Some say 36-year-old White House senior adviser Jared Kushner deserves sympathy after his family prematurely threw him into the deep end. Others say the heir to a real estate empire is a protégé who has become adviser to the most powerful man in the world despite his lack of political experience. Whatever the belief, President Donald Trump’s son-in-law is embroiled in controversies that could result in an indictment while he serves in his first-ever government position.
As political chaos abounds on Capitol Hill, here are four of the top Kushner controversies CRE players should be aware of.
1. Russia Probe
Kushner has come under scrutiny for his undisclosed meetings and chats with Russian contacts. An attorney representing the former Kushner Cos. CEO said he is cooperating with Congress regarding the investigation into these meetings. One of his contacts was the chairman of Russia’s state-run bank VEB, which initiated and financed a deal for the financially troubled Trump International Hotel and Tower project in Toronto in 2010. Kushner met with VEB chairman Sergey Gorkov in December, a month after the Toronto project went into receivership.
In addition to this, it was reported by the Washington Post that Kushner was in talks with the ambassador of Russia to possibly set up a secure line of communication between the Trump transition team and the Kremlin. This was proposed during a meeting at Trump Tower attended by former national security adviser Michael Flynn, according to U.S. officials, which contributed to Flynn's resignation after less than a month of service.
2. Lack Of Business Divestment
Conflict of interest criticisms have been numerous for the president and his son-in-law since both took their positions in the White House. Ethics experts called for complete divestment from business interests, and while Kushner stepped down as CEO of Kushner Cos. — a position he inherited from his father, Charles Kushner — he has yet to completely separate himself from his business and his real estate holdings.
According to financial disclosures, Kushner sold roughly 58 businesses and resigned from 260 entities, including 666 Fifth Ave., a building he acquired in 2007 for $1.8B, but that did not put a dent in his commercial holdings. A recent Washington Post report said the White House adviser still owns 90% of his real estate empire. The mogul still holds 124 real estate assets valued between $132M and $407M. Kushner’s 54-page financial disclosure does not clearly explain why he chose to sell some assets while keeping the majority of his investments intact, causing ethics experts to wonder and critics to persist with conflict-of-interest criticisms. Kushner was also in talks with a Los Angeles buyer in April to sell his stake in WiredScore, a SoHo-based internet connectivity certification service, for which the value of his stake ranges from between $5M and $25M.
3. Undisclosed Business Interests, Partners
It seems every week another layer is pulled back revealing a new piece of the Jared Kushner business empire puzzle. Kushner, like all White House staffers, filed a form disclosing business interests and the like to the public, but several business partners and investments made by Kushner or in a Kushner-owned property have surfaced in the past several weeks that were not disclosed.
One widely unknown relationship that is important to the Kushner family is with the world’s largest real estate owner, Blackstone Group. Within the past four years, the asset manager has loaned in excess of $400M to Kushner Cos. to finance deals — which means it is among its largest lenders. Last week Kushner negotiated a $110B advanced military equipment sale to Saudi Arabia that preceded the country’s $20B investment in a U.S. infrastructure fund owned by Blackstone, Bloomberg reports, raising questions of timing and a conflict of interest. This deal boosted Blackstone’s stock by about 8%, though a company spokeswoman said the deal was negotiated long before Trump was president.
BFPS Ventures, a Kushner-owned investment firm, partially owns real estate startup Cadre — a tech company that allows wealthy investors to invest in real estate as if it were stocks. Kushner’s involvement in this company was not disclosed in the government filing, nor were his relationships with George Soros, Goldman Sachs and Peter Thiel, all of whom are investors in Cadre.
Kushner and his wife, Ivanka Trump, also hold a vast art collection worth millions. This ruffled some feathers, according to Vanity Fair, since White House personnel are required to disclose art worth more than $1,000 that is held for investment purposes — meaning the buying and selling of pieces.
4. First Family Name-Drop
There have been claims that interactions between the president and Kushner have been strained recently as a result of the name-dropping scandal earlier this month during a pitch to secure funding from possible Chinese investors for a struggling New Jersey development. During a conference in Beijing, Kushner Cos. executive Nicole Meyer, Kushner’s sister, mentioned her brother’s role on the White House staff during the pitch. Critics said Meyer was trying to get investors to fund projects through the EB-5 visa program by highlighting the company’s close ties to the first family.
The company contested these claims, issuing an apology saying it was not its intention to highlight its relationship with the first family. The already troubled Jersey City project, called One Journal Square, received another blow following the scandal when anchor tenant WeWork, which was set to own 50% of the development, pulled out of the deal — though the co-working behemoth said the decision was made prior to the controversial name-dropping claims.
