Donald Trump received preferential treatment from Deutsche Bank to ease a loan for his Trump International Hotel while in office, and also failed to disclose the source of $3.7m in billings the property generated from 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 top Democrats on the House committee on oversight and reform, Carolyn Maloney and Gerald Connolly, accused the former president of providing “misleading information” about the money-losing Washington DC hotel’s finances, as well as concealing hundreds of millions of dollars in his own debts.
The five-star hotel, which opened in September 2016 — weeks after Trump accepted the Republican nomination for the presidency — has been the subject of persistent accusations of conflicts of interest during his term in office. Critics claim that large-scale bookings on behalf of Saudi Arabia and other foreign governments were intended to curry favour with the president — something the Trumps have denied.
Maloney, the oversight committee’s chair, and Connolly, who leads the subcommittee on government operations, said they had obtained documents that shed new light on the former president’s dealings with Deutsche Bank, which became one of his largest lenders after other banks shunned him following a number of bankruptcies.
The Trump Organization blasted the report as “intentionally misleading, irresponsible and unequivocally false”.
With regards to the Deutsche loan, in particular, it added: “At no time did the company receive any preferential treatment from any lender.”
The German lender also disputed the committee’s conclusions 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 by six years principal payments on a $170m loan for the property that he had personally guaranteed. Deutsche appeared to allow those payments to be pushed back to 2024, when the full loan was scheduled to mature, according to accounts filed by Trump and cited by the committee.
“Without this deferral, the hotel may have needed to pay tens of millions of additional dollars to Deutsche Bank at a time when it was already facing steep losses,” the report stated, adding: “Mr Trump did not publicly disclose this significant benefit from a foreign bank while he was president.”
A person familiar with the loan, who objected to the committee’s description, said it was always an interest-only facility until maturity. Principal repayments were only required if the building’s value fell below a certain percentage of the debt, known as a “loan-to-value” covenant, the person said.
Trump never breached this covenant, this person added, blaming the Trump Organization’s accountants for inaccurately describing the terms of the agreement.
A spokesperson for the House committee said its findings were drawn from audited financial statements the Trump Organization and Allen Weisselberg, its chief financial officer, provided to the federal government and certified as accurate.
The 2016 and 2017 statements described the loan in consistent language as not requiring principal payments “until August 12, 2018”. The 2018 statement then notes that the principal payments were not due “until maturity”, or 2024, the spokesperson said.
“If former President Trump now believes that 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. Its report was based on documents handed over by the GSA, which granted a 60-year lease to the Trump Organization to develop the historic property on Pennsylvania Avenue in 2012.
While Trump has touted the 263-room hotel’s success, the committee found it had more than $70m in losses during his time in office, causing the Trump Organization to inject an additional $24m into the property to shore it up.
The Trumps have been trying to sell the hotel, although their high asking price and the Covid-19 pandemic appear to be hindering that effort.