MARCH 29, 2017 12:59 PM EDT
Timothy L. O'Brien
In a happy moment in the otherwise cloudy world of the Trump family and the flood of financial conflicts they’ve carted into Washington, a major Chinese investor has decided not to pour billions of dollars into a Manhattan skyscraper owned by the Jared Kushner clan.
Had this deal gone forward -- the effect would have been to bail Kushner out of a huge, misbegotten investment while letting his family take home at least $400 million and retain a minority ownership stake in the building -- it would have compromised President Donald Trump's diplomacy with China.
The background: Anbang, an insurer and prolific deal-maker close to China's government, had considered investing $4 billion in 666 Fifth Avenue. Kushner had overpaid for the building in 2007, when he bought it with the help of bank loans for $1.8 billion. The financial crisis ensued, occupancy rates plummeted and Kushner had to be rescued by outside investors to keep the troubled building afloat. Anbang's investment would have valued the building at a handsome $2.85 billion, and also refinanced about $1.15 billion in debt.
The possibility of a transaction brought scrutiny from two Bloomberg news reporters, Caleb Melby and David Kocieniewski, as well as from Congress and the New York Times. I discussed it in a column here two weeks ago. And for good reason: Kushner is a senior White House adviser who has Trump's ear on foreign policy. The math of Trump's 36-year-old son-in-law being saved from a reckless investment by China presented all sorts of conflicts of interest and the potential for disastrous policy moves by the White House.
So Anbang is now gone and all has been made right? Well, no.
Kushner's family still owns a building that needs a financial lifeline, so 666 Fifth Avenue presents something that Congress may want to examine more closely when Jared Kushner meets with the Senate Intelligence Committee as part of an inquiry into possible collusion between Trump's campaign team and Russia during the 2016 presidential election.
The Federal Bureau of Investigation is also investigating the Trump-Russia connection, its director, James Comey, confirmed during a congressional hearing last week. There has been no suggestion that Kushner is part of the FBI probe, but the Senate's decision to question him makes him, as the Times pointed out when it broke the story of Kushner's upcoming testimony, "the closest person to the president to be called upon in any of the investigations, and the only one currently serving in the White House."
Kushner's meetings with Russian bankers during the presidential transition last fall and winter apparently help explain why the Senate is interested in speaking with him.
The timeline matters. Kushner began talking with Chinese investors about 666 Fifth Avenue last summer, around the time that Trump locked up the Republican nomination. Then he spearheaded more serious talks that took place in New York about a week after his father-in-law was elected in November.
According to the Times, Kushner met with Russia's ambassador to the U.S., Sergey Kislyak, in early December as part of what appeared to be normal presidential transition meetings. A second Kislyak meeting with a Kushner deputy followed in December, as well as another, brokered by Kislyak, between Kushner and the head of a Russian bank, Vnesheconombank. The U.S. had imposed financial sanctions on that bank because of Russian President Vladimir Putin's military incursions in Ukraine and annexation of Crimea.
Vnesheconombank has close ties to the Kremlin and its chief executive, Sergey Gorkov, attended a training academy for members of Russia's security and intelligence services.
A Trump spokeswoman described Kushner's meetings with the Russians as routine, which they may have been given his role at the time as Trump's liaison to foreign powers.
But given how important 666 Fifth Avenue was for Kushner at the time, it's also possible that he saw the Russians as potential investors alongside the Chinese. Or as financial backups should the Chinese walk away from a deal.
The Times, citing a government source, said that the Senate plans to ask Kushner if financial help for 666 Fifth was part of his chats with Gorkov and Vnesheconombank.
Kushner's responses to questions about Russian and Chinese financing for his family's building may clarify what inspired him to negotiate so diligently with foreign lenders at a time when he surely understood the negotiating value of having his father-in-law on the cusp of assuming power in the White House.
His appearance in the Senate will also offer a chance to quiz him about the intersection of personal financial dealings and public policymaking. That's an issue that remains troubling because Kushner, and his wife Ivanka Trump, and the president himself, have avoided adequately separating themselves from their private business interests even as they wield power.