Mueller Subpoenas Deutsche Bank Records Related to Trump -- 2nd Update

By Jenny Strasburg Features Dow Jones Newswires

Deutsche Bank AG received a subpoena earlier in the fall from U.S. special counsel Robert Mueller's office concerning people or entities affiliated with President Donald Trump, according to a person briefed on the matter.

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The subpoena requested documents and data about accounts and other dealings tied to relationships with Mr. Trump and people close to him, the person said. The bank has lent more than $300 million to entities affiliated with Mr. Trump, according to public disclosures.

Ty Cobb, the White House's chief lawyer handling the Russia investigation, said bank records of Mr. Trump and his family weren't subpoenaed. "Previous reports today about subpoenas for financial records relating to the president and his family are false," Mr. Cobb said.

Mr. Mueller is investigating Russian meddling in the 2016 election, including flows of cash tied to Russia and people in Mr. Trump's orbit, in a deepening probe that has led to charges against former advisers to Mr. Trump.

A Deutsche Bank spokesman said Tuesday that the bank "takes its legal obligations seriously and remains committed to cooperating with authorized investigations into this matter." The subpoena was earlier reported by German newspaper Handelsblatt.

Deutsche Bank's relationship with Mr. Trump goes back decades. Since 1998, the lender has led or participated in loans of at least $2.5 billion to companies affiliated with Mr. Trump, The Wall Street Journal has reported. The financing helped Mr. Trump build or purchase some of his highest-profile projects, including in Washington, New York, Chicago and Florida.

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Deutsche Bank kept doing business with Mr. Trump after other banks pulled away, and even after Deutsche Bank itself became embroiled in a nasty legal battle over 2005 loans worth more than $600 million to build the Trump International Hotel and Tower in Chicago. After Mr. Trump missed loan payments in 2008, he and Deutsche Bank sued each other. They settled out of court in 2009.

About that time, Deutsche Bank's investment bank soured on the relationship, people close to the matter say. But the lender's private-banking unit stepped in and extended more than $300 million in loans to Trump entities over several years, according to public disclosures and people close to the bank.

Mr. Trump offered personal guarantees for large portions of the Deutsche Bank loans. Those personal guarantees have factored into months of internal discussions among bank lawyers and executives about the implications of a default, were one to happen, according to people familiar with the discussions. One issue is the thorny prospect of pursuing a high-profile elected official for payment, and one with potential sway over ongoing investigations or other decisions that could affect Deutsche Bank, the people say.

Dan Stein, former chief of the criminal division at the Manhattan U.S. attorney's office, said the special counsel's subpoena of Deutsche Bank signals one of two possible directions for the broader investigation.

"Either it means they're going beyond the narrow question of election interference," Mr. Stein said of Mr. Mueller's team. Or it means the question of election interference may now somehow involve the transfer of funds to the president or his family or inner circle, he said.

Mr. Trump has called the special counsel's investigation a "witch hunt," and Moscow has denied meddling in the election.

Michael Caputo, a former Trump campaign adviser, said in an interview that the Deutsche Bank subpoena suggests the special counsel investigation is now veering into a probe of Mr. Trump's private business dealings. Referring to Mr. Mueller, he said, "If he goes into the Trump Organization financial records, that's a clear indication that it (the investigation) has gone amok."

The Justice Department order authorizing the special counsel gives Mr. Mueller a wide remit to investigate "any matters that arose or may arise directly from the investigation."

Deutsche Bank executives and lawyers had been expecting a demand for information from Mr. Mueller's team as the special counsel investigation progressed, according to people close to the bank. As Mr. Trump's primary lender in recent years, Deutsche Bank this year faced repeated document requests from Democratic lawmakers scrutinizing the administration's ties to Russia.

The Democrats lacked Republican support to compel Deutsche Bank to provide the information. Deutsche Bank lawyers have said U.S. bank-secrecy rules prohibited the lender from revealing details about its clients or their business with the bank without a subpoena or other formal request from Congress.

Deutsche Bank faces ongoing questions about a series of Russian trades that have been scrutinized in multiple investigations in the U.S. and Europe, including in a still-pending U.S. Justice Department probe. The Democratic U.S. lawmakers wanted the bank to detail any ties between those trades or other Russian financing and anyone connected to Mr. Trump, his family or advisers.

--Erica Orden, Rebecca Ballhaus and Peter Nicholas in Washington contributed to this article.

Write to Jenny Strasburg at jenny.strasburg@wsj.com

(END) Dow Jones Newswires

December 05, 2017 17:32 ET (22:32 GMT)