After the sister of White House senior adviser Jared Kushner dropped his name in early May while pitching a real estate development to wealthy Chinese investors, one of Kushner's lawyers quickly released a statement that he had already divested all interests in the venture known as One Journal Square.
More than two months later, Kushner released an amended financial disclosure that suggested a more complicated reality: At the time of the public statement, he maintained a connection to a subsidiary of the One Journal Square project. Kushner held a “contingent right,” which allows an investor the chance to gain ownership if certain benchmarks of financial success are met — such as revenue targets.
Kushner’s lawyer, Blake Roberts of WilmerHale, said that he stood by his initial statement that his client had divested from One Journal Square. He said that Kushner had sold his ownership stake in the project in March to his mother’s trust and that the contingent right, which was discovered only after the public statement, no longer held any value because it was connected to a prior version of the project that had fallen through.
“Jared divested that legacy contingent right as soon as it came to our attention,” Roberts said.
Kushner divested the right by moving it into his mother's trust just three days after the speech by his sister Nicole Kushner Meyer to investors in Beijing willing to put up $500,000 in exchange for EB-5 visas granting fast-track immigration into the United States.
The move illustrates the complexity of Kushner’s private holdings, which have been the subject of public scrutiny amid revisions to his financial disclosure forms and the fallout from his family’s sales pitch. More than 100 days after Kushner, President Trump’s son-in-law, entered the White House, his legal advisers were still grappling with the sprawling nature of his assets.
Kushner did not include the contingent right — one of 27 related to Kushner Cos. properties — in his financial disclosure form filed in late March. The rights were first disclosed in July in an amended form with a notice that they had been “inadvertently omitted.”
Josh Raffel, Kushner’s White House spokesman, said that the divestiture of the contingent right was not triggered by Meyer’s comments but was part of a process that was already underway to provide more information to ethics officials. Raffel declined to make Kushner available for an interview for this story.
In May, federal prosecutors for the Eastern District of New York issued a subpoena to Kushner Cos. for documents related to the One Journal Square project in Jersey City, according to reports by the Wall Street Journal and the New York Times.
The Times reported that "the authorities, in part, are looking into the role of Mr. Kushner's sister, Nicole Meyer."
“EB-5 is a long-standing federal program that is frequently used by many real estate developers to raise funds and help create jobs,” according to a statement by Kushner Cos. “The company is cooperating with legal requests for information about its participation in the program.”
The One Journal Square project is slated to include two luxury towers, with commercial and residential space and sweeping views of the Manhattan skyline. Construction has not begun.
On May 6, Meyer appeared in a hotel ballroom about 2:30 p.m. in Beijing to promote the project to a group of about 100 investors. She told them that the project "means a lot to me and my entire family," according to the Times. She also mentioned her brother's past role with the company and his new role in the White House.
Kushner Cos. later issued an apology and said that the reference to her brother was not “an attempt to lure investors.”
By the morning of May 6 in the United States, Kushner's team had received a flood of media inquiries about possible ethical issues posed by Meyer's remarks. Roberts issued a statement early that afternoon.
“Mr. Kushner divested his interests in the One Journal Square project by selling them to a family trust that he is not a beneficiary of, a mechanism suggested by the Office of Government Ethics,” he wrote, adding that Kushner had already pledged to recuse himself from any discussions involving EB-5 visas.
At the time of his sister’s remarks, Kushner was observing the Jewish Sabbath from sundown Friday to sundown Saturday and was not told about the statement issued by his lawyer until after it was released, according to two individuals close to Kushner.
Late on May 7, Kushner’s legal team discovered that he still held the contingent right to gain ownership in a subsidiary company affiliated with the One Journal Square project.
His lawyers have said that they were already working with ethics officials in April to learn how Kushner should report his contingent rights and had communicated with Kushner Cos. to seek that information. However, they declined to say who eventually turned over the details of the contingency rights, and why it took until May to do so.
The following day, on May 8, Kushner divested the right by giving it to a trust held by his mother, Seryl, according to Raffel.
When asked by The Post why the right was gifted rather than terminated if it had no value, Kushner’s lawyers have said that it was a simple, expeditious way to remove it from Kushner’s holdings. They declined to make the contingent agreement available to The Post.
Kushner Cos. also issued a statement to The Post saying that “the structure of the transaction involving One Journal Square changed in late 2016, rendering the contingent right valueless because it was outdated by May 2017.”
Kushner's lawyer, Roberts, has said that the right was dependent on a now-defunct deal with WeWork, a start-up company that specializes in shared working spaces. When the One Journal Square project was pitched to New Jersey officials, WeWork was both an equity partner and the planned anchor tenant. Bloomberg reported on May 8 that WeWork was no longer involved in the deal as an anchor tenant.
Roberts said that Kushner had no contingent rights for the new version of the project that Meyer pitched in China.
A spokesman for WeWork, Dominic McMullan, said last week that WeWork was still an equity partner in One Journal Square. He said WeWork had no knowledge of any Kushner Cos. contingent rights.
Through a spokesman, Laurent Morali, the president of Kushner Cos., said “the decision was made mutually by WeWork and us to amicably part ways last year. We’ve been in the process of negotiating an agreement doing so that is about to be final.”
Both White House and ethics officials have said that revisions to financial disclosure forms are common. A spokeswoman for the Office of Government Ethics said that the office does not comment on questions related to individual disclosure forms.
The most significant revisions on Kushner’s disclosure form involve a company called BFPS Ventures. On Kushner’s first form, the company was labeled as New York City real estate valued at over $50 million.
But after the revision in July, BFPS’s value decreased to less than $25 million and it was relabeled as a holding company that contained the 27 contingent rights and Kushner’s stake in Cadre, a real-estate investment venture founded with his brother, Joshua.
Don Fox, who previously served as a general counsel and acting director of OGE, said that he had read through Kushner’s new public form and noticed the revisions related to BFPS.
“Maybe it took them that long to peel back the onion that is BFPS and to figure out everything that’s in it,” Fox said. “There’s a lot of stuff in it.”
The new form also included a position that Kushner had not previously disclosed: He served as a managing member of BFPS Ventures from 2011 until May 2017. According to a footnote, Kushner had intended to resign from BFPS in January.
Shawn Boburg, Emily Rauhala and William Wan contributed to this report.