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Speaker 1: Welcome to the Bloomberg Law Podcast. I'm June Grosso. Every

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Speaker 1: day we bring you insight and analysis into the most

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Speaker 1: important legal news of the day. You can find more

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Speaker 1: episodes of the Bloomberg Law Podcast on Apple Podcasts, SoundCloud

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Speaker 1: and on Bloomberg dot com slash podcasts. A Wall Street

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Speaker 1: nemesis is joining the House Financial Services Committees investigation of

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Speaker 1: Deutsche Bank. His name is Bob Broach and he spent

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Speaker 1: more than twenty years with the Senate's Permanent Subcommittee on Investigations.

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Speaker 1: Joining me is Greg Farrell, Bloomberg News legal reporter. Greg

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Speaker 1: tell us a little bit about his personality, obviously, his

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Speaker 1: prosecutor personality and his investigation style. Well, first of all,

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Speaker 1: he's not a prosecutor. He's an investigator. He's very deliberate.

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Speaker 1: He's actually um very much a plane. Uh, he doesn't

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Speaker 1: stick out. If he didn't, you know, if it didn't

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Speaker 1: have this type of job, I'm not sure you would

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Speaker 1: have heard of me. He's not a flamboyant guy. He

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Speaker 1: does not call attention to himself, but he's very deliberate.

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Speaker 1: He's almost a nerd when it comes to pouring over

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Speaker 1: documents and being very thorough about whatever the subject he's done,

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Speaker 1: and based on his track record, I think he's quite

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Speaker 1: skeptical of a lot of big banks, and you know

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Speaker 1: their ability to comply with the law. You need a

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Speaker 1: nerd for this kind of investigation. Tell us about some

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Speaker 1: of his past investigations for the Senate. Well, the first

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Speaker 1: time I came across him was on Planet Enron, which

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Speaker 1: I covered in a previous life many years ago, and

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Speaker 1: I went to hear the presentation that the Senate Permanent

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Speaker 1: p s I, the Permanent Subcommittee on Investigations, had done

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Speaker 1: on loans from JP Morgan Chase and City Group to Enron,

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Speaker 1: and I, if I recall correctly because it was many

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Speaker 1: years ago, the substance of that was that Enron borrowed

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Speaker 1: money but then claimed it put it on its income

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Speaker 1: statement as revenue as opposed to debt, or it's bound

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Speaker 1: and revenue as opposed to debt. A big no no.

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Speaker 1: And the bank's basically allowed this to happen or didn't,

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Speaker 1: even though it seemed that they should have known. And

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Speaker 1: it was quite a thorough impressive investigation. Other people, including

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Speaker 1: the Manhattan District Attorney, also glommed onto this um and

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Speaker 1: you could tell this guy was driven by trying to

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Speaker 1: find you know, what had actually happened, as opposed to

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Speaker 1: back then there was a lot of Uh, there was

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Speaker 1: a circus light atmosphere, particularly among Democrats in Washington, regarding

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Speaker 1: ken Lay and ken Lay's relationship with President George W.

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Speaker 1: Bush and his father. Roach did not play in that

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Speaker 1: game at all. He was just very specific about these loans. Uh.

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Speaker 1: The the bad guy, if you will, on those deals

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Speaker 1: were the big banks, and he was there to castigate

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Speaker 1: them for, you know, basically entering into these deals without

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Speaker 1: you know, doing their own due diligence. I covered the

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Speaker 1: trial and the circus like atmosphere continued throughout. Now he's

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Speaker 1: already investigate as you mentioned banks and Deutsche Bank. What

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Speaker 1: is the committee planning to investigate here? Do we know

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Speaker 1: what their investigation will be focusing on? Only what Adam

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Speaker 1: Schiff had said last week. It's one of the few

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Speaker 1: public statements he and Congresswoman Waters have made, is that

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Speaker 1: they will be looking into basically personal not personal business deals,

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Speaker 1: but business deals between the Trump organization and Russia and

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Speaker 1: looking for any threads from Russia that tie into Trump

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Speaker 1: as candidate, Trump as real estate developer. Uh. License or etcetera. Um,

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Speaker 1: that was Shift statement. I think, um, you know, Congressman

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Speaker 1: Waters is being careful. She sent out a series of

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Speaker 1: letters when she was in the minority two years ago

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Speaker 1: that went nowhere. She she asked Deutsche Bank for you know,

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Speaker 1: information about client, you know, Donald J. Trump, for a

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Speaker 1: couple of loans that the bank had extended in for

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Speaker 1: the Post Office hotel in Washington, UHD Rale golf course

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Speaker 1: in Florida, as well as the Chicago Tower, and because

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Speaker 1: she didn't have the power of subpoena, the bank did

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Speaker 1: not have to respond. Um. She then sent a few

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Speaker 1: subsequent letters basically trying to push the Republican chairman of

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Speaker 1: the committee to do something, and then push the House

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Speaker 1: to do something, and that didn't go anywhere. I think

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Speaker 1: she wants to be very careful here. I think she

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Speaker 1: and Adam Shift realized that, um, this can't be just

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Speaker 1: an open ended fishing trip. That will be a poor

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Speaker 1: use of time in the next six to nine months,

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Speaker 1: and then presidential election season is on next year. So

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Speaker 1: I think she wants to be strategic and bring roach

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Speaker 1: in will help with that effort. I think the question

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Speaker 1: is how much patient patients she and Schiff have. I

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Speaker 1: think they want to show some results during this calendar

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Speaker 1: year and not have something come out, you know, a

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Speaker 1: year from now. She was particularly criticized and picked on

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Speaker 1: by President Trump. Um. And so do you think that

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Speaker 1: partisanship will end to into this at some point? So

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Speaker 1: they say it won't. I think that's a balancing a

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Speaker 1: fine line and a balancing act for her because she

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Speaker 1: does not want it will not be in the interests

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Speaker 1: of the committee for her to appear to be partisan.

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Speaker 1: So um. And, like I say, I think so far

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Speaker 1: that's the you know, the the line she's taken. The

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Speaker 1: President has been very successful at baiting some of his

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Speaker 1: enemies into responses, bating some of his enemies into doing

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Speaker 1: things they wouldn't do, targeting people, and then provoking the

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Speaker 1: reaction that does not make them look better. And Congressman

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Speaker 1: Waters has so far stayed above the fray to her credit.

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Speaker 1: And Roach, how is he likely to handle this in

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Speaker 1: a nonpart bipartisan way, um, in a nonpartisan way? So um.

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Speaker 1: We had a good quote from a Republican named Gary

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Speaker 1: Brown who talked about Roach being very like nonpartisan. He

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Speaker 1: will go where the facts are and um, which is

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Speaker 1: the type of person. It basically adds to the credibility

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Speaker 1: of the investigation that they brought someone in who's well

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Speaker 1: known as a very thorough, fact based um investigator and

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Speaker 1: not someone who's there just to basically toss bombs, uh,

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Speaker 1: you know, into the news cycle every day. Now you

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Speaker 1: write that the committee is also looking for someone with

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Speaker 1: a background in investigative reporting, well that that brings up

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Speaker 1: a lot of ideas. It does, but I think you know,

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Speaker 1: the way this gets described to us, it doesn't necessarily

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Speaker 1: mean they're looking for an investigative reporter. I think, you know,

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Speaker 1: like any committee, they're going to be doing a report

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Speaker 1: that wants them help. What better way to look than

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Speaker 1: a young, aggressive reporter who can weave something together into

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Speaker 1: a bigger story whatever it is that they're going to write.

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Speaker 1: They wanted to be convincing and compelling and make people

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Speaker 1: read it, So I think I would look at it

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Speaker 1: that way, rather than an actual plan where they put

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Speaker 1: a help wanted sign out for an investigative reporter. They

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Speaker 1: just want someone who's good with words and can sort

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Speaker 1: of see the bigger picture to be able to describe

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Speaker 1: this in a good way. And maybe that person is

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Speaker 1: on staff already be great to have a report that

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Speaker 1: was written in that way. Right now, just tell us

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Speaker 1: a little bit Deutsche Bank. We have a been a

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Speaker 1: minute here. Deutsche Bank has been investigated and over and over.

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Speaker 1: It's hard to keep tracking them. Just tell us about

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Speaker 1: the biggest investigations in about a minute. Well, they've been investigated.

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Speaker 1: They have five counting five separate monitors for various issues.

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Speaker 1: But the most important thing I think we should keep

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Speaker 1: an eye on is an investigation into uh a scandal

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Speaker 1: known as the mirror trading scandal that took place in

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Speaker 1: Russia in Moscow in over a period of several years

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Speaker 1: around The bank allowed some very wealthy Russians to trade

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Speaker 1: basically approximately more than twelve billion dollars worth buying shares

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Speaker 1: in Moscow and then selling them simultaneously in London, irrespective

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Speaker 1: of whether or not their good investments, just to get

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Speaker 1: many out of the country. And the UK has settled

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Speaker 1: with the bank over this. The New York State Banking

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Speaker 1: Regulator has settled with Deutsche Bank, but not the Justice Department.

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Speaker 1: So it would be interesting to see what happens if

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Speaker 1: the DJ ever does lower the hammer on Deutsche Bank

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Speaker 1: for that fascinating article, and you know so much about

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Speaker 1: financial crime. Gregg Farrell, Bloomberg mus Legal reporter. Thanks for

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Speaker 1: listening to the Bloomberg Law Podcast. You can subscribe and

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Speaker 1: listen to the show on Apple Podcasts, SoundCloud, and on

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Speaker 1: bloomberg dot com slash podcast. I'm June Brosso. This is

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Speaker 1: Bloomberg