Kushner and Questions of Corruption

The behavior of Jared Kushner, the president’ s son-in-law and close advisor, has become a concern for investigators.  Recent reports from several different news organizations begin to provide a pretty clear picture of why.

Business Insider reported on May 17th,

A Russian state-owned bank under US sanctions, whose CEO met with President Donald Trump’s son-in-law in December, helped finance the construction of the president’s 65-story Trump International Hotel and Tower in Toronto, according to a new report.


The Trump International Hotel and Tower in Toronto

The bank, Vnesheconombank, or VEB, bought $850 million of stock in a Ukrainian steelmaker from the billionaire Russian-Canadian developer Alexander Shnaider, who was constructing the hotel at the time, The Wall Street Journal reported on Wednesday.

The story went on to say,


Sergey Gorkov

Jared Kushner, Trump’s son-in-law and a top White House adviser, met with the Vnesheconombank CEO Sergey Gorkov in December, The New York Times reported in late March. Putin appointed Gorkov in January 2016 as part of a restructuring of the bank’s management team, according to Bloomberg.

At the time, Kushner was trying to find investors for an office building on Fifth Avenue in Manhattan.

Here we find the conflict of interest that has become a central concern for investigators with Kushner’s behavior.  Bloomberg reported on March 22,

The Manhattan tower co-owned by the family of Jared Kushner, President Donald Trump’s son-in-law, has been losing money for three years and faces increasing loan fees in 2017, which may explain why the family has been negotiating with Chinese insurance behemoth Anbang on new financing.


666 Fifth Avenue

The fees, at 666 Fifth Avenue, kicked in last month and escalate with each payment until the loan is repaid, a 2011 refinancing agreement shows. December brings another hurdle: Interest paid on the bulk of about $1.1 billion of loans jumps to 6.35 percent, more than double what it was after the debt was refinanced in 2011.

The Washington Post has provided a detailed description of how Jared Kushner took over his families business after his father went to prison.  Jared Kushner purchased 666 Fifth Avenue for a record setting $1.8 billion.  Then the market collapsed.  The Post (and The New York Times) describe how the deal has created mounting debt.  He has been struggling to deal with this debt since the market collapse.  The article also describes how Kushner purchased the New York Observer in 2006 and how he has attempted repeatedly to use it to pressure lenders that would not renegotiate his company’s debt.

In 2010 a new investor came in to save the day for Kushner companies– Vornado Realty Trust.  Bloomberg reports,

but the break was short-lived. Citibank, whose logo adorned the building and which occupied one-fourth of its 1.45 million square feet of office space, was leaving….

Kushner Cos.’ current situation — with rising debt costs that eclipse 666 Fifth’s income — now looks familiar, and it’s once again casting about for a savior.

The Kushner Tower and Kushner companies could use an infusion of money just like the Trump International Hotel and Tower in Toronto in order to deal with the mounting debt.  The Kushner Companies appear to think the prospects look good.  The Real Deal New York Real Estate News reported on March 21st,

Kushner Companies has a whole bag of tricks it’s been keeping secret for its planned conversion of the office tower at 666 Fifth Avenue into a mixed-use luxury destination.

Bloomberg, citing investor documents, reported last week that the redevelopment would be valued at $7.2 billion when completed. But Kushner Companies believes that the number could even hit $12 billion, sources familiar with the plans confirmed to the Wall Street Journal Tuesday.


A rendering of the renovations planned for 666 Fifth Avenue

We should take into account the information is based on unnamed sources familiar with the plans.  The article goes on to say,

Though Senior White House Adviser Jared Kushner has resigned from Kushner Companies and announced the sale of his stake in 666 Fifth to a family-operated trust, his father Charlie is said to be the one currently courting investors. Despite the management shake-up, ethics experts worry that a deal with Anbang or another large Chinese investor would be a thinly-veiled attempt at buying influence with the Trump administration.

It is in this context, that we now learn from The Washington Post that Kushner sought to set up a secret channel of communication with the Russians.  This raises concerns with investigators that one move in the Kushner companies “bag of tricks” may be using Jared Kushner’s influence as advisor to the president to negotiate lucrative deals and keep it all secret.  The Post reported,

Jared Kushner and Russia’s ambassador to Washington discussed the possibility of setting up a secret and secure communications channel between Trump’s transition team and the Kremlin, using Russian diplomatic facilities in an apparent move to shield their pre-inauguration discussions from monitoring, according to U.S. officials briefed on intelligence reports.


Ambassador Sergey Kislyak

Ambassador Sergey Kislyak reported to his superiors in Moscow that Kushner, son-in-law and confidant to then-President-elect Trump, made the proposal during a meeting on Dec. 1 or 2 at Trump Tower, according to intercepts of Russian communications that were reviewed by U.S. officials. Kislyak said Kushner suggested using Russian diplomatic facilities in the United States for the communications.

The meeting also was attended by Michael Flynn, Trump’s first national security adviser.

On May 29th, FOX News reported that a source close to Kushner told them he did not suggest using the Russian communications channel in the meeting.

During the meeting the Russians broached the idea of coordinating a secure line between the Trump administration and Russia, not Kushner, a source close to Kushner told Fox News. That follows a recent report from The Washington Post alleging that Kushner wanted to develop a secure, private line with Russia.

A couple things need to be noted here.  First, the FOX News story is based on an unnamed “source close to Kushner.”  The Post story is based on “intercepts of Russian communications that were reviewed by U.S. officials.”

Second, according to these intercepts, “Kislyak reportedly was taken aback by the suggestion of allowing an American to use Russian communications gear at its embassy or consulate — a proposal that would have carried security risks for Moscow as well as the Trump team.”  It would not make sense for Kislyak to be “taken aback by the suggestion of allowing an American to use Russian communications gear at its embassy or consulate” — if he made it.  So the FOX News story is inconsistent with the information gathered from the intercepts, according to U. S. Officials, on many levels and they apparently made no effort to confirm this story from this “source close to Kushner.”

Richard W. Painter is a professor at the University of Minnesota Law School and the former chief White House ethics lawyer from 2005 to 2007 during the Bush administration.  On MSNBC May 27th he responded to the reports that Jared Kushner sought a secret channel of communication with the Russians,

All I can say is that if president Obama’s transition team had tried that president Bush’s team would have made sure they got locked up and they would have told the president elect you can pick up your men in Guantanamo Bay on January 20.  This is treason.  It’s a violation of federal law for people to be communicating in encrypted messages and negotiating with the Russian government before the president takes office.


Richard W. Painter

I am amazed that anyone on capital hill is tolerating what is a combination of obstruction of justice, Russian espionage, collaboration with Russian espionage, and now violations of the Logan Act.  Very, very serious situation for this administration.

Reuters reported May 26th,

FBI investigators are examining whether Russians suggested to Kushner or other Trump aides that relaxing economic sanctions would allow Russian banks to offer financing to people with ties to Trump, said the current U.S. law enforcement official.


Jared Kushner

The head of Russian state-owned Vnesheconombank, Sergei Nikolaevich Gorkov, a trained intelligence officer whom Putin appointed, met Kushner at Trump Tower in December. The bank is under U.S. sanctions and was implicated in a 2015 espionage case in which one of its New York executives pleaded guilty to spying and was jailed.

The bank said in a statement in March that it had met with Kushner along with other representatives of U.S. banks and business as part of preparing a new corporate strategy.

So when Jared Kushner discusses “the possibility of setting up a secret and secure communications channel between Trump’s transition team and the Kremlin” during a time when Kushner Companies are “casting about for a savior” to invest up to $12 billion in their property it is going to raise the concern of investigators.  Particularly after “a Russian state-owned bank under US sanctions” has already “helped finance the construction of the president’s 65-story Trump International Hotel and Tower in Toronto.”

It appears Donald Trump is also concerned about Jared Kushner’s behavior.  On Saturday May 27th he was quoted as saying the following:

TAORMINA, Italy (The Borowitz Report)—Donald J. Trump on Saturday accused the media of exaggerating his relationship with Jared Kushner, asserting that “I don’t know him very well.”

“He’s someone I would see around the office and who, I guess, was working for me,” Trump told reporters on the last leg of his foreign trip. “Beyond that, I couldn’t tell you much about him.”

Trump acknowledged that he had spoken to Kushner at times during the 2016 campaign. “I’d pass him in the hall and say hello,” he said. “He seemed like an O.K. person. I never got much of a sense of the guy.”

When asked whether Kushner might have had improper contact with Russian spies during the transition, Trump said, “I couldn’t tell you if that’s the kind of thing he’d do. You really should ask someone who knows him.”

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