DARK TOWERS: Deutsche Bank, Donald Trump, and an Epic Trail of Destruction by award-winning journalist and acclaimed author David Enrich. His previous book, The Spider Network was short-listed for the Financial Times Business Book of the Year Award in 2017. In the years since, Enrich has been consistently breaking news about Deutsche Bank in his role as Finance Editor at the New York Times. Now, Enrich shares the full, riveting story of the world's most infamous bank and its shadowy ties to Donald Trump's business empire. Brimming with news and gripping prose, DARK TOWERS is the never-before-told saga of how Deutsche Bank became the global face of financial recklessness and criminality.
In DARK TOWERS, the story of Deutsche Bank is intertwined with that of Donald Trump: his businesses, his bankruptcies, his relationship with Russia, and his unlikely ascent to the presidency. It is a tale that will be bursting into the headlines in the weeks ahead, as the Supreme Court hears oral arguments on whether the bank must hand over its extensive Trump files to congressional investigators - and, by extension, the public.
Yet the extraordinary saga of Deutsche Bank goes far beyond Trump, encompassing an entire era of excess, corruption, and illegality on Wall Street. The story is told in part through the rise and tragic fall of Bill Broeksmit, a top Deutsche executive who killed himself in 2014, and his son's quest to hold the bank accountable after his death.
Enrich traces Deutsche Bank's history back to its propping up of a default-prone American developer in the 1880s, bankrolling the Nazis during World War II (including financing the construction of Auschwitz), and wooing Eastern Bloc authoritarians. He shows how, starting in the 1990s, a succession of hard-charging Deutsche executives made a fateful decision to pursue Wall Street riches, often at the expense of ethics and the law.
Soon, the bank was manipulating markets, violating international sanctions to aid terrorist regimes, scamming investors, tricking regulators, and laundering money for Russian oligarchs. Ever desperate for an American foothold, Deutsche also started doing business with a self-promoting real estate magnate nearly every other bank in the world deemed too dangerous to touch: Donald Trump. Over the next twenty years, Deutsche executives loaned billions to Trump, the Kushner family, and an array of scandal-tarred clients, including convicted sex offender Jeffrey Epstein.
As Enrich writes: "This is the story of Deutsche Bank's rise and fall. It is about the men who transformed a sleepy German lender into what was, for a time, the largest bank in the world, but who also set the stage for the ensuing catastrophe. It is about one well-intentioned and honest man who tried to save the bank but couldn't save himself, and about his son, who embarked on a quest to understand his father's demise. And it is about the consequences-dead people, doomed companies, broken economies, and the forty-fifth president of the United States-that Deutsche Bank wrought on the world." (Page 9)
More about what Enrich covers in DARK TOWERS
History of a criminal enterprise - Founded in 1870 in Berlin, Deutsche Bank was for most of its history a staid lender to German and European companies. But that sort of business wasn't very lucrative, and by the late 1980s, this iconic German institution was seduced by the siren song of Wall Street. As Enrich vividly details, a posse of Americans-led by a swashbuckling salesman named Edson Mitchell and his best friend and ethical compass, Bill Broeksmit-were recruited to give Deutsche a dramatic makeover.
From massive new trading floors in London and New York, the American newcomers were soon going head to head with the most aggressive U.S. investment banks, trading stocks and bonds and pushing the boundaries on complex new financial products known as derivatives. High-risk trading became an end unto itself, rather than a means to serve clients. Deutsche's bankers and traders cranked out one record-breaking year after another, and soon the Wall Street division was responsible for most of the bank's revenue and profits. Bankers got rich, as did shareholders, and by 2007 Deutsche had become the world's largest bank. To the mortification of the old school German industrialists, bankers, union leaders, and politicians who had formerly called the shots from the two dark towers that serve as Deutsche's headquarters in Frankfurt, the Americans increasingly dominated the bank. This new strategy worked brilliantly, until it didn't. As Enrich documents based largely on original interviews with more than 200 sources inside and outside the bank, Deutsche's ascent was fueled by greed, sloppiness, hubris, and criminality. When the reckoning came, exacerbated by the financial crisis of 2008, it was brutal. Deutsche came under intense scrutiny by regulators and prosecutors all around the world, who investigated scores of scandals related to money laundering, tax evasion, manipulating interest rates, manipulating the prices of precious metals, manipulating the currencies markets, bribing foreign officials, accounting fraud, violating international sanctions, cheating customers, and ripping off the German, British, and United States governments.
To date, Deutsche has paid nearly $10 billion in penalties and settlements under orders imposed by the U.S. Department of Justice, and another $1 billion to European regulators. The bank's earlier history was marred by its long-concealed role as a major financer of the Nazis' war machine and their campaign to exterminate the Jews. Now, the vast scale of Deutsche's malfeasance and criminality over the past two decades has added new, possibly permanent, stains to its reputation.
Trump's bankers - Enrich draws a straight line between the corporate culture that permitted Deutsche's criminal acts to the corporate culture that permitted the bank to become Donald Trump's chief financial enabler. Deutsche's risk-taking-the product of years of make-money-at-all-costs mismanagement-had gotten out of control. Painful financial decisions had been punted far down the road. The bank's many different computer systems didn't talk to one another, and neither did its German and American executives. Managers were incentivized to generate short-term profits and downplay the long-term risks, and different divisions competed against one another for business. Even by the amoral standards of Wall Street, Deutsche exhibited a jarring lack of interest in the reputation of its clients - including, until last summer, the convicted sex criminal Jeffrey Epstein.
In the words of one of its bankers, "Deutsche needs damaged clients," and Trump fit the bill perfectly. Other major banks wouldn't touch him because of his trail of bankruptcies and defaults. But with the support of their superiors, Rosemary Vrablic, a private banker who catered to the needs of the super-wealthy, and her boss Tom Bowers overrode the warnings of other divisions and pushed through large loans to Trump and his son-in-law, Jared Kushner. Over the past two decades, the bank has lent Trump more than $2 billion, and at the time he became president, he owed some $350 million - making Deutsche Bank his largest creditor.
Father and son - As Enrich relates, Bill Broeksmit did his best to keep Deutsche within ethical and legal boundaries amid the prevailing "greed is good" ethos of the day. The son of a midwestern minister, he was one of the early pioneers of complex financial instruments known as derivatives, which made him a coveted commodity on Wall Street. Originally intended as devices to shield clients from economic and financial risks, derivatives soon became vehicles for unconstrained speculation that would eventually threaten the entire global financial system.
In partnership with Edson Mitchell, Broeksmit helped build Deutsche into a powerhouse that mostly managed to stay on the right side of the law. But after Mitchell's death in a private plane crash in 2000, Broeksmit was left unmoored. Deutsche had become too big, too aggressive, and too poorly managed to enforce any semblance of ethical standards.
Broeksmit rose to become one of the bank's highest-ranking risk managers, and he sat on a board overseeing one of the bank's key American subsidiaries - the same unit that was lending money to Trump. By 2013, Broeksmit had grown disillusioned by what the company had become. As government investigators swarmed, he became a person of interest, not because he had participated in misconduct, but because he had failed to detect and stop it. He became terrified of being hung out to dry, of having his reputation ruined. On a rainy morning in January 2014, he hanged himself in his London apartment.
"In death," Enrich writes, "Bill Broeksmit became a symbol of what ails Deutsche Bank, of the destructive power of institutional greed, of how Wall Street lures even well-intentioned people away from their moral and ethical principles, of the relentless pressure that bears down on those who stand up for what they believe is right." (Page 359)
Broeksmit's son, Val, soon discovered that his father's personal email accounts were jammed with thousands of work-related files. Enrich happened to get in touch with Val just nine days after Bill's suicide. Val soon embarked on an epic, drug-fueled international odyssey to understand why his father had committed suicide - and what secrets lurked inside Deutsche Bank. Along the way, he struck up relationships with North Korean hackers, Glenn Simpson of Fusion GPS, the musician Moby, Congressman Adam Schiff, and Neil Young's ex-wife, among many others. In 2019, Val turned many of his father's documents over to the FBI and the House Intelligence Committee, which continue to investigate Deutsche Bank.