Jared Kushner Will Sell Many of His Assets, but Ethics Lawyers Worry
After President-elect Donald J. Trump announced Monday that he would appoint his son-in-law, the real estate investor Jared Kushner, as a senior White House adviser, lawyers for Mr. Kushner said he would sell many of his assets to avoid myriad potential conflicts of interest.
But because he plans to sell to his brother or to a family trust controlled by his mother, some ethics lawyers interviewed questioned how meaningful the divestiture would be.
Jamie S. Gorelick, a lawyer who is advising Mr. Kushner on how to deal with the ethical issues he will have to navigate while advising Mr. Trump on topics that could affect his bottom line, said Mr. Kushner would sell his interest in about 35 investments, including his family’s flagship office tower on Fifth Avenue in Midtown Manhattan. He also plans to restructure his role in his remaining holdings so he will not be involved in managing them, Ms. Gorelick said.
In addition, she said, he will sell his common stocks; resign as chief executive of Kushner Companies, his family business; and sell The New York Observer. He will also recuse himself from decisions that could affect his remaining holdings, as well as those of his wife, Ivanka Trump. “He will be treated as any other person entering public service,” said Ms. Gorelick, a partner at WilmerHale and a deputy attorney general under President Bill Clinton.
Matthew T. Sanderson, a lawyer at Caplin & Drysdale and former general counsel to Senator Rand Paul’s presidential campaign, said that, ideally, the transactions would be independent of the person selling the asset.
But as outlined by Ms. Gorelick, Mr. Sanderson said, the plan falls short of that standard. Not only does Mr. Kushner intend to sell the assets to his brother, Joshua, a venture capitalist, and to a trust controlled by his mother, Seryl, but his mother and siblings are the beneficiaries of the trust.
“It sounds like a shell game to me,” Mr. Sanderson said.
Even with these measures, Mr. Kushner will still have links to his family’s empire, which owns property across the country and relies on often-opaque foreign money.
Recent maneuvers over the tower at 666 Fifth Avenue underscore the complications. On Saturday, The New York Times reported that Mr. Kushner had been negotiating to redevelop the building with Anbang Insurance Group, a Chinese financial firm with a murky ownership structure and state connections.
The negotiations began about six months ago, around the time Mr. Trump clinched the Republican nomination. While the family trust will take over Mr. Kushner’s stake in the building, the value of his interest and other details of the transaction are not known. And as a White House adviser on issues including trade, he is likely to counsel the president on America’s relationship with China.
People close to Mr. Kushner and his wife have repeatedly highlighted the income they will be sacrificing; Ms. Gorelick said Ms. Trump would remove herself from management roles at the Trump Organization and at her apparel and licensing companies. She will draw income in fixed payments from the Trump Organization, so her salary will not fluctuate based on deals that could relate directly to new federal laws or decisions by her father’s administration.
Ms. Gorelick said Mr. Kushner’s legal team had consulted with the Office of Government Ethics, and agreed to certain requests, to craft a plan that would satisfy the legal requirements for him to serve. The lawyers concluded that at least one obstacle, a federal anti-nepotism law, was not applicable because, while the law prohibits federal officials from hiring relatives for agencies they lead, the White House is not an agency.
“I’m not saying that there isn’t an argument on the other side,” Ms. Gorelick said. “I just think we have the better argument.”
Richard W. Painter, a professor of law at the University of Minnesota and a chief White House ethics lawyer under President George W. Bush, said Mr. Trump and his team deserved credit for bringing Mr. Kushner on as an employee, rather than as an informal adviser not subject to criminal conflict-of-interest rules.
Mr. Painter noted that the trust was irrevocable, meaning it cannot be modified without the permission of the beneficiaries. He also said it was a positive sign that Mr. Kushner’s wife and young children were not beneficiaries. However, other relatives are.
“There will be appearance issues, and you need to make sure this is not a wink-wink, nod-nod issue,” he said.
P.C: http://www.nytimes.com/2017/01/09/us/jared-kushner-assets-conflict-of-interest.html
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