Kushner didn’t mention loan
$285M deal for firm left off form to Office of Government Ethics
A $285 million deal reached one month before Election Day was left out of disclosure form to the Office of Government Ethics.
One month before Election Day, Jared Kushner’s real estate company finalized a $285 million loan as part of a refinancing package for its property near Times Square in Manhattan.
The loan came at a critical moment. Kushner was playing a key role in the presidential campaign of his father-in-law, Donald Trump. The lender, Deutsche Bank, was negotiating to settle a federal mortgage fraud case and charges from New York state regulators that it aided a possible Russian money-laundering scheme. The cases were settled in December and January.
Now, Kushner’s association with Deutsche Bank is among a number of matters that could come under focus as his business activities are reviewed by special counsel Robert Mueller, who is examining Kushner as part of a broader investigation into possible Russian influence in the election.
The October deal illustrates the extent to which Kushner was balancing roles as a top adviser to Trump and a real estate company executive. After the election, Kushner juggled duties for the Trump transition team and his corporation as he prepared to move to the White House. The Washington Post has reported that investigators are probing Kushner’s separate December meetings with the Russian ambassador to the United States, Sergey Kislyak, and with Russian banker Sergey Gorkov, the head of Vnesheconombank.
The Deutsche Bank loan capped what Kushner Cos. viewed as a triumph: It had purchased four mostly empty retail floors of the former New York Times building in 2015, recruited tenants to fill the space and got the Deutsche Bank loan in a refinancing deal that gave Kushner’s company $74 million more than it paid for the property.
The White House, in response to questions from The Post, said in a statement that Kushner “will recuse from any particular matter involving specific parties in which Deutsche Bank is a party.” Kushner and Deutsche Bank declined to comment.
Deutsche Bank loans to Trump and his family members have come under scrutiny. As Trump’s biggest lender, the bank supplied funds to him when other banks balked at the risk.
Democrats from the House Financial Services Committee wrote on March 10 that they were concerned about the “integrity” of a reported Justice Department investigation into the Russian money-laundering matter “given the President’s ongoing conflicts of interest with Deutsche Bank,” citing “the suspicious ties between President Trump’s inner circle and the Russian government.” The Justice Department did not respond to a question about whether it is following up on the money-laundering settlement that Deutsche Bank reached with New York state regulators in December.
On May 23, the Democratic members asked Deutsche Bank to disclose what it had learned in its internal review about whether Trump may have benefited from the improper Russian money transfers. The bank refused, citing U.S. privacy laws.
The loan with Deutsche Bank is mentioned in documents filed with the Securities and Exchange Commission as part of a public offering of mortgage-backed securities. It states that Kushner and his brother, Joshua, “will be guarantors” under what was called a “nonrecourse carve-out.” Such guarantees require more than a loan default to kick in. They are known as “bad boy” clauses, a reference to how a lender could seek to hold the guarantor responsible for the debt under circumstances that might include fraud, misapplication of funds or bankruptcy deemed inappropriate. The terms of the guarantee, which are not secured by collateral, are negotiated between lender and borrower.
The corporate loan and Kushner’s personal guarantee are not mentioned on his financial disclosure form, filed with the Office of Government Ethics. Blake Roberts, a lawyer who represented Kushner on the matter, said in a statement to The Post that Kushner’s form “does not list the loan guarantee” because the disclosure relied on “published guidance” from OGE that he said “clearly states that filers do not have to disclose as a liability a loan on which they have made a guarantee unless they have a present obligation to repay the loan.”
The Post sent the language cited by Kushner’s lawyer to Don Fox, a former general counsel and acting OGE director. After reviewing the wording, he said in an interview that he would have advised Kushner to disclose the personal guarantee of the $285 million corporate loan because of its size and possible implications.
“If I were still at OGE and somebody came to us with that set of facts, I would say, ‘By all means, disclose it,’ ” he said, referring to “the spirit of the law.”