Donald Trump’s son-in-law and senior advisor Jared Kushner played a central role in the recently signed deal to sell $110 billion in modern weaponry to the Kingdom of Saudi Arabia.
What was less apparent was that a $50 billion investment by Saudi Arabia – which Kushner also had his fingerprints all over – to fund the rebuilding of America’s infrastructure was with the powerful Blackstone Group, which in recent years has been a key partner of the Kushner Companies real estate deals.
Since 2013, Blackstone has provided over $400 million in financing to facilitate four of the Kushner family’s large real estate deals, two of which have not ever been publically disclosed, according to Bloomberg News.
While Kushner has said he is separating himself from his family’s business, the close proximity of the two deals – one a gift to the Saudis, the other a kind of favor by the Saudi’s – still raised some eyebrows.
“The sequence of the deals,” reports Bloomberg News, “and the intertwined personal relationships of the principals raise concerns about conflicts of interest.”
Those personal relationships start with Kushner and his families long friendship and business interests with Blackstone’s CEO Stephen A. Schwarzman, who was in Riyadh with Kushner and Trump for the announcement.
Schwarzman, who has a fortune that Forbes estimated in 2016 at more than $10 billion, is a Republican with homes in New York and Palm Beach, like Trump.
In 2010, Kushner wife and the president’s daughter Ivanka invested in a fund created by Blackstone to provide seed capital to various hedge funds, according to financial disclosures unearthed by Bloomberg.
Schwarzman since the inaugural period has been the head of a business advisory council created by President Trump. The panel, which is not subject to government ethics restrictions, also includes CEO’s Mary Barra of G.M., Elon Musk of Tesla and Jamie Dimon of JP Morgan Chase & Co.
“Whether there are links among the arms deal, the Saudi investment, and the loans,” reports Bloomberg, “future steps will seem fraught [with potential conflicts].”
The Schwarzman relationship with the Kushner’s has certainly been very profitable, and that was even before the latest Saudi investment was announced, sending the price of Blackstone stock soaring eight percent in one day – which added about $500 million to Schwarzman’s personal net worth.
Blackstone’s investments with the Kushner’s include being a lender for the purchase of a New York City office building that was sold last year at a huge profit; and the purchase from the Jehovah’s Witness last year of buildings in Brooklyn which Jared Kushner has personally worked on with the goal of creating a new Silicon Valley-style business hub for start-up companies.
The Saudi money gives Blackstone a huge advantage as Trump actually starts spending government money to repair America’s crumbling roads, bridges, and other infrastructure. Blackstone now has over $100 billion at hand, which means it can bid on and then finance some or all of the huge construction projects without having to seek out partners immediately.
The Saudi deal’s impact on Blackstone also means the Wall Street giant’s stock’s price finally rose above the original 2007 asking price after at least two years when the price was slumping.
Kushner, it was revealed this week, is now one of the subject’s of the various federal inquiries into Russian interference in the 2016 presidential campaign, even as he continues in his role as the president’s closest advisor, with a broad portfolio that includes everything from encouraging American business innovation to bringing peace to the Middle East.
The deeper Kushner gets into all of these areas, the more reason there is to be concerned about his real or apparent conflicts, and those of his family.
Kushner may have said he would divest his business interests, but his family is not divesting, and when his time in the White House is over, he will be right back into it and no doubt using his government experience and connections to make even bigger deals.
Many of them, inevitably, will be with Stephen Schwarzman and Blackstone.
