STEVE INSKEEP, HOST:
How did Germany's most illustrious bank become so important to the business empire of Donald Trump? Deutsche Bank has given the president hundreds of millions of dollars in loans over the years, dating back far before he was president. Congressional investigators have asked Deutsche Bank to turn over the president's carefully guarded financial records, but his lawyers have filed suit to block the subpoenas. NPR's Lucian Kim has the backstory from Berlin.
LUCIAN KIM, BYLINE: President Trump doesn't like to reveal the details of how he does business. But when he was still on the campaign trail, he gave a little bit away.
(SOUNDBITE OF ARCHIVED RECORDING)
PRESIDENT DONALD TRUMP: It's called OPM. I do that all the time in business. It's called other people's money. There's nothing like doing things with other people's money because it takes the risk.
KIM: A lot of that OPM came from Deutsche Bank, which kept lending Trump money, even after he defaulted on a loan, even after he sued the bank, claiming it was responsible for his failure to pay his debts. It might seem like baffling behavior for such a venerable institution.
Deutsche Bank was founded in Berlin in 1870. I've come to its former headquarters, which were housed here in a complex of massive, stone buildings that symbolized solidity and the proximity to power. After World War II, the bank relocated to Frankfurt in West Germany.
In the 1990s, the bank started taking on ever more risk as it went global.
DIRK LAABS: There was nothing solid and nothing professional about that bank.
KIM: That's Dirk Laabs, author of "Bad Bank: The Rise And Fall Of Deutsche Bank." Lending to Donald Trump was only one of many questionable moves. Deutsche Bank bought up mortgage-backed securities and was dangerously exposed when the global financial crisis hit in 2008.
LAABS: This still comes as a shock for lots of - a lot of Germans. I think it's hard to understand for people abroad how big this bank was and how important it was for the mindset. It's like Mercedes-Benz for cars. That's what Deutsche Bank is for, you know, finance business in Germany.
KIM: But Dirk Laabs says this image of a bastion of financial prudence didn't reflect the changes that had taken place.
LAABS: On paper, the headquarter of Deutsche Bank is Frankfurt. But in the mid-90s, the power really shifted to London and to New York.
KIM: That's when Deutsche Bank started aggressively competing with Wall Street banks. That was also when American banks, which had been burned by Trump's defaults on casino loans, stopped lending to him. German journalist Ingo Nathusius says Deutsche Bank saw doing business with Trump as a price of getting into the game.
INGO NATHUSIUS: Deutsche Bank was an ambitious B bank that had to deal with B clients. And in that time, Donald Trump and Deutsche Bank needed one another, so it was kind of a symbiotic relationship.
KIM: This month, Trump tweeted it was fake news that banks wouldn't lend to him. He said he didn't need the money. But Deutsche Bank did take risks that more established Wall Street players wouldn't. Dirk Laabs says the bank's leadership in Frankfurt had lost control.
LAABS: The investment bankers in London and New York wouldn't really listen to their bosses in Frankfurt.
KIM: That's why it was British and American regulators who stepped in. Since 2003, they've ordered Deutsche Bank to pay penalties for selling toxic mortgages, manipulating interest rates and laundering $10 billion of Russian money. Deutsche has promised to clean up its act with better internal controls and reduced exposure to derivatives. In a statement to NPR, a Deutsche Bank spokeswoman said the bank has increased its anti-financial crime staff and enhanced controls. It takes compliance with anti-money-laundering laws very seriously. But Gerhard Schick, a former German lawmaker who now campaigns against financial crime, says Deutsche lacks a clear strategy.
GERHARD SCHICK: (Speaking German).
KIM: He says its business model for the future is still open and that, perhaps, it should set a more modest goal of just being a big European bank. But author Dirk Laabs says it's too late for reform.
LAABS: The reputation of Deutsche Bank is damaged for good in Germany.
KIM: In November, dozens of German law enforcement officers raided the bank's Frankfurt headquarters in a money-laundering probe. Last week, as the bank held its annual shareholders meeting, Deutsche's stock price hit an all-time low. If Deutsche Bank turns over records of its dealings with Donald Trump, there may be more bad news to come.
Lucian Kim, NPR News, Berlin.
(SOUNDBITE OF NICOLA CRUZ'S "SIKU") Transcript provided by NPR, Copyright NPR.