Once upon a time in there was a Developer
Once upon a time there was a real estate developer. A real estate developer like his father before him. Somehow this real estate developer (we’ll just came him The Developer) grew up with no morals and lied frequently and reflexively. The Developer was also famous for suing people. In fact he would boast about how he would sue people who offended him.
Did The Developer’s moral deficits arise from his upbringing among immoral real estate developers? Or was it some deficit of the soul? Who can say?
The Developer built grandiose projects, with his name in huge letters on the buildings. Many of The Developer’s projects were badly structured. The corporations holding the projects went bankrupt and many of the contractors who worked on the projects were paid pennies on the dollar. The banks that loaned The Developer money were often forced to write down their loans at a loss.
Although those around The Developer lost money, the developer usually managed to walk away with a profit. The Developer loudly boasted about his wealth and claimed to be a multi-billionaire, despite the smoking ruins he left behind him.
Eventually this long history of business ruin caused banks to stop lending to The Developer. Banks sometimes do stupid things, but even for them it was obvious that The Developer was a Very Bad Risk.
Well, almost all banks… There was one bank that still lent to the Developer: Deutsche Bank.
If the major banks in the United States would not lend money to The Developer, why was Deutsche Bank willing to do so?
In some fables, characters sell their soul to Satan to obtain worldly wealth or power. The Developer’s soul was already so stained that Satan would not make an offer. Satan know better than to buy something He already owned. In this fable, The Developer turned to Russian money since Satan and most banks would not do business with him.
Fables are often rooted in reality. Although The Developer lies frequently and is secretive about his business dealings, we do know a few things about The Developer and Russia.
The Developer’s son mentioned in a press interview that The Developer’s real estate company does a “disproportionate amount of business with Russians”. We know that The Developer has talked about his ambition to build in Moscow. The Developer has said admiring things about Russian President Putin. With these facts in mind, we can imagine a fable that might explain Deutsche Bank’s willingness to lend money to The Developer.
This fable is motivated by an article that was published in the New Yorker Magazine. The article (DEUTSCHE BANK’S $10-BILLION SCANDAL: How a scheme to help Russians secretly funnel money offshore unravelled by Ed Caesar, August 29, 2016) describes how Russian money was laundered by Deutsche Bank. This article might explain why Deutsche Bank is willing to lend money to The Developer when other banks are not.
In this fable, Deutsche Bank is not actually lending their own money to The Developer. Instead they are lending other people’s money. Russian money.
Why would Russians lend money to The Developer who is a Very Bad Risk? The Russian Oligarchs have been moving billions of dollars out of Russia, in many cases breaking Russian and Western laws. The Developer may be a risky bet, but an Oligarch may see him as a better bet than leaving the money in Russia. Fortunes rise and fall, as does the favor of Russian President Putin. An Oligarch never knows when he will have to move abroad.
In our fable, one or more Russian Oligarchs who want to launder money through The Developer’s businesses move the money to Deutsche Bank. Deutsche Bank launders the money, perhaps using the mirror trades that are described in the New Yorker Magazine article. Once the money has been moved out of Russia it is used to fund an offshore company (incorporated in the Caymans, Panama or some other venue with financial secrecy). Money moved into this corporation is loaned to The Developer by Deutsche Bank for a hefty fee. Deutsche Bank has no loan risk, since the loan is secretly underwritten by the offshore corporation and Russian money.
We many never know if this fable is just fantasy, or has its roots in reality. Like Aesop’s Fables, this fable should make us think about the implications of the story.