Deutsche Bank targeted by Dems over Trump ties

Deutsche Bank is facing a perilous 2019 with fresh scrutiny from Democratic lawmakers over the German financial titan’s dealings with President TrumpDonald John Trump5 things to know about Boris Johnson Conservatives erupt in outrage against budget deal Trump says Omar will help him win Minnesota MORE.

Democrats are eager to probe the bank’s relationship with Trump when they take control of the House, hoping to expose potential financial crimes and connections to Russian oligarchs.

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California Democratic Reps. Maxine WatersMaxine Moore WatersLawyer says suspect in mob boss killing believed he was on mission from Trump Hillicon Valley: Trump seeks review of Pentagon cloud-computing contract | FTC weighs updating kids' internet privacy rules | Schumer calls for FaceApp probe | Report says states need more money to secure elections Here are the 95 Democrats who voted to support impeachment MORE and Adam SchiffAdam Bennett SchiffPelosi, Democrats launch Mueller messaging blitz Mueller testimony could be frustrating for both parties Hillicon Valley: Equifax to pay up to 0M over data breach | Settlement invites criticism from lawmakers | Microsoft settles bribery case | Election security to take back seat at Mueller testimony MORE both plan to subpoena Deutsche Bank for Trump’s financial records when they likely take over the House Financial Services and House Intelligence committees, respectively, in January. 

The bank has reportedly already provided such records to special counsel Robert MuellerRobert (Bob) Swan MuellerThis week: Mueller dominates chaotic week on Capitol Hill Top Republican considered Mueller subpoena to box in Democrats Kamala Harris says her Justice Dept would have 'no choice' but to prosecute Trump for obstruction MORE, who is investigating the Trump Organization’s business activities in Russia as part of his broader probe into Russian interference in the 2016 presidential election.

Schiff told The New Yorker last week that he plans to obtain Trump’s records to see if there is anything in Trump’s business dealings that could raise questions about undue Russian influence. Trump owes the bank hundreds of millions for loans.

“Is that why Trump is so pro-Russian? Is his financial interest guiding his foreign policy?” Schiff asked.

“We are going to be looking at the issue of possible money laundering by the Trump Organization, and Deutsche Bank is one obvious place to start,” he continued.

Germany’s largest bank is already reeling from a slew of financial and legal troubles in the U.S. and Europe. The firm has paid billions of dollars in fines to settle allegations of money laundering, sanctions violations, market manipulation and risky sales practices.

The bank faces massive legal consequences from those actions and now faces the prospect of being dragged into a fierce political fight in the U.S. over its ties to Trump.

Top Democrats say investigating the bank is simply basic congressional oversight, but the probes are certain to give potent political ammunition to some of Trump’s most prominent critics.

“Typically, these investigations rarely unearth new information (especially if there are already other federal cases open by career prosecutors),” Brandon Barford, partner at Beacon Policy Advisors, told The Hill. “But they are a conduit by which certain facts can be emphasized and politicized.”

The company says it is cooperating with all probes.

“Deutsche Bank takes its legal obligations seriously and remains committed to cooperating with authorized investigations,” said spokesman Troy Gravitt in a statement. “Our recent record of cooperating with such investigations has been widely recognized by regulators. We intend to keep working in this spirit.”

Deutsche Bank has fallen dramatically from its perch among the most powerful global investment banks. Mounting costs from years of litigation and mismanagement have eviscerated its profits, and the firm is shrinking its investment wing in a pivot away from Wall Street.

Deutsche Bank was deeply involved in the risky mortgage-backed securities market and in 2017 paid the Justice Department $7.2 billion to settle fraud charges related to their role in the 2008 financial crisis.

The bank has also paid billions to settle both civil and government lawsuits alleging interest-rate manipulation, violations of U.S. financial sanctions and money laundering in Russia.

Its Frankfurt headquarters was raided last month as European Union prosecutors probe Deutsche Bank’s involvement in a tax-avoidance and money-laundering scheme detailed in the so-called Panama Papers.

Its business dealings with Trump, though, will take center stage in the U.S. House Democrats want to look for any potential connections between the bank’s questionable financial practices and its significant outstanding loans to Trump and his business empire.

Trump owes Deutsche Bank hundreds of millions of dollars on construction loans issued in the 1990s and 2000s through the firm’s wealth management unit. The bank was one of the few willing to deal with Trump, who was shunned by the rest of Wall Street after several bankruptcies. The Washington Post reported in 2016, shortly before Trump’s election, that he had debts totaling $360 million through his companies to Deutsche Bank.

“The Democrats have something of a target on Deutsche because of the bank’s relationship with the president,” said Ian Katz, director at analytics firm Capital Alpha Partners.

Trump has warned that investigating his personal finances would cross a red line. Waters, the incoming chairwoman of the Financial Services panel, though, has already sought information from Deutsche Bank about its relationship with Trump.

The bank has so far declined her requests, but once she takes the committee gavel, Waters can subpoena the company. That will force Deutsche Bank to comply or fight the subpoena in court.

“Deutsche Bank is key to understanding the relationship between the president and members of the president’s family and money laundering and all of that,” Waters told The Hill in a November interview.

Across the Capitol, Senate Democrats are also calling for more scrutiny on the bank.

Sens. Elizabeth WarrenElizabeth Ann WarrenPoll: Biden leads 2020 Democratic field by 15 points, followed by Sanders and Warren Warren introduces bill to cancel student loan debt for millions Democrats, advocacy groups urge Pompeo to abolish new 'unalienable rights' commission MORE (D-Mass.) and Chris Van HollenChristopher (Chris) Van HollenOvernight Energy: USDA expected to lose two-thirds of research staff in move west | EPA hails Trump's work on reducing air pollution | Agency eyes reducing inspections of nuclear reactors USDA expected to lose two-thirds of research staff in move to Kansas City Lawmakers pay tribute to late Justice Stevens MORE (D-Md.) have called on Senate Banking Committee Chairman Mike CrapoMichael (Mike) Dean CrapoOvernight Health Care — Presented by PCMA — Sanders mounts staunch defense of 'Medicare for All' | Biden, Sanders fight over health care heats up | House votes to repeal ObamaCare 'Cadillac Tax' | Dems want details on fetal tissue research ban Hillicon Valley: Senators unload on Facebook cryptocurrency plan | Trump vows to 'take a look' at Google's ties to China | Google denies working with China's military | Tech execs on defensive at antitrust hearing | Bill would bar business with Huawei Senators unload on Facebook cryptocurrency at hearing MORE (R-Idaho) to open a bipartisan investigation into Deutsche Bank.

“The compliance history of this institution raises serious questions about the national security and criminal risks posed by its U.S. operations,” they wrote.

Crapo told Politico this week that he didn’t plan on opening an investigation into “specific companies.”

But he acknowledged the bank’s troubles and said some of those problems could be addressed by work his committee is undertaking on money laundering laws.

The pressure Deutsche Bank is facing is likely to grow over its Trump ties and compliance with U.S. and European laws.

“They’re in a tough spot right now,” said Katz.