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For a book about global finance, David Enrich’s new investigation of Deutsche Bank contains an unsettling number of deaths.
There is the assassination by left-wing terrorists of a Deutsche chief in the ‘80s. Later, a plane crash eliminates a rising star in the bank’s ill-fated campaign to transform from a German commercial lender to a Wall Street powerhouse. There are numerous deaths by suicide of world-striding financiers, troubling both in their varieties and their similarities. (If you are struggling, contact the National Suicide Prevention Lifeline at 800-273-TALK). A banker vanishes from the Earth within parentheses; an insurance man expires in a footnote.
And there is the Holocaust. The American military, Enrich reports, concluded after World War II that Deutsche Bank was “a participant in the execution of the criminal policies of the Nazi regime in the economic field.” The Americans’ recommendation to liquidate the bank was not enacted. Instead, a convicted war criminal returned to head the bank. The extent of Deutsche’s role in the genocide—it financed Auschwitz, among other atrocities—became fully known only after a local New York regulator questioned an important deal in the ‘90s.
The bank apologized. “World War II and the Holocaust would have happened without the bank,” Enrich acknowledges, but adds its actions surely contributed to the Nazi’s extermination campaign.
In Dark Towers: Deutsche Bank, Donald Trump, and an Epic Trail of Destruction, the framing of responsibility versus complicity drives Enrich’s subtle and exhaustive exploration of a critical question for today’s politics: Would Donald Trump be president without Deutsche Bank?
As of 2016, Enrich, finance editor at the New York Times, recounts that “for nearly two decades Deutsche had been the only mainstream bank consistently willing to do business with Trump.” The bank had loaned him more than $2 billion in sum, and kept agreeing to more. “And that was despite two divisions of the bank, on separate occasions, having sworn never again to do business with The Donald because of his annoying habit of stiffing his lenders.”
Bankers can be irrational and act on imperfect information? No surprise there. But the great conflicts of this era are over institutions, their norms, and cultures. Can they restrain the irrational and the imperfect? At Deutsche, Enrich concludes, the answer is no: “Even by the amoral standards of Wall Street, Deutsche exhibited a jarring lack of interest in its clients’ reputations.”
Would other banks have funded Trump’s mythmaking? He might have found another arm to twist. Enrich’s case is that Deutsche, with its “mile-long rap sheet,” was especially prone to putting short-term interests over long. As the half-joking mantra went under Josef Ackermann, the bank’s CEO from 2002 to 2012, “The current quarter is the most important quarter we’re ever going to have.”
Deutsche Bank’s norms didn’t just fail to restrain its self-destructive relationships with Trump. It seemed to actively encourage them. “Deutsche needs damaged clients,” a private banker explains. Exposure reports that warned of risk in the Trump relationship failed to reach the highest levels of the bank. Even so, Enrich writes, “quite a few of the bank’s highest-ranking executives, including Ackermann and [later co-CEO Anshu] Jain, had more or less known what was going on—and, in fact, both CEOs had seemed to bless aspects of the relationship.”
Deutsche’s broken institutions made it a danger far beyond the bounds of American politics, according to Enrich. In Italy, it entered into a disastrous relationship to help the 500-year-old Banca Monte Dei Paschi di Siena hide losses, an arrangement that blew up the Italian bank when the press uncovered it. In Russia, “Deutsche used corrupt means to win business with the Kremlin,” writes Enrich. (“Deutsche steered very rich Russians into … Trump ventures,” he finds, but uncovers no smoking gun of a Kremlin plot to influence Trump politically through Deutsche.) Busting sanctions became something of a specialty. “By 2006, Deutsche had zapped nearly $11 billion into Iran, Burma, Syria, Libya, and the Sudan, providing desperately needed hard currency to the world’s outlaw regimes and single-handedly eroding the effectiveness of peaceful efforts to defused international crises,” Enrich writes.
Deutsche Bank didn’t simply stumble into crises. Its leaders in the modern era actively substituted their self-interest for the greater good. Ackermann cultivated a relationship with German Chancellor Angela Merkel. She turned to him during the Greek financial crisis, when the country’s debts drove a massive recession and threatened European integration at large. “The advice Ackermann provided tended to benefit banks—and one bank in particular,” Enrich writes. Deutsche owned “boatloads of Greek government bonds,” and allowing them to be reduced would have been “dangerous” for the bank. “Ackermann got his way.”
Trump got his way, too. Deutsche has been valuable to his presidency. A relationship with the Deutsche-employed son of former Supreme Court Anthony Kennedy was the linchpin of a strategy to persuade the justice that it was safe to retire, Enrich reports. When rumors circulated, inaccurately, that Special Counsel Robert Mueller had subpoenaed Trump’s records from the bank, the president exploded with fury. “To any government official paying attention, this was a powerful signal: Investigate Deutsche and risk the president’s wrath,” Enrich writes.
Deutsche has not been entirely comfortable with the president’s favor. In 2018, it appointed as CEO Christian Sewing, one of the few employees to say no to a Trump loan. “We lost our compass in the last two decades,” he said last year. But Enrich suggests that analysis doesn’t capture the bank’s full culpability. To have lost the way, one needs to have found it in the first place.
Write to Matt Peterson at matt.peterson@dowjones.com