Deutsche Bank is at the centre of an escalating row on Capitol Hill after the German bank refused to respond to a congressional request for information about the bank’s examination of Donald Trump’s bank account and whether he had financial ties to Russia.
Maxine Waters, a top Democrat on the House financial services committee, has challenged Deutsche Bank’s legal rationale for refusing to volunteer information about the US president’s account and an internal review the bank conducted last year.
The Guardian reported in February that Deutsche Bank – whose clients include Trump’s daughter Ivanka; her husband, Jared Kushner; and Kushner’s mother –conducted a close internal examination last year of the president’s personal account and the accounts of his family to gauge whether there were any suspicious connections to Russia.
Deutsche Bank claimed in a response to the first congressional request that US laws prohibit it from sharing information about its customers to government agencies.
But Waters and four other Democrats said in a letter that was sent to Deutsche’s Washington attorneys this week that the German bank had misinterpreted the law and said privacy rules do not apply to requests made by Congress.
The Democrats’ letter cited a 2012 legal article written by one of Deutsche’s own lawyers that said privacy statutes do not clearly address how banks should handle congressional inquiries.
The Democrats are pushing for Deutsche Bank to confirm press reports – including the report in the Guardian – that the bank conducted a review of Trump’s account and the accounts of his family members into possible Russia ties.
The Guardian reported that the bank was looking for evidence of whether loans to Trump, which were agreed in highly unusual circumstances, may have been underpinned by financial guarantees from Moscow. Sources inside Deutsche told the Guardian that no link was found.
The Democrats are also looking for information about a separate internal review of a trading scheme at Deutsche’s former Moscow branch – known as a mirror trading scheme – that allegedly allowed $10bn to flow out of Russia. It is still unclear who benefited from the scheme but Deutsche reportedly reviewed the matter internally.
The congressional letter to the two Deutsche attorneys – Steven Ross and Leslie Kiernan of Akin Gump Strauss – also stated that if Deutsche had any lingering liability concern about handing over information about Trump’s account to Congress, that the bank should “simply” ask the president and his relatives for their consent.
“Given President Trump’s repeated assertions that he does not have ties to Russia, such disclosure would ostensibly be in his interest,” the letter said.
In a statement, a spokesman for Deutsche said: “We reiterate that while we seek to cooperate, we must obey the law. Our lawyers will respond to the legal questions raised by the individual members of Congress in due course. In the meantime, we continue to refer the members to the legal basis from our previous response.”
Deutsche extended about $300m in loans to Trump before he became president, even as the former reality television star and businessman was being shunned by other financial institutions because of his poor track record and string of failed businesses.
Separately, Deutsche Bank is preparing to become the subject of new scrutiny by an independent third-party monitor who is going to be examining the bank’s handling of any suspicious activity involving non-US banks that may have occurred in the last six months of 2016. Usually, banks are meant to have strong procedures in place to identify and report such activity, but Deutsche’s systems have been deficient in the past.
The monitor, who has not yet been named, is due to begin its review of Deutsche’s activities in early July. The monitor – who will happen to be reviewing the period around the US election last year – was put in place as part of a $41m settlement with the US Federal Reserve announced at the end of May after the Fed found that the bank’s US operation did not have strong enough systems to detect suspicious transactions from the period of 2011 to 2015.