became a banker but not your normal reckless aggressive testosterone banker much more cerebral thoughtful and conservative and the first at merrill lynch we get started in the banking world as a man with the ethical compass so everyone wants to go go go and step on the gas shoot first and ask quotient and ask questions later this looks a little too easy should we ask more questions? to be smart enough and respected enough so what happened at deutsche bank over the years it is a parable for what happened in the banking

industry so the banks went from being these companies to serve their customers. not only their customers but the communities in which they operated, their employees, a government and shareholders and investors and owners. with a hold wide range of constituencies to one very narrow which was shareholders. that meant to do what's best for shareholders that meant maximizing profits as quickly as possible so with former colleagues and then got to know through reading e-mails to curtail the risk-taking to remember the fundamental question is this best for clients and why are we doing

it? and i keep thinking about this because the 2014 and 2015 deutsche bank word is an important financial institution at the time but i was working for an american newspaper and this is a german european bank no one really cared. and then and 2016 a certain someone started to run for president in a certain someone had a very special relationship with deutsche bank. donald trump was completely off-limits to the mainstream financial world because he had a nasty tendency to default on every loan he ever received someone banks are looking for customers to have that well documented pattern is normally

not your first point of call. thanks would not touch him then to hear crazy stories of the great links they would go to avoid even his friends wouldn't touch him. there is one anecdote that i love see it based on what we know about trump these days but it is at bear stearns. it used to be a wall street bank but then it collapsed. so even bear stearns wouldn't touch donald trump and they knew is one of the top executives with ace greenberg to use that to bear stearns would let him $100 million and so the banker talks to donald

trump is not a crazy pitch but as trump so they won't lend him anything so he says he will call you back when we make a decision and he will not call him back because trump is smart enough to get the message the lack of a return phone call that means we will not be loaning you $10 million the banker doesn't know how to say no so he took ace greenberg out to breakfast one day and said ace, why can i get my phone calls returned cracks it's so rude so ace says why are you not returning his phone calls that is so rude and the banker says we could solve this by letting him $100 million or what you want me to do? he says obviously we are new not doing this so the banker thinks about it and finally decides he has a plan.

he calls back donald trump and says i'm so sorry i haven't returned your phone call is very rude but we cannot make the loan and trump says why? because ace greenberg doesn't want to. [laughter] it gets better and ace greenberg or trumps is what are you talking about? we are buddies i just 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 henry kravitz, bill gates, warren buffett, and donald trump. [laughter] and trump pauses and thinks about it and says i can see that. that makes sense. [laughter] i heard that story and i thought to myself so to discount the value of the investment bankers provide and this gave me a whole new appreciation for investment

bankers. anyway deutsche bank did not have the scruples of bear stearns with whom to lend it to and was so eager to develop a foothold in a presence on wall street to pick up the scraps that other banks wouldn't touch so donald trump was one of those scraps starting in the late 19 nineties started to make about $2 billion of loans to trip over the next 20 years. he still owed $350 million deutsche bank by far was the largest creditor with all of the marquee projects that used to be the old cost one - - post office building and i was the trump hotel. so looking back at this relationship everything i learned about his father's

career and to be a voice for conservativism and management with this out of control bank that this was the vehicle to tell the story of how this random obscure german bank that nobody could pronounce became not only son ominous with financial destruction and economic doom and mayhem but to propel to the white house so i spent the past two years primarily focused on the trump relationship so i am a nerd i spent ten years on deutsche bank so that such a pleasure

to have a way to tell this story now amazingly that people seem to care. so that's my thing i would be happy to answer questions i'm sure people have a lot of questions about trump and i have a lot of answers. [applause] >> given your research on the origins and history of deutsche bank is it your view that the banks financing of auschwitz is crematorium's.

>> is not quite that simple but supporting the nazis was much more than financing auschwitz and with that chemical factory that supplies the poison gas. yes you know this deutsche bank was the company that the jewish owned businesses and took over the local banks off the customer ranks and it took the goal the art of the jewelry boxes so in fairness

what large german companies were doing to survive at the time so that's not you need to do something evil but it is clearly a party to genocide and that's with the benefit that doesn't explain it away but the reality is we don't know for a fact we knew it was happening but i think we can apply the reasonable standard to this looking back. >> one of the board members was the ceo of deutsche bank. how could he not have known?

but it is safe under the assumption that deutsche bank do about this and did it anyway and it is dangerous to make too many historical comparisons that is in comparable but it is true there is a 150 year history it is the 150th anniversary by the way over and over they have done the expedient thing to increase profits and that has led them to commit many many times per take on - - partaking of genocide is uniquely evil and generally it is because they rush to make as much money as possible as quickly as possible consequences be damned. >> thank you.

>> that's probably more than what you are looking for. >> first of all thank you for writing the book of a financial regulator and somebody has needed to tell the story for far too long. >> i like to ask a question that i'm sure you are aware was active on social media that you're not actively portraying his version of events so that's the question of money laundering to pay off trump. >> he is pretty adamant you don't touch on that. >> could you comment on that.

>> i'm going to answer your question i promise but let me just a back a little bit first so we go back about six years. one of the things i'm good at his people who weren't supposed to talk is talk i'm not good at a lot of things but that's what i am good out one - - good at. so val far and away no close competitors to the most intense source relationship i have ever had it's partly because i have known in the context of this awful tragedy and also because val is a complicated person shoved into foster care at a very young age and basically left there by his family between ages

five through nine at his formative years and has had a lot of problems with substance abuse and addiction so he is the troubled complicated person to have a tremendous amount of respect for and sympathy for we are not getting along that well right now. i will be honest that's an understatement. in october i wrote a story for the new york times that described that relationship that i alluded to with a history of substance abuse and credit card theft and one of the things that was motivating val is that he really wanted to make a name for himself he

was trying to get a film deal. he lives in l.a. now so i told him then that i actually regret what i wrote it was accurate and honest but it was a little too hard and a little too mean. i told him i'm sorry and i am. i told him i'm sorry and i am. . . . . is i has a deutsche bad

trump has spent much of the last probably five years or four years of searching for proof of this elusive rumor that it's not really deutsche bank that is financially supporting trumpeters russia and there is a tremendous amount of smoke and tons of circumstantial evidence and everyone is looking for the fire.

to stand here and say i found that i didn't and neither did the news outlets that he's been talking to. it's the most accurate description of circumstantial evidence is and how to interpret it but if you are reading things like the kremlin bank that was financing the loans, that may be true. i wish i did have proof of it. there is a lot of news about the tax return that they've been subpoenaed and you would imagine they have a lot of financial documents so what is your take on whether they are going to

produce them. they probably don't have them. >> this is another one where my reporting and my life is intersected. there's a couple of congressional committees here that have the financial service committee and house intelligence committee that are both conducting investigations that involve deutsche bank and its relationship with donald trump and both of those committees last spring were seeking everything they had on donald trump which includes and that includes his tax returns and any financial statements they have.

during the period when all of these loans were made as a part of the due diligence process. it's the first several pages of i can't even remember the formula, it's been a long day but coming back from 2011 to 2014. but these people have seen them in the bank's possession and then in the court hearing as they sued the bank to prevent it from complying there've been legal wrangling going on. he saluted them to block them from compliance and so in the

court hearing the lawyers said we do have some tax returns, but we don't have the personal tax returns and this left me scratching my head because i talked to people who had said they have seen them, so i called were actually texted one of these people and i said you are not going to believe what happened in court. they said they don't have them and he said, i'm not even going to say it because we have cameras here that there were bue obscene words he used and he said they are lighting. i don't know if they destroyed them or returned them. it sounds like they gave them back and i don't know what would usually happen in these circumstances but usually what would happen if the client has the right to request they be returned. i don't know when that happened. certainly in the past couple of years, but i don't know if that predates or postdates.

i imagined but i don't think even reckless criminal deutsche bank would do that after a federal subpoena, but i don't know. anyway, point being it sounds like they do not have the personal tax returns. they do have some that include the family members. the tax returns i always thoug thought. they are not going to show the sources of income or the business partners. they are not going to give the view of the assets he has that are valuable in the countries outside of the united states. the things the deutsche bank has

that are going to be valuable just as the other financial statements, income statements, any documents around my understanding is the bank has very detailed relationships between the businesses they have with each other and where all of the money is coming from and going to. they've got the documents or a lot of them. this was something that hasn't done as much attention as i thought it was but the compliance officers that raised repeatedly red flags about what they deemed to be suspicious transactions involving trump and the accounts of money going to russians where the concerns were overruled and it was never reported it to the government.

it's amazing to me the banks struggle with when and how. most banks air on the side of overreporting rather than underreporting to such an exte extent. it's such an extent you can't make heads or tails of anything. it's just inexplicably decided to go in and opposit an oppositn holding back and in particular even when they feel they raised a fuss about these transactions.

and the story continues. this hasn't responded to what you are saying that the example of conscience i think not even his conscience but they being a conservative businessman was that he was on the oversight board of the entity called deutsche bank trust company's america in case anyone was

wondering if this was the entity that among other things was doing the lending to donald trump and the entity that has asked any given time tens of billions of dollars of assets going through it and only very few employees including the financial officers and no real accounting stuff. they raised a lot internally on the oversight board about why it was this hugely important part of the bank was under intense scrutiny from our friends at the fed and they seem to be stuck in some of what the fed was asking them to do including trying to conduct stress tests in the baking industry and he was one of the few people in spite of the bank pushing the bank to take more seriously with the fed was asking him to clean up its act. he did not succeed.

>> can you talk a little bit more about his son and what role he may have played in the approval of the loans in deutsche bank? >> everyone is interested in justin kennedy, which is justice kennedy's son. he was out of deutsche bank for about ten years from my figure t was 98 or 99 until 2009 and he was in what was called the commercial real estate business of the commercial banks at his job is to make big commercial real estate loans and then package the loans into bonds which then got sold to investors and his role was to basically handle the second half of the process rather than the first half so he wasn't the one coming

out saying you and you and you. he was saying if we lend to you and you this is how we will be able to kind of package them and sell it and our expectation based on how we are going to sell it and structure affects how much money we can afford and the interest rate. it sounds technical and complicated as a part of the lending process. kennedy had a strong personal relationship with donald trump and ivanka trump as well and most notably i think did a 640 million-dollar loan to trump to build a huge skyscraper in chicago and kennedy was one of the lead plaintiff men on that transaction and it turned out to be a faithful loan for both trump and deutsche bank because it was made in 2005 ended than three years later the financial

crisis happened and trump was having trouble selling those in the building so he asked, he had to pay back the money and he asked deutsche bank for a six-month extension and they granted it and it comes up in november of 2008 at the financial crisis and trump doesn't have the money to repay or the desire to repay said he takes the unorthodox approach in addition to the faulting on the loan, he sues deutsche bank arguing that because of the financial crisis was an act of god, essentially voids the contract and on top of that, i'm going to sue you because you caused the financial crisis and by what $3 billion of damages. if so that led to a bunch of litigation. kennedy dumped into trump so he sues the bank and they are like

you've got to be kidding me. this is in the first time he's done something really aggressive and cost a bunch of money so finally they are like we are done with this guy once and for all they are not right away. but that was kind of the temporary thinking investment for kennedy about this important audience was gone from the bank. he jumped the gate co. bumped into him a short while after that and said something to the affect of no hard feelings i hope and kennedy thinking about his long-term future for the problem, let's be pals and he was. he was deutsche bank at the end of 2009 and went on for a long term successful ardith business relationship with trump in his children and the kushners as well even after he went to

deutsche bank. i can't remember exactly the question but tha that the relatp between trump and kennedy was long and multifaceted. anthony kennedy would often come by the offices and talk to kennedy and his colleagues. he was a known presence in the offices and i don't want to spoil the ending of the book, but it comes back to this at the end he leaves the supreme court and i will say that isn't entirely unrelated to the work that his son had gone many years earlier. >> speech of debate the >> microphone. >> i'm sorry. >> this is reminding me of a conversation i had with my husband ten years ago one of the more high-profile bankruptcies

when i said we were worth more than donald trump wasn't time. i'm really interested in following up a little bit more of a conversation from the federal reserve gentleman here. what have the banking regulators taken defend the recklessness not just in this case with trump but the rest of their business? >> the american regulators, a number of them described the phraseology that they were the representatives of deutsche bank and the main regulators which are known for the hometown companies and as americans

watched as they would insist they had to be routed through the local regulator which is kind of the way that it supposed to work fo work but it isn't usy enforced. but they would insist that these would go through and they would just die in this maze of german bureaucracy and this happened over and over again. more recently they've gotten the message that they need to be a little bit more serious. the u.s. and the british have been more aggressive. i will say that the fed i don't think comes across looking all that good in the book.

i'm sorry to. the fed was aware and had an opportunity to stop money laundering involving deutsche bank going back over 15 years now and on multiple occasions to a very soft kind of slap on the wrist return penalty you better not do it again which we now no different work and there is a scene in the book where deutsche bank gets kind of cute out by the officials that are angry about the laundering tens of millions of dollars for the wealthy russians and they will get a penalty and if they get a penalty it will be zero and they were just urged to stop doing it which has about the affect you think that it would.

>> is can't resist the open microphone here. my question is a little bit nerdy maybe. a little bit more clarification. you mentioned over ten or 20 years to the date when did the two of the family $2 billion somehow he's been able to sort of whittle that down to 250 million. how much of the difference between the two figures between the businesses that were financed in the loans. >> profits for trump or deutsche bank. he is the one that has to pay back.

they were throwing money after he defaulted paper charging these ridiculously low interest rates that any of us went in a million get at least 2% on a 100 million-dollar loan which is fabulous. that is a hugely profitable transaction. it's still much cheaper than he would be able to get anywhere else to build the things or by things that are going to produce income at a rate much higher than 2% so it is easy to bid. the funny thing about this is that he despite his default in his record of not paying anyone that for the most part h he's ce

out of this and so it isn't as if he lost buckets of money on this relationship first of all it was charging him huge fees playing kind of matchmaking services where they introduce them to wealthy russians who want to invest in real estate including his resorts. but the bank in the end the relationship probably was profitable but in terms of the dollars and cents financial i think it is probably a good one. >> the difference between -- >> it is unclear. the those data back its start in

1998 with a loan to the renovated building on wall street and then they get paid back over and over and over again so that 350 million or i guess for loans that have been made since 2011. the others had been paid back to either deutsche bank or other parties that ended up lending to it. that was a simple question that i made very complicated. >> they are supposed to be present saviors and a i've always felt this all of a sudden deutsche bank which is their national bank is loaning money this way and others does this come from those? most of it is money that it's borrowed from the big international investors through issuing debt or selling stocks.

things like that. so it is i is and the germans ae subsidizing. but the interest, the irony is to me that the whole reason they felt that it was necessary and important to get into doing the wild and crazy stuff they did on wall street and with characters like trump it turns out that being the bank to a bunch that don't want to borrow money isn't lucrative. so the bank in the 80s and 90s arrivals in america and london were minting money on all sorts of crazy wall street activities and peoples burning desire to get into debt. people in the institutions to get into debt. so, deutsche bank serving a primarily german clientele they didn't want to go into debt. so they went to boost its profitability and attract international investors and the

way tinto theway to do that wasy by getting other people more in depth so it turned its sights towards the america where it found people like trump. i should also say that this is completely unrelated to your question but it isn't just trump they were doing business with. he is obviously the most famous clients they had and a lot of headlines but this is a bank that was so desperate to get in bed with anyone that could that it was just open for business with the worst of the worst of american capitalism. jeffrey epstein is the kind of example of that. they obviously kind of lied to everyone saying he was a billionaire and a wonderful financier. by 2012, 2013 after he'd been convicted of sex crimes, people realized he was kind of full of it and he was morally reprehensible.

they finally washed their hands of him into the end of 2012 and 2013 epstein who at this point had a lot of money and they were trying to keep up a façade as an international businessman that didn't have anywhere to go and he probably would have had to shut down his dirty little operation were it not for this attending 15 and decided even when any other bank had cut him off in the financial system and was willing to get in bed with him and the things you will not be surprised to hear was deutsche bank. they continued up until the time of his arrest and that was after multiple and for us using the dn elsewhere in the bank raised concerns probably about the ethics and morality but was well known for having done a lot more bad stuff than what he had been charged with.

but it was also they were seeing the signs internally have been laundering money and possibly bribery and things like that. and yet they overruled the concerns and continued doing business with them because it seemed lucrative to do so. >> i was wondering first what is the sort of net worth of the deutsche bank right now and then the total amount of the fines and settlements but they've had to pay a. it was at the time as applicable of months ago the market value had declined by 95% of some are

getting more confident that they are going to folks on the reform. they've been findinthey then fie exact number is over $10 billion which it sounds like a ton and it is but it is and i think that's received the biggest fund. this is an industry that has been find a lot and they have a distinction of being the most destructive bank and i think that is in part just the pure destruction of money that every financial scandal of the past ten, 15 or 20 years they've been either at or near the center of it whether it is laundering money, bribing government officials, manipulating the currency is, evading taxes,

violating sanctions laundering money, ripping off the government's, i could go on. it's a bad thing. >> they've had their management several times in the past. he seems serious and the bank is shrinking a lot and trying to turn over a new leaf and he announced the latest turnaround plan that finally we've made a ton of mistakes we are going back to the roots and we are going to be like who we were back in the olden days and i remember thinking she needs to brush up up up on the history before he says things like that.

so they have a long road ahead and it will be interesting to see if they survive. >> we have time for one more question. >> my question to you is obvious they played a role getting donald trump on his feet financially as you've alluded to in the documentary in your book so brilliantly. but donald junior as we have seen so many times on television when he was asked quite a few years ago how is it he got back on his feet financially if they kept turning him down and turning him down.

>> it's actually eric trump, and he said to donald trump or the russians have been financing the golf courses and right at the time he said that, they just bought a new golf preserve and guess who paid for the financing of that. so he said publicly if the russians that paid fo but paid r deutsche bank that paid for it, so obviously very confusing in his mind whether they were russians or deutsche bank. and so, they have been in russia for more than a century. it has extraordinarily close ties with russian companies and with the russian government. the bank's longtime ceo when he stepped down as the ceo vladimir putin offered him a job in the kremlin running the russian

fund, and they are known as kind of a spy bank because they are iin offices over the world and d it's kind of an outpost for the russian intelligence in its finance the kgb and is now run by a close pal of putin and the links with deutsche bank are so close and the son of the ceo was running the moscow operations for a while until he died a mysterious accident. they have basically the entire team that started the business was the crew hired directly from deutsche bank. they had tens of millions of dollars in recent years and it's hundreds of millions of dollars that they have been lent so the ties are very tight and it is a

neat explanation for why they would be willing to take such extraordinary risks maybe if they were not taking any risks. if they were guaranteed which would mean an absence the kremlin was financing altogeth altogether. that is the entirely plausible rumor. i do so many others have spent, i.e. in particular because i've devoted the past several years of my life. i've been looking and examining documents and interviewing scores of people involved in this and i don't have proof. but i have is a lot of circumstantial evidence and there is a lot of circumstantial evidence. i wish i could say more. >> what would be the speculation as to why they are so

enthusiastic with financing trump them directly. i don't know if anyone knows who felix is coming off of these reliable but he says that when trump plans to build the trump tower in moscow he says that they were handled and all the travel is up again he isn't the most reliable witness on these things but why would they be doing this i don't know, it would essentially be the kremlin doing an it and we know obviousy that the russian government was interfering in the election to get him elected so it isn't that hard to imagine why the government owned bank would be trying to make his life a little easier and became kind of the

more polished his record as a businessman. but again, i do not have proof that that is what happened. i don't even have it isn't proof, there's a lot of rumors, there's a lot of circumstantial evidence. but we would never publish that in the newspaper. it isn't solid. i wish i had it, but i don't. >> this strictly classified at this point with my fundamental question to you is what horse in the race do they have through supporting trump what were they going to ultimately gain by it? >> the russian government endgame is to give trump elected a. i don't know that they were actually doing anything to support financially or otherwise. i don't want speculation.

appreciate your honesty. [applause] if you could fold up your chairs and clean them up against something that would be great. >> you are watching a special edition of booktv. booktv. every now during the week while members of congress are working in their districts because of the corona virus pandemic. is a link