Looking up at Deutsche Bank’s headquarters in Frankfurt, the parallel buildings seemed to bend toward each other as they soared skyward—an illusion that created the impression of two towers that nearly fused into one at the top. Val Broeksmit stood on the sidewalk, scowling at the hulking high-rises. From the ground, the structures—Credit and Debit—appeared ominous and almost black, their angled glass panels reflecting the night sky.
It was August 2016, and the bank was once again engulfed in a dangerous crisis. Investors had lost confidence in the assurances offered by its parade of chief executives, most recently John Cryan, that it had enough capital. They were sick of Deutsche’s making less money than its rivals, partly due to billions of dollars in recent losses. The bank had become a giant casino for derivatives traders, and nobody trusted that its executives had come clean about the extent of losses lurking among the trillions of dollars of the instruments that remained parked on its balance sheet. Regulators had already faulted Deutsche for hiding more than $3 billion in such losses during the crisis. How many billions more were yet to be acknowledged? Equally frightening, there appeared to be no end in sight to the government investigations into Deutsche’s years of misconduct. Even after dishing out billions of dollars to defuse a multitude of government probes, the bank remained under suspicion for manipulating currencies markets and violating sanctions and laundering money and deceiving customers and improperly peddling mortgage bonds—and that was just in the United States. The penalties for all this misconduct were certain to exceed $10 billion. Deutsche’s market value at the time was less than $20 billion.
Indeed, to an increasing number of investors and regulators, the bank appeared not only short on capital but on the fast track to insolvency. Its stock price was circling the drain, reflecting, as CNBC put it, “mounting concerns about [Deutsche’s] survival.” Deutsche was so big, and its holdings of derivatives were so vast, that if the bank buckled, the collateral damage was guaranteed to spread, viruslike, to hundreds of other institutions all over the world: Deutsche’s customers, trading partners, and other banks. Two months earlier, the International Monetary Fund had given voice to such fears in a report that warned that Deutsche was “the most important net contributor to systemic risks in the global banking system.” Things were so bad that Cryan, the German government, and Christine Lagarde, the head of the IMF, all had to publicly deny rumors that the bank was in secret negotiations for a taxpayer bailout. (As a general rule, when a bank feels compelled to deny that it needs a bailout, it almost certainly needs a bailout.)
Val was vaguely aware of the existential dangers confronting his father’s former employer. By his side was a pretty German art student named Julie, who had become Val’s girlfriend and European traveling companion. She was fifteen years younger than Val and enamored of his seeming worldliness (and forgiving of his persistent drug use). Up in those dark towers, he told Julie, sat the guys who were responsible for his father’s death—and for Deutsche’s downward spiral. Craning her neck, feeling her boyfriend’s hatred, Julie was filled with a sense of dread.
Val had flown to Paris in March 2016. He wanted answers, and he wanted an adventure, and he had the details of his mother’s American Express card, which he’d fished out of her email, and he fantasized about the notoriety he would achieve if he managed to take down Deutsche Bank.
Before he’d even left Charles de Gaulle Airport, things had veered off course. He’d used Alla’s Amex to buy a bunch of new Apple equipment and downloaded his father’s files onto a laptop. After snorting a few lines of heroin in an airport bathroom, he briefly left his bags unattended, and much of his new computer equipment vanished. He called Larry Meltzer, and the therapist didn’t do anything to calm his jittery client. It was possible, he cautioned, that Val was being followed, perhaps by someone from Deutsche who wanted to stop him from disseminating any more damaging information and had swiped his computer gear. Meltzer urged Val to be vigilant.
He rented a Nissan and drove to Amsterdam. One evening, someone smashed the car’s window and stole his last laptop—the one with everything from his father’s email accounts. That sealed it for Val: Deutsche had caught on to his plan and was determined to thwart him. Meltzer, too, thought a conspiracy might be afoot.
Val began running up enormous hotel bills on his mother’s credit card. He didn’t feel guilty. “This is the only way I can get at her,” he told me. “This is the only jab I can take at her, the credit card.” Alla’s money manager eventually figured out what was happening and canceled the card. Cut off from his illicit subsidy, Val set up shop in a campground north of Amsterdam. He played occasional gigs there to earn his keep. That is where he met Julie, a twenty-four-year-old art student whose father had died in 2015 from a heart attack. “We shared the madness of death,” she would say. They also shared lots of mushrooms.
When Val discovered another credit card in his mother’s email, they escaped the campground and toured Europe, making a pit stop in Frankfurt on their way to Julie’s hometown of Nuremberg. She was awed by Val’s seemingly magical ability to charm strangers into handing over cash and guitars and hotel rooms in exchange for the credit-card digits he had committed to memory. (In another life, Val might have made a good derivatives salesman.)
That summer, Val contacted the lawyer for the widow of David Rossi, the Monte dei Paschi executive who had fallen out his office window in what had been ruled a suicide. Having discovered Bill’s prophetic warnings about the Paschi transactions, Val now wondered if there were more clues in Italy about his mindset when he decided to die. (A New York Post editor, Michael Gray, had told Val that the Rossi family had surveillance footage showing him falling out of his window backwards—not a normal way to commit suicide—which triggered in Val a frenzy of conspiracy-theorizing about the circumstances of his father’s death.*) Val explained to the widow’s lawyer that his father was a dead banker, too, and that he would very much like to compare notes. “Maybe I can help, maybe we can help each other and perhaps also help other families of those who have suffered through all this misery,” Val wrote.
The lawyer, Luca Goracci, said Val was welcome to come to Siena to talk. Val, his smashed Avis rental car replaced with a convertible, set out for the Tuscan hill town in August. He checked into a hotel with a view out his window into the palace headquarters of the 544-year-old Paschi. That evening, he walked to Goracci’s small home office. An exposed lightbulb dangled from the ceiling, making Goracci reminiscent of a figure in a Caravaggio painting. Rossi’s still-grieving widow, Antonella Tognazzi, was in the corner, clad all in black, and when she emerged from the shadows Val was so surprised that he let out a small yelp.
“What is it you want?” Tognazzi asked.
“I’m looking for connections,” Val answered. He wanted to understand how Deutsche, his father, and people in his orbit like Michele Faissola were tangled up in the Monte dei Paschi mess. Was there something that linked the deaths of Broeksmit and Rossi?
By now, after two government bailouts, the Italian bank was a ward of the state. A number of Paschi executives had been convicted of fraud and sentenced to jail, and Deutsche and some employees—including Faissola—faced criminal charges for allegedly helping the Italian bank obstruct justice and falsify its accounts. (Faissola denied wrongdoing.)* Val, Tognazzi, and Goracci talked for an hour or so. Tognazzi was certain that her husband had been murdered, and she had some evidence to support her claim. One piece was the footage of Rossi falling backward out of the palace window. As he lay twitching on the ground, two shadowy men had walked up to him in the courtyard, observed his body, and returned to their car. Tognazzi suspected that her husband’s killing was related to Paschi’s deep financial problems—the aftermath, in part, of its derivatives deals with Deutsche.
Val returned to the townhouse the next day. This time he was ushered into the family’s living quarters, arranged around a small courtyard. An elaborate spread of meats and cheeses was laid out on the table. As they ate, Goracci painted a sordid picture of the corrupt relationship between Deutsche and Paschi. Paschi’s connections to the local mob and corrupt politicians ran so deep and were such an open secret that anyone who had done minimal due diligence would have had trouble missing all the danger signs. Goracci reported that Rossi had been mixed up in some sinister-sounding stuff: Not least, he had been renting a car once a month and driving to Switzerland to deposit cash into secret bank accounts for clients who Goracci believed were connected to the local mafia. That, the lawyer concluded cryptically, probably had something to do with why Rossi had been murdered.
As Goracci dropped these bombshells, Val scribbled notes. He was intrigued by the unsolved mystery, which once again showed his father’s former employer to be so obsessed with profits, so apathetic about its clients’ reputations, that it had gotten mixed up in some deadly criminality. If Val was honest with himself, he also felt a pang of jealousy. Things would be easier to stomach if his father had been killed by someone other than himself.
On Val’s way out, Goracci gave him a folder of documents he had gathered during his investigation. Outside, the ancient city glowed in the late-afternoon sunlight. Colorful flags hung from lampposts and balconies, enlivening the streets’ faded hues. The decorations were on display for Siena’s famous Palio horse race, two days away. Hordes of tourists had descended on the town to witness the summer ritual, and Siena seemed to be thriving. Beneath the surface, though, Paschi’s demise had taken a big bite out of the region’s economy. For centuries, the bank had been not just the go-to lender for projects large and small; its foundation—endowed with a controlling interest in the bank’s shares—also had been a generous benefactor of many of Siena’s most important institutions. As the value of the bank’s shares rose, the foundation had flourished, doling out more than 200 million euros a year. But then the bank’s shares crumbled like the city’s ancient walls, and the foundation’s coffers were suddenly emptied. By the time of Val’s visit, its yearly distribution had shriveled to 3 million euros. Here was a vivid illustration of the real-world harm caused, at least in part, by Deutsche’s recklessness. The world’s oldest bank had been reduced to ruins, and Deutsche’s fingerprints were all over the wreckage.