A New York Times report speculating about the timing of Justice Anthony Kennedy's retirement from the Supreme Court has spawned theories that it could have something to do with his son's financial ties to President Trump.
While Justin Kennedy was a top official at Deutsche Bank, the institution gave Trump more than a billion dollars in loans. The New York Times reported that as the president walked out of the House chamber following his first speech to Congress in February 2017, he told Justice Kennedy: “Say hello to your boy. Special guy.”
As is often the case with controversies involving Trump, there is a Russian connection. Last year, Deutsche Bank was forced to pay a $425 million fine for having helped Russian investors launder more than $10 billion.
Justin Kennedy's next job after resigning from Deutsche Bank was CEO of LNR Property, which led to a business relationship with Jared Kushner. LNR assisted the Trump son-in-law in avoiding foreclosure on a $1.8 billion deal involving a building at 666 Fifth Avenue in New York City.
By retiring this summer, the story goes, Justice Kennedy is doing the president a favor. Trump will have time to get a conservative successor appointed to the court before the November elections. With Republicans in control of the Senate, confirmation of the nominee is likely.
If Democrats seize the majority in the mid-terms, they will almost certainly reject any proposed justice who opposes abortion rights, supports the administration's immigration policies and holds other views in line with the court's right wing.
The newly constituted court might have to rule on whether a president can pardon himself. The urgency of that possibility may have helped prompt what the Times called a “White House campaign to create a Supreme Court opening” this year.
Justin Kennedy “worked closely with Mr. Trump when he was a real-estate developer,” the newspaper's Adam Liptak and Maggie Haberman wrote. “During Mr. Kennedy's tenure, Deutsche Bank became Mr. Trump's most important lender, dispensing well over $1 billion in loans to him for the renovation and construction of skyscrapers in New York and Chicago at a time other mainstream banks were wary of doing business with him because of his troubled business history.”
Last year, the Financial Times described Justin Kennedy as “a trader who arrived from Goldman to become one of Mr. Trump's most trusted associates over a 12-year spell at Deutsche.”
However, the degree to which the younger Kennedy was involved in the loans to Trump is in question. Stephanie Ruhle, an MSNBC commentator and former employee of the bank, told her viewers: “While I know and it has been well-reported, Deutsche was a massive lender to Mr. Trump, I want to put a new context. A lot of this comes from multiple sides of the bank, specifically the private bank, and that was not where Mr. Kennedy worked.”
Ruhle noted that “a lot of the recent lending comes from the private bank … most of which was done after Justin left the bank.” She added: “To say that he was the point guy that lent all of this money to Trump, I think, is short-sided. It's a lot more complicated.”
During the 2016 election campaign, Trump released financial documents indicating that he owed about $360 million to Deutsch Bank. The Washington Times reported that the total included about $125 million in mortgages on the Trump National Doral golf resort.
Trump is still indebted to the bank for about $175 million. Mueller, as part of his probe into whether the president's campaign colluded with Russia to interfere in the election, has obtained bank records concerning Trump and his family.
The real-estate mogul has been involved with the German lender for about two decades. The partnership began during the financial crisis of the late 1990s, when U.S. banks turned their backs on Trump due to failed projects like his casinos in Atlantic City.
Deutsche Bank's Mike Offit, working with other real-estate bankers, arranged a $125 million loan for improvements at Trump's 40 Wall Street building. “I had one way to succeed — that was to make this thing big and profitable,” Offit told Bloomberg. “If I was super conservative and wasn't willing to do some unusual stuff, how was I going to compete?”
Offit was also responsible for financing the Trump World Tower in New York City and other Trump ventures before leaving Deutsch Bank in 1999.
Six years later, the bank advanced the future president $640 million to build the Trump International Hotel and Tower in Chicago. Trump eventually refused to make payments on the loan, instead suing the bank and other investors for $3 billion. The bank responded with a lawsuit against Trump, and the two parties reached a settlement.
The conflict did not end the relationship between Trump and the lender. Deutsche Bank also gave loans to Kushner and other Trump family members.
All of that information aside, much remains unclear about what, if anything, would be in this arrangement for the outgoing Anthony Kennedy. Despite the unsurprising level of suspicion about the links between the Kennedys and the Trumps, attempts to link this to the broader narrative of alleged Trump-Russia collusion remain mostly unconvincing. For one, there is the fact that Justin Kennedy had no direct control over the loans given to Trump. There is also the fact that the subsequent money laundering scandal Deutsche Bank became in embroiled in was after Justin Kennedy's time there. Finally, there is the fact that the Russian money laundering scandal itself happened before Trump had a serious political career, as Slate's Mark Joseph Stern pointed out.
In fact, there have been a number of pieces in the last day or so cautioning against delving into the territory of conspiracy theory, in outlets ranging from the Washington Post to Slate to the New York Post.
Perhaps, as Stern put it, Kennedy is simply happy to leave his legacy in Trump's hands.