Background check chief has 'never seen' mistakes like Jared Kushner forms - CNNPoliticsJared Kushner "enriched himself" by not revealing his ownership of a real estate tech business that raised millions of dollars while he served in the government, said a member of the House Judiciary Committee, calling it part of a pattern of unethical behavior that he believes should cause the White House Senior Adviser to be stripped of his security clearance.
Congressman Ted Lieu told Newsweek that Kushner's failure to list a company called Cadre on his initial financial disclosure forms—an oversight that could mean millions for the president’s son-in-law—is an ethical lapse that should have severe ramifications.
"It appears [Kushner] ended up being the beneficiary of that omission," said Lieu, a California Democrat. "He enriched himself by failing to disclose the asset."
Kushner’s lawyer has said that her client’s failure to list Cadre on the initial filing in March was merely an "administrative error." But that "error" allowed Kushner to maintain a stake in the start-up at a time when the three-year-old business doubled its venture funding from rich private investors.
Kushner's failure to cite Cadre on his financial disclosure form came as the Office of Government Ethics was deciding whether to grant him a Certificate of Divestiture, which requires incoming government employees to divest "100% of all financial interests" from listed companies so they don't violate conflict-of-interest laws. It also allows those government employees to sell their assets without paying heavy capital gains taxes.
The timeline suggests more than just an inadvertent oversight, but an effort by Kushner to hold onto Cadre rather than be forced to divest his interests in the emerging company, according to ethics experts.
On March 9, Kushner submitted his original financial disclosure form to the Office of Government Ethics. It did not specifically list Cadre as one of Kushner's assets, though he co-founded the company with his brother, Joshua Kushner and his Harvard classmate Ryan Williams, who remains Cadre CEO.
The company was already attracting attention in New York's real estate and tech circles because of its promise to disrupt both industries by allowing investors to buy shares in real estate developments much like they would buy shares of companies on the stock market.
Kushner’s lawyer says Cadre was not specifically cited on the March 9 form because his holding company, BFPS Ventures, acquired his interest in Cadre on February 17. That transaction appears to be noted on his financial records as a $100,000 to $250,000 sale.
But that amount does not match subsequent disclosures. When Kushner finally amended his financial disclosure form on July 21, he valued his interest in Cadre from $5 million to $25 million.
That disclosure came after Cadre had raised $65 million more in venture funding from major donors including Andreessen Horowitz, adding to a list of prominent venture capitalists such as Democratic donor George Soros and tech entrepreneur Peter Thiel.
The disclosure form suggests that Kushner has not fully divested from Cadre. Indeed, a representative for the start-up told Newsweek that Kushner maintains "a small, passive investment," but has "no operational or advisory role," describing the cofounder as "an early investor in the company."
Government watchdogs have a problem with Kushner’s continued ownership of Cadre.
"Mr. Kushner co-founded Cadre and continues to own a significant part of it," the nonprofit Citizens for Responsibility and Ethics in Washington wrote to then-Ethics Office Director Walter Shaub on July 6. "As a result [the Ethics Office] appears to have granted the certificate of divestiture based on incomplete information."
Shaub, who resigned on July 19 from the ethics office complaining of the Trump administration's disregard for conflict-of-interest guidelines, never signed off on Kushner’s Certificate of Divestiture. Instead, it was approved by the office's general counsel, David Apol on July 20, the day after Shaub quit. Apol replaced Shaub the next day. The New York Times described Apol as having "a much more cordial relationship with the White House" than Shaub.
Kushner's failure to include the full value of Cadre in his initial filing likely allowed him to hold onto most of his interest rather than be forced to divest, Citizens for Responsibility and Ethics in Washington says. And had Kushner revealed his ownership in Cadre, the company might not have been as attractive to investors, who would obviously be keen on putting money into a company so closely linked to a person inside the White House. A Kushner representative admitted that investors would certainly have known about Kushner’s holdings in Cadre from publicly available information, which concerns ethics experts.
"(Kushner) could potentially have been wanting to not disclose this asset as the latest round of funding was happening," Elana Fine, executive director of the Dingman Center for Entrepreneurship at the University of Maryland, College Park, said. "When a venture capitalist like Jared Kushner invests in a company, they’re always expecting a return on that investment."
The type of business Cadre does is also noteworthy because it sits at the nexus of Kushner’s two power bases: real estate and, now, politics.
Cadre operates as an online platform, connecting wealthy investors like Soros, for example, to emerging real estate properties in which they can buy partial ownership. The billionaire was one of Cadre's initial key investors, opening up a $250 million line of credit between his family offices and Kushner’s start-up.
But ethics experts think the real estate investing platform may allow foreign investors to hide their identities to the public, though not to Cadre insiders.
"It's a novel kind of business," said Virginia Canter, who is executive branch ethics counsel for Citizens for Responsibility and Ethics in Washington. "Because of the real estate interests that can be traded on the platform, and who can be buying and selling that real estate, [Kushner’s] financial interest in Cadre concerns me … You can have foreign governments or other individuals who have significant interests before Jared Kushner. This is the man responsible for Middle East peace talks and the American Innovation office.
"The point is, Cadre could result in a benefit to him and there’s no way for us to have any insight or to hold him accountable," she added. "In any other administration, he’d be required to divest of this asset. You line this up with [Kushner's] failures on his security forms … and it’s a lot to just say it was an inadvertent failure. It looks like it’s a systemic problem and, in some cases, more than that."
The head of a government bureau responsible for clearing background checks told lawmakers Wednesday he has "never seen that level of mistakes" when asked about numerous omissions in Jared Kushner's security clearance application.
Charles Phalen, the director of the National Background Investigations Bureau, a newly created division within the Office of Personnel Management, made the comment in response to a question during a House subcommittee oversight hearing.
Democrats have called on the White House to revoke security clearances granted to Kushner, President Donald Trump's son-in-law and senior adviser, and Ivanka Trump over reports of their use of personal email accounts and Kushner's multiple updates to his security clearance questionnaire, known as SF-86, for failing initially to include meeting with foreign officials.
Democrat Raja Krishnamoorthi of Illinois asked Phalen, "can you recall if there has ever been an applicant having to submit four addenda detailing over 100 errors and omissions being able to maintain their security clearance once those errors and omission have been identified?"
Phalen said he has not seen "the breadth" of all applications "but I have never seen that level of mistakes."
Earlier in the hearing, Phalen noted that OPM did not handle the fact checking of Kushner's application. "I don't know in the particular cases you're talking about because we had no visibility in our organization into any of those activities. Those were done by other organizations."
Kushner's initial SF-86 form did not mention any foreign contacts, though he quickly supplemented it to indicate that he would provide that information. He updated the form in the spring, listing about 100 contacts, but did not mention the June 2016 meeting he attended with Russian lawyer Natalia Veselnitskaya, Donald Trump Jr., and former Trump campaign chairman Paul Manafort. He updated the SF-86 forms once more in June to include that meeting.
Once the meeting was publicly revealed in press reports, it created a firestorm of interest especially after emails revealed Trump Jr. agreed to the meeting after being promised "very high level and sensitive information" that would "incriminate" Democratic presidential nominee Hillary Clinton, though Trump Jr. says no such information materialized.
Trump campaign officials' meetings with foreign nationals are of interest to Justice Department Special Counsel Robert Mueller's team and Congressional committees investigating Russian interference with the election.
Jamie Gorelick, an attorney for Kushner, said Thursday, "as we have previously stated, Mr. Kushner's SF-86 was prematurely submitted and, among other errors, did not list any contacts with foreign government officials. The next day, Mr. Kushner submitted supplemental information stating that he had had "numerous contacts with foreign officials" about which he would be happy to provide additional information. He submitted that supplemental information to the FBI and is cooperating fully with its background investigation."
In July, Kushner released a statement saying it was an inadvertent mistake. "I did not remember the meeting and certainly did not remember it as one with anyone who had to be included on an SF-86," Kushner said.
Earlier that month Gorelick expanded on the reason for the multiple amendments to the application form, noting, "he has since submitted this information, including that during the campaign and transition, he had over 100 calls or meetings with representatives of more than 20 countries, most of which were during transition. Mr. Kushner has submitted additional updates and included, out of an abundance of caution, this meeting with a Russian person, which he briefly attended at the request of his brother-in-law, Donald Trump Jr. As Mr. Kushner has consistently stated, he is eager to cooperate and share what he knows," Gorelick said.
A OPM spokesman said Phelan's comments was "taken out of context" but did not elaborate.
A new FEC filing says the Trump Campaign paid over $200,000 to a lawyer for Donald Trump Jr. The Law Offices of Alan S. Futerfas got $89,259 in disbursement dated July 14, and $148,665 in disbursement dated August 2. That amounts to $237,924.
Law Newz reached out to the Trump Campaign and Futerfas for comment, and to help put this payment in correct context.
He started working for Jr. amid striking news. After days of ever-shifting statements to The New York Times, the president’s son publicly admitted met with a Russian lawyer in June 2016 to get dirt on Democratic Candidate Hillary Clinton. A special counsel and several congressional committees are investigating whether the Trump campaign colluded in election interference and cyberattack efforts by the Russian government.
He denied wrongdoing. Though it did raise eyebrows it later turned out the Campaign paid Futerfas to represent Jr. days before the revelations about the 2016 meeting. This was revealed in the last FEC filing in July.
According to a new bombshell report by The Daily Beast, Members of Trump’s family and campaign staff, including Donald Trump Jr. and Kellyanne Conway, promoted tweets affiliated with a Russian “troll farm” during the 2016 presidential election.
An account that claimed to be the unofficial Twitter account of Tennessee Republicans used the username @Ten_GOP and was run by the Russian-backed Internet Research Agency, according to the publication.
Conway, Trump’s campaign manager at the time, retweeted two days before the 2016 election one of @Ten_GOP’s tweets that said, “Mother of jailed sailor: ‘Hold Hillary to same standards as my son on Classified info’ #hillarysemail #WeinerGate.”
Brad Parscale, Trump’s digital director on the campaign, also retweeted one of the posts that read, “Thousands of deplorables chanting to the media: ‘Tell The Truth!’ RT if you are also done w/ biased Media!”
According to the report, Trump Jr. had followed the account and had retweeted their posts on several different occasions. One week before the election, he retweeted, “BREAKING: #VoterFraud by counting tens of thousands of ineligible mail in Hillary votes being reported in Broward County, Florida Please, RT.”
On Election Day, he also retweeted a post that read, “This vet passed away last month before he could vote for Trump.. Here he is in his #MAGA hat.. #voted #ElectionDay.”
Former National Security Advisor Michael Flynn also retweeted the account on at least one occasion, and his son retweeted the account a total of 34 times.
After Flynn was fired in February after it was disclosed he misled the Trump administration about his contacts with Russian officials, the account promoted for Flynn to be reappointed as national security adviser.
The account, which was created in Nov. 2015 and attracted more than 100,000 followers, was suspended in August, according to the Daily Beast.
The Senate Intelligence Committee met with Twitter earlier this month to discuss how Russia interfered with the election on Twitter. The Committee also invited Twitter, Facebook, and Alphabet, Google’s parent company, to testify publicly on Nov. 1.
The discovery presents the first evidence that several members of the Trump campaign pushed covert Russian propaganda on social media in the run-up to the 2016 election.
A prominent exiled Russian oligarch said in an exclusive interview with NBC News that he is nearly certain Russian President Vladimir Putin tried to collaborate with the Trump campaign, and that he believes a top Russian banker was not "acting on his own behalf" when he held a controversial meeting with Jared Kushner last December.
The pointed remarks come from a longtime Putin rival, Mikhail Khodorkovsky, an oil executive who was Russia's richest man before he was imprisoned and exiled by the Kremlin.
"I am almost convinced that Putin's people have tried to influence the U.S. election in some way," Khodorkovsky told MSNBC’s Ari Melber in his first U.S. television interview since Trump took office.
Khodorkovsky says he believes the likelihood that Putin "personally" tried to cooperate with the Trump campaign to affect the election is a "9 out of 10."
"Whether or not that proposal was accepted, I would let the people responsible for investigating the matter answer that question," he added.
Khodorkovsky was freed and exiled from Russia in 2013, after spending 10 years in prison for tax evasion. Several international human rights groups have said the prosecution was political retribution for his public criticism of Putin.
Acting on orders
Khodorkovsky has links to some Putin allies implicated in the FBI probe into Russian election meddling, based on his time running Yukos, Russia's largest oil company.
His former head of human resources, Sergey Gorkov, now runs a Kremlin bank and met with Kushner in December last year. The U.S. has accused Gorkov's bank of providing cover for Russian spies.
Khodorkovsky says Gorkov was a "fine employee" who "carries out orders," suggesting the banker would not have been acting alone in meeting with a senior figure of the incoming Trump administration.
"I have no doubt that he wouldn’t do anything on his own behalf," Khodorkovsky said.
READ: The full transcript of Ari Melber's interview with Mikhail Khodorkovsky
Khodorkovsky also said he believes Gorkov's orders come from either Andrey Kostin or Herman Gref, who both run Kremlin-backed banks that were sanctioned by the Obama administration.
"If there were any instructions, they came from the level of Kostin, the chairman of the board of VTB bank," Khodorkovsky said, "or from the level of Mr. Gref, which isn’t nearly as likely, despite the two of them being close."
Khodorkovsky says he believes the likelihood that Putin "personally" tried to cooperate with the Trump campaign to affect the election is a "9 out of 10."
"Whether or not that proposal was accepted, I would let the people responsible for investigating the matter answer that question," he added.
Khodorkovsky was freed and exiled from Russia in 2013, after spending 10 years in prison for tax evasion. Several international human rights groups have said the prosecution was political retribution for his public criticism of Putin.
Acting on orders
Khodorkovsky has links to some Putin allies implicated in the FBI probe into Russian election meddling, based on his time running Yukos, Russia's largest oil company.
His former head of human resources, Sergey Gorkov, now runs a Kremlin bank and met with Kushner in December last year. The U.S. has accused Gorkov's bank of providing cover for Russian spies.
Khodorkovsky says Gorkov was a "fine employee" who "carries out orders," suggesting the banker would not have been acting alone in meeting with a senior figure of the incoming Trump administration.
"I have no doubt that he wouldn’t do anything on his own behalf," Khodorkovsky said.
READ: The full transcript of Ari Melber's interview with Mikhail Khodorkovsky
Khodorkovsky also said he believes Gorkov's orders come from either Andrey Kostin or Herman Gref, who both run Kremlin-backed banks that were sanctioned by the Obama administration.
"If there were any instructions, they came from the level of Kostin, the chairman of the board of VTB bank," Khodorkovsky said, "or from the level of Mr. Gref, which isn’t nearly as likely, despite the two of them being close."
Kostin also categorically denies Khodorkovsky's claims.
In a statement to MSNBC, Kostin's bank said Khodorkovsky’s assertion is "completely false, unfounded and with no substance."
"Mr. Kostin is not personally acquainted with Mr. Kushner," the statement said, and he has "never had discussions, or any other kind of communication, with Mr. Gorkov regarding a possible meeting with Mr. Kushner, and doesn’t understand the point such a meeting could have had." Gref’s bank did not respond to requests for comment.
Kushner's meeting with Gorkov already drew contradicting accountsfrom the attendees. The Kremlin bank said it was a business meeting, while the Trump administration said it was a diplomatic meeting.
Asked about those conflicting accounts, Khodorkovsky said "it’s difficult for me to interpret such a contradiction."
"It’s very possible that what your administration regards as a governmental issue, Russian representatives view as purely business," Khodorkovsky said. "Although, in my experience, it's typically the opposite."
Putin needs an American enemy
More broadly, Khodorkovsky also sized up Putin's relationship with Trump, noting Putin is a "strong tactician" with more experience.
"If they were to face off, I wouldn't bet on Trump," Khodorkovsky said.
He added that Putin’s perceived success at affecting the U.S. election is still a challenge for him back in Russia.
"Putin needs America as an enemy," he said. "Now he’s got complicated task of having to say, 'Yes, Trump is our guy in the White House, but America is our enemy,'" he continued, adding that so far, "the Kremlin propagandists are managing to succeed at this."
Khodorkovsky also reflected on his years in a Russian prison, and his outlook for speaking out now.
"Could I have been murdered? Certainly," he says of his days behind bars. "I was knifed in the face while sleeping. Was I afraid of it? No."
He now runs an organization devoted to supporting democratic reforms in Russia, and says he "accepts the risks" of speaking out against Putin while living in exile in Switzerland.
"I could make my life safer by not getting involved in the sociopolitical life of my country," he says, "but then it wouldn’t be my life."
I was about to make a whole new thread on this. Who do you think will be first to be charged? Manafort? Flynn? Don Jnr?
The Big Orange Retard is already having a meltdown on Twitter.I was about to make a whole new thread on this. Who do you think will be first to be charged? Manafort? Flynn? Don Jnr?
#RussiaIsFakeNews folks are gonna be crying in their cereal tomorrow morning, and...
She needs to hire a bullet proof vest and a body guard.Even soon-to-be ex-wifey's about to snitch.....
Don Jr's wife hires criminal defense lawyer for divorce case as Mueller probe heats up
When the Kushner Cos. bought three apartment buildings in a gentrifying neighborhood of Queens in 2015, most of the tenants were protected by special rules that prevent developers from pushing them out, raising rents and turning a tidy profit.
But that’s exactly what the company then run by Jared Kushner did, and with remarkable speed. Two years later, it sold all three buildings for $60 million, nearly 50 percent more than it paid.
Now a clue has emerged as to how President Donald Trump’s son-in-law’s firm was able to move so fast: The Kushner Cos. routinely filed false paperwork with the city declaring it had zero rent-regulated tenants in dozens of buildings it owned across the city when, in fact, it had hundreds.
While none of the documents during a three-year period when Kushner was CEO bore his personal signature, they provide a window into the ethics of the business empire he ran before he went on to become one of the most trusted advisers to the president of the United States.
“It’s bare-faced greed,” said Aaron Carr, founder of Housing Rights Initiative, a tenants’ rights watchdog that compiled the work permit application documents and shared them with The Associated Press. “The fact that the company was falsifying all these applications with the government shows a sordid attempt to avert accountability and get a rapid return on its investment.”
Kushner Cos. responded in a statement that it outsources the preparation of such documents to third parties that are reviewed by independent counsel, and “if mistakes or violations are identified, corrective action is taken immediately.”
“Kushner would never deny any tenant their due-process rights,” it said, adding that the company “has renovated thousands of apartments and developments with minimal complaints over the past 30 years.”
For the three Queens buildings in the borough’s Astoria neighborhood, the Kushner Cos. checked a box on construction permit applications in 2015 that indicated the buildings had zero rent-regulated tenants. Tax records filed a few months later showed the company inherited as many as 94 rent-regulated units from the previous owner.
In all, Housing Rights Initiative found the Kushner Cos. filed at least 80 false applications for construction permits in 34 buildings across New York City from 2013 to 2016, all of them indicating there were no rent-regulated tenants. Instead, tax documents show there were more than 300 rent-regulated units. Nearly all the permit applications were signed by a Kushner employee, including sometimes the chief operating officer.
Had the Kushner Cos. disclosed those rent-regulated tenants, it could have triggered stricter oversight of construction crews by the city, including possibly unscheduled “sweeps” on site by inspectors to keep the company from harassing tenants and getting them to leave.
Instead, current and former tenants of the Queens buildings told the AP that they were subjected to extensive construction, with banging, drilling, dust and leaking water that they believe were part of targeted harassment to get them to leave and clear the way for higher-paying renters.
“It was noisy, there were complaints, I got mice,” said mailman Rudolph Romano, adding that the Kushner Cos. tried to increase his rent by 60 percent. “They cleaned the place out. I watched the whole building leave.”
Tax records show those rent-regulated units that numbered as many as 94 when Kushner took over fell to 25 by 2016.
In Kushner buildings across the city, records show frequent complaints about construction going on early in the morning or late at night against the rules, improper or illegal construction, and work without a permit.
At a six-story walk-up in Manhattan’s East Village that was once home to the Beat poet Allen Ginsberg, the Kushner Cos. filed an application to begin construction in late 2013 that, again, listed zero rent-regulated tenants. Tax records a few months later showed seven rent-regulated units.
“All of a sudden, there was drilling, drilling. ... You heard the drilling in the middle of night,” said one of the rent-regulated tenants, Mary Ann Siwek, 67, who lives on Social Security payments and odd jobs. “There were rats coming in from the abandoned building next door. The hallways were always filled with lumber and sawdust and plaster.”
A knock on the door came a few weeks later, and an offer of at least $10,000 if she agreed to leave the building.
“I know it’s pretty horrible, but we can help you get out,” Siwek recalls the man saying. “We can offer you money.”
Siwek turned down the cash and sued instead. She said she won a year’s worth of free rent and a new refrigerator.
New York City Council member Ritchie Torres, who plans to launch an investigation into permit applications, said: “The Kushners appear to be engaging in what I call the weaponization of construction.”
Rent stabilization is a fixture of New York City that can bedevil developers seeking to make money off buildings. To free themselves of its restrictions, landlords usually have to wait until the rent rises above $2,733 a month, something that can take years given the small increases allowed each year.
Submitting false documents to the city’s Department of Buildings for construction permits is a misdemeanor, which can carry fines of up to $25,000. But real estate experts say it is often flouted with little to no consequences. Landlords who do so get off with no more than a demand from the city, sometimes a year or more later, to file an “amended” form with the correct numbers.
Housing Rights Initiative found the Kushner Cos. filed dozens of amended forms for the buildings mentioned in the documents, most of them a year to two later.
“There is a lack of tools to go after landlords who harass tenants, and there is a lack of enforcement,” said Seth Miller, a real estate lawyer who used to work at a state housing agency overseeing rent regulations. Until officials inspect every construction site, “you’re going to have this incentive for landlords to make life uncomfortable for tenants.”
New York City’s Department of Buildings declined to comment specifically on the Kushner documents but said it is ramping up its monitoring of construction, hiring 72 new inspectors and other staff under laws recently passed by the City Council to crack down on tenant harassment.
“We won’t tolerate landlords who use construction to harass tenants — no matter who they are,” said spokesman Joseph Soldevere.
Exactly how much money the Kushner Cos. earned from the buildings mentioned in the documents is unclear. Of those 34 buildings, only the three in Queens and a fourth in Brooklyn appear to have been sold. The company also likely made money by reducing the number of rent-regulated tenants and bringing in those who would pay more.
Jared Kushner, who stepped down as CEO of the Kushner Cos. last year before taking on his advisory role at the White House, sold off part of his real estate holdings as required under government ethics rules. But he retained stakes in many properties, including Westminster Management, the Kushner Cos. subsidiary that oversees its residential properties. A financial disclosure last year showed he still owns a stake in Westminster and earned $1.6 million from the holding.
Back in Queens, the mailman Romano was one of the few rent-regulated tenants who fought back.
He hired a lawyer who found out he was protected from the Kushners’ 60 percent rent hike by law, something Romano did not know at the time. And his rent, which was set to increase to $3,750, was restored to $2,350.
Romano is still in the building where he has lived for nine years, with his wife, four children and his guests from the construction days — the mice.
“I still haven’t gotten rid of them.”
This won't amount to anything. It's a shitty thing to do but it's terribly common and generally amounts to nothing even when they do catch it in a reasonable amount of time.
Again? How many fake docs or omissions is that now?