Jared Kushner And The Murky World Of Real Estate
DAVID GREENE, HOST:
President Trump's son-in-law, Jared Kushner, seems to have a pretty big portfolio in the White House. He has been asked to take a leading role in Middle East peace negotiations, also coming up with a strategy to solve America's opioid epidemic and also managing relations with Mexico and China. Now, before coming to Washington, the 36-year-old Kushner was a New York businessman. And as NPR's Jackie Northam reports, there is concern his business connections might collide with his White House role.
JACKIE NORTHAM, BYLINE: Long before his father-in-law decided to run for president, Jared Kushner was a thriving real estate and investment mogul. When he was just 26 years old, he shelled out a record-breaking $1.8 billion for a Manhattan skyscraper. Hiten Samtani, managing editor at therealdeal.com, a real estate news publication, says that helped make Kushner companies a major player in the New York market.
HITEN SAMTANI: They've got about 20,000 apartments primarily in the northeast. They've got about 13 million square feet of commercial space. They are, you know, a very, very substantial real estate company with investors and lenders all across the country and international partners as well.
NORTHAM: But Daniel Weiner, a senior counsel at the Brennan Center for Justice, said the world of commercial real estate can often be murky, involving shell companies and many foreign and unnamed investors.
DANIEL WEINER: It is very, very, very different from many other ways that other people make money, partly because its a highly leveraged industry, which means that someone who is at the head of a real estate empire likely owes money to lots of different people.
NORTHAM: Weiner says juggling this kind of debt is normal, boilerplate even, for a New York real estate developer at Kushner's level. But he says it could pose serious conflicts of interest if that developer moves into an influential position in the White House.
WEINER: Because if someone is your creditor and then they turn around and they need something from the federal government, it might be hard to say no. And I'm not saying that this is the case with Mr. Kushner, but that is sort of one of the issues that comes up.
NORTHAM: Even the perception of such a conflict can create a problem. Take, for example, that Manhattan skyscraper Kushner bought in 2007. His company has struggled to cover the building's debt payments. It was recently negotiating a deal with Anbang Insurance Group, a Chinese financial powerhouse with close ties to Beijing. One of Kushner's White House roles is overseeing diplomacy with China. Therealdeal.com's Samtani says the terms made no financial sense for Anbang.
SAMTANI: Anbang was in talks with Kushner to invest in this property at terms that would be unheard of in New York real estate, you know, terms that would be highly favorable to the Kushner companies.
NORTHAM: There was bad publicity, and ultimately, the deal fell apart. Kushner has given up his stake in the skyscraper, but the family business still owns it. He's sold off many assets and stepped away from the daily operations of his company to avoid conflicts. But he has not fully divested himself from all his real estate holdings in New York. Until he does, these problems could continue to plague Kushner, says Rob Walker, a Washington lawyer specializing in government ethics.
ROB WALKER: Navigating away from conflicts and perception of conflicts, that's going to be a kind of permanent responsibility and obligation on his part and on the part of White House ethics officials.
NORTHAM: The law firm representing Kushner says it's working with the Office of Government Ethics to reduce the areas of potential conflict and that Jared Kushner is already recusing himself from matters that could present a problem. Jackie Northam, NPR News.
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