Friday, March 31, 2017

Ivanka Trump and Jared Kushner Still Benefiting From Business Empire, Filings Show


Ivanka Trump and her husband, Jared Kushner, leaving the Oval Office in February. Credit Stephen Crowley/The New York Times

Ivanka Trump and Jared Kushner, President Trump’s daughter and son-in-law, will remain the beneficiaries of a sprawling real estate and investment business still worth as much as $741 million, despite their new government responsibilities, according to ethics filings released by the White House Friday night.
Ms. Trump will also maintain a stake in the Trump International Hotel in Washington, D.C. The hotel, just down the street from the White House, has drawn protests from ethics experts who worry that foreign governments or special interests could stay there in order to curry favor with the administration.
It is unclear how Ms. Trump would earn income from that stake. Mr. Kushner’s financial disclosures say that Ms. Trump earned between $1 million and $5 million from January 2016 to March 2017, and puts the value of her stake at between $5 million and $25 million.
The disclosures were part of a broad, Friday-night document release by the White House that exposed the assets of as many as 180 senior officials to public scrutiny. The reports show assets and wealth that senior staff members owned at the time they entered government service.
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Those disclosures were to include the assets of Gary Cohn, the former president of Goldman Sachs Group Inc. who now leads the National Economic Council, and Stephen K. Bannon, the counselor to the president.
Mr. Trump’s administration is considered the most wealthy in American history, with members of his senior staff and cabinet worth an estimated $12 billion, according to a tally by Bloomberg News. The Friday filings will add voluminous detail to that top-line figure.
“I think one of the really interesting things that people are going to see today — and I think it’s something that should be celebrated — is that the president has brought a lot of people into this administration, and this White House in particular, who have been very blessed and very successful,” the White House press secretary, Sean Spicer, said. White House officials “have given up a lot to come into government by setting aside a lot of assets.”
Until January, Mr. Kushner was the chief executive of Kushner Companies, a family-run real estate investment firm with holdings across the country, a growing business that has taken part in at least $7 billion of acquisitions over the past decade.
Late Friday, the White House released details of the plan devised by his advisers to avoid conflicts of interest between his government role and the wide-ranging business empire Mr. Kushner ran with his father. That business depends on foreign investment from undisclosed sources, as well as billions of dollars in loans from the world’s biggest financial services firms.
The White House also detailed the business interests of Ivanka Trump.
Although Mr. Kushner has stepped down from his management positions at the more than 200 entities that operated aspects of the family real estate business, he will remain a beneficiary of the vast majority of the business he ran for the past decade, through a series of trusts that already owned the various real estate companies.
The plan laid out on Friday “is not sufficient,” said Larry Noble, a former general counsel and chief ethics office for the Federal Election Commission. “While removing himself from the management of the businesses is an important step, he is still financially benefiting from how the businesses do. This presents potential for a conflict of interest. Given his level in the White House and broad portfolio it’s hard to see how he will recuse himself from everything that may impact his financial interest.”
While the filing discloses Mr. Kushner’s personal lenders, it does not provide information on his business partners or lenders to his projects.
His real estate firm has borrowed money from the likes of Goldman Sachs, Blackstone, Deutsche Bank and the French bank Natixis. It also received loans from Israel’s largest bank, Bank Hapoalim, which is the subject of a United States Justice Department investigation into allegations that it helped wealthy Americans evade taxes using undeclared accounts.
Most recently, his firm’s flagship property at 666 Fifth Avenue in Manhattan was the subject of controversy: at about the time his father-in-law received the Republican nomination last spring, Kushner’s firm began conversations with a Chinese company with ties to some of the Communist Party’s leading families about a plan to invest billions of dollars in the troubled office tower.
Kushner and the firm, Anbang Insurance Group, agreed to end the talks on Wednesday after weeks of negative publicity about the deal, criticized as a bailout of the Kushners. The building had already been rescued by a number of prominent firms, including the private equity giant Carlyle Group, and Zara, the Spanish fashion retailer founded and owned by Amancio Ortega, one of the world’s wealthiest men.
Mr. Kushner has divested his stakes in any businesses connected to that property.
The disclosures do not reveal the names of investors and lenders to ventures that Mr. Kushner is retaining a stake in. For example, the form shows Mr. Kushner is retaining a stake in a limited liability corporation that owns a Trump-branded luxury rental high rise building in Jersey City, worth as much as $5 million. That project was financed with tens of millions of dollars from wealthy Chinese investors through a controversial visa-for-sale program called EB-5.
However, the filing does not disclose the names of any of those investors — or partners in any of his other projects.
“We don’t know who the business partners are in many of these investments,” Mr. Noble said, “and those business partners may also have interests that will be affected by how he advises the government. And that’s a concern.”
“He could have foreign business partners who have a real interest in policy, and he may be advising the president on those policies,” Mr. Noble added. “This is a dark area where we just don’t know what’s going on.”
In all, the Kushner company owns more than 20,000 apartments and approximately 14 million square feet of office space.
Previous disclosures by the U.S. Office of Government Ethics showed that Mr. Kushner divested his interest in several entities, mostly partnerships connected to a venture capital firm run by his brother Joshua called Thrive Capital, which invests in technology firms, including Instagram.
He also shed his interests in a funds run by the private equity giant Blackstone Group — whose chief executive officer Stephen A. Schwarzman is a Trump economic adviser — as well as BlackRock, the world’s largest asset manager.
Overall, he has shed his stakes in 58 businesses.
He is still the sole primary beneficiary of the majority of the trusts that will retain assets, with his children as the secondary beneficiary.
The release Friday night is just the first step in the review for many of these filings by the federal government. For the most senior White House officials — Assistant to the President and Deputy Assistant to the President, which is about 50 positions in total — these forms will be sent to the Office of Government Ethics.
O.G.E., as it is known, will then review the forms to attempt to make sure the disclosures are complete and identify potential conflicts of interest that it sees, asking the White House staff members, through the White House Counsel’s office, to take steps to address any of these outstanding conflicts.
Only then will these disclosures be “certified” by O.G.E. and then O.G.E. will post the forms again, on its website, with changes that have been made to address its concerns.
“OGE has not certified these reports yet,” said Walter M. Shaub Jr., director of the United States Office of Government Ethics. “We will be working closely with the White House to refine them and address any questions we have about how they will handle potential conflicts of interest.”
Government Ethics had offered after Mr. Trump was elected to work more closely with the White House, including perhaps sending some of its lawyers, who are experts in the federal law governing conflicts, to the White House to train staff there that would be involved in reviewing the financial disclosure reports being filed by new White House employees. But the Trump administration did not take up this offer, an O.G.E. spokesman said Friday.
Mr. Shaub said the office is committed to seeing this process through.
“The primary purpose of financial disclosure is to identify and resolve conflicts of interest,” he said. “We take that responsibility seriously. We are looking forward to working with the White House to help them accomplish that goal.”
Mr. Kushner was also required to submit some limited financial information for his wife, Ivanka Trump, who will continue to receive payments from the Trump Organization as well as her fashion brand.
Ms. Trump, who now serves as an assistant to the president, resigned from her leadership roles at both companies. Instead of performance-based payments, Ms. Trump will now receive fixed payments from T International Realty, the family’s luxury brokerage agency, as well as fixed fees from two entities related to real estate projects, according to the documents.
Ms. Trump had previously rolled her fashion brand into the Ivanka M. Trump Business Trust, which is overseen by her brother-in-law, Josh Kushner, and sister-in-law, Nicole Meyer. The documents released on Friday valued the trust at more than $50 million.
The brand is largely a licensing operation, meaning that it sells the use of Ms. Trump’s name to partners who manufacture her clothes, shoes and other accessories. Since it is privately held, little is known about the company’s financials, but the Times has previously reported that revenues were roughly between $4 million and $6 million in 2013, before the debut of a major clothing partnership.
The less senior White House staff whose disclosures are being released today — which include Special Assistant to the President — are not reviewed by the Office of Government Ethics, so in that case, it is only the White House Counsel’s office that examines them to determine if there are potential conflicts, and what steps employees must make to sell assets, resign positions they might have or recuse themselves from decisions.
Already, a complaint has been filed against at least one White House staff member, for taking actions that might benefit his own financial interest. Christopher P. Liddell, who serves as an assistant to the president and the director for strategic initiatives had served as the chief financial officer of companies including Microsoft, International Paper and General Motors before taking his White House job, and until recently, he also owned stock in General Motors, according to forms that have been filed, among more than 750 other companies.
But in late January and early February, according to a complaint that has been filed by Citizens for Responsibility and Ethics in Washington, Mr. Liddell participated in a series of meetings that involved several of the companies that he still owned a total of about $2 million in stock in, including International Paper, General Motors. Mr. Liddell, according to disclosures, sold these stock holdings by mid-February.
“It is Ethics 101 — the most basic thing you are not supposed to do: using your official capacity to benefit your financial interest,” said Norman Eisen, who served as a White House ethics lawyer during the Obama administration and now is a co-chairman of the Citizens for Responsibility and Ethics in Washington. “And we are asking the question of whether he has done that here.”
The White House did not respond Friday when asked about this complaint.

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