Ivanka, Kushner could profit from tax break they pushed
WASHINGTON—At an Oval Office gathering earlier this year, President Donald Trump began touting his administration’s new real estate investment program, which offers massive tax breaks to developers who invest in downtrodden American communities. He then turned to one of the plan’s strongest supporters.
“Ivanka, would you like to say something?” Trump asked his daughter. “You’ve been pushing this very hard.”
The Opportunity Zone program promoted by Ivanka Trump and her husband Jared Kushner — both senior White House advisers — could also benefit them financially, an Associated Press investigation found.
Government watchdogs say the case underscores the ethical minefield they created two years ago when they became two of the closest advisers to the president without divesting from their extensive real estate investments.
Trump and Kushner jointly own a big stake in a real estate investment firm, Cadre, that recently announced it is launching a series of Opportunity Zone funds that seek to build major projects under the program from Miami to Los Angeles. Separately, the couple owns interests in at least 13 properties held by Kushner’s family firm that could qualify for the tax breaks because they are in Opportunity Zones in New Jersey, New York and Maryland — all of which, a study found, were already coming back.
Six of the Kushner Cos. buildings are in New York City’s Brooklyn Heights area, with views of the Brooklyn Bridge and Manhattan skyline, where a five-bedroom apartment recently listed for $8 million. Two more are in the beach town of Long Branch, N.J., where some oceanfront condos within steps of a white-tablecloth Italian restaurant and a Lululemon yoga shop list for as much as $2.7 million.
There’s no evidence the couple had a hand in selecting any of the nation’s 8,700 Opportunity Zones, and the company has not indicated it plans to seek tax breaks under the new program. But the Kushners could profit even if they don’t do anything — by potentially benefiting from a recent surge in Opportunity Zone property values amid a gold rush of interest from developers and investors.
Ivanka Trump’s advocacy for the Opportunity Zone program “creates a direct conflict of interest with her spouse’s investment in Cadre,” said Virginia Canter, chief ethics counsel for the nonprofit Citizens for Responsibility and Ethics in Washington. “Jared Kushner’s interests are Ivanka Trump’s interests and vice versa.”
The couple’s financial disclosures show their jointly held financial empire is worth between $200 million and $800 million, with much of it in real estate, including a stake of between $25 million and $50 million in Cadre. Those documents state they must recuse themselves from dealing with policy matters that touch on real estate and “would have a direct and predictable effect on Cadre.” Ivanka Trump also has interests in Trump Organization properties which are not located inside Opportunity Zones.
“Ms. Trump has divested assets, set up trusts, removed herself from businesses and decisions about her investments,” Abbe Lowell, ethics counsel for the couple, said in a statement. “In addition, she adheres to the ethics advice she has received from counsel about what issues she can work on and those to which she is recused.”
The Kushner Cos. did not respond to requests comment.
President Trump was scheduled to attend an Opportunity Zone event in Washington on Wednesday that would depict the program as a boon to distressed communities. White House spokesman Hogan Gidley told the AP that individual state governors of both parties nominate communities for Opportunity Zone designation “based on what underserved areas would benefit most. … The White House has nothing to do with those decisions.”
The Investing in Opportunity Act, which became law last December as part of the Republican-sponsored tax overhaul, never gained traction when it was first proposed during the Obama administration, but it quickly found favor in a White House headed and dominated by real estate developers and investors.
A significant moment came when the law’s key GOP sponsor, South Carolina U.S. Sen. Tim Scott, met President Trump after the violence-plagued white supremacist rally in Charlottesville, Virginia, in August of 2017.
Trump promised Scott his support for Opportunity Zones as a way to show his administration’s outreach to minority communities. But Scott had already found a supporter weeks earlier in Trump’s daughter, in conversations that grew out of previous meetings about passing a child care tax credit.
Political sponsors and lobbyists told the AP that Ivanka Trump played an important role in promoting the legislation, while Kushner was also quietly supportive behind the scenes.
A team from Economic Innovation Group, or EIG, a Washington think tank that pioneered the Opportunity Zones concept, met with top Kushner aides Reed Cordish and Chris Liddell two weeks before the tax reform bill was passed.
Funded by Napster founder and early Facebook investor Sean Parker, EIG spent more than $1.4 million on lobbying over the past two years, both before and after the Investing in Opportunity Act passed.