Senate Democrats are moving to tighten the screws on Deutsche Bank over the firm’s dealings with the Trump and Kushner organizations.
Seven Democrats on the Senate Banking Committee wrote to the Federal Reserve on Thursday, requesting it probe whistleblower allegations, first reported by the New York Times last month, that Deutsche Bank buried suspicious activity from accounts associated with President Trump and his son-in-law and senior White House adviser Jared Kushner.
The letter, led by Sen. Chris Van Hollen (D-Md.), asks if the Fed is already looking into whether Deutsche Bank ignored red-flag reports from its own anti-money-laundering experts to protect a pair of powerful and lucrative clients of its private wealth management division. The senators sent the letter to Federal Reserve Chair Jerome H. Powell and New York Federal Reserve President John Williams.
“Only by conducting a thorough review of this activity can we better what happened in these cases; what practices, procedures, or personnel may need to be changed at the bank; and what regulators should do to ensure the Federal Reserve’s ability effectively to monitor compliance with Anti-Money Laundering Laws,” the letter reads. Others on the letter include Sen. Sherrod Brown (Ohio), the top Democrat on the panel, and 2020 presidential candidate Sen. Elizabeth Warren (Mass.).
A Fed spokesperson in Washington said they have received the letter and plan to respond. A Deutsche Bank spokesman declined to comment.
The Times story details how the bank’s anti-financial crime team, based in Jacksonville, Fla., compiled “multiple suspicious activity reports involving different entities that Mr. Trump owned or controlled,” according to three former employees. One of the specialists found “money had moved from Kushner Companies to Russian individuals.” They recommended the bank report the activity to regulators at the Treasury Department. Instead, executives with the private wealth division decided to do nothing, the paper reported.
The bank is already facing intense scrutiny from congressional Democrats over its ties to Trump’s business empire. It has been the only major financial firm willing to back Trump over the last two decades, after a string of bankruptcies rendered him persona non grata on Wall Street. It still holds $300 million in outstanding debt from Trump — and it continues to make headlines for allegations of misconduct and money laundering on behalf of its clients.
Also on Thursday, for example, the European Commission announced it will review past money-laundering cases at E.U. banks, with a focus in part on Deutsche Bank, to determine how to improve its own rules.
The bank has faced some eye-popping penalties — $700 million in 2017 alone — for its conduct. And it is no stranger to punitive action from the Fed. In 2017, the regulator downgraded Deutsche Bank’s U.S. operations to “troubled condition” status, “a rare censure for a major financial institution that has contributed to constraints on its operations,” the Wall Street Journal reported last year. “It also means the bank has had to clear decisions about hiring and firing senior U.S. managers with Fed overseers. Even reassigning job duties and making severance payments for certain employees require Fed approval.”
The House Financial Services and Intelligence committees have subpoenaed Deutsche Bank for records related to Trump’s businesses. The president lost a bid in federal court last month to block the bank, and Capital One, from complying with the subpoenas — a decision the Trump team has appealed.
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