Mueller Failed to Follow Trump’s Money Trail

(Bloomberg Opinion) -- Three years ago, as Special Counsel Robert Mueller pushed ahead with his probe of Team Trump’s intersection with Russia, he issued subpoenas to the German financial giant Deutsche Bank AG. Mueller was seeking information about Paul Manafort’s dealings with the bank, and his request for records about Donald Trump’s former campaign manager apparently set off alarms in the White House.

Trump had also done lots of business with Deutsche Bank, and although Mueller issued his subpoenas secretly, word somehow leaked to 1600 Pennsylvania Avenue. When the White House asked Mueller’s team what they were examining, Mueller responded that Manafort, not Trump, was the target.

“At that point, any financial investigation of Trump was put on hold,” writes Andrew Weissmann, a veteran federal prosecutor who played a senior role in Mueller’s investigation, in a new book. “That is, we backed down — the issue was simply too incendiary; the risk, too severe.”

Weissmann’s book, “Where Law Ends,” is the first insider’s narrative of the Mueller investigation. The book portrays Mueller as an admirable and purposeful prosecutor who was overly deferential to the White House on a number of pivotal matters and was ultimately outmaneuvered by Attorney General William Barr, who was nakedly deceitful. Mueller’s fumbles have been amply documented elsewhere, including his decisions not to depose Trump and not to explicitly recommend obstruction of justice charges against him (even though Mueller’s own public summary of his investigation made it clear obstruction had occurred).

By my lights, however, the most unfortunate lapse — one that Weissmann substantiates — is Mueller’s inexplicable failure to follow the money trail. There is abundant and damning evidence of the Trump camp’s coziness with Russia before, during and after the 2016 campaign. That coziness continues to this day. But we still lack a complete understanding of what incentives Trump has had for persistently kowtowing to Russian President Vladimir Putin.

Following the money, and determining the extent to which Trump is financially beholden to Russia, would have answered one of the lingering mysteries of Trump’s tenure and clarified why the president has been so cavalier about compromising national security and allowing elections to be corrupted.

Trump actively pursued a major real estate deal in Moscow while he was campaigning for president. He worked closely with a career criminal on the Trump SoHo Hotel project before he even ran for president, a development funded in part with lots of murky money from eastern Europe. Didn’t Mueller find all of that a wee bit curious?

“We still do not know if there are other financial ties between the president and either the Russian government or Russian oligarchs,” Weissmann writes in his book. “We do not know whether he paid bribes to foreign officials to secure favorable treatment for his business interests, a potential violation of the Foreign Corrupt Practices Act that would provide leverage against the president. We do not know if he had other Russian business deals in the works at the time he was running for president, how they might have aided or constrained his campaign, or even if they are continuing to influence his presidency.”

The place to start looking for possible skeletons in Trump’s financial closet is easy to identify: Deutsche Bank. After all, Trump has a long and troubled track record with the bank. After Trump engineered a series of bankruptcies in the early 1990s, most major banks shunned him. But Deutsche took his business, beginning in 1998 with a modest renovation loan for 40 Wall Street, a Manhattan skyscraper Trump controls. In the early 2000s, Deutsche loaned Trump as much as $640 million for a Chicago project — the Trump International Hotel and Tower.

More recently, Deutsche’s private banking arm has helped Jared Kushner, Trump’s son-in-law and a White House adviser, as well as Kushner’s mother, arrange multimillion-dollar loans and lines of credit. The private bank also has loaned Trump about $300 million, according to Bloomberg News and Trump’s government financial disclosure forms, for such projects as his Washington hotel and the Trump National Doral golf course.

And Deutsche hasn’t been a vigilant financial steward. Apart from its dealings with Trump, it’s been mired for the past several years in investigations involving money laundering, market manipulation, bid-rigging and compliance problems that have forced it to cough up billions of dollars in fines and see its reputation tarnished.

Steve Bannon, another disgraced former Trump campaign manager, told the author Michael Wolff that the most perilous aspect of Mueller’s probe was the money trail. “This is all about money laundering,” he told Wolff. “Their path to [expletive] Trump goes right through Paul Manafort, Don Jr. and Jared Kushner. … It goes through Deutsche Bank and all the Kushner stuff.”

The New York Times reported last year that anti-money-laundering specialists at Deutsche Bank recommended alerting officials at the Treasury Department about multiple transactions involving entities tied to Trump and Kushner in 2016 and 2017, but senior executives blocked them. “Deutsche Bank employees said the decision not to report the Trump and Kushner transactions reflected the bank’s generally lax approach to money-laundering laws,” the Times noted. Bank employees “said it was part of a pattern of the bank’s executives rejecting valid reports to protect relationships with lucrative clients.”

The Manhattan District Attorney’s Office appears to have picked up the ball that Mueller dropped and is currently investigating Trump for possible tax fraud and falsification of business records — according to a new filing it submitted to an appeals court on Monday. The DA’s office is seeking eight years of Trump’s tax returns as part of its investigation, which is also examining the president’s payment of hush money to two women who allegedly had sexual encounters with him. And the DA’s office is examining whether Trump inflated the value of his properties and other assets in order to secure funds from lenders and investors. Deutsche would have knowledge of that, as well.

In 2006, Trump sued me for libel, claiming that a biography I wrote, “TrumpNation,” lowballed his wealth and misrepresented his track record as a businessman. Trump lost the suit in 2011. He had sought $5 billion in damages, which was, more or less, the difference between what he claimed he was worth at the time — about $6 billion — and what my sources believed him to be worth — $150 million to $250 million.

During the litigation, my lawyers got their hands on an assessment of Trump’s wealth that Deutsche Bank had pulled together in 2004. The bank estimated that Trump had a net worth of about $788 million, even though he told them he was worth $3 billion — so Deutsche Bank had firsthand experience with Trump’s efforts to juice the value of his assets.

If Trump doesn’t get re-elected, he’ll lose some of the legal insulation the White House provides him and be more vulnerable to the DA’s investigation than he already is. That may not make up for lost time or undo the damage from Mueller’s soft-pedaling, but it is at least a reminder of how important it is to follow the money if the public is going to fully understand who Trump is and what he’s done.

This column does not necessarily reflect the opinion of the editorial board or Bloomberg LP and its owners.

Timothy L. O'Brien is a senior columnist for Bloomberg Opinion.

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