UNITE HERE’s Culinary Workers Union Local 226 has called on financial regulators to investigate the relationship between Robert Cashell, Jr., the Chairman of Heritage Bank of Nevada, headquartered in Reno, Nevada, and Deutsche Bank, the parent company of a felon.
In letters to the Federal Deposit Insurance Corporation (FDIC) and Nevada’s Division of Financial Institutions, the union expresses concern over Mr. Cashell’s suitability as the Chairman of a state-licensed and FDIC-insured bank.
These letters follow the union’s request to Nevada’s gaming regulators to investigate Deutsche Bank’s suitability to own and profit from Nevada casinos, given that a subsidiary of the bank pleaded guilty to criminal wire fraud in relation to the LIBOR scandal [1]. In April of 2015, U.S. and U.K. authorities charged Deutsche Bank a record $2.5 billion in fines for manipulating LIBOR, a benchmark interest rate for trillions of dollars in credit card, student, and mortgage loans and other financial instruments [2, 3].The bank has also been the subject of other legal matters, including a Justice Department probe into possible money laundering, a South Korean trial for market manipulation by one of its subsidiaries, and a Department of Labor tentative denial for exemption, which restricts the bank’s ability to manage retirement accounts [4, 5].
Mr. Cashell is the at-will designee of a Deutsche Bank subsidiary, holding the latter’s 38.6% voting equity interests in Station Casinos LLC [6]. Deutsche Bank paid Mr. Cashell $75,000 when they appointed him to the Board of Station Voteco LLC [7]. As a director, Mr. Cashell is also paid $125,000 a year by Station Casinos [8].
Under the leadership of Mr. Cashell, Heritage Bank of Nevada nearly tripled its insider loans between December 2012 and December 2014 [9, 10]. A water company Mr. Cashell owns near Topaz Lake received a loan from Heritage Bank in 2008 [11]. Since 2007, the Topaz Lake Water Company has received 13 violations from the Nevada Division of Environment’s Bureau of Safe Drinking Water due to high levels of arsenic and coliform bacteria [12]. In 2009, the water company owned by Mr. Cashell provided unsafe drinking water by having arsenic levels that averaged two to five times more than the maximum contaminant level for arsenic, according to the Nevada Division of Environmental Protection [13].
Below are the letters the Culinary Union sent to the FDIC and Nevada’s Division of Financial Institutions:
[1] U.S. Department of Justice. Deutsche Bank’s London Subsidiary Agrees to Plead Guilty in Connection with Long-Running Manipulation of LIBOR. Press Release. April 23, 2015.
[2] U.S. Department of Justice. Deutsche Bank’s London Subsidiary Agrees to Plead Guilty in Connection with Long-Running Manipulation of LIBOR. Press Release. April 23, 2015.
[3] Protess, Ben and Jack Ewing. Deutsche Bank to Pay $2.5 Billion Fine to Settle Rate-Rigging Case. New York Times. April 23, 2015.
http://www.nytimes.com/2015/04/24/business/dealbook/deutsche-bank-settlement-rates.html?_r=0
[4] Geiger, Keri and Greg Farell. DOJ Said to Probe Deutsche Bank on Russia Mirror Trades. Bloomberg Business. August 3, 2015. http://www.bloomberg.com/news/articles/2015-08-03/deutsche-bank-said-to-be-probed-by-doj-on-russia-mirror-trades
[5] Department of Labor. Notice of Proposed Exemption Involving Deutsche Bank AG. Employee Benefits Security Administration. http://webapps.dol.gov/federalregister/PdfDisplay.aspx?DocId=28456
[6] Station Casinos LLC. SEC Form 10K. Filed March 10, 2015. Pg. 81.
[7] Nevada State Gaming Control Board. Special Meeting. May 26, 2011. Pg. 58.
[8] Station Casinos LLC. SEC Form 10K. Filed March 10, 2015. Pg. 116.
[9] Heritage Bank of Nevada. FFIEC 041. December 31, 2012 Call Report.
[10] Heritage Bank of Nevada. FFIEC 041. December 31, 2014 Call Report.
[11] Nevada Secretary of State. Uniform Commercial Code Reports. Accessed on April 23, 2015.
[12] Nevada Division of Environmental Protection, Bureau of Safe Drinking Water. Nevada Drinking Water Information System. Drinking Water Watch. Violations: Topaz Lake Water Co Inc. https://ndwis.ndep.nv.gov/DWW/JSP/Violations.jsp?tinwsys_is_number=295874&tinwsys_st_code=NV
[13] Nevada Division of Environmental Protection. American Recovery and Reinvestment Act – 2009. Topaz Lake Water Company – Arsenic Treatment. https://ndep.nv.gov/recovery/topazlake_arra.html