Information about the two CEOs Jürgen Fitschen and Anshu Jain as well as major shareholders of the commodity trading company DEUTSCHE BANK (Germany)
DEUTSCHE BANK was founded in March 1870. In the course of the 20th century it grew to be a high street bank, partly through takeovers and mergers. It was heavily involved in financing both the two World Wars started by Germany and Hitler fascism. In the days of national socialism it was involved in “Aryanisations” . There is evidence that the bank contributed to the financing of Auschwitz concentra-tion camp and profited from gold transactions of the Nazi regime. It was only due to influence exerted on the highest level and in the context of emerging “cold war politics” that it was able to evade charges before the Nuremberg war crimes tribunal.
Today, DEUTSCHE BANK is a stock company with its headquarters in Frankfurt/Main. Its main branches are in London, New York, Singapore and Sydney. At the end of 2012, the bank had more than 98,000 employees and a balance sheet total of almost 2.2 trillion Euros. This makes it Germany’s biggest bank and the world’s third-biggest bank . As a universal bank it offers the full range of banking and fi-nancial services. From a controlling authority’s point of view, some countries regard this as a very criti-cal and problematic state of affairs as these different business areas may result in massive conflicts of interests.
With a market share of about 21 % (in 2008) it is rated as the world’s biggest foreign exchange trader. The bank puts particular emphasis on investment banking issuing shares, bond loans and financial pa-pers. DWS capital investment company, which is a fully owned subsidiary of DEUTSCHE BANK, held a 20 % market share in Germany in 1999. In the German private customer market, it had a market share of about 15% in 2010 including the Postbank subsidiary. In a study published by Zurich Technical University (ETH) in 2011, DEUTSCHE BANK ranked in 12th place among the most influential companies of the world economy.
During the financial crisis which started in 2007, the bank continued to exist without any direct state support. The acquisition of Abbey Life Insurance from the British bank Lloyds TSB in 2007, the takeover of Sal. Oppenheim in 2009 and holding the majority of shares in Postbank in 2010 were among the major additions to the company in the last couple of years. Preliminary proceedings in the US against DEUTSCHE BANK for possible charges of aiding and abetting tax dodging were suspended in late 2010 after a fine was paid.
The bank is one of the large banks rated as “financial institution of systemic importance” by the Fi-nancial Stability Board (FSB). As a result, it is subject to special surveillance and more stringent require-ments regarding its equity base. Due to international cross connections, its collapse would be deemed a particularly high risk for financial markets. As a result, it is one of 4 institutions required to have an extra 2.5 % equity base on top of the Basel III requirements.
Anshu Jain, whose real name is Anshuman Jain, is a British citizen of Indian descent. After studying in India and the US, Jain worked with two American investment banks and created the first department for special hedge fund management in the sector at MERRILL LYNCH. In 1995, he started working for DEUTSCHE BANK in London. After 5 years of Jain working there as a chief investment banking executive of DEUTSCHE BANK, he is said to have earned his department 16 billion Euros – this is after deduction of all bonuses. According to a rough estimate by WirtschaftsWoche, Jain’s department was accountable for 50 % of DEUTSCHE BANK’s overall profit in 2005. As a result of this sucess and the respective bonus payments, Anshu Jain has constantly topped the DEUTSCHE BANK internal wages ranking list over the last years. This makes him the top earner among the employees of any German stock company. The magazine eFinancialNews ranks him second in a list of the “100 Most Influential People”.
Accusations against Jain were voiced in early 2008 as a result of the worldwide subprime crisis which was triggered in the US. DEUTSCHE BANK AG’s “Corporate Banking & Securities” division, seem-ingly the bank’s most successful division for years, had to write off billions from loans for leveraged takeovers in the first quarter of 2008 which lead to a dramatic slump of revenues and a loss before tax of 1.6 billion Euros. Only the year before, Jain and his team had generated a profit of 2.2 billion Euros. Jain was also named as the man responsible for fraud with asset-backed securities (ABS) containing risky mortgages . Foreclosures carried out by DEUTSCHE BANK affiliate DEUTSCHE BANK NATIONAL TRUST resulted in 1.4 million families being evicted from their homes in the US – partly with the aid of forged documents and signatures. At the same time, the mortgage business conducted by Jain earned DEUTSCHE BANK billions in profits.
Anshu Jain has been a member of the board of DEUTSCHE BANK since 2009. As of early June 2012, he is joint chairman of the board of DEUTSCHE BANK together with Jürgen Fitschen. They are both suc-cessors to the long-time chairman of the board Josef Ackermann. Jain is responsible for the areas of Corporate Finance, Sales and Trading as well as Global Transaction Banking. Like his colleague Jürgen Fitschen, he received a salary of 4.8 million Euros in 2012. His private assets are estimated at 60 million Euros.
Jürgen Fitschen is from northern Germany. He worked for CITIBANK for more than a decade before changing to DEUTSCHE BANK in 1986 where he started as head of their business in Asia. In 1993, he became head of their corporate banking area, and in 2001 he became a board member for the area of Corporate & Investment Banking. After a restructuring of the board in 2002, Fitschen was made a mem-ber of the Group Executive Committee which ranks below the board. There he started out as being responsible for business with corporate clients. From 2004 onwards, he was responsible for the worldwide Regional Management and was head of the German Management Committee. Following an expansion in the bank’s leadership, Fitschen was promoted back to the board in 2009 while keeping his responsibili-ties. In 2012, he was made chairman of the board. In December 2012 it emerged that preliminary proceedings had been initiated against Fitschen on account of the suspicion of VAT fraud in connection with the trade in CO2 certificates. He was the subject of public criticism after he complained to the Min-ister President of Hesse, Volker Bouffier, about the search of the headquarters of DEUTSCHE BANK which, in his oppinion, had damaged the bank’s reputation. Fitschen became president of the Federal Association of German Banks in 2013.
Even though he was replaced by Jain and Fitschen in late May 2012, the former boss of DEUTSCHE BANK, Swiss national Josef Ackermann, cannot remain unmentioned. He entered the bank as a board member in 1996. He was spokesman of the board from 2002 until 2006, then the sole chairman of the board and of the Group Executive Committee from 2006 until 2012. He is the main person responsible for decisions which were made during that time. Ackermann publicly announced a rate of return on eq-uity of 25 % as a goal of the bank. Obviously, he was happy to use any and all means in order to achieve this. From 2004 onwards he was one of the defendants in the MANNESMANN trial with charges of misappropriation of funds in connection with that company’s takeover by VODAFONE. The trial was finally ended on condition of payments. Ackermann had to pay 3.2 million Euros towards the overall amount of 5.8 million Euros. Had he been sentenced to pay a criminal fine, the maximum penalty would have been 3.6 million Euro (720 daily rates of 5,000,- Euros) – and Ackermann would have had a criminal record.
The accusations against DEUTSCHE BANK and the scandals the bank and those responsible are in-volved in are manifold. On the one hand, they are connected to the business practice and the activities of the bank itself and on the other hand they are about financing dubious or destructive practices of companies DEUTSCHE BANK does business with.
In April 2013, a pool of international media started to publish reports about tax havens relating to about 130,000 persons and all of the big banks. According to investigations by Northern German Broad-casting Company and Süddeutsche Zeitung, DEUTSCHE BANK founded more than 300 companies and trusts in several tax havens – most of them in the British Virgin Islands – via their Singapore branch. In many cases, they installed their subsidiary REGULA LTD. as a director. According to the critics, they helped to cover up the flow of funds and promoted possible offences. DEUTSCHE BANK were not inclined to communicate on whose orders they did so and what the purpose of the business was - or is. With offshore machinations it is possible to cover up money laundering, tax dodging and corruption. In one of their brochures, DEUTSCHE BANK unashamedly offers their clients “the foundation, the manage-ment and the administration” of trusts, companies and foundations in various countries. They point to their close cooperation with the clients’ legal and tax advisors. Their website dboffshore.com advertises their offshore services. There, it says that the tax haven Mauritius offers “a tax-neutral environment”. According to the company, the staff of their local office rose from 5 to over 200 in recent years.
In 2012 it became known that many banks had developed a routine of manipulating the interest ref-erence rates LIBOR and EURIBOR in their favour in order to generate trade profits. There are indica-tions that in the year 2008 alone, DEUTSCHE BANK earned 500 million Euros this way.
Ludwig Poullain, the former boss of the now defunct West German State Bank WestLB, accused DEUTSCHE BANK to have misused their power for transactions which are contrary to their commitments to the national economy. Cities like Hagen and Pforzheim, Würzburg, Neuss and Milan – local commu-nities as well as regions like Tuscany – lost millions and some of them were ruined due to high-risk speculative transactions based on incorrect forecasts of interest rates. DEUTSCHE BANK (and other companies like JPMorgan Chase & Co.) earned high fees from these.
It has to be criticised in the strongest possible terms that DEUTSCHE BANK is involved in speculation with foodstuffs and land grabbing by means of their commodities and agricultural funds which is profit-able for them and their shareholders. Both of these are business with hunger. Speculation with food-stuffs will raise food prices in the poorer regions. Land grabbing will deprive the local population of the land for their own crops.
Like many NGOs, Prof. Olivier de Schutter as the current UN special deputy for the right to appropri-ate nutrition is of the oppinion that extreme fluctuations in prices in the the food market have little to do with supply and demand. Therefore, in July 2012, he admonished DEUTSCHE BANK for their responsibil-ity for rising food prices, among other things. He is the successor to ethecon Blue Planet Awardee Jean Ziegler . According to him, hedge funds and banks have understood that tensions between supply and demand promise higher prices. If they bet on higher prices it leads to a self-fulfilling prophecy. This actu-ally means that if DEUTSCHE BANK or GOLDMAN SACHS bet on higher prices agricultural commodities will sell at higher prices. People tend to buy more and faster as soon as prices go up. This leads to an artificial panic .
Likewise, experts of the German Institute for Economic Research came to the conclusion that such speculations have a rising influence on agricultural prices. There is proof of price increases of 20 to 30 % . But especially in developing countries even a mall price increase means that people cannot buy suffi-cient food – or none at all. Whereas some banks have opted out of speculation with foodstuffs, DEUTSCHE BANK carries on relentlessly after they took a short break with their speculations.
Other food shortages result from the fact that especially large corporations acquire huge tracts of land, often with dubious methods, particularly in developing and emerging countries; under these condi-tions, local farmers can no longer grow food for their own local or regional needs. On these lands the corporations produce only for the markets of the so-called First World. Food is therefore scarce and un-affordable for the local population. That DEUTSCHE BANK arranges and funds such land grabbing has been recently shown in the case of Cambodia and Laos.
DEUTSCHE BANK was also criticised because of a cynical investment fund it offers, which speculates on the life expectancy of human beings. Even the Ombudsman of the Bankers Association considers this incompatible “with our moral concepts, particularly the inviolability of human dignity”. DEUTSCHE BANK collected more than 700 million Euros from small investors for three different life insurance funds, of which db Kompass Life 3 is the most morbid one. Such funds usually buy life insurance policies so they can cash in when the policy holder dies. DEUTSCHE BANK went one step further with Kompass Life 3: They did not actually buy real policies. Instead, they offered the investors a kind of bet on the remaining life expectancy of about 500 persons who are regularly contacted by a “tracking company”. The product is based on complex mathematical models, but it works according to a simple but morbid principle: the sooner the so-called reference persons of the fund die, the higher the profit for the investors.
Many shareholders also criticise the marked discrepancy between bonus payments made to employees, particularly in investment banking, and the amount of dividends paid out. In 2012, the 98,219 em-ployees of the bank received salaries totalling 13.5 billion Euros. The official net profit decreased by 85 per cent to 665 million Euros in the same year. At the same time, the amount of total bonus payments only came down by 11 per cent – to a handsome 3.2 billion Euros.
In November 2012, the DEUTSCHE BANK cancelled the free checking account for particularly good customers; these accounts were considered a status symbol for the wealthy. According to the bank, all accounts should be „harmonized“ and „special conditions that were granted in the past in individual cases, will no longer be offered.“ What is worthy of criticism appears not so much to be the elimination of these special conditions as that they had been granted earlier only to those who could most easily afford such payments.
DEUTSCHE BANK’s managers feel no qualms about making their profits at the expense of the envi-ronment, the climate, human rights and even human lives. It is the height of cynicism that at the same time, they engage in greenwashing, which means they want to give the bank an appearance of sustain-ability and environmental consciousness. The truth is that the bank is one of the biggest investors when it comes to financing nuclear power plants, dams and other huge projects.
DEUTSCHE BANK’s investments in coal mining cause climate change and pollution; these include,for example, include both the preparation of the IPO as well as the continuing support of the world‚s biggest coal producer, COAL INDIA , whose mining areas border directly on Indian national parks where you can find the last wild tigers, whose existence is so seriously threatened .
Also, financing extremely harmful mining methods such as the Mountaintop Removal in the U.S. Ap-palachian region where whole mountaintops are blasted and sometimes excess toxic waste is simply poured into the next valley also contributes to the profits of the DEUTSCHE BANK.
Furthermore, environmentalists of the association, Save the Rainforest, in June 2012 criticized the DEUTSCHE BANK’s support of the Malaysian palm oil trading company FELDA at its IPO, which thus indirectly encouraged the further extensive clearing of valuable forest areas. This harms the environment to the same extent as it does the climate.
Even after the meltdown in Fukushima, Japan, the DEUTSCHE BANK is sticking to its investment and financing of nuclear power plants. Even for the group operating the damaged Fukushima nuclear plant, the Japanese energy company TEPCO, whose managers received the ethecon Black Planet Award 2011 , the bank issued bonds – and did so even after it was announced that the company had falsified safety reports and had withheld repairs. In addition, companies active in the uranium mining industry, such as AREVA, received loans that bring massive damage to the environment, and the health of work-ers and the nearby population .
Via stocks and bonds the DEUTSCHE BANK maintains extensive transactions with the world biggest commodity multi, GLENCORE. Thus the DEUTSCHE BANK is directly involved in the endlessly long list of violations and crimes against human and labor rights, and against environmental protection in the context of natural resource extraction.
The bank also maintains business dealings with armaments companies and their suppliers – whether in terms of bonds, loans or shares. This includes companies who produce outlawed cluster bombs or even nuclear weapons as well as firms who don‘t hesitate to supply their weapons even to states which violate human rights and suppress their own population. DEUTSCHE BANK therefore makes a profit from such business dealings by armaments companies like RHEINMETALL or LOCKHEED MARTIN and Co.
This list could be continued with a critical analysis of all the investments of the Bank in all companies with which it is related. Up to now the DEUTSCHE BANK and its managers attempted to maximize profits with no other consideration but that could change in the near future – not so much because of a feared loss of prestige because of the many scandals, but rather for financial reasons.
In the third quarter of fiscal year 2013 the DEUTSCHE BANK reported a massive drop in profits. This was primarily because the reserves for legal disputes had to be increased by a further billion Euros - apparently in anticipation of several cases in court . One of them was almost immediately announced later, when the nationalized U.S. mortgage lender FANNIE MAE declared its intention to proceed against nine major banks. The real estate financier sued the financial institutions, among them the DEUTSCHE BANK at a federal court in New York and is also responding to the scandal surrounding the Libor manipulations that have brought the company losses of around 800 million Dollar . Additional civil trials and compensation claims could follow.
ethecon declares the major shareholders and senior management responsible for decisions and actions of DEUTSCHE BANK. They own the company and they run the company. They are responsible for the frightful ruin of human health and destruction of environment, even for the death of many people. They represent not only a threat to peace and human rights, but also for democracy, ecology and humanity as a whole. They act for the benefit of personal power and private wealth and violate in an alarming way morals and ethics. Because they accept the downfall of Earth as a Black Planet, ethecon - Foundation for Ethics & Economy reviles the responsible of the DEUTSCHE BANK with the International ethecon Black Planet Award 2013.