For two decades, Glenn Simpson had been a reporter’s reporter, mostly at The Wall Street Journal, dredging up explosive stories about political corruption. He was so renowned in Washington journalism circles that a C-Span camera crew once trailed him as he sifted through documents in a federal public-records room. In addition to his reporting chops, Simpson was notorious in the Journal’s Washington bureau for belching, scratching his bare belly in view of colleagues, and leaving his desk strewn with half-eaten sandwiches. He was tall and dark-eyed and had a noticeable crick in his neck, a relic of a long-ago car accident. He was often frowning.
In 2009, Simpson and a colleague decided to leave journalism and launch a research company, Fusion GPS, that would cater to hedge funds, corporations, and law firms looking for dirt on their rivals. Drawing on Simpson’s reporting skills, Fusion built a large network of clients.
As the 2016 presidential campaign got under way, a conservative website bankrolled by the hedge fund magnate Paul Singer hired Fusion. Its assignment: investigate Trump. Once Trump locked up the Republican nomination, Democrats hired Fusion to search for connections between Trump and Russia. Simpson hooked up with Christopher Steele, a retired British spy who on Fusion’s behalf started compiling materials about Trump’s dalliances with Russia over the years. He wrote a series of memos outlining what he had gleaned—including that Russia had damaging materials on Trump and that officials in the Trump campaign had been in contact with the Kremlin—and the result was what would become known as the Steele Dossier. On January 10, 2017, the dossier burst into public view when BuzzFeed published the document.
Trump lashed out. Fox News and other conservative outlets joined the chorus. The rest of the media swarmed. Simpson was shoved from the shadows into a white-hot international spotlight.
Two weeks later, he phoned Val.
Like countless others, Val had marveled at the dossier’s sensational gossip. Now here Simpson was on the phone, trying to get the star-struck Val to divulge whatever he had on the new president and his relationship with Deutsche. Without going into details, Val said he had gobs of information about all sorts of things at the bank. Simpson agreed to pay $10,000—half up front, half upon delivery—for the materials. The conversation lasted only a few minutes. Anxious that he was being spied on, Simpson didn’t want to talk over an unsecured phone line. They switched to an encrypted chat program called Signal; Simpson said they should meet in person. “Let’s get you here asap,” he messaged.
They decided to meet two days later on Saint Thomas, in the U.S. Virgin Islands. Simpson texted Val an American Express card number to book plane tickets and asked him to start searching for some specific topics. “Any Russia stuff at all,” Simpson requested. He added that he was eager for emails or documents related to Renaissance Technologies—the huge hedge fund that Deutsche had worked with to help save it billions in taxes. Simpson was especially curious about any materials on Renaissance’s enigmatic leader, Robert Mercer, who along with his daughter Rebekah had become a leading financier of Trump, Steve Bannon, and Breitbart News. “Be safe and I will see you tomorrow,” Simpson signed off.
The weather in Saint Thomas was balmy, and Val and Glenn alternated between sifting through Bill’s files in a hotel suite and sitting at a picnic table on the beach, drinking beers and smoking cigarettes. Simpson was slightly manic, chattering constantly about Trump and Fusion’s financial struggles and the high likelihood that, at that very moment, they were under government surveillance. He told Val that he hoped that any damaging information on Mercer, Trump, or Deutsche would prove valuable to current or prospective Fusion clients. But to both men’s dismay, they found no bombshells in Bill’s email accounts. There were scant mentions of Trump. The name Mercer hardly came up. There was a lot on Renaissance, but that ground had already been well trodden by Bob Roach’s Senate investigation.
Simpson, however, was not ready to quit. He invited Val to return with him to Washington; once there, Val shacked up in a guest room in Simpson’s white colonial. One morning, Val was on the front porch, smoking a Marlboro. Simpson joined him and noticed a small rip in the corner of one of his window screens. “Were you messing with my window?” Simpson demanded. “Did you leave the house last night?” Val denied it, but Simpson eyed him suspiciously. “Let’s see what the video shows,” he said. He escorted Val into his office, flipped on a computer monitor, and pulled up a feed from an infrared camera trained on the front of his house. The grainy footage showed Simpson’s son trying to pry the screen off the window. Simpson didn’t apologize, but he seemed to relax a little. Val was probably not a spy.
The two men spent the next several days together. They talked about Trump and Christopher Steele and their fathers. Val confided to Simpson about his difficult childhood and his disappearing father and the void that Bill had filled and then vacated. And they plowed through more of Bill’s files, which by now Simpson had copied onto his own computer.
Simpson hired a retired auditor from Deutsche to comb through the materials, too. The auditor had left the bank years earlier, angry about many of the same ethical transgressions that had bothered Broeksmit, not least the derivatives that had helped torpedo Monte dei Paschi. He blamed the bank’s troubles largely on the reckless management style of Anshu’s Army. He had vented about this over the years to journalists, whistle-blowers, lawyers, and regulators at the Securities and Exchange Commission and the New York Fed, which was apparently how he had appeared on Simpson’s radar. Now he was a Fusion contractor.
The auditor had worked alongside Broeksmit at times in the past, including when he was trying to rein in Troy Dixon, and he found it a little creepy now to be pawing through the dead man’s emails. His desire to punish Deutsche helped him overcome his queasiness. He eventually found something interesting. Attached to one of the email chains Broeksmit had received in advance of a DBTCA board meeting was an Excel spreadsheet. To an untrained eye, the spreadsheet looked meaningless, just thousands of rows of numbers under indecipherable headings. But the auditor’s eyes were well trained. The document was a snapshot, as of October 8, 2013, of DBTCA’s outstanding exposures to hundreds of financial institutions—how much Deutsche owed them and how much they owed Deutsche. It was no secret that the bank did extensive business with most of the world’s biggest banks—that was part of the reason that the IMF, in 2016, had branded the company as the world’s most systemically dangerous bank—but what jumped out at the auditor as he scrolled through this spreadsheet was just how much business, mostly via derivatives, Deutsche had been doing with Russian banks. There were tens of millions of dollars outstanding with VTB. Alfa-Bank—another large, oligarch-controlled Russian lender—was on Deutsche’s list, too. (VTB and Alfa both were under American sanctions.) And the spreadsheet showed that a network of more obscure companies—like Russian International Bank and Russian Joint-Stock Commercial Roads Bank and Russian Mortgage Bank and Russian Commercial Bank (Cyprus) Limited, to name a few—also were doing tens of millions of dollars of business with Deutsche. And that was just on this one particular day that the spreadsheet captured in the fall of 2013, and only in the one DBTCA unit of Deutsche. There was no telling how much other business was happening on other days and in other parts of Deutsche.
The spreadsheet alone didn’t prove anything nefarious—there wasn’t enough information for that. But it was a tantalizing clue as to just how deeply entangled Deutsche was with Russia and just how little—despite everything that was already public, thanks to Deutsche’s repeated scrapes with Western law enforcement and regulatory agencies—was really known about what the bank was up to.
Those answers lay hidden inside Deutsche. Short of theft or a very lucky break with a very disgruntled employee, the only way to crowbar open those electronic vaults was for a government body to issue a subpoena. Simpson and Fusion didn’t possess such authority. But Simpson knew some powerful people—and now he sent Val to meet them.
After nearly twenty years working for the Senate’s investigative committee, Bob Roach had switched to the Senate Banking Committee, where he became the chief investigator for the panel’s Democrats. In the fall of 2016, as allegations swirled about the Kremlin’s efforts to skew the election in Trump’s favor and of Trump’s supposedly being in Putin’s clutches, one thing had jumped into Roach’s mind: his old nemesis, Deutsche Bank. There was no doubt that the bank had extensive business dealings with Russia, and those dealings included acting as a conduit for dirty money to get out of the country and into the Western financial system. Deutsche, of course, was the only reliable connection that Trump, his family, and his company had to the mainstream banking world. And Eric Trump had blurted that Russians financed the family’s golf projects—even though Deutsche had made the Doral loans.
Perhaps this was more than a coincidence. Maybe Deutsche was what connected Trump to Russia. The rumor that had been ricocheting around Washington, New York, and London was that VTB had in the recent past funneled dirty money to Trump via Deutsche. VTB certainly seemed connected to Trump. Felix Sater, who had once rented the penthouse suite at Trump’s 40 Wall Street building, claimed that VTB was facilitating travel and other arrangements for the future president’s team in 2016 as they discussed a possible Trump Tower project in Moscow.* And there was no doubt that VTB had deep, long-standing ties to Deutsche. Now the theory was that one of the reasons that Deutsche had been willing to take such risks on loans to Trump was that it wasn’t actually taking the risks at all: VTB had agreed to secure the loans; if Trump defaulted, Deutsche could collect whatever it was owed from the Russian bank. In effect, that meant that VTB was the one lending to Trump—a direct financial connection between the Russian government and the American president. Deutsche executives insisted this was false, but that didn’t stop the rumor from spreading.
Simpson and Roach had known each other for nearly two decades, back to when Simpson, then at The Wall Street Journal, was digging into offshore shell companies at the same time that Roach was investigating tax avoidance. Both men were rumpled and indefatigable and accustomed to being underestimated, and now they lived within walking distance of each other and chatted regularly. In February 2017, Simpson suggested that Roach meet Val and peruse his father’s files. Roach was happy to oblige; it wasn’t every day that someone offered you an unfiltered look at documents from inside a company like Deutsche.
One afternoon, Val—by now staying in a suite Simpson had rented for him at a hotel near the White House—showed up to visit Roach at the Dirksen Senate Office Building on Capitol Hill. Roach still had the rectangular body and sharp jaw of a onetime wrestler; now he had added a flip-top phone and a bunch of cheesy dad jokes to his homespun repertoire. He led Val into his cramped office, amid towering piles of binders, books, and paperwork. Roach had prepared a bundle of printouts for Val: news articles and other materials about Deutsche’s years of working with Russian oligarchs and other Putin cronies. They included clippings from a few days earlier, when Deutsche had been penalized by British and New York regulators for the Russian mirror-trading scheme. After agreeing to pay $629 million to settle the cases, the bank pointed at Tim Wiswell, who had been fired in 2015, as “the mastermind of the scheme.”
Roach told Val that he was looking for a Trump connection to Russia via Deutsche. They spent several hours at a small table, huddled over Val’s laptop. Val struck Roach as hopelessly scatterbrained, like a burned-out hippie, but the investigator was experienced in dealing with difficult witnesses. Guys like this often didn’t realize the value of what they possessed, and the trick was to not get too discouraged or impatient with their idiosyncrasies.
That evening, after a short Senate tour, Val agreed to leave Roach with a digital sampling of some of his father’s files. After Roach glanced through the materials, his curiosity was piqued. He knew what the natural next step was: The banking committee should subpoena Deutsche for all of its records related to Trump. But there was no way that any of the Republicans who controlled the banking committee would sign off on a subpoena that had the potential to turn up damaging information about their party’s occupant of the White House. (The Democrats, in the minority, didn’t have the authority to issue subpoenas on their own.) Nor was there appetite for months- or years-long investigations that might lead to unexpected places. Roach broached the issue of trying to subpoena Deutsche, and his Democratic bosses waved him off.
A week later, Val rented a red Nissan Pathfinder and drove to Philadelphia, where he procured a few grams of heroin. His next stop was New York City. Simpson had asked Val to meet with a man there named John Moscow, an attorney at the law firm BakerHostetler. Moscow was a minor legend in New York legal circles. He had spent thirty-two years as a prosecutor in the Manhattan district attorney’s office, renowned for his victories on big corporate fraud and money-laundering cases. He decamped to private practice in 2005, his Rolodex brimming with contacts in the government, at central banks, at top-tier law firms—and with plenty of journalists, including Simpson. (Most recently, Moscow had hired Fusion to help a BakerHostetler client—a Russian company called Prevezon—that was accused of participating in the theft of hundreds of millions of dollars from the hedge fund of an American investor, Bill Browder. Fusion’s job was to dig up dirt on Browder. Simpson produced a 600-page dossier. The relationship between Simpson and Moscow was thus cemented.)
Val rode an elevator up to BakerHostetler’s headquarters in a Rockefeller Center skyscraper. Moscow occupied a corner office. A wall was crowded with framed photos of him with decades’ worth of government bigwigs. Through floor-to-ceiling windows, Val admired the views of midtown Manhattan, its office towers aglow in the evening sky. With his straggly hair and wearing a T-shirt and hoodie, Val was not a conventional visitor to these plush offices. He had snorted some heroin before coming, and he was feeling good—focused, confident, carefree. He unfurled his by-now-well-practiced spiel, explaining who his father was, all the stories Val had leaked to the media, what might still lurk in his father’s files, and on and on. Moscow requested a peek, and Val opened his laptop and gave a little multimedia presentation.
Moscow didn’t know what to make of his unusual guest. The guy seemed manic—he was talking in rapid-fire bursts—and Moscow wondered if perhaps he was on drugs. Val peppered his monologue with finance buzzwords, but he clearly didn’t know much about how Wall Street really worked. And yet . . . he had a cache of documents that appeared to be authentic and could be extremely valuable. Moscow asked if he could have a copy of the files. Val initially balked—he was beginning to worry that he was diluting the value of his possessions by not guarding them more closely—but eventually agreed to share the materials. A BakerHostetler aide came in and copied the files onto a thumb drive.
Back in the Manhattan DA’s office, Moscow had gotten to know a forensic accountant named Sean O’Malley. The two men had stayed in touch over the years. Now O’Malley was leading a team of anti-money-laundering agents at the New York Fed who were investigating. Moscow told O’Malley that he had something interesting to share, and then delivered him a USB stick containing Val’s items. The circle was thus complete. Many of the files were related to the scramble inside Deutsche and DBTCA to pacify the very unhappy New York Fed, in the stress tests, in the mirror-trade investigations, and in the bank’s accounting and financial reporting—in some cases by masking its problems. Now the materials were in the hands of the very regulator the bank had been so angering.
O’Malley must have been thrilled. The Fed had been struggling to get its hands on internal Deutsche documents; BaFin, the German regulator, was only gradually moving away from its practice of protecting its turf from foreign authorities. While it was possible for American regulators to subpoena documents from Deutsche, it wasn’t as easy as it sounded. That made Val’s trove especially useful.
A few months later, on a Tuesday afternoon at the end of May, the Fed’s years of frustration with Deutsche culminated in an eighteen-page legal agreement with the bank, known as a cease-and-desist order. Like the order the Fed had imposed on DBTCA twelve years earlier in relation to the Latvian money laundering, this one demanded that the bank take immediate action to prevent its customers from using Deutsche to engage in financial crimes. Unlike the 2005 order, this one came with a $41 million penalty attached—a small but symbolic escalation in the severity of the Fed’s wrist-slapping. The central bank explained that its latest examination of DBTCA had “identified significant deficiencies” in its risk management and its compliance with anti-money-laundering laws. Because of DBTCA’s staffing shortages and stone-age technology—the problems that Broeksmit had repeatedly emailed his colleagues about—billions of dollars of suspicious transactions had washed through DBTCA between 2011 and 2015. The Fed’s order was public, but in secret it imposed a more draconian punishment: It downgraded the bank’s financial status to “troubled”—a classification that reflected its managerial and financial woes and set it up for years of intense regulatory scrutiny and limits on its operations. After so many years of running wild, DBTCA was finally being put on a tight leash.
Back in Washington, Simpson had lost patience with Val. His irresponsibility, his never-ending nagging about wanting to be part of Fusion’s sleuthing, and his spending on Simpson’s Amex had all gone too far. “You’re acting like a vagabond,” Simpson finally exploded.*
For his part, Val was sick of Simpson, who had paid only half of the $10,000 he had promised. “Don’t talk to me like you’re my father,” Val snarled.
“Well,” Simpson snapped, choosing words packed with emotional dynamite, “you need someone to act like your father.”