Concern about conflict of interest given bank’s federal probes.

Deutsche Bank faces huge potential fines from federal government.

For years, Donald Trump has used a powerful tool when dealing with bankers: his personal guarantee. Now that guarantee - employed to extract better terms on hundreds of millions of dollars of loans to the Trump Organization - is at the center of a delicate loan-restructuring discussion at Deutsche Bank, which is under investigation on several fronts by the U.S. Department of Justice.

The bank is trying to restructure some of Trump’s roughly $300 million debt as part of an attempt to reduce any conflict of interest ('COI') between the loan and his presidency. Normally, the removal of a personal pledge might lead to more-stringent terms. But there is little normal about this interaction. Trump’s attorney general will inherit an investigation of Deutsche Bank related to stock trades for rich clients in Russia - where Trump says he plans to improve relations - and may have to deal with a possible multibillion-dollar penalty to the bank related to mortgage-bond investigations.

Whatever terms a restructured loan might include, they will reflect the complex new relationship spawned between Germany’s largest bank and its highest-profile client. Ethicists say this concerns them.

‘LOOKS TERRIBLE’.   "When you have political appointees making decisions about banks that the president owes a lot of money to, it looks terrible,” said U. of Minnesota law professor Richard Painter, who was the chief ethics lawyer for President George W. Bush.

Deutsche Bank declined to comment. Alan Garten, GC of the Trump Organization, said the loans are modest in the context of Trump’s multibillion-dollar empire, and the effort to shift away from a personal guarantee isn’t significant because the loans were structured to become standard debt eventually, following completion of the projects.

The scramble to restructure is the latest chapter in Trump’s fraught relationship with Deutsche Bank, one of the few financial institutions on Wall Street that still does deals with a man long known as a publicity-seeking and unconventional real-estate developer who didn’t hesitate to sue his lender eight years ago.

Deutsche Bank also lends to Trump’s extended family, including his son-in-law Jared Kushner. Weeks before the election, the bank refinanced most of the $370 million of debt against retail spaces Kushner’s company owns in midtown Manhattan.

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