Trump son-in-law's ties to Israel raise questions of bias
JERUSALEM: Jared Kushner, President Donald Trump's son-in-law and senior adviser, has deep business and personal ties to Israel that could raise questions about his ability to serve as an honest broker as he oversees the White House's Mideast peace efforts.
But some say these ties, which include a previously undisclosed real estate deal in New Jersey with a major Israeli insurer, may give Kushner a surprising advantage as he is expected to launch the first peace talks of the Trump era. Having the trust of Israeli Prime Minister Benjamin Netanyahu, the thinking goes, could make Kushner well positioned to extract concessions from the hard-line Israeli leader.
Kushner's family real estate company has longstanding and ongoing deals with major Israeli financial institutions. These relationships, along with a personal friendship with Netanyahu and past links to the West Bank settler movement, could emerge as potential stumbling blocks by creating an appearance of bias.
Harel Insurance Investments & Financial Services Ltd. confirmed that it shares ownership and profits on a New Jersey apartment building with the Kushner Companies. Harel informed The Associated Press of the joint investment and said it had not previously announced it publicly. In addition, the Kushner Companies confirmed longstanding relationships with two major Israeli banks that have been investigated by US authorities for allegedly helping wealthy clients evade US taxes.
"Financial investments in Israel would seem to only further complicate conflicts of interest issues," said Larry Noble, senior director of regulatory programs and general counsel at Campaign Legal Center, a group that advocates for strong enforcement of campaign finance laws.
Jared Kushner headed the billion-dollar family firm before joining the White House as a senior adviser in January. As a condition to taking the job, Kushner has agreed to file a financial disclosure report and divest some holdings that could create a conflict of interest.
The Trump administration has faced repeated conflict of interest accusations since taking office. Although the billionaire real estate magnate says he's no longer managing his global financial interests, critics say these businesses still stand to profit from the prestige or policy decisions of the presidency. In addition, they note that Trump's children continue to manage many of these ventures, opening the door for the president to continue to wield his clout behind the scenes.
While Kushner's role in Mideast diplomacy remains unclear, Trump has said his son-in-law will work to "broker a Middle East peace deal."
Last week, Jason Greenblatt, a White House envoy who reports to Kushner, paid his first official visit to the region, holding a series of meetings with Israeli and Palestinian officials on what was billed as a listening tour to sound out the sides.
As the US pushes forward, Kushner's family's business and personal ties to Israel have raised questions over his ability to mediate.
The newly disclosed deal with Harel, one of Israel's biggest financial groups, was for a multifamily residential building in New Jersey with Kushner, the Israeli insurer said, adding that both companies continue to collect tenants' rent payments.
Harel would not say when the property was purchased, how much it cost or even give its address, though it said it was a "relatively small" investment. The company, which trades on the Tel Aviv Stock Exchange, managed some $50 billion in assets as of the end of 2015, according to its website.
Harel said it has also partnered with Kushner on a much larger deal: A consortium of lenders that provided some $50 million to the Chetrit Group and JDS Development, two New York real estate firms that are trying to build a 73-story residential tower that aims to be Brooklyn's tallest. The loan was repaid and "yielded a handsome profit," Harel said in a statement.
"As is known, Kushner (Companies) are experienced and knowledgeable with proven ability in deals in the rental property sector in general and in New Jersey specifically," Harel said.
A Kushner Companies spokeswoman, Risa Heller, said the loan for the Brooklyn project was paid off, but she declined to say if Jared Kushner has sold his interest in the New Jersey property. Jamie Gorelick, an attorney who has advised Kushner on conflict of interest matters, referred questions to Heller.
The Kushner Companies also confirmed having a "longstanding relationship" with two major Israeli banks, Bank Hapoalim and Bank Leumi, but wouldn't elaborate. Both banks declined to comment.
The Trump administration has inherited a Justice Department investigation into allegations that Bank Hapoalim helped American clients evade taxes, and the bank could reach a settlement in the case as early as this year. Bank Leumi also allegedly helped US customers evade US taxes from 2002-2010, and reached a settlement with the Justice Department in 2014 to pay $400 million to the US government.
There is no evidence that Kushner Companies was connected to either investigation, and the Justice Department declined to comment.
White House spokeswoman Hope Hicks did not answer specific questions about Jared Kushner's ties to Israeli business partners. "Mr. Kushner will comply with financial disclosure and ethics requirements, including the obligation to recuse from particular matters involving specific parties if a reasonable person would question his impartiality," she said in an email statement.
Kushner is covered by government conflict of interest laws, so he is required to divest himself of any financial interests that may present a conflict and must not participate in any matter that has a direct effect on his financial holdings.
While Kushner has divested himself of some financial interests, the assets were put in a trust run by relatives, presenting the potential for a conflict of interest, said Noble, the campaign finance advocate.
He said the Justice Department investigation into Bank Hapoalim is "especially problematic" if Kushner or the White House in any way influence the inquiry.
Kushner's business ties are just one of the potential pitfalls to his diplomatic career.
Trump's son-in-law was also co-director of a family foundation that donated tens of thousands of dollars to Jewish settlement groups in the West Bank, according to US tax records. The family also donated at least $298,600 to the Friends of the Israel Defense Forces, an organization that runs educational and cultural programs for Israeli soldiers, between 2010 and 2012, according to the tax records.
Palestinians and most of the international community consider Jewish settlements to be obstacles to peace because they are built on territory captured by Israel in the 1967 Mideast war that Palestinians want for a future state. The Palestinians also revile the Israeli military after decades of bloodshed.
Kushner and his family also have longstanding personal ties to Netanyahu. At a White House news conference last month, Netanyahu joked that he has known Kushner since he was a boy.
Zalman Shoval, a former Israeli ambassador to the US and co-chairman of an Israeli real estate fund that counts Kushner's father, Charles, among its backers, said he doesn't know Jared Kushner personally but thinks his affiliations to Israel will be helpful in peace negotiations.
"There's trust. When there's trust on one side, there can also be a more conciliatory attitude on that side," Shoval said.
Palestinian officials would not comment on Kushner, but a senior Palestinian official said he was encouraged by early signs that the new US president was strongly committed to the establishment of a Palestinian state.
Jibril Rajoub told foreign reporters that Trump made clear to Palestinian President Mahmoud Abbas in a recent phone call that he was his "strategic partner" in making a "real and serious" peace between Israelis and Palestinians.
"There is very, very positive progress," Rajoub said.