Key Messages
Deutsche Bank’s Risky History: How The Bank Built An Empire Of Greed And Complicity In Fascist States, Dictatorships, And Donald Trump’s Presidency
Deutsche Bank has been at the center of some of the most nefarious financial ventures in recent history.
This once venerable German institution was founded in 1870, and quickly gained a reputation for taking on riskier projects than other banks – both willingly and unwillingly.
Its dealings with the Nazi Party made it complicit in the Holocaust.
It also has a long history of lending money to failed states and dictators, gaining an unsavory reputation among global political leaders.
But Deutsche Bank’s greatest notoriety is its involvement with Donald Trump, who would not have become President without its help.
This came in the form of a loan during a time when Trump’s businesses were faltering.
Finally, as regulators learned of the bank’s unscrupulous practices, particularly in trading markets in London and New York, executive Bill Broeksmit became distraught and took his own life – becoming a symbol for Deutsche Bank’s institutional greed that had grown out of control.
Learn more about this sinister history behind what was once the world’s largest bank when you read Dark Towers: The Inside Story Of A Wall Street Revolt by investigative journalist David Enrich .
Deutsche Bank: The Controversial History Of Germany’s Financing Giants
Deutsche Bank was founded in 1886 and, since its inception, it has established a reputation for allying itself with unscrupulous characters and institutions.
This became readily apparent when its founder Georg von Siemens welcomed Henry Villard back into his good graces, despite the money he had lost on the reckless railroad venture of which Villard had been part.
This indiscretion to turn a blind eye to questionable investments did not end there.
Despite allegations against its wartime director Hermann Abs of participating in war crimes, Deutsche withheld punishment granting him control once more; During his reign over Deutsche Bank spearheaded the conversion of Holocaust victims’ gold fillings into cash and financed Auschwitz as well as the factory that produced Zyklon B; Both clear examples of nefarious business practices.
It is these types of morally questionable strategies that have led Deutsche Bank to build an image of dealing with unscrupulous characters and corrupt activities throughout its history.
The Changing Culture Of Deutsche Bank From Conservative To Speculative With The Introduction Of American Financial Innovators
As Deutsche Bank embraced modern financial practices and began to enter the international market, its company culture underwent a dramatic shift.
Traditional German approaches to banking which relied on cautious consensus decision-making were replaced by the risk-taking, bold style of American financial trading.
This resulted in an influx of brash American traders who specialized in derivatives – products whose value is based on other products.
Deutsche’s appointed leader Edson Mitchell quickly got to work recruiting his old team from Merrill Lynch, as well as doubling the work force in 18 months.
He also secured a deal with his former colleague Bill Broeksmit by offering him a significantly high salary to join Deutsche’s London office.
This marked yet another transition in company culture: the focus had gone from collective goals to individual aims of profit-seeking.
Without a unifying force instilled within the bank as it shifted towards a more modern approach, it could have produced catastrophic results.
The Death Of Edson Mitchell Lead To The Implementation Of Dirtier Tactics At Deutsche Bank
By the mid-1990s, a power shift was underway at Deutsche Bank.
As their investment arm began gaining strength and prominence, the bank risked getting involved in increasingly high-risk deals and financial practices.
This included a generous $125 million loan to Donald Trump, despite his unpopularity with traditional lenders due to his history of defaults on loans.
With the acquisition of Bankers Trust for $10 billion in 1998, Deutsche Bank’ investments arm started rapidly increasing its profits, taking up an overwhelming 85 percent of total profits only one year after the purchase.
The Bankers Trust deal exhibited some of Deutsche’s dirtiest moves yet – cutthroat derivatives deals which were explicitly deceiving customers into buying risky investments they didn’t fully understand or agree with.
Unfortunately, these were just a few examples of how playing “dirtier” had become normal business practice for Deutsche Bank as their investment operations flourished.
When the U.S Securities and Exchange Commission investigated them in 2001, they resorted to even more unethical tactics such as poaching away their lead investigator in exchange for riches and glory – ultimately succeeding in making their case get dropped.
Under Joe Ackermann’S Leadership, Deutsche Bank Took On A Dangerous “Profit-At-Any-Price” Mentality While Letting Its Infrastructure Degrade
Under Joe Ackermann’s leadership, Deutsche Bank adopted a ‘profit-at-any- cost’ mentality.
Instead of investing in the bank’s infrastructure, Ackermann instead focused on one metric – Return On Equity.
This measure showed how much profit an investment in the bank would make over a given year.
Deutsche was willing to do whatever it takes to bring in profits and its bonus compensation system was fashioned after this philosophy.
While this led to massive bonuses for traders, it also meant that money was being funneled into funds controlled by sanctioned regimes such as Iran, Syria and North Korea.
Trying to improve the bank’s computer systems was not considered due its costly nature, so the bank continued with its fragmented software which prevented them from making informed decisions properly and efficiently.
Ultimately, Ackermann’s focus on profit above all else caused an unnecessary strain on the bank’s operational capabilities due to his reliance on outdated infrastructure.
Deutsche Bank’S Business With Donald Trump Proves That Money Comes First, And Its Lasting Consequences
Despite being well aware of Donald Trump’s history of defaults on Wall Street, Deutsche Bank still chose to do business with him due to their eagerness for growth.
This was a risky move in itself, yet one that the bank was willing to take in order to obtain more profits and greater recognition in the United States.
Deutsche even provided Trump with an incredibly large loan of $640 million in 2005 for a luxury tower he wanted to build in Chicago.
Accounts from the bank showed that Trump’s net worth was much lower than he had claimed; however, they still proceeded with the agreement as they had faith in his showmanship.
Additionally, loans came with unbelievably low interest rates adding to Deutsche’s strategy of getting into the US market with minimum risk involvement.
All this suggests that Deutsche put aside any apprehensions they may have harboured when it came down to working with Donald Trump, perhaps blinded by their desire for success.
Luck And Financial Fakery Enabled Deutsche Bank To Outlast The Great Recession
Deutsche Bank managed to survive the Great Recession of 2007-2008, largely due to a combination of luck and deceit.
Prior to the downturn, Anshu Jain and Joe Ackermann had enabled Deutsche Bank to reach $2 trillion in assets and become one of the largest banks in the world.
To get there, they adopted an aggressive risk management strategy with borrowings reaching 50:1 compared to other banks which rarely exceeded 20:1.
Fortunately for them, just before disaster struck Jain noticed signs of economic distress, leading him to instruct his team to sell off their US housing market riskiest positions – these savvy decisions saved them from potential losses.
When things got really bad, he desperately contacted Bill Broeksmit who helped batten down their hatches while staying afloat through managing their books carefully.
Through it all Deutsche Bank was able to make a profit – or at least appear that way – by trading high-risk investments and hiding billions in potential losses.
Overall, Deutsche Bank weathered the Great Recession through luck and subterfuge rather than responsible investing.
The Tragic Downfall Of Bill Broeksmit, The Banking Genius Who Stood Up To Deutsche Bank’S Corrupt Practices
Bill Broeksmit was a major player in the Deutsche Bank saga, both as an employee that helped build it up and as someone tasked with cleaning up its many problems.
When regulators began to appear on the scene, they began to pick apart all of the shady dealings that had occurred over the years – something Bill Broeksmit had warned against.
However, instead of being taken seriously, his warnings were disregarded and he was made a figure of fun by younger traders.
The situation only deteriorated further when two promotions he expected were put on hold for political reasons, and he was then assigned to figure out a mess in an obscure Deutsche arm.
This arm was the dumping ground for problematic deals that had been made since 2006 – ones that Broeksmit felt completely detached from since he associated them with other people’s greed.
It soon became clear that not only did regulators have their eye on him but they were suspicious of his involvement in illegal activities.
This added one more straw to break the camels back and Bill Broeksmit could no longer keep continuing on living like this – so he took his own life in 2014.
It is clear then that due to mounting pressure from fraudulent practices done behind closed doors, Bill Broeksmit felt increasingly alienated from Deutsche Bank — the business he’d helped construct so many years prior.
The Ousting Of Anshu Jain Marked The Start Of A Dark Age For Deutsche Bank, As It Struggled With Fines And Scandal Amidst An Era Of Reckoning And Restructuring
Anshu Jain’s resignation from Deutsche Bank in 2015 marked the beginning of a new era at the bank – one that was all about reckoning and restructuring.
When Jain resigned, Deutsche had already been dealing with massive fines, investor distrust and over 7,000 outstanding legal actions.
The bank was at its lowest point ever, and it seemed like there was no relief in sight.
However, when yet another fine came down – this time for $2.5 billion – everything changed.
This showed that the board saw that they could not trust Jain with leading them in difficult times anymore, so he had to go.
With Jain’s ouster as the start of a restructure plan, Christian Sewing was brought in as CEO.
His goal? To take the investment arm back to Deutsche’s stoically conservative roots by drastically cutting it down and reducing the workforce by 20 percent.
Additionally, news had broken out about their illegal activities with Russian oligarchs laundering money through their Moscow branch; a reality that only added to their troubles.
Ultimately, Anshu Jain’s departure signaled a major restructuring of Deutsche Bank as it sought to rectify its financial woes and move forward after years of controversy and scandal.
How Deutsche Bank Helped Propel Donald Trump To The Us Presidency
Donald Trump’s financial woes kept him from becoming a US President until he found a benefactor in Deutsche Bank.
The bank agreed to let Trump off the hook for an immense sum – over $300 million less than he owed – giving him the breathing room to pursue his ambition of being President of the United States.
Because of this lifeline, Deutsche began extending loans and credit lines to Trump as well as money for investments such as his Miami golf course and the historic building in Washington that became the Trump International Hotel.
Furthermore, Jared Kushner- now Trump’s son-in-law – referred Trump to Rosemary Vrablic at Deutche.
Vrablic is a former money laundering specialist who pushed through Trump’s loan request despite it being an unprecedented move by a regular bank.
The support from Deutsche came at a pivotal time for iTrump, allowing him to finance his campaign and present himself as legitimate – debts or not.
When questioned about how he was able to fund his campaign, he would point out his relationship with the bank and falsely refer people to Vrablic who he said was Deutsche Bank’s CEO!
How Bill Broeksmit’S Tragic Death Exposed The Deeds Of Troubled Bank Deutsche Bank
Valentin Broeksmit, stepson of former Deutsche Bank executive Bill Broeksmit, was key in shedding light on the bank’s dark dealings.
After Bill’s death, Val became obsessed with finding out why his father killed himself and began poring over Bill’s laptop.
There he found a list of passwords as well as hundreds of emails that had been forwarded from Bill’s work account.
This archive proved to be incredibly valuable—it revealed the extent of Deutsche Bank’s corrupt activities and showed beyond a doubt that these dealings contributed to Bill Broeksmit’s suicide.
Evidence such as letters from Bill’s doctors detailing his severe anxiety helped solidify this conclusion.
Principally via Val Broeksmit’s efforts, the world soon knew the truth behind Deutsche Bank’s misdeeds and how it led up to an individual paying the ultimate price for their sins.
Wrap Up
The main takeaway from “Dark Towers” is that corruption and unchecked greed at Deutsche Bank has had a huge impact not just on the finance industry, but on global economics and the US presidency as well.
Despite efforts to restructuring and avoid repeating past mistakes, the damage inflicted can’t be undone.
It’s clear that this story serves as a cautionary tale for any organization or individual that may take their power for granted: no one should underestimate the dangerous consequences of such actions, regardless of how powerful they think they are.
All it takes is a single mistake to have far-reaching implications — and with enough of them, catastrophic results can arise.
