Kushner's 2017 Apartment Deal Shows Turn Toward Israeli Firms

(Bloomberg) -- Jared Kushner has expanded his personal ties to Israeli financial firms as he oversees policy in the Middle East for his father-in-law, President Donald Trump.

A line of credit Kushner and his father hold with Israel Discount Bank jumped to as much as $25 million during the past year, from under $5 million in late 2017, his most recent financial disclosure shows. He recently closed similar credit lines with U.S.-based firms, according to the filing.

An additional Israel connection is revealed in the documents. Kushner listed a single property loan as a personal liability -- a debt affiliated with Quail Ridge, a New Jersey apartment complex that his family purchased in September. Psagot Investment House, Israel’s largest asset manager, invested alongside the family firm, Kushner Cos.

Kushner has divested from some assets that might pose conflicts with his role as a White House senior adviser whose portfolio includes brokering peace in Israel. But the latest disclosure highlights how piecemeal that effort has sometimes been.

“For somebody who is responsible for brokering Middle East peace, in any other administration he would have been required to divest these assets from the get-go,” said Virginia Canter, a lawyer with the nonprofit Citizens for Responsibility and Ethics in Washington, which has filed ethics complaints against Kushner. “It would make it hard for other parties involved in Middle East negotiations to view him as an impartial broker.”

The Quail Ridge purchase was Kushner Cos.’ first deal with Psagot, Bloomberg reported in November. There is at least one other undisclosed partner in the deal.

For the deal, Kushner Cos. employed a commonly used tax strategy, using proceeds from sales of other properties in which he had a personal interest. Jared Kushner was a direct party to the deal and his wife, Ivanka Trump, was also represented. “This transaction was made by the filer and a trust of which the filer’s spouse is a beneficiary,” according to the document.

Representatives for Kushner Cos. and for Kushner’s lawyer, Abbe Lowell, declined to comment on the Quail Ridge deal and the credit line with Israel Discount Bank. Emails sent to a spokesman for Psagot outside of normal business hours weren’t immediately returned.

The Quail Ridge loan was between $5 million and $25 million and was made by Bank of America, according to Kushner’s disclosure. Kushner holds the debt “with certain members of Quail Ridge, LLC,” the filing says.

Bigger Credit Line

The credit line held with Israel Discount Bank has increased since Ivanka Trump filed an updated disclosure of the couple’s finances late last year. During the last 18 months, Kushner and his relatives have closed credit lines with U.S. firms including Valley National Bank, Investors Savings Bank and Signature Bank, according to the disclosure.

Kushner Cos. bought the Quail Ridge property using the proceeds from a Toledo, Ohio, property sale using a “like-kind exchange,” which allows real estate investors to re-invest capital gains without paying taxes on them. Jared Kushner disclosed more than $5 million in capital gains, rent and royalties for Quail Ridge LLC.

Jared Kushner has led Middle East policy along with Jason Greenblatt, formerly a Trump Organization lawyer. Israeli Prime Minister Benjamin Netanyahu once slept in Kushner’s childhood bed on a visit to the U.S., and Kushner has developed a friendship with Saudi Arabia’s Crown Prince Mohammad bin Salman.

To contact the reporters on this story: Caleb Melby in New York at cmelby@bloomberg.net;David Kocieniewski in New York at dkocieniewsk@bloomberg.net

To contact the editors responsible for this story: Jeffrey D Grocott at jgrocott2@bloomberg.net, Andrew Martin

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