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Trump’s Biggest Lender Wants New Terms

Mother Jones

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Donald Trump’s biggest creditor, Deutsche Bank, is seeking to restructure some of the president-elect’s debt, Bloomberg reports. Trump’s companies owe the German lender at least $364 million, more than half of his total $713 million debt load, and his loans with the bank—a potential source of leverage over the incoming commander-in-chief—pose a significant conflict of interest.

According to Bloomberg, Deutsche Bank is seeking to limit the conflict by removing Trump’s personal guarantee from the loans, meaning that the president-elect would not be personally on the hook if the loans go bad. Trump has also personally guaranteed loans to his second-biggest lender, Ladder Capital Finance, to which he owes $282 million.

Bloomberg cited unnamed sources who indicated that the bank was the party seeking the changes and that delicate restructuring talks are underway. Trump’s personal guarantees have helped him secure low interest rates, and if the guarantees are removed, the bank could compensate by raising the interest on Trump’s loans or asking for other assets to serve as collateral.

Mother Jones reviewed all of Trump’s publicly listed debts earlier this month and found that Trump has four loans with Deutsche Bank: two mortgages on his Miami Doral golf course, a loan on his Chicago tower, and a $170 million loan tied to his brand-new Washington, DC, hotel. All four loans were made through Deutsche Bank’s private bank, a division that caters to high-net-worth individuals and has the flexibility to make loans that the commercial lending side of the firm might balk at.

Documents filed with the Securities and Exchange Commission by Ladder Capital show that Trump has guaranteed $8 million of his $100 million mortgage on Trump Tower and $26 million of the $160 million mortgage on the 40 Wall Street office tower.

Since his election, Trump has repeatedly faced questions about the unprecedented conflicts of interest posed by his business empire. So far, the president-elect has done little to allay concerns about his business interests. Trump canceled a scheduled press conference earlier this month at which he said he would discuss how he would separate himself from his business, but he also indicated that his solution did not involve divesting himself from his assets. Instead, he suggested he would step back from daily operations. That would do little to insulate himself from conflicts, and it would do nothing to solve the ethical issues created by his loan guarantees, which make him personally responsible if the bank ever deems the terms of the loans to have been broken. Even if he does divorce himself from his business, he can’t separate himself from the guarantees that put his own money on the line—or from the leverage his lenders have over him.

Trump’s relationship with Deutsche Bank when he enters the White House is particularly fraught because the German firm is currently in the midst of a regulatory tussle with the Justice Department. In 2015, the bank paid American and European regulators $2.5 billion in a settlement for its role in helping to rig the interest rate market. Now the bank is negotiating with the Justice Department on an even bigger potential settlement—as much as $14 billion—for its role in the creation and sale of bad mortgage products in the run-up to the 2008 financial crisis.

Separately, Reuters recently reported that Ladder Capital may be exploring putting itself up for sale, opening the possibility that Trump’s second-largest lender could wind up in the hands of interests that aren’t necessarily aligned with America’s.

The potential conflicts of interest over the Deutsche Bank loans are separate from concerns that ethics experts have expressed about a possible violation of the Constitution’s emoluments clause, which prohibits government officials from receiving beneficial treatment from foreign governments. Those concerns stem from a $920 million loan from the state-owned Bank of China and a coalition of lenders (that also includes Deutsche Bank) to a real estate partnership that Trump is part of.

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Trump’s Biggest Lender Wants New Terms

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Trumpapalooza for May 23, 2016

Mother Jones

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A while back I asked how to handle the fire hose of Donald Trump news, and one suggestion was to ignore it during the day and then put all of it into a single end-of-the-day roundup. I’m not sure this is a viable long-term solution, but let’s give it a try. Here’s the Trumpapalooza for May 23, 2016:

Global Warming

Publicly, Trump has made it clear that he thinks global warming is a hoax. But when it comes to building a sea wall to protect one of his golf courses, it turns out he’s a true believer: “If the predictions of an increase in sea level rise as a result of global warming prove correct,” his company says in a letter, “it could reasonably be expected that the rate of sea level rise might become twice of that presently occurring….As a result, we would expect the rate of dune recession to increase.”

Wall Street

Trump apparently isn’t quite as plugged into the world of the rich and powerful as he thinks:

If there were any prevailing doubts of his stature on Wall Street, Mr. Trump said the chief executive at Deutsche Bank could easily allay it. “Why don’t you call the head of Deutsche Bank? Her name is Rosemary Vrablic,” he said in the recent interview. “She is the boss.”

Ms. Vrablic is a private wealth manager at Deutsche Bank in New York. She is not the company’s chief executive; John Cryan holds that role. Both declined to comment on Mr. Trump.

Energy Policy

Trump recently met with Robert Murray, CEO of Murray Energy, and had a question for him:

During the meeting, Murray said Trump had asked him about numerous facets of U.S. energy policy. At one point, Murray said he would suggest lifting obstacles to opening liquefied natural gas, or LNG, export facilities to reduce the supply glut of natural gas in the country.

He said that Trump was agreeable with the idea, but then had a question. “What’s LNG?” Murray said Trump asked.

Rape

Josh Marshall says that if Trump is going to dredge up groundless old rape accusations against Bill Clinton, it’s time to ask him some questions about his own past sexual conduct:

Trump’s former wife Ivana said Trump raped her in a sworn deposition. Given how central a role rape accusations have played in Trump’s campaign — against Mexicans, political opponents, etc. it is clearly a highly germane question, as frankly it would be for any presidential candidate.

The details surrounding the alleged rape are bizarrely novelistic even by Trumpian standards. According to Ivana, Trump was driven to freakish rage by a failed anti-baldness surgery — a so-called ‘scalp reduction’. But the actions are very clear cut. According to her deposition, Trump flew into a rage, attacked her, held her down and began pulling hair out of her head to mimic his pain and then forcibly penetrated her….This was a pretty concrete and specific accusation. And the author of the book that first surfaced the deposition said he’d found numerous friends of Ivana’s who she had confided the incident to at the time.

Vince Foster

The right-wing fever swamp has long believed that Vince Foster, a deputy White House counsel in the Clinton administration, didn’t commit suicide on July 20, 1993. Rather, Hillary Clinton had him murdered and then ordered his body dragged to Fort Marcy Park, where he was found the next day. Even by conservative standards this is both fantastical and repulsive (Foster was a good friend of Hillary’s). Naturally, that didn’t stop Trump:

When asked in an interview last week about the Foster case, Trump dealt with it as he has with many edgy topics — raising doubts about the official version of events even as he says he does not plan to talk about it on the campaign trail. He called theories of possible foul play “very serious” and the circumstances of Foster’s death “very fishy.”

“He had intimate knowledge of what was going on,” Trump said, speaking of Foster’s relationship with the Clintons at the time. “He knew everything that was going on, and then all of a sudden he committed suicide.” He added, “I don’t bring Foster’s death up because I don’t know enough to really discuss it. I will say there are people who continue to bring it up because they think it was absolutely a murder. I don’t do that because I don’t think it’s fair.”

There was also some polling news, but who cares about polls in May?

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Trumpapalooza for May 23, 2016

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Why Are These Hedge Fund Kingpins Dumping Millions Into the Midterms?

Mother Jones

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Hedge fund pioneer James Simons during a 2007 interview Mark Lennihan/AP

As Democrats and Republicans battle for control of the Senate, hedge funds are dumping millions of dollars into congressional campaigns. Most of these companies are lining up behind one party or the other. But the second-biggest spender, Long Island-based Renaissance Technologies, is playing both sides of the aisle. As of early September, the firm’s CEO, Robert Mercer, had given $3.1 million to Republican candidates and super-PACs. Its founder and chairman, James Simons—a brilliant former National Security Agency code breaker—had donated $3.2 million to their Democratic counterparts.

Neither man has spoken publicly about his motives, but the donations coincide with at least two federal investigations into Renaissance’s business dealings. In July, Renaissance executives were hauled before a Senate subcommittee and grilled about the company’s use of complex financial instruments to dodge billions of dollars in taxes and skirt federal leverage limits, which protect the financial markets from swings and crashes. As Sen. Carl Levin (D-Mich.) put it during the hearing, “excessive leverage” can “bring down not just a reckless borrower, but the financial institution that lent it money, and that failure can ripple through the entire financial system.”

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Why Are These Hedge Fund Kingpins Dumping Millions Into the Midterms?

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