Report says Trump received help from Deutsche Bank for hotel loan
Donald Trump received preferential treatment from Deutsche Bank to ease a loan for his Trump International Hotel during his tenure, and also failed to disclose the source of the $ 3.7 million property billing generated by foreign governments, according to a report released by a congressional committee on Friday.
In a letter to the administrator of the General Services Administration on Friday, two senior Democrats on the House Monitoring and Reform Committee, Carolyn Maloney and Gerald Connolly, accused the former president of providing “information deceptive “about the hotel losing money in Washington DC finances, while hiding hundreds of millions of dollars in its own debts.
The five-star hotel, which opened in September 2016 – weeks after Trump accepted the Republican nomination for president – has faced persistent accusations of conflict of interest during his tenure. Critics say the large-scale bookings on behalf of Saudi Arabia and other foreign governments were meant to curry favor with the president – which the Trumps have denied.
Maloney, chairman of the oversight committee, and Connolly, who heads the government operations subcommittee, said they had obtained documents that shed new light on the former chairman’s relationship with Deutsche Bank, which has become the one of its biggest lenders after other banks avoided it following a number of bankruptcies.
The Trump Organization called the report “intentionally misleading, irresponsible and unequivocally false.”
Regarding the Deutsche loan, in particular, he added: “At no time has the company received preferential treatment from a lender.”
The German lender also challenged the committee’s findings and said “the letter makes several inaccurate statements regarding Deutsche Bank and its loan agreement.”
According to the committee’s findings, in 2018 the bank allowed Trump to delay the principal payment of a $ 170 million loan for the property he personally guaranteed by six years. Deutsche appeared to allow those payments to be postponed until 2024, when the full loan was due to fall due, according to accounts filed by Trump and cited by the committee.
“Without this postponement, the hotel may have had to pay tens of millions of additional dollars to Deutsche Bank at a time when it was already facing heavy losses,” the report said, adding: “Mr. Trump did did not publicly disclose this important advantage of a foreign bank while he was president.
A person familiar with the loan, who objected to the committee’s description, said it was still an interest-only facility until maturity. Principal repayments were only required if the value of the building fell below a certain percentage of the debt, known as a “loan-to-value” clause, the person said.
Trump never violated that pact, the person added, accusing Trump Organization accountants of misrepresenting the terms of the deal.
A spokesperson for the House committee said its findings were drawn from audited financial statements of the Trump Organization and Allen Weisselberg, its chief financial officer, provided to the federal government and certified to be accurate.
The 2016 and 2017 statements described the loan in consistent language as not requiring principal repayment “until August 12, 2018”. The 2018 release goes on to note that principal payments were not due “until maturity”, or 2024, the spokesperson said.
“If former President Trump now believes these financial statements are inaccurate, the Trump Organization has a duty to correct the certified statements it previously submitted to the General Services Administration,” the spokesperson said.
The committee has been investigating the hotel for five years. His report was based on documents submitted by the GSA, which granted a 60-year lease to the Trump Organization to develop the historic Pennsylvania Avenue property in 2012.
While Trump touted the success of the 263-room hotel, the committee found that he suffered more than $ 70 million in losses during his tenure, forcing the Trump Organization to inject an additional $ 24 million into ownership to consolidate it.
The Trumps have tried to sell the hotel, although their high asking price and the Covid-19 pandemic appear to be hampering that effort.