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The Journal Gazette

Thursday, December 28, 2017 1:00 am

Kushner loan records sought

Prosecutors allege no wrongdoing

Washington Post

Federal prosecutors have requested records related to a $285 million loan that Deutsche Bank gave Jared Kushner's family real estate company one month before Election Day, the company confirmed this week.

The records were sought by prosecutors in Brooklyn and do not appear related to special counsel Robert Mueller's investigation into Russia's interference in the 2016 election.

A Kushner Cos. spokesperson said the firm is cooperating in the review of what it called a “routine” transaction.

The Washington Post reported details of the loan in June. Under the deal, Kushner Cos., which in 2015 had purchased four mostly empty retail floors of the former New York Times headquarters in Manhattan, entered into an October 2016 refinancing agreement with Deutsche Bank. The loan was part of a refinancing deal that gave Kushner's firm $74 million more than it had paid for the property.

The loan was secured while Kushner was both the head of the company and playing a leading role in running the presidential campaign of his father-in-law, Donald Trump.

The refinancing was personally guaranteed under certain circumstances by Kushner and his brother, Joshua. The loan was not listed on Kushner's financial disclosure report because he did not have “a present obligation to repay the loan,” his lawyers have said.

Christine Taylor, a Kushner Cos. spokesperson, said in a statement that the request from the U.S. attorney's office in the Eastern District of New York appears to have been made in response to news coverage.

“Kushner Companies, in its long history, has participated in hundreds of loan transactions with an outstanding track record of success,” Taylor said. “We have always taken pride in the principled way we conduct our business and our trusted relationships with all our lending partners, including Deutsche Bank.”

The bank has been repeatedly fined in recent years by a variety of enforcement agencies, including a $7.2 billion U.S. penalty in December 2016 for mortgage fraud and a $425 million New York state fine in January 2017 related to a money laundering case.

It is not clear what prosecutors are seeking to find out about the Kushner Cos. loan. Deutsche Bank is one of the biggest lenders to both Kushner Cos. and the Trump Organization, which had about $364 million in debt to the bank as of last year.

Kushner Cos. previously has confirmed that federal prosecutors subpoenaed records related to its use of a visa program called EB-5, in which foreign investors who put $500,000 in a real estate project can be put on a track for U.S. citizenship.

Kushner has not been accused of wrongdoing in any of the cases.

The investigation by the U.S. attorney in Brooklyn is separate from the work of Mueller's team, which is scrutinizing contacts between Russia and the Trump campaign.

Among the interactions that Mueller's investigators have sought to learn more about was a December 2016 meeting that Kushner held with Sergey Gorkov, the head of a state-owned Russian development bank.

The White House has said the meeting was a typical diplomatic session, while a bank official has said it was related to Kushner's business.