AN INSIGHTFUL PIECE FROM POLITICO.
“Editor’s note: The original version of this story said, incorrectly, that a representative for Kushner did not reply to a request for comment. In fact, an email was sent to the wrong address. POLITICO Magazine regrets the error. It is our policy to seek the input of the subjects of our stories.
He was supposed to be the calm one, cool and unflappable under his Ray-Bans and beltless blue bespoke suits. If Steve Bannon was the Rumpelstiltskin of the administration, donning multiple half-tucked dress shirts at a time and always carrying a clutch of briefing papers and barreling through the administrative state, Jared Kushner, through pedigree and temperament, could reach out one of his long, elegant fingers and tap everyone in the West Wing on the shoulder and urge them to just cool out a bit. In a White House sullied by ties to Russia and all sorts of unsavory characters from the fringe, Kushner was set to float above, surrounding himself with fellow figures from the elite worlds of Manhattan finance and real estate and deep-sixing the harder-edged ideas of the White House’s “nationalist” wing.
Except that isn’t quite how it has gone in the White House over the past several months. It was Kushner who reportedly pushed for the firing of FBI Director James Comey over the objections of Bannon. And it was Kushner who was the lone voice urging for a counterattack after Deputy Attorney General Rod Rosenstein announced the appointment of a special prosecutor, according to the New York Times. And it is now Kushner whose family’s business activities leave him open to the same level of conflict-of-interest charges that have dogged his wife and father-in-law, and Kushner who appears to be as closely tied to the Russian government as anyone serving in the White House: NBC News and the Washington Post reported Thursday that the FBI is taking a close look at his contacts with the Russians.
What happened to America’s princeling? Is he hearing footsteps from Bannon and the other anti-globalists in the White House’s great and daily game of dominance? Is he trying to play to the instincts of his audience of one, President Donald Trump? The widespread assumption liberals make about Kushner seems to be this: Because he is soft-spoken, slim and handsome, with degrees from Harvard and NYU and a family that donates to Democrats, he couldn’t possibly be the same guy knifing his West Wing rivals and urging the president to go to war with the Justice Department and the FBI.
But that assumption is wrong. Those who know him from his days as a young New York real estate magnate and newspaper publisher say America is just getting to know the Jared Kushner they have always known, that beneath the unflappable golden exterior is someone unafraid to bungee jump or to counterpunch when he feels slighted.
“Polite elegance,” said his friend Strauss Zelnick, an entertainment mogul and founder of the private equity firm Zelnick Media Capital, when asked to describe Kushner’s modus operandi. But, Zelnick added, “He’s tough. In an exceedingly polite way, he is as tough as anyone is in New York City real estate.”
In the world of New York real estate, Kushner’s ability to play a new kind of game was immediately apparent soon after he moved to the city and took over his father’s sprawling New Jersey-based midmarket real estate empire, in 2008. By that point, the Kushner name was associated not with the malls and cul-de-sacs of the Garden State but with tawdry scandal after Jared’s father, Charles Kushner, was convicted in 2005 and sent to prison for illegal campaign contributions, tax evasion and witness tampering after he attempted to blackmail his brother-in-law by hiring a prostitute to seduce him and then sent the videotaped encounter to his sister.
“I believe that God and my parents in heaven forgive me for what I did, which was wrong,” Charles Kushner told an interviewer years later. “I don’t believe God and my parents will ever forgive my brother and sister for instigating a criminal investigation and being cheerleaders for the government and putting their brother in jail because of jealousy, hatred and spite.” By all accounts, Jared was deeply affected by his father’s prison sentence, and visited him weekly.
And so, in an effort to rehabilitate the family name, Kushner focused the family business on Manhattan and purchased the New York Observer, a pink-paged society weekly that made up in influence among the social and literary elite what it lacked in circulation or profitability (full disclosure: I worked as a political reporter there from 2010-2012). But the paper soon expanded into coverage of Kushner’s home turf of commercial real estate, and people in that world saw the paper’s editorial resources devoted to pushing Kushner’s agenda or settling his scores.
“I think he is someone who saw all this shit with his father go down, and it turned him into a person who was determined to operate in much the same way but just be quieter about it,” said Brian Thomas Gallagher, who worked as a deputy editor at the paper during the Kushner era. “The idea that he thought the thing to do was to buy himself a position in the New York cultural elite is probably true in its way, but I don’t think he ever saw [it] that way. He saw how poorly his dad was treated in the papers, and the Observer was his tool or a house organ for his real estate company.”
Under Kushner, the new New York Observer became a center of the real estate industry’s social world, spinning out a packed calendar of panels and events and an annual list of the hundred most important people in the industry, which industry pros pored over with Talmudic intensity—assuming that the list was more a reflection of who was in Kushner’s good graces rather than who was actually on the up and up in terms of what they built in the five boroughs.
“The Observer became his mouthpiece in the world of New York City real estate,” said one prominent real estate broker who asked to remain anonymous because “like everybody else in New York and New Jersey real estate, I realize there is no upside to talking about Jared Kushner or Donald Trump.”
“It was not something a lot of real estate people do,” this person added. “They aren’t usually so upfront about these kinds of things. But he burst onto our scene with it and made his vehicle for being out there.”
Elizabeth Spiers, a former Observer editor, has told the story of how Kushner directed her to dig up dirt on Richard Mack, another real estate developer who held some of the debt on one of Kushner’s buildings, after he refused to write down the loan during a cash-flow crunch. “[D]uring one of our weekly meetings,” she wrote in a blog post, “Jared told me he had a story he wanted us to pursue and that it was very important to him.” Spiers says she knew Kushner had an agenda, but agreed to run it down. “Apparently, Richard Mack had been on the other end of some transaction nearly gone wrong and it had rubbed Jared the wrong way,” she wrote.
Spiers put her most aggressive real estate reporter, Dan Geiger, on the case—but after calling up “everyone within a 100-mile radius of the subject,” the best he could find were vague suggestions that Mack could be “kind of an asshole.” Kushner was disappointed and insisted she assign another reporter to the story—who also came up empty. Vicky Ward, a well-regarded journalist who profiled Kushner for Esquire, disclosed last year that he then ordered Spiers to find an authority outside the newsroom to write the same story: her. She declined.
Spiers departed on amicable terms with Kushner, she says, but the anger toward him among former Observer employees runs deep. Harleen Kahlon was an experienced digital media maven when she was hired by Kushner in 2010 to boost the paper’s digital outreach. The two worked closely to redesign the website, with a weekly one-on-one meeting in her office in which Kushner would come in, put his feet up on her desk and check in on the progress of the site’s redesign, for which he hired one of New York’s top digital firms. “He would compensate his lack of knowledge by saying stuff like, ‘Let’s just blow up the whole concept of digital.’ It would sort of sound interesting for a second and then you would just forget about it and get on with the work.”
At the end of the year, when she went to collect her performance bonus at his real estate office for meeting agreed upon metrics on page views and audience growth, Kushner told her that they couldn’t pay, citing financial concerns, and asked her to “take one for the team.” Instead, Kahlon abruptly quit. Ever since, whenever she sees him on TV or on the streets of New York, she points him out to people as: “the guy that stole my money.”
Just before the election, Kahlon described her former boss on Facebook thusly: “We’re talking about a guy who isn’t particularly bright or hard-working, doesn’t actually know anything, has bought his way into everything ever (with money he got from his criminal father), who is deeply insecure and obsessed with fame (you don’t buy the NYO, marry Ivanka Trump, or constantly talk about the phone calls you get from celebrities if it’s in your nature to ‘shun the spotlight’), and who is basically a shithead.”
Kushner could play hardball with his politics too. In February 2014, when New York Attorney General Eric Schneiderman began an investigation into Trump University, he was treated to a front-page hit piece in the Observer in which he was caricatured as a sociopath from “A Clockwork Orange.” When I was at the paper, I once wrote a small item about a Trump appearance on “Fox and Friends,” in which he complained about a New York Times article that described Trump’s real estate empire as little more than an effort to cash in on Trump’s name for a marketing fee, it prompted a quick complaint from the father-in-law to Kushner, who promptly called my editor to relay the concern.
Kushner operated much the same way across the river in his old home in New Jersey, only without the real estate angle to pose political complications. There he set up an Observer online outpost called The Politicker, which consisted for a time at least of little more than anonymous tips wired through an anonymous blogger. That blogger, David Wildstein, ultimately went to work for Chris Christie, a Kushner nemesis ever since Christie had prosecuted Kushner’s father while serving as a U.S. attorney. Wildstein faces up to 27 months in federal prison for his role in shutting down Fort Lee traffic as part of Christie’s “Bridgegate” scandal, but before he was sentenced, he received a note from Kushner, telling him, “I thought the move you pulled was kind of badass.”
It has always been part of the Kushner Way: unfailingly polite and urbane on the surface while searching for the soft underbelly to stick the knife in.
Asher Abehera, a Brooklyn-based developer of hip commercial and residential real estate properties who has done five major deals with Kushner, remembers him sitting in the conference rooms of major law firms as billions of dollars worth of transactions were being sorted out, and Kushner filling up the glasses on the table with water, and staying around afterward to clean up. “He is obsessed with this notion that the whole New York City real estate world is antiquated. He wants to do things differently,” Abehera said, in part by creating high-end bespoke living and working spaces in previously under-recognized neighborhoods for a world in which “even an accounting company wants a hip office space.”
“This was a guy buying iconic buildings at an incredibly young age. It’s a massive feat. It is hard to do any deal in New York because you are in this sea of hyper-aggressive people. He is like alkaline in that sea of aggressive people.”
Which is not to say that Kushner shrinks from a fight. Soon after taking charge of the company, Kushner tried to renovate The Puck Building, a 19th Century red-brick neo-Romanesque jewel in the SoHo neighborhood, and one of the few iconic Manhattan properties that the company owned. The building was landmarked, and Kushner wanted to add six penthouses. The city’s Landmarks Preservation Commission rejected Kushner’s plans. Rather than go back to the drawing board, Kushner and his architects resubmitted them with only slight modifications. The LPC, which has been accused of being too landlord-friendly in the past, rejected them again. Kushner resubmitted again, again with only slight revisions. Again the team was rejected, until the fifth go-around when they finally got approval.
“It was clear from the beginning that they weren’t willing to fundamentally rethink what they were trying to do, so they just tried to shave the corners and hope it sneaked past Landmarks,” said Andrew Berman, who fought Jared on the deal as head of the Greenwich Village Society for Historic Preservation. “He was shockingly persistent.”
It was not the first or the last time that Kushner sparred with Berman, whom Trump loved to use as a punching bag as he devised his own plans to rip up the New York City skyline. Unlike Trump however, Kushner never took on Berman or the preservationists frontally, and never met with them privately to broker a compromise. In 2008, Kushner was behind a plan to tear down a hundred-year-old neoclassical tenement synagogue in the East Village to build condos on the site. After an outcry from the congregation, Kushner quickly retreated. In 2013, when Kushner purchased a beaux-arts tenement building in the South Village, preservationists, figuring that he “was probably not interested in preserving those buildings for posterity,” as Berman put it, rushed to have them landmarked.
Kushner has found frustration at the high end of the real estate business, too. As global capital has poured into the New York City real estate market over the past five to seven years, he has been riding around in the froth, embarking upon acquisition after acquisition. But industry watchers say it remains unclear what all of that activity will amount to. Kushner landed on the Manhattan scene with a bang, buying 666 Fifth Avenue for $1.8 billion, a record sum at the time for an individual building in New York. The acquisition came at the height of the city’s real estate bubble, and raised eyebrows around town that the Kushners were no longer bit players from the Jersey swamps. Instead, however, the building has been nothing short of a burden, nearly going into foreclosure in 2011 and now with only 70 percent of the property occupied—far below the Manhattan average of the low 90s—and after losing $10 million in 2015 after debt payments. The Kushners now face a looming $1.2 billion debt payment on the building that has sent them scrambling to find other investors. Real estate experts remain mystified by the purchase, doubting the building will ever be profitable for the amount Kushner paid. (Kushner has sold his personal stake in the building since joining the White House.)
“There has always been a lot of eye-rolling around town about that purchase,” said one real estate attorney. “What’s the German word? Schadenfreude? You see some kid pull these audacious deals and then you see them sucking wind. People are waiting for him to fall on his face.”
It’s true elsewhere too. One appraiser pointed out that you would often hear of Kushner making deals in the real estate press, but rarely read about those deals panning out with rental income or occupancy rates that exceed expectations.
If the purpose of the foray into Manhattan and into publishing was to rehabilitate the Kushner name, it is hard to know how well that worked out. The Kushners are not on the city’s bold-faced cultural boards or civic institutions, and now that he is more associated with Trump than with even his own family, such invitations are likely to be less forthcoming.
As for the Observer, rather than use a storied journalistic institution for an entryway into the right rooms of Manhattan, Kushner wanted to see the paper turn profitable—something that had never occurred in its previous decades of existence. He pushed for page views and cut staff and page counts when possible, and cycled through a string of editors. When the paper at last became profitable for a brief period in 2011, Kushner pushed to cut staff to increase margins. During the height of the Trump campaign, a number of reporters quit and one wrote an open letter on the paper’s website decrying her boss’ role in the Trump campaign. Ken Kurson, the longest-serving editor in the Kushner era and a family friend and political operative, resigned this week to work at Teneo, a global advisory firm founded by Clinton insiders. Kushner has handed over the reins of the paper to his brother-in-law and shuttered the print edition for good, and with it any intention of remaining an influential player in New York City.
Meanwhile, damaging stories keep landing as journalists dig into the Kushner real estate empire, which is said to have taken part in at least $7 billion worth of acquisitions over the past decade and, according to Forbes, to have a worth close to $1 billion. A recent investigation by ProPublica revealed that Kushner Companies has bought thousands of distressed apartment complexes in Rust Belt cities in recent years, hardly the stuff of Manhattan dreams. A subsidiary that manages the complexes has been ruthless in pushing out those who didn’t pay their rent, ProPublica reported, hitting them with steep late fees and even going after them in court. “It was a lot of construction and a lot of evictions,” Kushner said in 2012. “But the communities now look great, and the outcome has been phenomenal.”
Alec MacGillis, who reported the story, found that few of the “Kushnerville” residents he met knew their money was going to a company owned by the president’s son-in-law. “That Jared Kushner?” one exclaimed. “Oh, my God. And I thought he was the good one.”