Investigative reporters Susanne Craig and David Barstow say the president received today’s equivalent of $413 million from his father’s real estate empire, through what appears to be tax fraud.
CRAIG: That started in 1949. And it was one of the projects that had got – that Fred Trump had received government funding to build. It was a complex called Beach Haven. And what Fred Trump did – it was quite ingenious – is he bought the land underneath Beach Haven, the complex that he would go on to build, and he placed the land in a trust for the benefit of his five children. And then he started paying them rent. He makes them his landlord. And every year, they’d continue to get payments. So instead of paying some…
GROSS: Wait. Wait. Could we just stop a second?
GROSS: I don’t really understand how 3-year-old Donald Trump can be his father’s landlord. Can you explain that?
CRAIG: Sure. It was his land to do what he wanted with. And he put it in a trust, in this instance, when they were very young for their benefit and began paying them rent. It’s completely legal. But that’s sort of one of the ways in which he early on – you know, he’s in – this point, it’s in the 1940s. His children are young. And he’s looking for ways, you would imagine at this point, to begin to take care of his children as they get older so that they – you know, when they grow up, they’ve got money. And it is a way to transfer what is – now he’s becoming a very richer man – is one way to begin to transfer wealth to them. This is the first one. It happened in 1949.
GROSS: So what are some of the ways that by the time Donald Trump was a teenager, he was already wealthy? What are some of the other ways his father gave him money?
BARSTOW: He began doing a number of things. So he started buying or building apartment complexes in Brooklyn and Queens and then gradually transferring ownership of those apartment complexes to his children. So, for example, Donald, when he was 17 years old, became co-owner with his family members of a 52-unit apartment building in Brooklyn that his father had acquired for them. And so they would – over time, Fred Trump assembled roughly eight apartment complexes – over a thousand units in all – that he transferred through a variety of mechanisms to his children. So those thousand units start churning out profits that flowed effortlessly into the pockets of his children.
We actually documented in our reporting 295 different revenue streams that Fred Trump ultimately created for Donald Trump over a 50-year period. I mean, Fred Trump was so ingenious at finding different ways of putting money into Donald Trump’s pockets. So he didn’t just put him on his payroll as a salary employee. He also paid him separately to be a consultant to him. He paid him separately to be a property manager for him. He paid him separately to be a purchasing agent for him. On and on it would go.
CRAIG: He was getting laundry revenue at one point from Fred Trump.
BARSTOW: Yes. And…
CRAIG: …From the buildings.
BARSTOW: You know, some of these revenue streams were relatively modest. Some of them were kind of one-hit wonders. But when you added it all up, it was this incredible stream of money that made Donald Trump – he was a millionaire, actually, by the time he was 8 or 9 years old. Before he ever entered and set foot into Manhattan, where he would make his name, Fred Trump had already transferred to him over $9 million in wealth.
GROSS: So you say by the time he was 29, in 1975, Donald Trump had collected nearly 9 million – the equivalent of $9 million in today’s dollars from his father. When he was 30, in 1976, the myth of Donald Trump really starts to expand. There’s a 1976 article in your newspaper, The New York Times, and you describe it as one of the first major Donald Trump profiles and a cornerstone of decades of mythmaking about his wealth. What did the article say? What were the main points of this 1976 article about Donald Trump?
BARSTOW: It was really one of the first big, big profiles that ran of Donald Trump. And Donald Trump did something in this particular profile that he would actually repeat and use to great effect in subsequent profiles, which was he took The New York Times reporter on a tour of what he called his jobs, his empire. And he starts driving around New York pointing out this building and that building and talking about how wonderful they were doing.
And effectively, what he was doing was he was appropriating his father’s empire as if it were his own empire. So these buildings that he’s pointing out as his jobs and part of his empire, they were, in fact, completely owned by his father. He had no ownership stake in any of those buildings. And so what he did, especially when it was critical to kind of the early mythmaking of Donald Trump, was he simply asserted that his father’s empire was his empire.
And those claims, unfortunately, largely went unchallenged for many, many years by the reporters who were kind of swept up in the glamor of this young, swaggering, handsome guy who was so full of confidence and so full of big plans for the city of New York. And so that story was the thing that, I think, helped give birth to the myth of Donald Trump, self-made billionaire.
CRAIG: One of the things that’s really remarkable about that story when you read it is, you know, he goes through job after job and says that things that are his father’s are his own. And he tells the reporter that he’s worth in excess of $200 million. And everything he pointed to in this story that would go to his net worth at that time was his father’s. He had a tax return a few years later where we see he declared – I think he made $25,000 a couple years later.
BARSTOW: That year, actually – that exact – that year…
CRAIG: It was actually that year.
BARSTOW: And yet, he was sitting there saying that he was worth $200 million. And that was a claim that he would – part of the claim that would put him on the very first list of wealthiest Americans published by Forbes magazine in 19 – I want to say – ’81, ’82 – ’81, somewhere in there.
CRAIG: And it was a spectacular con.
GROSS: And I guess Donald Trump got used to people taking him at his word, even when his word wasn’t true.
.. GROSS: This is FRESH AIR. And if you’re just joining us, my guests are New York Times reporters Susanne Craig and David Barstow, two of the three writers who reported just a couple of weeks ago on how Donald Trump engaged in suspect tax schemes as he reaped riches from his father. And it deconstructs the whole Donald Trump myth about how he’s a self-made millionaire or billionaire. And it shows, like, how much money Fred Trump, Donald’s father, funneled to him and his other siblings and how they came up with schemes to avoid paying taxes, making Donald Trump a very, very wealthy man by the time he was a teenager.
OK. So in addition to some of the tax schemes we talked about, Fred Trump made a lot of loans to Donald Trump. Donald Trump has always said that he got a million-dollar loan from his father and helped parlay that into his own empire. So how much money would you estimate Fred Trump gave Donald Trump in loans?
BARSTOW: We were able to document in real dollars $60 million in loans, not one million. In today’s dollars, it equates to $140 million in loans, which is on top of the $413 million in direct wealth that we saw transferred to Donald. What we also saw – I think what is important also is that, in many cases, these were loans that were never repaid. You know, he would take out – we were looking at one particular year, and it was like every month. He’s going back to Dad, and he’s borrowing another couple hundred thousand bucks and then another 500,000 bucks and then a million dollars. It was just, like, a monthly run to Fred Trump to get more money.
And we saw especially that the flow of loans increased as Donald Trump took on big, new projects, or they increased when he was suddenly in trouble, he had run into another financial ditch. So it was a really steady stream that went well beyond, you know, the notion of a guy in his early 20s getting a million dollars from Dad and then being off to the races. These were loans that actually extended well into his 40s and 50s.
GROSS: So how did Donald Trump use the money that was loaned from his father?
CRAIG: Yeah. He used the money for many of his ventures. He had Trump Tower. Money that he got from Fred Trump was used to support that. It was used to support his ventures in Atlantic City and elsewhere. Many of them went under. I mean, especially, you look at Donald Trump’s history in Atlantic City, he’s got several bankruptcies. At one point, he was hundreds of millions of dollars in debt. And this is a time he not only owed the banks hundreds of millions of dollars, he was in debt to his father and was going to his father at these very crucial times for more support.
GROSS: So he gets a lot of money from his father, tries to build his own empire and ends up in debt in a lot of instances, instead of making a fortune from his own investments.
BARSTOW: You also see that when he fell – you know, when he would fall down, the safety net was there. The Fred Trump safety net was there to catch him.
CRAIG: There was one just almost unbelievable moment in the story, and you see it in 1990. And this is a time in, you know, the back end of 1990. And Donald Trump is in incredible financial distress. A number of his companies are either in trouble or facing bankruptcy. And Fred Trump had been there for him at every turn, according to the documents. We can see he’s assisting him with money in one case. Donald Trump’s casinos, they’re facing a debt payment. And Fred Trump has a lawyer go into the casino and buy casino chips and walk out without placing a bet. It was simply a way to give Donald Trump money. And this period…
GROSS: And this was, like, $3 1/2 million worth of chips. Right?
CRAIG: It was $3 1/2 millon worth of casino chips. And at this period, his father is there for him at every turn in every document that we can see. And Donald Trump, at this period, has a lawyer – one of his lawyers – draft a codicil to his father’s will, essentially a new will. And this codicil to the will is taken to Fred Trump’s house in December 1990. And Fred Trump immediately sees this codicil as an attempt by Donald to take control of his empire and to potentially put it at risk.
And Fred Trump immediately says no. He freaks out. And he makes a call to his daughter, who is a federal judge and a lawyer. And a new codicil, within months, is drafted that removes Donald as the sole executor of Fred Trump’s will and puts Donald and Robert Trump and Maryanne Trump in charge of his affairs. And then ultimately, a new will is drafted.
But you see, in the depth of Donald Trump’s financial life, after all his father has done for him, that he makes this move that’s an incredibly dramatic move. And it’s scarring to the family, what he did.
GROSS: So what you’re saying, I think, is that at the end of Fred Trump’s life – or toward the end of Fred Trump’s life, Donald Trump tried to take advantage of him for Donald Trump’s own good, to help Donald Trump bail himself out. And Fred Trump, Donald’s father, became suspicious of the son that he had helped with so much money over so many years.
BARSTOW: What we know for sure is that Fred Trump perceived this as an attempt by his son to gain complete control over his estate and, potentially, to use the empire that Fred Trump had doggedly and patiently built over many decades – to use that empire, potentially, as collateral to help bail Donald Trump out of his own financial difficulties.
GROSS: My guests are New York Times reporters David Barstow and Susanne Craig. After a break, we’ll talk about another scheme used to transfer wealth from Fred Trump’s real estate empire to his children. I’m Terry Gross, and this is FRESH AIR.
(SOUNDBITE OF ERNESTO CERVINI’S “WOEBEGONE”)
GROSS: This is FRESH AIR. I’m Terry Gross. Let’s get back to my interview with New York Times reporters Susanne Craig and David Barstow who, along with Russ Buettner, spent a year and a half investigating how Donald Trump’s father, Fred Trump, used various tax schemes to transfer about 413 million in today’s dollars from Fred’s real estate empire to Donald. The reporters say one of the family’s tax schemes involve fraud. This story offers a completely different narrative than the one Donald Trump has always presented of himself as a self-made billionaire.
.. And they had regular family meetings after Fred Trump died. They would hand out checks. You know, Fred Trump’s buildings were very profitable. And they would meet every few months to get an update on the status of the empire and to get a check. And then in 2003, at one of these meetings, Donald Trump announced that it was time to sell and quickly assembled a private sale to a developer in New York for almost all of it. And it was sold – you know, give or take a few buildings – in one sale for just under $800 million.
GROSS: So the buildings that were sold, were those buildings that Fred Trump had still owned at the time of his death? Or did it also include all the buildings that had been transferred from Fred Trump to the children?
CRAIG: They included both the buildings that had been transferred and the ones that he owned. It was pretty much his whole empire. And it sold – you know, the buildings that sold in 2004 were to a New York developer named Ruby Schron, and the price tag was just over $700 million. And what’s interesting about that is we learned through the documents that we went through that that sale price was roughly just under $200 million than what the banks would value it at, you know, in the months after the sale. So it’s incredible to see that that empire was sold for much less than they could’ve got for it very quietly and for much less.
GROSS: So it wasn’t, like, the deal of the century that Donald Trump made?
CRAIG: It definitely wasn’t.
.. GROSS: Susanne, I’m going to ask you to choose either “The Art Of The Deal,” “The Art Of The Comeback” or “The Apprentice” and tell us what was actually going on in Donald Trump’s financial life when these books or the show based on all his fabulous accomplishments and deals went public.
CRAIG: I’m thinking which one to choose.
CRAIG: What are you thinking, David?
BARSTOW: “Art Of The Comeback.”
CRAIG: (Laughter) Go for it.
BARSTOW: Oh. Well, so he publishes “The Art Of The Comeback” in 1997. And it’s this story of his sort of, you know, pulling himself up out of the muck of his casino collapse and, through his grit and determination and wily negotiating skills, getting himself back on his feet. Well, within – a few weeks of the publication of this book so happens to coincide with the time when he actually took possession of one-quarter of his father’s real estate empire through one of these very elaborate tax schemes that we describe in the story. So at this moment when he’s boasting about, you know, his derring-do of getting himself off the mat, it actually coincides perfectly with the moment when he’s just taken possession of 25 percent of this enormous real estate empire. And somehow, someway, not a word of that made its way into the book “The Art Of The Comeback.”
CRAIG: I’m also thinking of, immediately, “The Apprentice” and the opening scene of “The Apprentice” and the song – money, money, money, money – that happened in 2004 right as the sale had gone through, the hundreds of millions of dollars that they had gotten from Fred Trump. And yet when you watch that opening scene, it’s all Donald Trump – Donald Trump’s plane is there, the gold tower in Midtown Manhattan – when, in fact, it was all the opening scene that Fred Trump built and paid for.
.. GROSS: I’m wondering how you feel knowing that you have just totally punctured the myth of how Donald Trump made his money and what he did with his money and his great negotiating, deal-making abilities. And so many people still believe the myth, and Donald Trump is still putting forward the myth.
CRAIG: It’s interesting. When I think about that, I think you have to sort of – I go back to that idea – you know, the lie repeated over and over and passed down into history becomes fact. And I think that we’ve reset that. I think it’s going to take time for this to move into the bloodstream of America. But I think that we’ve taken, I think, a good first stop in resetting exactly the origins of Donald Trump’s wealth. But I do think it’s going to take time, and I think there’s some people who are always going to believe what they want to believe.
But I think the the power of the story is, you know, I think, how careful we were and how documented it was and the Times’ decision to put so many of those documents up. I think it’s really hard to refute the story. It’s hard to refute because it’s absolutely true, and the documents are there. And a lot of them are the source documents of the Trump family themselves. But I think it will take time for this to sort of – you know, for people to digest it. And – but I think it’s going to happen.
There are only two sure things in life: death, and Donald Trump refusing to release his taxes. At this point hiding his taxes isn’t even supposed to be an option: the law says that the House of Representatives has the right to see his returns, and IRS officials are breaking that law if they fail to comply. But this isn’t the America we used to know. It will be a big surprise if the Trump administration complies with the law, and most Republicans will surely support Trump in his defiance.
What will we see, if those returns ever become public?
- Maybe that Trump isn’t as rich as he claims;
- probably evidence of corrupt practices, before and after taking office; and
- we will definitely see clear, unconstitutional conflicts of interest in his dual role as president and business tycoon.
.. Hypocrisy is pretending to care about the public interest when you’re actually serving your own interests. Opposing things that would be to your personal benefit, and supporting things that would make you a bit poorer, isn’t hypocritical at all — if anything, it deserves a little extra respect, because you’re making at least some sacrifice in support of your beliefs.
Democrats of all people should realize that being rich — which, by the way, none of the candidates are, as the truly rich assess such things — doesn’t prevent a politician from helping ordinary working families. Ever heard of a guy named Franklin Delano Roosevelt?
I have to admit that Sanders’s reluctance to release those returns, and his vague, almost Trumpian promises to release them “soon” were starting to worry me. Was there something actually bad in them? But right now it seems that he was just being foolish.
Trump, by contrast, almost surely has some very strong reasons he doesn’t want us to see his taxes — reasons strong enough to push him into defying the law. And that’s exactly why the public interest demands that those returns get released.
At Deutsche Bank, Mr. Offit’s mandate was to lend money to big real estate developers, package the loans into securities and sell the resulting bonds to investors. He said in an interview that one way to stand out in a crowded market was to make loans that his rivals considered too risky.
In 1998, a broker contacted him to see if he would consider lending to a Wall Street pariah: Mr. Trump, who was then a casino magnate whose bankruptcies had cost banks hundreds of millions of dollars.
Mr. Offit took the meeting.
A few days later, Mr. Offit’s secretary called him. “Donald Trump is in the conference room,” she whispered. Mr. Offit said he rushed in, expecting to find an entourage. Mr. Trump was alone.
He was looking for a $125 million loan to pay for gut renovations of 40 Wall Street, his Art Deco tower in Lower Manhattan. Mr. Offit was impressed by the pitch, and the loan sailed through Deutsche Bank’s approval process.
Mr. Trump seemed giddy with gratitude, Mr. Offit recalled. He took Mr. Offit golfing. He flew him by helicopter to Atlantic City for boxing matches. He wrote a grateful note to Sidney Offit for having “a great son!”
Mr. Offit commissioned a detailed model of 40 Wall Street. A golden plaque on its pedestal bore the names and logos of Deutsche Bank and the Trump Organization. Mr. Offit gave one to Mr. Trump and kept another in his office.
Mr. Trump soon came looking for $300 million for the construction of a skyscraper across from the United Nations headquarters. The loan was approved. He wanted hundreds of millions more for his Trump Marina casino in Atlantic City. Mr. Offit pledged to line up cash for that, too.
Not long after, Edson Mitchell, a top bank executive, discovered that the signature of the credit officer who had approved the Trump Marina deal had been forged, Mr. Offit said. (Mr. Offit was never accused of forgery; the loan never went through.)
Mr. Offit was fired months later. He said it was because Mr. Mitchell claimed that he was reckless, a charge Mr. Offit disputed.
It was the first hiccup in the Trump relationship. It would not be the last.
Over the next few years, the commercial real estate group, with Mr. Kennedy now in a senior role, kept lending to Mr. Trump, including to buy the General Motors building in Manhattan. Occasionally, Justice Kennedy stopped by Deutsche Bank’s offices to say hello to the team, executives recalled.
At an annual pro-am golf tournament the bank hosted outside Boston in the early 2000s, Mr. Trump sat down for a recorded interview with the bank’s public relations staff, who asked about his experience with Deutsche Bank.
“It’s great,” Mr. Trump exclaimed, according to a person who witnessed the interview. “They’re really fast!”
In 2003, a Deutsche Bank team led by Richard Byrne — a former casino-industry analyst who had known Mr. Trump since the 1980s — was hired to sell bonds on behalf of Trump Hotels & Casino Resorts. Bank officials escorted Mr. Trump to meet institutional investors in New York and Boston, according to an executive who attended.
The so-called roadshow seemed to go well. At every stop, Mr. Trump was greeted by large audiences of fund managers, executives and lower-level employees eager to see the famous mogul. The problem, as a Deutsche Bank executive would explain to Mr. Trump, was that few of them were willing to entrust money to him.
Mr. Trump requested an audience with the bank’s bond salesmen.
According to a Deutsche Bank executive who heard the remarks, Mr. Trump gave a pep talk. “Fellas, I know this isn’t the easiest thing you’ve had to sell,” the executive recalled Mr. Trump saying. “But if you get this done, you’ll all be my guests at Mar-a-Lago,” his private club in Palm Beach, Fla.
The sales team managed to sell hundreds of millions of dollars worth of bonds. Mr. Trump was pleased with the results when a Deutsche Bank executive called, according to a person who heard the conversation.
“Don’t forget what you promised our guys,” the executive reminded him.
Mr. Trump said he did not remember and that he doubted the salesmen actually expected to be taken to Mar-a-Lago.
“That’s all they’ve talked about the past week,” the executive replied.
Mr. Trump ultimately flew about 15 salesmen to Florida on his Boeing 727. They spent a weekend golfing with Mr. Trump, two participants said.
A year later, in 2004, Trump Hotels & Casino Resorts defaulted on the bonds. Deutsche Bank’s clients suffered steep losses. This arm of the investment-banking division stopped doing business with Mr. Trump.
.. Mr. Trump told Deutsche Bank his net worth was about $3 billion, but when bank employees reviewed his finances, they concluded he was worth about $788 million, according to documents produced during a lawsuit Mr. Trump brought against the former New York Times journalist Timothy O’Brien. And a senior investment-banking executive said in an interview that he and others cautioned that Mr. Trump should be avoided because he had worked with people in the construction industry connected to organized crime.
Nonetheless, Deutsche Bank agreed in 2005 to lend Mr. Trump more than $500 million for the project. He personally guaranteed $40 million of it, meaning the bank could come after his personal assets if he defaulted.
By 2008, the riverside skyscraper, one of the tallest in America, was mostly built. But with the economy sagging, Mr. Trump struggled to sell hundreds of condominium units. The bulk of the loan was due that November.
Then the financial crisis hit, and Mr. Trump’s lawyers sensed an opportunity.
A provision in the loan let Mr. Trump partially off the hook in the event of a “force majeure,” essentially an act of God, like a natural disaster. The former Federal Reserve chairman Alan Greenspan had called the financial crisis a tsunami. And what was a tsunami if not a natural disaster?
.. One of Mr. Trump’s lawyers, Steven Schlesinger, told him the provision could be used against Deutsche Bank.
“It’s brilliant!” Mr. Schlesinger recalled Mr. Trump responding.
Days before the loan was due, Mr. Trump sued Deutsche Bank, citing the force majeure language and seeking $3 billion in damages. Deutsche Bank countersued and demanded payment of the $40 million that Mr. Trump had personally guaranteed.
With the suits in court, senior investment-banking executives severed ties with Mr. Trump.
.. Ms. Vrablic’s superiors encouraged her to make loans that rival banks dismissed as too large or complex. They saw it as a way to elbow into the hypercompetitive New York market.
.. One of Ms. Vrablic’s clients was Jared Kushner, who married Ivanka Trump in 2009. Mr. Kushner regarded Ms. Vrablic as the best banker he had ever worked with, according to a person familiar with his thinking.
Shortly after the Chicago lawsuit was settled, Mr. Kushner was told that Mr. Trump was looking for a loan and introduced him to Ms. Vrablic, according to people familiar with the relationship.
.. Mr. Trump flew Ms. Vrablic to Miami to show her a property he wanted to buy: the Doral Golf Resort and Spa. He needed more than $100 million for the 72-hole property.
Deutsche Bank dispatched a team to Trump Tower to inspect Mr. Trump’s personal and corporate financial records. The bankers determined he was overvaluing some of his real estate assets by as much as 70 percent, according to two former executives.
.. By then, though, Mr. Trump had become a reality-TV star, and he was swimming in cash from “The Apprentice.” Deutsche Bank officials also were impressed that Mr. Trump did not have much debt, according to people who reviewed his finances. Aside from his history of defaults, he was an attractive borrower.
Mr. Trump also expressed interest in another loan from the private-banking division: $48 million for the same Chicago property that had provoked the two-year court fight.
Mr. Trump told the bank he would use that loan to repay what he still owed the investment-banking division, the two former executives said. Even by Wall Street standards, borrowing money from one part of a bank to pay off a loan from another was an extraordinary act of financial chutzpah.
.. Investment-banking executives, including Anshu Jain, who would soon become Deutsche Bank’s co-chief executive, pushed back. Lending to Mr. Trump again would be foolish, they argued, and signal to clients that they could default and even sue the bank.
Executives in the private bank countered that the proposed loans had Mr. Trump’s personal guarantee and therefore were low risk. And the Chicago loan, they noted, would lead to the repayment of tens of millions of dollars that Mr. Trump still owed the investment-banking division.
A top executive with responsibility for the private bank discussed the loans with Mr. Ackermann, the chief executive, who supported them, according to two officials. A powerful committee in Frankfurt, which evaluated loans based on risks to the bank’s reputation, signed off.
“There is no objection from the bank to proceed with this client,” wrote Stuart Clarke, the chief operating officer for the Americas, in a Dec. 5, 2011, email, according to a recipient.
Deutsche Bank wired the money to Mr. Trump. The loans carried relatively low interest rates, executives said, but the business promised to be profitable: As part of the deal, Mr. Trump would hold millions of dollars in a personal account, generating fees for the bank.
“I have no recollection of having been asked to approve that private-banking loan,” Mr. Ackermann said in an interview. He added: “I would have approved it, if it came to me, if it was commercially sound.”
Ms. Vrablic’s relationship with the Trumps deepened.
Deutsche Bank lent money to Donald Trump Jr. for a South Carolina manufacturing venture that would soon go bankrupt. It provided a $15 million credit line to Mr. Kushner and his mother, according to financial documents reviewed by The Times. The bank previously had an informal ban on business with the Kushners because Jared’s father, Charles, was a felon.
In 2012, Jared Kushner recommended that the editor of The Mortgage Observer, one of the publications he owned, write a profile of Ms. Vrablic. The editor, Carl Gaines, knew Mr. Kushner was her client and objected, according to a person familiar with the exchange.
“Just go meet with her,” Mr. Kushner said. “You’ll figure something out.”
A gauzy profile of Ms. Vrablic was published in February 2013.
Shortly afterward, the private bank produced a promotional video featuring some of its marquee clients. The video was played at a retreat for Deutsche Bank’s senior leadership in Barcelona. In it, Ivanka Trump extolled the private bank’s work with her family and thanked their relationship manager, according to two people who saw the video.
.. In early 2014, Mr. Trump and his personal lawyer, Michael Cohen, approached Ms. Vrablic about more potential loans.
The owner of the Buffalo Bills had died, and the N.F.L. franchise was up for sale. Mr. Trump was interested, and he needed to show the league he had the financial wherewithal to pull off a transaction that could top $1 billion.
Mr. Trump asked Ms. Vrablic if the bank would be willing to make a loan and handed over bare-bones financial statements that estimated his net worth at $8.7 billion.
.. Mr. Cohen testified to Congress last month that the documents exaggerated Mr. Trump’s wealth. Deutsche Bank executives had reached a similar conclusion. They nonetheless agreed to vouch for Mr. Trump’s bid, according to an executive involved.
Mr. Trump’s bid did not win, but another lending opportunity soon arose.
A federal agency had selected Mr. Trump to transform the Old Post Office Building in Washington into a luxury hotel. But his financial partner — the private equity firm Colony Capital, run by Thomas J. Barrack Jr. — pulled out. Mr. Trump needed nearly $200 million.
.. Because of his decades-long pattern of defaults and his increasingly polarizing political rhetoric — among other things, he had been spreading a lie about President Barack Obama being born overseas — Mr. Trump remained untouchable for most banks.
Ms. Vrablic was willing to help.
In a memo outlining the rationale for the Old Post Office loan, Ms. Vrablic said Mr. Trump was expected to add large sums to his brokerage account if he received the loan, according to an executive who read the document.
This time, there was less internal opposition. One reason: Mr. Jain — by then the bank’s co-chief executive — had a solid relationship with Ms. Vrablic. Mr. Jain accompanied her to meetings with high-profile clients, and he praised her work to colleagues, multiple executives said.
..On a foggy Wednesday in February 2013, Ms. Vrablic and Mr. Jain went to Trump Tower to meet with Mr. Trump, according to two executives with knowledge of the meeting. Ms. Vrablic’s rapport with the client was immediately clear: Mr. Trump’s assistant greeted her as an old friend, and she seemed relaxed with Mr. Trump and his daughter, one executive said.
.. They discussed Mr. Trump’s finances over lunch, and Mr. Jain said he was surprised by his low level of debt, the executives said. After lunch, Ms. Vrablic told her colleagues that Mr. Jain had sounded upbeat about Mr. Trump’s finances.
A $170 million loan to pay for the overhaul of the Old Post Office went through in 2015, and Mr. Trump added more money to his brokerage account. (In May 2016, he reported up to $46 million of stocks and bonds in the account.)
.. On Aug. 6, 2015, Mr. Trump participated in the first Republican presidential debate. He clashed with the Fox News moderator, Megyn Kelly. He flew back to New York early the next morning. That evening, he called in to a CNN talk show and said of Ms. Kelly that there was “blood coming out of her wherever.”
In the intervening hours, Mr. Trump had used a black Sharpie to sign documents for another loan from Deutsche Bank: $19 million for the Doral resort. That brought to more than $300 million the total lent under Ms. Vrablic.
.. On the campaign trail, rivals assailed Mr. Trump’s financial history. In response, he pointed to Deutsche Bank-funded successes like the Old Post Office project, now a gleaming hotel a few blocks from the White House.
.. In early 2016, Mr. Trump asked Ms. Vrablic for one final loan, for his golf course in Turnberry, Scotland.
.. Ms. Vrablic said yes, but a fight soon erupted.
Jacques Brand, who was in charge of Deutsche Bank’s American businesses, angrily objected, partly because of Mr. Trump’s divisive rhetoric.
Ms. Vrablic appealed the decision. Senior executives in Frankfurt, including Christian Sewing, who would become chief executive in 2018, were shocked that the private bank would consider lending Mr. Trump money during the campaign, bank officials said.
The bank’s reputational risk committee killed the transaction in March 2016.
.. That same month, as The Times was preparing an article about Mr. Trump’s excommunication from Wall Street, he cited his warm relationship with Deutsche Bank.
.. “They are totally happy with me,” he said to The Times. “Why don’t you call the head of Deutsche Bank? Her name is Rosemary Vrablic. She is the boss.”
.. After Mr. Trump won the election, Deutsche Bank’s board of directors rushed to understand how the bank had become the biggest lender to the president-elect.
A report prepared by the board’s integrity committee concluded that executives in the private-banking division were so determined to win business from big-name clients that they had ignored Mr. Trump’s reputation for demagogy and defaults, according to a person who read the report.
The review also found that Deutsche Bank had produced a number of “exposure reports” that flagged the growing business with Mr. Trump, but that they had not been adequately reviewed by senior executives.
.. On Deutsche Bank’s trading floor, managers began warning employees not to use the word “Trump” in communications with people outside the bank. Salesmen who violated the edict were scolded by compliance officers who said the bank feared stoking public interest in its ties to the new president.
One reason: If Mr. Trump were to default on his loans, Deutsche Bank would have to choose between seizing his assets or cutting him a lucrative break — a situation the bank would rather resolve in private.
.. Two years after Mr. Trump was sworn in, Democrats took control of the House of Representatives. The chamber’s financial services and intelligence committees opened investigations into Deutsche Bank’s relationship with Mr. Trump. Those inquiries, as well as the New York attorney general’s investigation, come at a perilous time for Deutsche Bank, which is negotiating to merge with another large German lender.
Next month, Deutsche Bank is likely to start handing over extensive internal documents and communications about Mr. Trump to the congressional committees, according to people briefed on the process.
Ms. Vrablic, who is intensely private and rarely discusses her personal life with colleagues, declined to comment. People familiar with her thinking said she expected to be called to testify publicly on Capitol Hill.
Maintaining the public image of a powerful and flawless businessman is difficult. And since Trump’s success depends, in large part, on his facade, he’ll do almost anything to defend it.
This defense has often involved suing or threatening to sue any journalist who publishes or intends to publish something that questions the veracity of his claims or the prudence of his actions.
Even if he knows he can’t win a particular lawsuit, the threat of one still scares off many publishers and journalists who either lack the funds to deal with the legal fees involved or dread the thought of years of arbitration.
Trump is especially defensive about the image of his vast wealth, which is why he sued Timothy O’Brien, the author of TrumpNation. Trump wants the media to believe that his net worth is in the billions, but, based on documents he personally showed to O’Brien, it would seem he’s actually worth somewhere between $150 and $250 million.
For years, O’Brien was bogged down by the lawsuit, which was eventually dismissed. Trump wasn’t displeased with the outcome, however, and he even admitted that the real goal of the lawsuit was to make O’Brien’s life miserable. So, in that regard, the lawsuit was a success for Trump.
Trump has also become a master of deflecting any facts that might contradict the image he nurtures.
Here’s a good example: during his campaign for president, in an appearance on NBC’s Today Show, Trump was asked about his court testimony in 1991, when he confessed to posing as John Baron and John Miller.
At first, Trump simply lied and claimed that this was the first time he’d ever heard about such a thing. But when the host pressed him about it, Trump expertly deflected the inquiry by questioning its legitimacy and suggesting that even asking about a 25-year-old incident was below the dignity of a journalist.
As we can see, Trump has a unique way of handling facts, which we’ll explore further in the next blinks.