On Thursday, the real estate firm owned by the family of White House advisor and son-in-law to the president Jared Kushner received approximately $800 million in federally-backed funding in a deal that is raising ethical concerns, Law & Crime reports. The funds were secured so that the company could purchase a $1.1 billion Mid-Atlantic apartment portfolio.
The 10-year, $800 million debt package was issued by Warren Buffet’s Berkadia Commercial Mortgage and the debt is backed by government-owned Freddie Mac. The portfolio consists of about 6,000 rental units in the Maryland-D.C. area.
The deal marks the company’s biggest acquisition since its purchase of 666 Fifth Avenue in 2007, which set a record at the time at a price of $1.8 billion. The infamously troubled lease was ultimately unloaded to an asset management company after creating substantial financial pressure for Kushner and his family.
Prior to taking his position as one of President Donald Trump’s senior advisors, Kushner was the company’s chief executive officer. He has since divested himself from the company to avoid conflicts of interests and the company is currently owned by his family and operated by Charles Kushner, Nicole Kushner Meyer, and Laurent Morali.
When the potential deal was first reported in February of this year, Peter Mirijanian, a spokesman for Jared Kushner’s attorney Abbe Lowell, reinforced that Kushner has divested his interests and was no longer involved in Kushner Companies’ management or any related business decisions.
“As part of an ethics agreement he has and has followed, Mr. Kushner has had no role in the Kushner Companies or its activities since joining the government over two years ago,” Mirijanian wrote at the time. “He is walled off from any business or investment decisions and has no idea or knowledge of these activities.”
Kushner Cos. got a $800 million federally backed loan to buy apartments. Jared Kushner, the company’s former head, is a senior White House adviser. https://t.co/Vch7N4SIwG— Citizens for Ethics (@CREWcrew) May 24, 2019
None-the-less, due to the United States backing the lion’s share of the funds through Freddie Mac, ethics experts and watchdog groups have expressed concern with the deal.
“What’s really infuriating is that Kushner’s lawyer defends him by referring to an ethics agreement the public has not seen, tweeted Walter Schaub, the former director of the U.S. Office of Government Ethics. “The ethics agreements of all Senate-confirmed appointees are online. Why are the ethics agreement of White House appointees secret?”
This is by no means the first time Kushner has raised concern among such watchdogs. When completing his initial government disclosure forms, Kushner failed to disclose multiple relevant financial ties. In addition, Nicole Kushner Meyer, Kushner’s sister, mentioned Kushner by name when negotiating an investment for their company’s New Jersey development in 2017, raising additional concerns about Kushner’s role in the family business.