The Real Deal New York

Kushner Cos. scored big loans after lenders met with Jared at the White House: report

Family firm, lenders deny they discussed real estate business during meetings
March 01, 2018 10:55AM

The White House, Dumbo Heights, Apollo’s Joshua Harris, Citigroup’s Michael Corbat and Jared Kushner (Credit: Dumbo Heights, Getty Images and Citigroup)

Kushner Companies received more than $500 million in loans last year from lenders who had recently met with Jared Kushner at the White House, the New York Times reported. The loans are the latest instance in a continued line of dealings that represent potential conflicts of interest between Kushner’s government and business roles.

Early last year, Apollo Global Management co-founder Joshua Harris met with Kushner several times at the White House, three people familiar with the meetings told the Times. Harris, who was advising the Trump administration on infrastructure policy, discussed a possible White House job that never materialized.

But in November, Apollo lent Kushner Companies $184 million to refinance the 30-story Chicago office building that’s home to AT&T, which the company bought in late 2007 for $275.7 million.

Kushner also met earlier last year with Citigroup chief executive Michael Corbat, according to the Times. The two discussed financial and trade policy and did not talk about the family real estate business, one person told the newspaper.

Shortly after the meeting, Citigroup in the spring lent Kushner Companies and an unnamed partner $325 million. Kushner and the partner appear to have used the loan as part of the deal to buy Invesco out of the Dumbo Heights complex in Brooklyn.

The deals add fuel to claims that Kushner’s business is in too close proximity to his role at the White House.

“This is exactly why senior government officials, for as long back as I have any experience, don’t maintain any active outside business interests,” said Don Fox, the former head of the Office of Government Ethics during the Obama administration. “The appearance of conflicts of interest is simply too great.”

Kushner Companies spokesperson Christine Taylor said Kushner’s White House job had no bearing on the family company’s relationships with financial institutions.

“Stories like these attempt to make insinuating connections that do not exist to disparage the financial institutions and companies involved,” she said.

Taylor also noted in an email to The Real Deal that the buildings are “high performing assets and didn’t need anyone’s help with finding financing.” The AT&T building, for example, is fully leased, she said.

A spokesperson for Apollo said Harris was not involved in the decision to make the loan to Kushner Companies, and that the deal “went through the firm’s standard approval process.”

A Citigroup spokesperson said Kushner Companies has been a client since before the election and the relationship was not connected to Kushner’s White House job. The Dumbo Heights loan, the spokesperson said, was negotiated with one of Kushner Companies’ business partners.

Meanwhile, the head of New York’s Department of Financial Services last week asked Deutsche Bank, Signature Bank and New York Community Bank to provide information about their relationships with Kushner and Kushner Companies, Bloomberg reported.

The broad request sought information regarding the banks’ relationship with Kushner and his properties, records for certain loan applications and descriptions of how the banks approve loans to Kushner Companies, according to Bloomberg.

Taylor, the Kushner Companies spokesperson, said the company has not received a copy of the letter from the financial services department.

“Our company is a multibillion enterprise that is extremely financially strong.,” she said. “Prior to our CEO voluntarily resigning to serve our country, we never had any type of inquiries. These type of inquiries appear to be harassment solely for political reasons.”

Taylor further added: “All these stories are politically motivated and not based on any conceivable wrongdoing by our company.” [NYT and Bloomberg]Rich Bockmann