President Trump owes a lot of money: hundreds of millions of dollars of it.
Whom he owes it to has been the subject of countless conspiracy theories. Lately, liberals and other social media accounts have been spreading rumors, presented as fact, that he owes it to the Kremlin or Russian oligarchs.
After The New York Times reported that Mr. Trump’s federal tax returns showed that he had personally guaranteed $421 million of debt, questions about who lent him all this money have reached the upper echelons of the Democratic Party. “It’d be really good to know who the president of the United States, the commander-in-chief, owes money to, because the American people have a right to know what is influencing the president’s decisions,” Senator Kamala Harris said at last week’s vice-presidential debate.
The answers are not hard to come by.
According to Mr. Trump’s latest financial disclosure report, filed with the U.S. Office of Government Ethics, he owes at least $135 million to a smattering of small financial institutions such as Ladder Capital. His biggest creditor — to whom Mr. Trump owes well over $300 million — is Deutsche Bank. From 2012 through 2015, the scandal-plagued German bank lent Mr. Trump money for his Doral golf resort in Florida ($125 million), his hotel in Washington ($170 million) and his skyscraper in Chicago (at least $45 million).
Why on earth would Deutsche Bank have lent hundreds of millions to Mr. Trump given his track record of stiffing his lenders, including Deutsche Bank itself?
One conspiracy theory is that Deutsche Bank agreed to make the loans because they were backstopped by Russians — the Kremlin or a state-owned bank or an oligarch. If Mr. Trump were to default, it would be the Russians, not Deutsche Bank, on the hook for the losses.
Another, related claim is that after Deutsche Bank made the loans, it sold chunks of them to Russians. It is common for large loans to be syndicated or securitized — in other words, chopped up and sold to investors. In the late 1990s through the mid-2000s, Deutsche Bank did this with some of its large loans to Mr. Trump.
Under this theory, the president would owe the money to Russians, not the German bank.
There is a certain logic to this. Russians interfered on Mr. Trump’s behalf in the 2016 election. Deutsche Bank is the only mainstream financial institution that’s been consistently willing to do business with Mr. Trump. And Deutsche Bank for decades has had close ties to Russia and has facilitated money laundering for wealthy Russians.
But the theories don’t hold up.
Deutsche Bank didn’t chop up and sell the latest batch of debt — the only portion that is still outstanding, according to bank officials with direct knowledge of the transactions. The loans remain on Deutsche Bank’s books.
It is true that Deutsche Bank was willing to lend to Mr. Trump when few others would. But there is an explanation. To overcome the bank’s wariness, Mr. Trump agreed to personally guarantee most of the debt on all of the loans. That meant that if he defaulted, Deutsche Bank could seize his personal assets, as The Times has previously reported.
The result was that the loans would generate fees and interest payments for Deutsche Bank but would entail little financial risk.
Deutsche Bank remains a vast repository for Mr. Trump’s financial secrets, and the president’s lawyers have spent more than a year fighting against congressional subpoenas for the bank’s records related to Mr. Trump. It is not impossible that evidence will emerge that muddies this picture.
For now, though, it isn’t very complicated.