Diary from Trumpland

Trump and a scam

Print edition : May 11, 2018

Robert Mueller, the special counsel investigating Russian interference in the 2016 U.S. Presidential election. Photo: Doug Mills/NYT

Special Counsel Robert Mueller’s investigation into Russian interference in the U.S. presidential election of 2016 could lead to the exposure of a massive money-laundering fraud involving collusion between governments and corporations.

TWICE in January 2017, United States President Donald Trump summoned James Comey, Director of the Federal Bureau of Investigation. Trump was concerned about the presence of a dossier produced by a former MI6 agent, Christopher Steele. This dossier apparently contained evidence of an incident that took place in a Moscow hotel suite some years earlier. Trump, then a private citizen, had been accused of hiring two sex workers to urinate on each other. Trump told Comey that his wife, Melania Trump, was upset by these stories. He wanted Comey to tell the press that the dossier was not accurate. In his recently released memoir, A Higher Loyalty, Comey writes that Trump was insistent. “There’s no way I would let people pee on each other around me,” he had said. Comey declined to humour Trump. Four months later, Trump fired Comey.

The sacking of Comey led to the appointment of a special counsel, Robert Mueller, to investigate Russian interference in the U.S. election of 2016. Mueller’s brief was clear: Did the Russian government have sufficient purchase on Trump to influence him and did the Russian government, working with Trump’s campaign, influence the election? The investigation—now known as Russiagate—has gone on for a year. Mueller continues to prod at the heart of Trump’s campaign. His report is eagerly anticipated.

The word “collusion” has now entered the everyday vocabulary of Americans. Did Trump collude with the Russians? The great divides in U.S. society, which are reflected in the electoral patterns, are reflected in the opinions about collusion. About 50 per cent of the Republicans believe fervently that Russia did not influence the election. They believe it was their exercise of the franchise that put Trump, their legitimate President, in the White House. Meanwhile, 70 per cent of Democrats want Trump to be impeached. They do not believe that he is a legitimate president; they believe that he is an insult to their democracy and that he could only have won with Russian support. There is no universal agreement on collusion, although there is universal interest in the entire fiasco. And how could there not be interest? The story is wild beyond belief. The focus is on Russian bots and troll farms supposedly run by the Kremlin as well as on the attack on the former Russian intelligence operative Sergei Skripal and his daughter Yulia. This is the stuff of mystery novels set in the Cold War; in a new book by John le Carre the tradecraft is extended to the Internet. There is focus on the sexual life of Trump, and sex workers with nom de plumes such as Stormy Daniels. Hush money was paid by Trump’s devoted lawyer Michael Cohen, agreements were written to maintain their silence. There is a flash of prurience in the reporting, an expectation that some salacious news will finally leak from the Mueller investigation.

Money laundering

Behind the talk of troll farms and sex tapes lies an even murkier reality. There is a window in this investigation into the normal corruption of everyday international business. Trump’s entire real estate empire from Abu Dhabi to New York is financed by people who make their money in spurious ways. How does the Trump Corporation, like so many multinational firms, raise the astronomical amounts of money required for its construction activities? The money comes from funds that are often opaque. Investigations by diligent and honest bureaucrats often uncover the muck. There is an ongoing story about Trump’s relationship with Deutsche Bank, for instance.

Trump and Deutsche Bank

It begins with a November 2008 letter written by Steven Molo, Deutsche Bank’s attorney, to the Supreme Court of New York asking that Trump immediately pay $40 million for the unpaid loan of $640 million that he had taken to build a hotel in Chicago. Trump sued Deutsche Bank, saying that it had helped cause the 2008 financial crisis. He said Deutsche Bank owed him $3 billion in damages. Deutsche Bank was furious. It was the only bank that continued to lend to Trump after he had burned his bridges with other financial institutions.

Two years later, Trump and Deutsche Bank were back in business. Deutsche Bank lent Trump the money to pay back Deutsche Bank. This loan came from Deutsche Bank’s private loan division. This opened the floodgates for Deutsche Bank money into the Trump organisation. By November 2016, when Trump won the election to be the next U.S. President, he owed Deutsche Bank $300 million. Why did Deutsche Bank bail Trump out and why did it continue to lend him money?

In January 2017, New York State’s Department of Financial Services and the United Kingdom’s Financial Conduct Authority fined Deutsche Bank $630 million for a money laundering scheme that ran from Moscow to New York and London. “The bank missed numerous opportunities to detect, investigate and stop the scheme due to extensive compliance failures, allowing the scheme to continue for years,” wrote the Department. This is mild language. It assumes that the bank was not actively and consciously committed to the money-laundering scheme, which is said to have involved $10 billion.

Mirror trades

Deutsche Bank is accused of being part of a series of “mirror trades” that laundered money from Russia to the West. The way a “mirror trade” works is quite elegant. A customer in Moscow bought Russian stocks from the Moscow branch of Deutsche Bank and then another customer sold that amount of securities to Deutsche Bank in London. These $3 million trades often cast the same customer as buyer and seller. That is how the money left Russia. The money then would swim to offshore locations as well as to New York. Deutsche Bank’s head in Moscow, Tim Wiswell, and co-chief executive officer, Anshu Jain, were in the thick of the scheme. Wiswell was removed by the bank when the scandal broke. Anshu Jain resigned after it was found that Deutsche Bank had helped manipulate the London Inter-Bank Offer Rate (LIBOR). Deutsche Bank did an internal investigation of the money laundering. Nothing was released to the public. In Michael Wolff’s Fire and Fury, Trump’s former adviser Steve Bannon called the deals that involved these banks, the Russian oligarchs and the Trump family, “greasy”.


Since March last year, Representative Maxine Waters of California has sought answers to the questions she has posed in the U.S. House Committee on Financial Services. Maxine Waters mused about the links between Trump, Deutsche Bank and Russian money laundering. It is a matter of public record that Trump’s Attorney General, Jeff Sessions, slowed down the U.S. Justice Department investigation of the illegal transactions made by Deutsche Bank. The Labour Department gave the bank a reprieve and allowed it to continue to manage lucrative pension funds and retirement accounts. Why was this?

On March 10, Maxine Waters wrote to her colleagues in the House Committee. “The potential magnitude of Deutsche Bank’s Russian money-laundering scheme should not be downplayed,” she cautioned. There was no response to Maxine Waters, who then continued to write to different agencies asking for updates on the investigation. Nothing happened.

Then, last December, Mueller, according to Handelsblatt, asked Deutsche Bank to provide materials relating to Trump and his associates. This was what Maxine Waters had wanted. If the materials have been released and if they make their way into Mueller’s report, it is likely that there will be a great deal of juicy matter here on how high finance works. Trump, angry at this move, threatened to fire Mueller in December. Mueller, Trump is said to have told friends, crossed the “red line” by entering into his personal finances. Trump’s hand was stayed after Mueller told him that the story about records from Deutsche Bank were not true. This might have been Mueller buying time.

What the Russiagate investigation might turn up is the collusion not of Russia and Trump but of governments and corporations, of the massive fraud at the heart of the system. It is not in the interest of people like Mueller to ruin public trust in the institutions of government and the economy. It is likely, therefore, that this thread, a significant one, will remain in the business press and in hushed conversations at golf clubs. It will not define the problem. The discussion will remain around troll farms and sex workers. Banks and real estate firms will remain inviolate.

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