Calls for Deutsche Bank, a Big Trump Lender, to Face Independent Prosecutor

— -- Two Justice Department investigations of the German bank that has loaned Donald Trump more than $300 million must be turned over to an independent prosecutor, a senior U.S. Senator said this week, because there will be “a clear conflict of interest” between Trump’s personal business interests and his public duties.

“The credibility of this investigation will be completely undermined, and our criminal justice system will be diminished by this obvious conflict of interest,” Sen. Richard Blumenthal, a Connecticut Democrat and former federal prosecutor, told ABC News in an exclusive interview this week. “What's needed here is clearly an independent prosecutor, without any connection to an Attorney General who likely will be someone who is a personal confidant and campaign surrogate for Donald Trump.”

Deutsche Bank has become one of his company’s most reliable lenders. The German bank has helped finance the renovation of the Trump Old Post Office development in Washington, D.C., his purchase of the Doral golf course and country club in Florida, as well as the construction of a Trump office building in Chicago.

At the same time, the bank has been the target of two long-running federal investigations – one looking at lending practices leading up to the massive mortgage meltdown of 2007 and 2008, and another focused on allegations that the bank helped clients illegally funnel money out of Russia.

Deutsche Bank has confirmed in public filings that the Justice Department’s demands in settlement negotiations over the mortgage fraud case could be steep – the initial U.S. position was to demand a back-breaking $14 billion settlement. In the filings, the bank said it was "cooperating fully," with the investigation.

Sen. Blumenthal said if the Justice Department gets what it wants, the settlement “would gravely threaten the bank, possibly bankrupt it, and thereby impact Donald Trump’s business interests very, very severely.”

The bank declined comment to ABC News, but has conveyed in public statements that it hopes the settlement amounts will be reduced significantly after more negotiating.

“Talks are ongoing,” the bank reported to investors.

The status of the investigation has been a dominant topic in German financial circles, but a German embassy spokesman in Washington said the topic did not come up during Trump’s phone call with Chancellor Angela Merkel last Thursday.

“I’m pretty sure this was not part of it,” said Markus Knauf, the embassy spokesman. “She congratulated him for winning the presidency and pledged that the U.S. and Germany would continue to work together.”

How a Trump Justice Department will proceed with those talks has become the latest in a series of questions about how the incoming president will navigate between his many business entanglements and his new and powerful government post.

Trump has indicated he would leave his business dealings to his children, and focus his attention on his duties as president.

In an interview after his election, he told CBS 60 Minutes, “I don’t care about hotel occupancy. It’s peanuts compared to what we’re doing here.”

Since the election, reports suggest that the line between his business dealings and his official work has been blurred.

That included a report about comments he made to British officials about his Scottish golf course, and a meeting he held with Indian businessmen about a project in Mumbai. A Trump Organization official who refused to be named described the meeting with the Indian businessmen as a "congratulatory exchange in passing."

A review of his financial disclosure filings indicates that Trump has business interests around the globe, generating more than $50 million in income from various entities in 18 countries.

Already, Trump has garnered attention for meeting with developers of a Trump project in India, and for raising the issue of wind farms during a meeting with British officials – an issue for the operation of his Scottish golf club.

Ethics experts have warned that if Trump maintains a role in advocating for his business empire, those actions could taint any negotiation between Deutsche Bank and the Justice Department during a Trump administration.

“The scope of possible conflicts is tremendous,” said Noah Bookbinder, executive director of CREW, a prominent ethics group in Washington, DC. “Perhaps most problematic are foreign policy issues, where he might have an incentive, to, for instance, try to improve the reputation of and brand of Trump and Trump Hotels and Trump Buildings in countries where he has businesses, and that could conceivably affect the kinds of decisions he makes in terms of American foreign policy.”

“And that's a really disturbing thought,” Bookbinder said.

Bookbinder, a former federal prosecutor, described a range of scenarios that would complicate the federal case against Deutsche Bank.

Would Trump object, for instance, to imposing steep fines on the bank if that would create such serious financial distress that bankers could be forced to call in Trump’s loans? Conversely, he said, if Trump’s loans were re-negotiated with more favorable terms, critics could question whether such an effort was done to curry favor with the incoming president.

“I think that even if Donald Trump says and does nothing, the attorneys and the employees at the Department of Justice who are working on this are going to know that the new president has an interest potentially in Deutsche Bank getting a good deal,” he said. “So there's going to be some suspicion even if there's no evidence of Donald Trump actually doing anything to try to influence the result.”

ABC News sought comment from the Trump transition team and the Trump Organization, but has not received a response.

Overnight, Trump tweeted in apparent response to criticism of his references to business dealings during talks with foreign leaders: “Prior to the election it was well known that I have interests in properties all over the world. Only the crooked media makes this a big deal!”

And on Tuesday, a defiant president-elect told the New York Times: “The law is on my side, the President can’t have a conflict of interest.”