Deutsche Bank Approved Property Sale to Russian Businessman Despite Internal Objections
October 31 2019 - 12:19PM
Dow Jones News
By Jenny Strasburg
Deutsche Bank AG officials approved the sale of a chunk of
Silicon Valley real estate to a Russian businessman despite
objections from its U.S. reputational risk committee, according to
documents and people familiar with the matter.
The lender's Germany-based global reputational risk committee
approved the $72 million deal in May 2018, overruling concerns
raised by executives including the one responsible for Deutsche
Bank's U.S. anti-money-laundering controls, the people said. He has
since left the bank.
The transaction, which was championed by its real-estate team,
occurred at a time when Deutsche was under scrutiny by members of
Congress over its Russian business relationships.
Deutsche Bank continues to hand over documents to Congress in a
probe of money-laundering controls and longtime links with Russian
companies and oligarchs. A U.S. Justice Department investigation
into aspects of those Russia relationships and the bank's handling
of internal red flags is ongoing, according to people close to the
bank and its interactions with investigators.
Spokesmen for Deutsche Bank and its asset-management arm, DWS,
said the business was acting as a fiduciary for fund investors.
They said the deal went through the bank's processes to prevent
money laundering and other financial crimes by clients. The deal
didn't involve financing from Deutsche Bank, they said.
"Consistent with our policies and procedures extensive due
diligence was conducted on this transaction and involved, among
others, the [anti-financial crime] unit of Deutsche Bank.
Additionally, the transaction was made subject to the reputational
risk assessment procedures in place at that time," a spokesman for
DWS said.
The bank identified no evidence the deal "would violate money
laundering or sanctions laws. As a result, the discussion of
whether to move forward with the transaction was focused on
reputational considerations, " a spokesman for Deutsche Bank
said.
"There are processes in place that govern reputational risk
considerations, and regional and global judgments about these
considerations can differ, as occurred in this instance," the
Deutsche Bank spokesman said.
Write to Jenny Strasburg at jenny.strasburg@wsj.com
(END) Dow Jones Newswires
October 31, 2019 12:04 ET (16:04 GMT)
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