Why Jared Kushner’s conflicts of interest matter

Jared Kushner, Donald Trump’s son-in-law, is all but running foreign policy during Trump’s transition to the Oval Office, while also serving as CEO of his family business and doing deals with a companies closely tied to the Chinese government.

A New York Times report on Kushner’s conflicts of interest makes clear that they’re at least as numerous and complex as those of his father-in-law, the future president. Kushner has a loan from an Israeli bank under Justice Department investigation. He does business with a Chinese company that the Obama administration has blocked from acquiring some American hotels out of security concerns. Investors in some of his projects have benefited from a federal program that hands out US visas in exchange for hefty investments in American companies.

Even if Kushner were just Trump’s son-in-law, this would be troubling: Trump will have authority over a wide range of federal programs and regulators that could affect Kushner’s business. But Kushner is much more than just a relative. He’s a trusted adviser, serving as a go-between for the president-elect on foreign policy and laying the groundwork for a role in the White House.

The report on Kushner makes clear the Trump administration’s conflicts of interest reach far beyond Trump himself, whose business ties already create an unprecedented way for foreign governments and special interests to try to bribe the president.

The president-elect is relying on advisers and building an administration that has already shown a willingness to give short shrift to traditional concerns about ethics. Kushner’s ties to China show the ultimate risk: that beyond just enabling corruption, this disregard for ethics could threaten national security.

Kushner’s business relationships with China could change foreign policy

Eight days after the presidential election, the New York Times reported, Kushner met with the chairman of Anbang Insurance Group, a Chinese company with somewhat mysterious ownership that has been buying up hotels in the United States, including the famed Waldorf-Astoria in New York City.

Anbang’s shareholders are concealed through a series of shell companies, but the company is tied to China’s leading politicians. And the Obama administration’s actions have suggested that the company’s acquisition of hotels could be a security risk:

• Obama bucked tradition in 2015 when he didn’t stay at the Waldorf-Astoria for an event at the United Nations not long after Anbang bought the hotel. Officials cited nonspecific security concerns as the reason for the president’s decision to stay elsewhere.
• A panel made up of the leaders of nine federal agencies, which evaluates business deals that involve foreign governments or companies connected to them for security risks, scuttled Anbang’s plans to acquire the Hotel del Coronado, near a San Diego naval base. Anbang also pulled out of an attempt to buy Starwood Hotels that would have required review by the committee.

Kushner, on the other hand, is trying to partner with Anbang to redevelop 666 Fifth Avenue, his company’s flagship property. And, as the New York Times points out, the Committee on Foreign Investment — the panel that reviews Anbang’s acquistions — will soon be made up of Trump’s appointees, rather than Obama’s.

This matters because Kushner is specifically influential on foreign policy. And although he doesn’t have an official role in the administration yet, he’s already become a go-between: When the Chinese ambassador needed to get in touch with the Trump administration after Trump talked to the president of Taiwan, creating a diplomatic uproar, they called Kushner, the Times reported.

And although Kushner has said he’ll resign as CEO and sell his stake in some of his properties, including 666 Fifth Avenue, it’s not clear exactly what that divestment will entail — or whether it will get rid of all of the conflicts of interest the Times reported.

Kushner’s conflicts of interest rival Trump’s

The president-elect has unprecedented conflicts of interest and doesn’t have to abide by federal ethics laws. If Kushner takes an official position in the administration — and he’s hired lawyers who say he could, despite anti-nepotism laws — he will be more constrained. But his past business relationships create a potential for some serious conflicts of interest, and in some cases already may have influenced him:

The Times reported:

• Goldman Sachs has lent money to the Kushner Companies and invested in Cadre, a real estate technology firm that Kushner cofounded. Kushner was a leading voice urging Trump to appoint Gary Cohn, president of Goldman Sachs, as his chief economic adviser.
• Kushner’s company has taken a loan from Bank Hapoalim, Israel’s largest bank, which the Justice Department is investigating for helping enable tax evasion in the US.
• Foreign investors, including some from Russia and China, have invested in Kushner’s companies, including Cadre and the real estate firm. Foreign investors on some projects were rewarded with visas through the EB-5 program, which gives investors putting at least $500,000 into American companies a two-year visa and path to citizenship. Congress is responsible for renewing the EB-5 program, and the Government Accountability Office, in the executive branch, has raised concerns about it.
• Kushner has an indirect investment in a venture capital firm that has invested in Oscar, a health insurance company that depends on the Affordable Care Act.
• And, of course, Kushner is related to Trump — although he’s hired a Washington law firm that, according to the Times, argues that, even though federal officials can’t hire relatives to work in the agencies they lead, the White House is not a federal agency and so Trump can hire him.

The problems are bigger than just Jared Kushner

The bottom line here isn’t just that Kushner has conflicts of interest that could influence the advice he gives his father-in-law, and, by extension, American policy — although that would be pretty worrisome on its own.

It’s that the conflicts of interest in the Trump administration won’t just be confined to the president-elect. Instead, the web of conflicts appears likely to spread, offering more ways for foreign governments and interest groups to affect the administration’s decisions by working their business relationships with people in positions of power — including the president himself.

The director of the federal Office of Government Ethics is raising concerns about Trump’s Cabinet nominees, saying the fact that confirmation hearings have been scheduled for nominees who haven’t finished their financial disclosures is “of deep concern.”

Together, the Kushner report, the Office of Government Ethics letter, and the fact that Trump still hasn’t said how he will step back from his companies while in office suggest that the Trump administration just isn’t all that concerned about traditions typically seen as a bulwark against corruption.

http://www.vox.com/policy-and-politics/2017/1/9/14205898/jared-kushner-white-house-conflicts-anbang

Mentions

• 88 KUSHNER-KABR (Trump Bay Street)
• Waldorf Astoria Beverly Hills

States

• New Jersey