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Excerpt: "The Trump administration has waived part of the punishment for five megabanks whose affiliates were convicted and fined for manipulating global interest rates."

Donald Trump. (photo: Alex Brandon/AP)
Donald Trump. (photo: Alex Brandon/AP)


Trump Administration Waives Punishment for Convicted Banks, Including Deutsche - Which Trump Owes Millions

By David Sirota and Josh Keefe, International Business Times

10 January 18

 

he Trump administration has waived part of the punishment for five megabanks whose affiliates were convicted and fined for manipulating global interest rates. One of the Trump administration waivers was granted to Deutsche Bank — which is owed at least $130 million by President Donald Trump and his business empire, and has also been fined for its role in a Russian money laundering scheme.

The waivers were issued in a little-noticed announcement published in the Federal Register during the Christmas holiday week. They come less than two years after then-candidate Trump promised “I'm not going to let Wall Street get away with murder.”

Under laws designed to protect retirement savings, financial firms whose affiliates have been convicted of violating securities statutes are effectively barred from the lucrative business of managing those savings. However, that punishment can be avoided if the firms manage to secure a special exemption from the U.S. Department of Labor, allowing them to keep their status as “qualified professional asset managers.”

In late 2016, the Obama administration extended temporary one-year waivers to five banks — Citigroup, JPMorgan, Barclays, UBS and Deutsche Bank. Late last month, the Trump administration issued new, longer waivers for those same banks, granting Citigroup, JPMorgan, and Barclays five-year exemptions. UBS and Deutsche Bank received three-year exemptions.

In the year leading up to the new waiver for Deustche Bank, Trump’s financial relationship with the firm has prompted allegations of a conflict of interest. The bank has not only sought the Labor Department waiver from the administration, it has also faced Justice Department scrutiny and five separate government-appointed independent monitors. Meanwhile, the New York Times recently reported that federal prosecutors subpoenaed Deutsche for “bank records about entities associated with the family company of Jared Kushner, President Trump’s son-in-law and senior adviser.”

All of these interactions with the Trump administration and the federal government are transpiring as Deutsche serves as a key creditor for the president’s businesses.

Trump owes the German bank at least $130 million in loans, according to the president’s most recent financial disclosure form. Sources have told the Financial Times the total amount of money Trump owes Deutsche is likely around $300 million. The president’s relationship with the bank dates back to the late 1990s, when it was the one major Wall Street bank willing to extend him credit after a series of bankruptcies. In 2016, the Wall Street Journal reported Trump and his companies have received at least $2.5 billion in loans from Deutsche Bank and co-lenders since 1998.

The relationship has had problems. After the financial crash, Trump defaulted on a $640 million loan from the bank. Deutsche brought Trump to court, and the famously litigious real estate mogul countersued for $3 billion in damages, claiming the financial crisis was a “force majeure” event that Deutsche Bank helped create. But the rift was short-lived: the parties settled, the loan was repaid, and Deutsche was soon lending to Trump again.

In December, Bloomberg and others reported the bank had turned over financial records to special prosecutor Robert Mueller after his office subpoenaed the records as part of his investigation into possible collusion between the Trump campaign and Russia during the 2016 election. Trump’s lawyers have called that reporting inaccurate.

“We have confirmed that the news reports that the Special Counsel had subpoenaed financial records relating to the President are false,” Trump attorney Jay Sekulow said in a statement. “No subpoena has been issued or received. We have confirmed this with the bank and other sources.”

Less than three weeks later, the New York Times reported federal prosecutors had subpoenaed Deutsche Bank records related to White House senior adviser and Trump son-in-law Kushner and his vast business holdings. There is no evidence those subpoenas were related to Mueller’s investigation.

The subpoenas come less than a year after Deutsche Bank was fined $425 million by New York State for laundering $10 billion out of Russia.

All five of the banks granted waivers from the Obama and Trump administration were fined for their involvement in the LIBOR  scandal that led to $9 billion worth of fines from regulators around the world. Deutsche Bank has paid $3.5 billion for its role in the scandal, more than any other bank. The scandal involved illegally manipulating the London Interbank Offered Rate or LIBOR, which is used to set the cost of borrowing for a variety of financial transactions.

In 2015, Deutsche Bank pled guilty in the U.S. to wire fraud for its role in the scandal. Less than two years later, in the final hours of the Obama administration, Deutsche Bank agreed to a $7.2 billion settlement with the Justice Department for misleading investors in mortgage-backed securities between 2006 and 2007.


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+28 # ER444 2018-01-10 15:45
Great. And my nest egg was gone. The plans to pay off my mortgage were destroyed. Who is going to help me?
 
 
+28 # krazykwiltkatt 2018-01-10 21:46
As Bob Dylan famously wrote 'Money doesn't talk, it swears.' So many have been and will be hurt by this but 'wot the Hell' the Rich will do fine.
 
 
+32 # relegn 2018-01-11 07:07
Why is the US government allowing mega-banks to engage in criminal activity with little or no real punishment? Should Deutsche Bank even be allowed to do business in the US considering their long record of criminal practices?
 
 
+11 # Robbee 2018-01-11 08:54
Quoting relegn:
Why is the US government allowing mega-banks to engage in criminal activity with little or no real punishment? Should Deutsche Bank even be allowed to do business in the US considering their long record of criminal practices?

- follow the money! - dickhead's money!
 
 
+3 # lfeuille 2018-01-11 19:12
Because the head of the government is a criminal.
 
 
+18 # Kootenay Coyote 2018-01-11 09:03
Making the Swamp safe for robber banks.
 
 
+21 # Wise woman 2018-01-11 10:44
I understood Obama's reasoning for bailing out the banks to forestall an economic collapse. But to allow them to get on with business as usual was a sin against all but the one percent. Thy should have been fined, broken up, their CEOs replaced and made to pay back their debts. The banks and corporations have killed the middle class and created tremendous poverty in the land. Seniors who saved in yesterday's economy are devastated by inflation and pitiful interest rates. Social security has never kept up with inflation. A new depression is in offing.
 
 
+1 # Robbee 2018-01-11 18:32
Quoting Wise woman 2018-01-11 10:44:
I understood Obama's reasoning for bailing out the banks to forestall an economic collapse.

- would you please, please, please stop slandering barak with what bush 2 did during his prior presidency? enough already! - beg your pardon! but you said it thrice the first few times! - robbee tires of reading your same fake news, over and over, already, thanks!

barak did not bail out the banks; george w did!
 
 
+5 # randrjwr 2018-01-12 13:13
How is this not directly related to Trump's financial well-being? As in, "Now, maybe you won't call in my loan." Isn't this a violation of the so-called "emoluments rule" in a sort of inverse way, i.e., giving by not taking, on the part of Deutsche Bank?

Is there no limit to what Trump will get away with?
 

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