Heads in the Sand


Common sense commentary on politics, culture and current events. If it's on your mind, it's in the news. And now in the news with your host, Mike Dakkak. Spoke to you a couple of weeks ago about all of the money that was leaving Russia through that mirror trading scheme. And how was being done with the help of one of the world's largest banks Germany's Deutsche Bank? One of the very first things that intrigued me about the story when I first read about it was what Russia was doing with all that money wants it left. Why were they letting all that money? Leave russia. Vladimir Putin doesn't seem like the kind of guy that would let something like that. Go unchecked. And so the fact that it was left, unchecked lead, you to believe that it was being done with the approval of the highest levels of the Russian government. The second thing that intrigued me the most though, is, why don't you Bank one, along with it? Don't you Bank is not some fly by night corporation? It's the seventeenth largest Bank in the world. Seventeen billion dollars in assets. I mean, real people work their professionals armies of lawyers armies of compliance managers. Didn't anyone catch stuff like this when it happened, didn't they feel they had a responsibility to report activity like this when they found it. Well, the answer those questions is both. Yes and no. There are people who catch the stuff. Unfortunately, what happens after these things are caught is another story. There's a unit at Deutsche Bank that is made up of thousands of employees who job, it is to scan financial transactions conducted by the Bank for signs of suspicious activity things like sanctions violations, or money laundering. A former employees said that in the years after the merge trading scandal broke at Deutsche Bank. They raised concerns with supervisors about yet more transactions involving companies owned or operated by wealthy Russian individuals. They felt were suspicious. I usually went transactions like that are flagged there initially flagged by automated programs by software there, then reviewed by senior employees, who decide whether to file, what are known as suspicious activity reports those reports go on to more senior employees still who decide ultimately whether to submit those reports to law enforcement officials like the US treasury department, for example, for possible criminal investigation, and that didn't happen in these cases, instead employees were told that they had bad attitudes for flagging these transactions, and they were told not to file those suspicious activity reports employees, felt, they say that the Bank, did not wanna bother important clients. But the decision didn't make much sense to employee's because Deutsche Bank was already in trouble for the mirror trading scheme involving billions of dollars leaving Russian. It had been ordered to pay hundreds of millions of dollars in fines and actually was operating still is operating under an order from the US Federal Reserve that requires it to do more to stop activity. They deemed to be suspicious. And yet here it was again, seemingly looking the other way on actively they deemed to be suspicious. What raised eyebrows, even further was who some of these suspicious activities seem to involve, and that was Donald Trump as well as members of his family. Starting in the summer of twenty sixteen. So this is at the height of the presidential election Deutsche Bank employees, flagged, a number of transactions involving the real estate companies of Jared Kushner, the president's son-in-law, a longtime anti money laundering specialists at the Bank stationed in the anti money laundering unit and stateside here in Jacksonville, Florida investigated the matter and found that money moved from companies owned by Kushner's family to Russian individuals are precisely because of the bank's history with Russian individuals. And because of that order to tighten its security potential illegal transactions that employees concluded that the transactions needed to be reported to the US government. And so she drafted a suspicious activity report gathered up additional evidence documents that would support her decision and presented them to superior officers that people who ultimately would have to decide. I'd whether to report it to the federal government. Now, it's basically that report would have been reviewed by a team of anti money, laundering experts, not run of the mill Bank officers and certainly not Bank officers from the same unit the transactions originated from and this case, that was the private banking division, that's done to make sure that these supervisors who review the findings can remain objective, and have no conflicts of interest. If the Bank officers revealed the findings are the same officers who authorized the transactions in the first place, and are the same officers who are responsible for maintaining a positive relationship with those clients and Mike, cloud their judgment, and yet, that's exactly what happened here. The report went directly to the private banking division, manages their perhaps unsurprisingly belt the reports findings were overblown. They decided not to submit it to the government. Don't you banks private banking division caters to not just the wealthy, but the ultra wealthy and so Deutsche Bank employees believe the report was killed because of the banks strong relationship with Kushner and his companies. In two thousand seventeen this is after Donald Trump becomes president transactions involving him and several of his companies. Get reviewed by the special investigations unit at Deutsche Bank and that unit is tasked with flagging and investigating financial crime at the Bank there. The financial crime team at the Bank. That seemed produces multiple suspicious activity reports involving different companies that Trump either owns or controls now don't you Bank, ultimately decided not to file those suspicious activity reports with the US treasury department either. I'm please found that unusual because they said it was rare for the Bank to not disclose. Multiple reports involving the same high profile client. One of the employees woman by the name of Tammy McFadden was ultimately fired for voicing concerns. She complained to superiors about how the Bank was investigating accounts of high profile individuals, especially those that held public office, because such individuals are, especially susceptible to extortion, or blackmail, or just corruption more broadly, their accounts are subject to extra vetting. Mcfadden's hold her superiors that such individuals. They're known internally as politically exposed clients were not receiving that extra vetting. And there were dozens of them she said, not just Trump. Superiors at Deutsche Bank told her to stop asking questions. Mcfadden Sukkur complaints to human resources after doing that. She was transferred to another division. She was fired subsequently. The Bank told her that she was not productive enough. She wasn't processing enough transactions, but she disputes that she says the number of transactions assigned to her were reduced dramatically after she kept raising her concerns. She said she was fired as an act of retaliation that Deutsche Bank was trying to silence. Her though, each Bank, denies LaSalle Gatien's. But McFadden says this is business as usual at Deutsche Bank, you present them with everything and you give them a recommendation and nothing happens. It's the db way she says they are prone to discounting everything. But even if they're prone to discounting, everything the fines, and the potential legal. Trouble would automatically make them wanna stop being prone to discounting, everything, wouldn't they? I mean, the US Justice department fine deutchebanks six hundred thirty million dollars for their role in the Russian mirror trading scandal. Now even have six hundred and thirty million dollars is not enough to put a real dent in the coffers of a seventeen billion dollar company. It should be enough to make it so that they don't wanna make a habit out of it. And yet they keep repeating the same behavior. They continue to look the other way on these things. Now that tells you that a calculation is being made here, they figured that it would be more damaging to their business to crack down on this behavior, and eliminate it than it is to ignore it and deal with the average. Fine. Whatever it may be you. Whenever it comes down, which by the way is an all that often. Right. What maybe once every eight or nine years, every ten years if that clearly, they've regarded any fines that come down as a cost of doing business to business expense like regulatory fees, or rent for office space. Maybe they've even factored some of the costs in sue the commissions or fees. They charge some of these accounts who knows. On Trump specifically, though, Deutsche Bank kinda has a long history of peculiar behavior in two thousand and three Bank helped Donald Trump's casino company sell hundreds of millions of dollars in bonds that company defaulted in two thousand and four deutchebanks clients suffered deep losses, the banks investment division vowed never to do business with Trump again the following year. Trump approached another part of the same division and asked for six hundred million dollars to build a tower in Chicago. And he got that loan in two thousand and eight Trump defaulted on that one and not only did he default on the loan, but he actually sued Deutsche Bank for trying to recover the money. This time the whole investment division out to cut him off three years after that in two thousand and eleven Deutsche Bank began lending to him again this time through another division, the aforementioned private banking division, the one of the loans. He takes out there, forty eight million dollar loan. He uses to pay back the money, he still owed deutchebanks investment division from the. Tower in Chicago, that he defaulted on a few years earlier. So he's barring money from Deutsche Bank to pay back money from doing. I mean it's just bizarre behavior, and yet they keep lending to them over the years. It's estimated Deutsche Bank has lent Trump and his companies about two billion dollars. And it's rather open question, how sound of a business decision? That was what they have to show for it in terms of profit. They do though, have losses and a lot of headaches to show for it. And Joseph Ackermann deutchebanks CEO at the time was kept apprised of the situation and was asked on at least one occasion, whether the Bank should keep lending to Trump. He reportedly gave us thumbs up. He says now he doesn't recall ever being involved in that decision. So why do they keep repeating this peculiar behavior? One Deutsche Bank was trying to break into the crowded world of investment, banking on Wall Street in the US. This was back in the late nineties. They felt the best way to do it or one of the best ways was too long to clients deemed risky by other banks. Deutsche bank. Remember is a German Bank based in Germany. Donald Trump was considered an untouchable by Wall Street in the late nineteen eighty s and early nineteen nineties all of this casinos just about in Atlantic City, New jersey went bankrupt banks that loan him the money to build and finance those casinos lost hundreds of millions of dollars. But every long he wanted from Deutsche Bank sailed through the Bank was desperate to win business from big name clients, and Donald Trump has many false notwithstanding is nothing if not a big name. But even banks who are desperate to muscle into crowded marketplaces? Don't make a habit out of losing money. So maybe they consider Trump a loss leader. Maybe they figured just about everything Trump does make splashy headlines and doing business with him. Even if it cost them some money every now and then may lead to other more profitable business from other individuals or other sources later on perhaps, but even that strategy doesn't explain looking the other way on Russian money laundering or some of the CEOs curious relationships with others and Trump circle or Vladimir Putin circles for that matter. Cyprus, for example, is a beautiful island nation in the eastern Mediterranean Sea. It's got lots of beautiful miles of shoreline loads of great beaches. It's very well known for its beaches. It's got tons of famous archaeological sites ruins of palaces and soums. There's actually quite a lot to like about the country. But there's one thing that Cyprus has known for that isn't quite so positive. It's known to be a hub for money laundering out of Russia. It's known to be the place. Where if you're a very wealthy Russian, and you've got all of this money and you have an exactly gotten all that money through the most legitimate of means Cyprus is known to be a place where you take that money and deposited in banks there and some banks, there will make it look like all that money you've gotten is actually quite legitimate. If you're a very wealthy Russian, who has a lot of money and you want to get it out of Russia. You take the Cyprus that's just what you do. And in Cyprus they make it look like. Well, you know there's totally nothing wrong with the hub. Hundreds of millions of dollars. You've just deposited. They're out of the clear. Blue sky, you'll also be able to do with it. Whatever you, please from that point on like ticket to wherever, it's alternate destination may be. Once Cipriani Bank, that's been at the center of several money laundering scandals in the past is the Bank of Cyprus, two of the three biggest investors in the Bank of Cyprus, our wealth of scratched that extremely wealthy Russians. And they're both close personal associates of Latimer Boone's, but one of them a fellow by the name of ladder, mirrow straw, kofsky, was not just a close associate of Putin's. He actually used to work with Putin in the Leningrad KGB now, that by itself is interesting enough where it gets super interesting, though. And I've mentioned this on shows past is who the third largest shareholder is. And that's Wilbur Ross Wilbur Ross is a billionaire American businessman. He's a close personal friend of Donald Trump. And, oh, by the way, he just so happens to be our current secretary of commerce. Ross was put in charge of a US Russia investment fund in the nineteen ninety s after these Soviet Union had. Collapsed at the time President Clinton appointed him to help push the newly formed Russian country toward a free market economy, when Europe's debt crisis spread in two thousand and twelve in two thousand and thirteen affected Cyprus significantly the nation's second, biggest Bank, a Bank by the name of, like Bank closed the government imposed losses on uninsured deposits. Many of those belonged to wealthy Russians. The Bank of Cyprus was hit by the crisis as well. The government in Cyprus wanted to find a solution to keep that institution solvent and open the Cypriot government in consultation with Russian President Vladimir Putin property institution, up. It consortium led by Wilbur Ross took a majority stake of eighteen percent in the Bank in September two thousand fourteen Ross was brought in as one of two vice chairman of that Bank. The other vice-chairman will straw. Husky the KGB guy when Wilbur Ross took over the Bank of Cyprus in two thousand fourteen he brought in to be chairman of the Bank, Josef Ackermann, the formerly of Deutsche Bank, which made to make your e choice to head a Bank that was on the verge of collapse. Or did it all of these dots just kind of they're all floating out there in space? They could be coincidences, but they certainly beg some questions. Don't they the thing is when you come to ask those additional questions, you get stonewalled, you get accused of conducting a witch hunt during Wilbur Ross's confirmation hearings in February two thousand sixteen to be commerce secretary. He was asked a series of rain questions by democratic senators about his time at the Bank of Cyprus and all of these connections between the Bank. It's officers Deutsche Bank and Donald Trump questions like, who asked you to take a leadership position with the Bank of Cyprus and did anyone from Russia or with ties to Russia. Ask you to take a leader. Position with the Bank, are you aware of any Russian investors in the Bank of Cyprus having contacts with the Trump presidential campaign, Trump organization or the Trump administration? When did you first learn of ladder, MIR straw, kofsky involvement with the KGB? For some reason, still unclear the White House told Ross not to submit answers to those questions. And he never did he was confirmed to be commerce secretary despite objections from democratic senators about those questions. Now present day house committees still smarting over the mullahs report. And the fact that it found. No, collusion are still investigating Trump and in an effort to get to the heart of some of these matters issued subpoenas to a number of financial firms in order to get some financial documents about Donald Trump. One of those institutions was Deutsche Bank, a federal judge ruled this week that both Deutsche Bank as well as Capital, One have to comply with congressional subpoenas and turn over years of financial records, relating to the president. President Trump as well as several members of his family had sued Deutsche and Capital, One to block those subpoenas. The only reason for the subpoenas. They argued was to harass the president. A federal judge in New York disagreed. He said, well, it's, it's congress and they have that subpoena power so they can pretty much do whatever they please. The Trump's have appealed that decision and that decis. Came just days after another federal judge this in Washington DC ruled that President Trump's accounting firm, a company called May's ours. Must also comply with congressional subpoenas, and hand over financial records of Donald Trump both personal and some related to various businesses dating back to two thousand eleven Trump world is also appealing that ruling. But don't you Bank has a long history of helping Russian money? Leave Russia and a lot of that money has found its way to Donald Trump's coffers. There's an unusual number of real estate transactions that involved on Trump properties homes apartments in his buildings at cetera and money coming from Russia, but Trump properties are not the only destinations Russian money, also has a way of finding its way to the coffers of Europe. And another very interesting development is that it's found its way to European political parties. We've seen a rise in the last several years of far right populist political parties in Europe. They started out as fringe movements, but they got organized. They got political and are now vying for control of seats in the parliaments of many European nations Europe, just actually had several days of huge elections. Some four hundred million people across twenty eight nations. In Europe, voted they were voting for representatives in the euro. Qian parliament, which is the lawmaking arm of the European Union. It's got seven hundred fifty one members and voters vote on them every five years. The last set of elections were in two thousand fourteen. This year's elections were of keen interest because of the recent rise in Europe's far, right? Parties, and these parties are run on platforms of strong, nationalism, anti immigration anti-globalism. They promote things like populism some of that sentiment even is on and indeed. Some of it has even crossed the border into outright, neo-nazism. But the broader sentiment is largely seen as what has fueled the vote by England. For example, to leave the European Union in two thousand sixteen known as Brexit, the vote that just place over this past weekend was spread out over four days. And as I say, people in twenty eight different countries voted the far-right parties performance wasn't as strong as was predicted it was basically more or less, where it was in two thousand fourteen but even that level is pretty high. What is rather? Worrisome, though is the fact that centrist parties didn't fare, very well at all the far right? Didn't do as well as hoped. But that's not because moderates one. Rather, it's because extreme or shall we say partisan parties on the other end of the spectrum one heavily liberal parties like the green party. They run on platforms that include environmental responsibility, diversity inclusion quality non-violence that kind of thing they also saw a surge in seats in the parliament. But what's even more interesting is the increase, you see and partnerships between far-right European parties and bladder. Putin's political party in Russia, many of Europe's far right parties have signed cooperation deals with Putin's political party in recent years, the league in Italy, which actually did quite well in this week's elections, the F B O and Austria, marine Le Pen, the famous French populace took a nine million-euro loan from a Russian Bank in two thousand fourteen as about twelve million dollars at least was at the time. On paper, what these parties say they do in these cooperation agreements is promote peace between their nations and Europe. More broadly and Russia. For example, the agreement signed with the Austrian F, B O party includes agreements to hold joint policy. Consultations exchange of experience of legislative work work towards development of economic ties and party building. They agreed to hold joint conferences seminars roundtables that kind of thing, what many believe they're really getting out of the agreements, though is cooperation and information sharing political cover some in the form of propaganda. And of course, money loans. A lot of people forget this. But remember, the, the access Hollywood tape, that was released in October two thousand and sixteen in which Donald Trump could be heard making those comments on what say describing criminal acts against women that was released on a Friday in October twenty sixteen less than an hour later, WikiLeaks began publishing the first bunch of John Podesta's emails, that's the kind of political cover that could be extended by Russian active measures with some of these far. Right. Groups are looking to strengthen the national identities of their countries. Do they really think Russia and Putin are looking for the scene? And by the way, it's it's happened here with with help and also with contributions. I mean you see it with Russian activity with the NRA. I mean, does anyone really believe that Russia has some deep philosophical connection with the notion of giving the citizenry in the world, the right to bear arms, and be independent against their governments? It's not philisophical. It's political. They use right wing. Right of center organizations to infiltrate political parties, and hopefully, compromise the people within them. Phoolan looks to weaken by strengthening his endgame is not the same as ours and people in these parties. And in these movements better, make sure that when Russia's interests eventually come into conflict with theirs, and ours, because they eventually will that will be able to handle it because by then Putin's long arm may have stretched far enough into our political process through influence infiltration and funding that they may have a harder time dealing with him than they originally believed. Well, that's chauffeur today hope you enjoyed Gavin comments on any of the issues we touched on today. Drop me a line, you can reach me comments at ITN show dot com. That's comments at ITN show dot com and remember to keep up with in the news on Twitter, and on Facebook at IT ancho, that's show. One word, thanks for listening, everyone until next time take care. If it's on your mind, it's in the news, subscribe to end the news on both. I tunes and on Stitcher radio. This has been in the news.

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