Time for Congress to call senior leadership of both the bank and the county to ensure that Trump is not abusing his position for personal benefit: (Spoiler, he IS abusing his position for personal benefit)
All over the country, businesses large and small are seeking breathing room from their lenders, landlords and business partners as they face the financial fallout from the coronavirus crisis.
President Trump’s family company is among those looking for help.
Representatives of Mr. Trump’s company have recently spoken with Deutsche Bank, the president’s largest creditor, about the possibility of postponing payments on at least some of its loans from the bank.
And in Florida, the Trump Organization sought guidance last week from Palm Beach County about whether it expected the company to continue making monthly payments on county land that it leases for a 27-hole golf club.
The Trump Organization’s requests put lenders and landlords in the awkward position of having to accede or risk alienating Mr. Trump.
Other companies may be able to tap into a $500 billion rescue fund that will be administered by the Treasury Department. But the economic bailout package, which Mr. Trump signed into law last week, specifically barred the president and his family from access to that money.
Late last month, Mr. Trump’s representatives contacted their relationship managers in Deutsche Bank’s New York private-banking division, which caters to wealthy customers. They wanted to discuss the possibility of delaying payments on some of the hundreds of millions of dollars of outstanding loans that the Trump Organization has from the bank, according to a person briefed on the talks. The discussions are continuing.
Deutsche Bank has lent Mr. Trump and his companies about $2 billion since 1998, the only mainstream financial institution consistently willing to do business with Mr. Trump and his companies. At the time he became president, Mr. Trump owed the bank about $350 million, including on loans to buy and renovate the Doral golf resort near Miami and to develop a luxury hotel in the Old Post Office building in Washington.
Both properties are suffering in the economic shutdown. In response to Miami-Dade County’s rules, the Doral resort has ceased all operations, while the Washington hotel continues to operate, albeit with few guests and with its restaurant and bar closed. The Trump Organization rents the Washington property from the federal government, and the company had been soliciting bids from potential buyers for the lease, a process that is now on hold, The Washington Post reported.
Mr. Trump received the loans for those properties, as well as another related to his Chicago skyscraper, from 2012 to 2015. Because of his history of defaults and bankruptcies, Deutsche Bank insisted that Mr. Trump provide personal guarantees on those loans, meaning that the bank has recourse to his personal assets if he were to stop paying back the money.
Ever since Mr. Trump’s election, Deutsche Bank executives have been fretting about what would happen if he were to default, according to bank officials. Seizing the president’s personal assets would be an unattractive proposition. But opting not to collect on the loans would be the equivalent of an enormous financial gift to Mr. Trump, whose administration wields enormous power over the bank. Deutsche Bank’s operations in the United States are supervised by federal regulators, and the Justice Department has been conducting a criminal investigation of the bank.
The Trump Organization reached out on multiple occasions last week to Palm Beach County to ask whether it expected the company to continue making the monthly payments of tens of thousands of dollars due under its long-term lease, according to people briefed on the discussions.
It’s already clear that Trump is going to ignore any attempt at Congressional oversight of the bailout, and he’s already doing things like diverting ventilators to states with “friendly” governors.
Since he’s already issued a signing statement that he will not cooperate with Congressional oversight, subpoenaing Trump’s creditors is a way to get some leverage over him (remember, Trump is personally liable for the Deutsche Bank loan) to get compliance on oversight.
You grill folks from the bank and the county, and suddenly they will be disinclined to cut Trump slack.
Politics ain’t beanbag.