00:35 Kelly McEvers I'm Kelly McEvers, and this is Embedded. 00:38 Hello, hello. 00:38 Can you hear me? 00:40 Crosstalk Hi, how are you? 00:40 Kelly McEvers Hey, I'm good. 00:41 This is Kelly. 00:41 And this is Daniel Golden. 00:43 Crosstalk Oh, this is a trip down memory lane here. 00:45 Oh, I remember the Kaspersons. 00:49 Let's see. 00:50 They gave money. 00:51 Kelly McEvers And back in 2003, he started doing all this reporting on how the children of wealthy people were getting into these really good colleges and universities like Harvard because their parents were making big donations. 01:06 And at one point, he gets this list. 01:09 Daniel Golden I had been given by a source of mine a list of the 400 or so members of Harvard's Committee on University Resources, which is its committee of sort of big donors, big prospective donors. 01:23 And so that's where I came across the Kushners. 01:27 Kelly McEvers Charles and Cyril Kushner, a very wealthy family, 01:30 that runs a big real estate company in New Jersey and New York. 01:34 Their son, Jared Kushner, started at Harvard in 1999. 01:41 Jared Kushner is now, of course, the son-in-law of the President of the United States and one of his closest advisors. 01:48 Back when Daniel Golden was doing this research, though, Jared Kushner was just the son of wealthy parents, neither of whom had gone to Harvard themselves. 01:57 Which meant it was unusual for them to end up on this big donor committee. 02:01 So Daniel Golden started calling people who knew Jared Kushner at his high school, this private Jewish school in New Jersey called the Frisch School. 02:08 Daniel Golden It didn't take long to find out that he didn't have the kind of outstanding record that you would normally expect a Harvard student to have. 02:17 Kelly McEvers Yeah, I just want to read the quote from the official that you spoke to at the Frisch School. 02:20 His GPA did not warrant it. 02:22 His SAT scores did not warrant it. 02:24 We thought for sure there was no way this was going to happen. 02:27 Then lo and behold, Jared was accepted. 02:29 He was accepted, Daniel Goldin found out, after his father, Charles, pledged a major donation to Harvard. 02:38 Daniel Golden And, you know, I learned that Charles Kushner had given Harvard, had pledged $2.5 million in 1998, which was, you know, around the time Jared would have been beginning the college admission process. 02:51 Kelly McEvers The implication, Daniel Golden says, is that Charles Kushner used this pledge, a quarter of a million dollars each year for 10 years, to help his son get into Harvard. 03:02 A pattern Golden saw over and over in his reporting, which eventually became a book and won him a Pulitzer Prize. 03:09 And it seems to fit a pattern we will see later in Charles Kushner's career. 03:15 using money to get what he wants for him and his family. 03:19 Something you will hear more about in this episode. 03:23 A spokesperson for Kushner Companies told Daniel Golden the idea that this donation to Harvard was related to Jared Kushner's application, quote, is and always has been false. 03:33 Quote, Jared Kushner was an excellent student in high school, the spokesperson said, and graduated from Harvard with honors. 03:40 And here's what Harvard told us when we asked about the Kushners. 03:43 We consider a range of academic and personal factors as part of a whole person admissions process. 03:49 Philanthropy is not part of our review. 03:52 They also said they would not answer any questions about donations. 03:56 After Harvard, Jared Kushner went to the NYU Law School. 04:00 Charlie Kushner also donated to NYU around that time, though Charlie is an NYU alum, so that raised fewer questions. 04:08 And after that, Jared Kushner starts running his father's real estate company. 04:13 And this is all a pretty typical story for a wealthy family. 04:16 But Jared Kushner is now in an atypical position. 04:20 Jared Kushner My name is Jared Kushner. 04:22 I am senior advisor to President Donald J. Trump. 04:26 Kelly McEvers And he has a lot of duties in the White House. 04:29 Soundbite Kushner has gone from son-in-law to close advisor to the president's go-to guy on you name it. 04:36 Kushner seems to be at the head of nearly every table at the White House. 04:40 And tackle issues like veterans care and opioid addiction. 04:43 We see Jared Kushner in nearly every meeting with a foreign leader that passes through this point. 04:55 He is so great. 04:55 If you can't produce peace in the Middle East, nobody can. 04:59 Kelly McEvers So we wanted to go back into Jared Kushner's record to see what we could learn about this person who has no previous experience in government, but who now has this big government job. 05:13 And what we're going to do is we're going to tell you a bunch of stories. 05:17 We're going to look at Jared's family so we can understand more about his father, Charles, and see how Jared and Charles do business. 05:25 And how, if at all, the way they do business has changed now that Jared is in the White House. 06:04 Soundbite You know, it's not just that there aren't really the guardrails on Trump's presidency this term. 06:10 It's that he's doing things that are just not conservative. 06:23 Kelly McEvers To understand Jared Kushner, you have to understand his father, Charles Kushner. 06:28 And to know Charles Kushner, you have to know the story of his parents. 06:33 Their names were Ray and Joseph Kushner. 06:35 They're both now deceased. 06:38 But back in the 80s, Ray told her story to the Holocaust Resource Center of Kean University in New Jersey. 06:45 You're about to hear some of that interview. 06:47 And Ray Kushner's story has been told before, but there's some of it that we found was pretty surprising. 06:55 Rae Kushner and her family lived in what was then Poland and is now Belarus. 07:01 Rae Kushner Rae Kushner's father made hats, mostly men's hats, out of fur. 07:16 Kelly McEvers The family was middle class and they were comfortable. 07:19 And then came the Nazis. 07:23 Ray Kushner's town was bombed. 07:25 Jews were forced to wear yellow stars and then eventually forced to live in a ghetto. 07:30 And then one day, this terrible thing happened. 07:33 Nazi soldiers gathered 50 young girls from the ghetto. 07:36 Rae Kushner Ray was one of those 50 girls. 07:49 Kelly McEvers The Nazis brought them to the town square. 07:53 Rae Kushner And music was playing, a whole orchestra. 07:57 Kelly McEvers The Nazis were drunk and cheering. 07:59 And they had gathered the city's Jewish intellectuals. 08:03 Rae Kushner He gathered all the intelligent people. 08:06 Kelly McEvers People these girls knew. 08:07 Rae Kushner Like the doctors, professors, teachers, lawyers. 08:13 He brought them by 100 to 150 people. 08:18 And he showed them by the music on the square. 08:23 And the blood was running on the square, on the stones. 08:30 And we supposed to wash the stones. 08:34 The girls were told to wash the blood off of those cobblestones. 08:38 And we washed the stones from the square. 08:42 And we helped to put on the bodies. 08:44 The 50 girls were also told to pick up bodies. 08:48 Kelly McEvers And put them on a wagon. 08:58 In the beginning of the Nazi occupation, there were thousands of Jews living in the ghetto where Rae and her family lived. 09:04 But as time went on, more and more people disappeared and were killed, including Rae's mother. 09:13 So the young boys of the ghetto decided they had to find a way to escape. 09:18 There was only one entrance to the ghetto, and it was heavily guarded. 09:21 So they decided to dig a tunnel. 09:23 Rae Kushner And they tried to build that tunnel. 09:27 So every night they dug. 09:32 Kelly McEvers And they hid the dirt under beds and in walls so the Nazis wouldn't know what they were doing. 09:36 The night they got out, it was raining. 09:44 Ray says 250 people crawled out of that tunnel, away from the ghetto and into the woods. 09:56 Ray and her father and her sister went from farmhouse to farmhouse and eventually met up with a group of Jews who survived by living in pits during the day and foraging for food at night. 10:06 They lived day by day. 10:14 After the war, she meets up with Joseph Kushner, and they get married in Hungary. 10:20 Joseph had survived the Nazis living in the woods, too. 10:24 The two end up in a refugee camp, and they're stuck there for three and a half years. 10:28 Rae Kushner Nobody wanted to take us in. 10:31 Three and a half years we were waiting to get a visa. 10:36 Kelly McEvers And eventually, their cousins in the U.S. sponsored them. 10:40 Rae Kushner And they got visas. 10:42 Kelly McEvers Of those original 200 members of Ray's family, only a handful of them had survived. 10:59 Rae and her father, her sister, and her husband, Joseph, move to New York City and then settle in New Jersey. 11:08 This is one of the interesting things about Rae's story. 11:17 She made it here on a visa as a refugee. 11:21 Now her grandson works in an administration that has worked to curb the number of refugees coming to the U.S., 11:29 We tried to ask Jared Kushner about this, but his spokesman declined to comment. 11:34 And when she first came to the U.S., Ray didn't want to tell her story. 11:39 But then, like so many Holocaust survivors, she decided to record it. 11:43 Rae Kushner We were left over to tell somebody what happened. 11:47 People should know what happened to us. 11:50 If we're not going to tell now, in 20 years, I don't know who's going to be to tell them. 11:57 Kelly McEvers She says it's her duty to warn the world to be careful, to not let someone like Hitler come to power ever again. 12:03 And here's the other interesting part of Rae's story. 12:16 As she's talking about how history cannot repeat itself, she starts talking about this rally by the Ku Klux Klan in front of the White House in 1982. 12:27 We actually found some archival tape of NPR's coverage at the time. 12:30 Soundbite Tom Robb, who is head of the Arkansas branch of the Knights of the Ku Klux Klan, told reporters that the purpose of the Klan march was to show that there are still Americans willing to stand up for the Christian faith and the values upon which this nation was founded for white people. 12:45 Kelly McEvers And this is what Ray Kushner says about watching a rally like this as a Holocaust survivor. 12:50 Rae Kushner What kind of feelings we have when I came to Washington and Nazis are going with the swastikas in front of the White House. 13:00 And they're going on free. 13:06 And this scares us. 13:08 This is very painful. 13:14 Kelly McEvers Members of the Kushner family have said that what Ray and Joseph survived means the family should do everything they can to prevent anti-Semitism. 13:25 We tried to ask Jared Kushner about the recent neo-Nazi rally in Charlottesville, Virginia, and how Donald Trump said there were very fine people on both sides. 13:35 But Jared Kushner's spokesman declined to comment. 13:40 Last year, Jared Kushner did write an op-ed about his grandparents and about his father-in-law in the newspaper he owns, the New York Observer. 13:49 And he says Donald Trump is not a racist and is not anti-Semitic. 13:54 He says holding the president responsible for the racist views of some of his supporters isn't fair. 14:04 Jared Kushner's grandmother, Ray Kushner, died in 2004. 14:07 We're going to take a break. 15:18 Okay, so we heard how Charles Kushner, Jared's father, made these major donations to universities at the time of his son's attendance. 15:27 We heard how Charles' parents survived the Holocaust and came to the U.S. Charles' real name is actually Hanan, after Ray's younger brother. 15:35 This younger brother made it out of the tunnel that night, but got separated from the family and didn't survive. 15:43 So now we're going to talk about what the Kushners did once they settled in New Jersey. 15:48 David Koshinevsky I was at the Times from 95 until 2014. 15:50 Oh, wow. 15:52 Kelly McEvers David Koshinevsky has reported on the Kushners for decades. 15:55 He was with The New York Times, and he's now with Bloomberg. 15:59 And he says the family of Ray and Joseph Kushner was part of this group known as the Refugee Builders, this handful of families of Holocaust survivors who went on to run construction and real estate companies in New Jersey. 16:13 And the Kushners did well from the beginning. 16:14 David Koshinevsky They had 4,000 or 5,000 apartments. 16:17 And, you know, it's not flashy, but incredibly profitable. 16:21 You know, those little cookie cutter apartments, they're a cash machine if they're well run. 16:25 And those were well built and well run. 16:27 Kelly McEvers And it was a family business. 16:29 In the 80s, Jared's father, Charles Kushner, who actually goes by Charlie, starts Kushner Companies with his father, Joseph. 16:37 Then Joseph dies and Charlie takes over. 16:39 And the company grows a lot. 16:43 David Koshinevsky The business thrived under Charlie. 16:45 He was aggressive. 16:46 He expanded and got a lot more apartment complexes and built it into an even more profitable venture. 16:54 But the family members thought that he played fast and loose with the expenses and that caused friction. 16:59 Kelly McEvers One of the things Charlie Kushner did with the company's money was to donate to places like schools and to the political campaigns of Democrats. 17:10 David Koshinevsky Charlie Kushner became one of the biggest known political donors in the U.S. 17:16 It was one day in 2000 where he bundled a million dollars to the Democrats, which that was a lot of money back in those days. 17:23 So he became a stop on the fundraising tour for Democrats. 17:27 You know, the Clintons would visit him and Charlie was one of the ones who was quickest to pull out his checkbook. 17:40 Kelly McEvers Over the years, David says, these donations pay off. 17:44 Remember, this is right around the time the Kushners pledged $2.5 million to Harvard, and Jared gets into Harvard. 17:50 Charlie Kushner also donates to the governor of New Jersey. 17:53 David Koshinevsky He was the number one donor to Jim McGreevy, who was the elected New Jersey governor in 2001. 17:59 His cabinet was larded with Kushner people, the chief of staff, the chief counsel, or all people who had worked with or close to Charlie Kushner. 18:08 Kelly McEvers Around this time, Charlie Kushner gets nominated to be the chairman of the Port Authority of New York and New Jersey. 18:13 David Koshinevsky Which, you know, to most people sounds like a boring thing that just collects your tolls. 18:17 But it's a multi-billion dollar agency that controls the bridges, controls the tunnels, controls the airports in New York. 18:24 And if you're a real estate developer, it controls all kinds of land and access. 18:28 And it is a way to make the kind of connections that can do your business incredibly well. 18:34 And you can make a ton more money. 18:41 Kelly McEvers So at this point, Charlie Kushner has wealth. 18:43 He's got the real estate business. 18:44 It's doing well. 18:45 He has influence through his connection with the New Jersey governor. 18:49 And he's about to get real power with this job at the Port Authority. 18:53 And then something happens. 18:56 The accountant for Kushner Companies sues Charlie Kushner. 19:01 His brother, Murray, had already sued him. 19:04 The accountant claims Charlie has been cooking the books and has taken money from the company and used it for his own interests. 19:11 The accountant says Charlie paid Israeli leader Benjamin Netanyahu $100,000 of company money to speak at Charlie's synagogue and at an event honoring Charlie. 19:21 And the accountant says Charlie is funneling company money into these political campaigns and that he used company money to pay Bill Clinton a $125,000 speaking fee. 19:32 David Koshinevsky says all of this gets the attention of New Jersey's top federal prosecutor. 19:39 David Koshinevsky The U.S. attorney starts getting reports that there's money being misallocated and misused by one of the biggest Democratic political donors in the country. 19:51 He started to investigate. 19:52 That U.S. attorney was Chris Christie. 19:56 Christopher J. Christie My name is Christopher J. Christie. 19:57 I'm the United States Attorney for the District of New Jersey. 20:00 To my immediate right is Joe Billy. 20:03 Kelly McEvers This is pretty early in Christie's career as a federal prosecutor. 20:06 And at the time, he's going after big corruption cases and working to take down these big New Jersey political players who've been misusing their office. 20:13 Christopher J. Christie We're here today to announce the filing of criminal complaint against Mr. Charles Kushner. 20:21 Kelly McEvers So Christie spends months investigating Charlie Kushner. 20:25 And by the time he has enough evidence to announce charges against Kushner, the case has gotten a lot more complicated than just the misuse of company money. 20:36 Christopher J. Christie Criminal complaint alleges aiding in the interstate travel to promote prostitution, obstruction of justice and witness retaliation. 20:47 Kelly McEvers You heard it. 20:48 Prostitution, obstruction of justice and witness retaliation. 20:56 Prosecutors laid out a pretty crazy story, and reporters later published who all the characters in that story were. 21:03 Here it is. 21:05 At some point during the investigation, Charlie Kushner had found out that his sister, Esther, was cooperating with federal investigators. 21:14 David Koshinevsky And he goes rogue. 21:15 Kelly McEvers He decides to go after his sister's husband. 21:18 David Koshinevsky He was going to try to set a honey trap for him and try to get an accomplice to find a prostitute and wanted to set him up. 21:28 Kelly McEvers Right. 21:28 So prosecutors claim Charlie Kushner hires two guys to hire a prostitute. 21:32 Then he ends up going to New York City to do it himself. 21:36 And he hires this prostitute to sleep with his sister's husband. 21:40 Christopher J. Christie Co-conspirators and... 21:43 The prostitute and the sister's husband go to a motel. 21:51 David Koshinevsky They have their encounter, which is then videotaped. 21:56 Charlie then decides to get back at his sister. 21:58 The way to maximize the effect of it was that he arranged to have the videotape delivered to her house at the day of a family party. 22:07 Kelly McEvers At that same press conference, an FBI agent says Charlie was clearly trying to intimidate his sister. 22:13 Soundbite This arrest and ongoing investigation highlights some of the lowest forms of blackmail an individual can use to attempt to dissuade an individual from cooperating with law enforcement authorities. 22:26 Kelly McEvers But his tactic doesn't work. 22:29 His sister gave the tape to the FBI. 22:33 So on the day of the news conference, Charlie Kushner's taken into custody. 22:36 Christopher J. Christie And I think at approximately 11 o'clock this morning, he voluntarily surrendered himself to FBI headquarters in Newark, where they have processed it. 22:45 David Koshinevsky And this took what had been an interesting case and turned it into tabloid manna from heaven, because you have big New Jersey developer, politically connected Democrat, huge bundler for the Democratic Party nationally involved in this crazy revenge sex scheme. 23:07 Kelly McEvers Charlie Kushner eventually pleads guilty to assisting the preparation of false tax returns, witness retaliation, and making false statements to the Federal Election Commission. 23:17 He does not plead guilty to the prostitution charges or to obstruction of justice. 23:22 He goes to federal prison in Alabama for 14 months. 23:26 At this point, his oldest son, Jared, is at NYU Law School. 23:30 He's 24. 23:32 Jared and Charlie were really close. 23:34 David Koshinevsky It was almost like an old world sense of family loyalty. 23:38 So when Charlie was in prison, Jared would go every weekend to go visit him. 23:44 In Alabama. 23:44 In Alabama. 23:46 For years, he would carry this wallet. 23:48 People said it was kind of an odd, you know, kind of rough-hewn wallet. 23:52 And it turns out that it was something that his father had made for him in the shop in the prison. 23:57 Kelly McEvers Charlie eventually gets out of prison and does some time at a halfway house in Newark. 24:02 Jared takes over operations at his father's business, Kushner Companies. 24:07 And the company keeps doing well. 24:12 And, David Koshinevsky says, Jared and Charlie continue to defend what Charlie did. 24:18 David Koshinevsky They've made statements about it, and I think they viewed it at the time that they were the victims. 24:23 The thinking, you know, Charlie inherited this medium-sized company and turned it into a big company made it far more profitable. 24:30 He helped make his siblings richer. 24:33 And here are these ingrates who I made rich, who I took the family legacy and kept them from ruining it and built it to something even bigger. 24:40 And they're going to question me and they're going to go to the cops on me. 24:44 And, you know, so they view it. 24:46 And Jared Kushner has later said this as, you know, the U.S. attorney overstepped his boundaries in getting involved in what was essentially a family squabble. 24:56 Kelly McEvers So yeah, here you have Charlie Kushner, this tough son of Holocaust survivors who works really hard to make his business thrive and who is willing to videotape his sister's husband with a prostitute who he hired. 25:10 And you have his son Jared, who is very loyal to Charlie. 25:16 So loyal, he would later tell New York Magazine this... 25:20 All he did was put the tape together and send it. 25:23 Was it the right thing to do? 25:25 At the end of the day, it was a function of saying, you're trying to make my life miserable? 25:30 Well, I'm doing the same. 25:35 And then, years later, when both Jared Kushner and that U.S. attorney, Chris Christie, the guy who put Jared's father in prison, were both up for jobs in Donald Trump's White House, Jared got a job. 25:50 Chris Christie didn't. 25:53 Both Chris Christie and Jared Kushner say Christie's prosecution of Charlie Kushner had nothing to do with this. 26:03 After the break, we will pick up where we left off. 26:05 Charlie Kushner has finished his sentence, and the Kushner companies go in a new direction. 26:39 All right, so Jared Kushner and his father, Charlie, are reunited, and they're working together at Kushner Companies. 26:45 Jared is the front man for the company. 26:47 Charlie's more behind the scenes. 26:50 And the company is doing really well. 26:52 By now it has about 25,000 apartments. 26:55 Caleb Melby Mostly located in New Jersey and Pennsylvania, states around New York, but mostly not in New York. 27:02 Kelly McEvers That's Caleb Melby. 27:04 He and David Koshinevsky, who you heard earlier, are now going to tell us how Charlie and Jared decided to take their company in a whole new direction. 27:13 They're both reporters for Bloomberg. 27:15 And they're going to talk about 2006, when the Kushners decided they wanted to expand. 27:20 David Koshinevsky They wanted to say bye-bye New Jersey and to say we're bigger than you. 27:23 We can leave New Jersey behind and make money on the big stage. 27:27 Kelly McEvers And when you leave New Jersey for the big stage, you go to New York City. 27:31 David says this was especially important to Jared. 27:34 David Koshinevsky He wanted to kind of rebrand them into kind of hipper New York spaces like in Dumbo. 27:38 Very fashionable. 27:40 He talked about this is Kushner 2.0. 27:42 They were looking for a big trophy property. 27:45 Kelly McEvers But getting one of these properties is not easy. 27:47 Because remember, at this point, 2006, we're getting to the peak of the housing boom. 27:52 Everybody has cash. 27:54 And the sellers want to get the highest price they can. 27:56 Caleb Melby You had insurers, you had pension funds. 27:59 People knew that they could get a loan together really quickly. 28:02 So to say you were going to go into business with this family who was really mostly famous for Charlie's criminal proceedings before was a big bet. 28:12 And it took them, they looked at more than like two dozen buildings. 28:16 Kelly McEvers Oh, wow. 28:16 The Kushners finally settle on a building they want, 666 Fifth Avenue. 28:24 All right, yeah, so we are standing in front of 666 Fifth Avenue. 28:29 There are these, like, perforated steel panels. 28:33 Like, you'll have, like, a window panel, window panel, window panel, window panel, and it's kind of like brushed steel, and it's just a big, tall rectangle. 28:44 David says the Kushners loved a lot about this building, the minimalist design, the artwork in the lobby, and most important, the prestigious location on Fifth Avenue. 28:53 So it's the fall of 2006. 28:56 Charlie Kushner has gotten out of prison and the Kushners decide to make an offer on 666. 29:02 666. 29:04 Charlie had his staff work the weekend after Thanksgiving to put the financial package together. 29:08 David Koshinevsky I mean, people who knew the books of the company, who knew the company's cash position, who knew the market were skeptical and said, look, I don't know that this is the right price. 29:17 I don't know that we can do the financing. 29:19 But Charlie told his accountants and his finance people, I make the decisions, you make them work. 29:27 Kelly McEvers What was the price? 29:27 What was the final price? 29:29 David Koshinevsky $1.8 billion. 29:30 Wow. 29:31 Which was a record at the time. 29:34 Kelly McEvers $1.8 billion was the most that had ever been paid for a building in Manhattan. 29:40 The Kushners only had to put down $50 million in cash. 29:44 The rest comes from some high-interest loans and a $1.2 billion mortgage. 29:50 Remember that. 29:51 A $1.2 billion mortgage. 29:56 After they close on the deal, the Kushers have this big party at a swanky Manhattan restaurant with a $250 per person tasting menu. 30:03 David Koshinevsky They went to Per Se and everyone got these gold cufflinks, everyone involved in the deal to kind of celebrate and they thought that this was their great moment. 30:10 Kelly McEvers You mean like the people who stayed up late to make the numbers work? 30:12 Yes. 30:13 They all got cufflinks out of it? 30:13 David Koshinevsky Some of the other, and the cufflinks were made to look like the metal facing on the side of the building. 30:20 Kelly McEvers So yeah, 2007, everyone's flying high. 30:24 And we all know what happens next. 30:26 Soundbite You know what, right now, breaking news here. 30:28 Stocks all around the world are tanking because of the crisis on Wall Street. 30:33 The Great Recession. 30:34 And we are expecting a tsunami of foreclosures and short sales. 30:37 Weakness in the housing market. 30:39 Signal that commercial real estate is weak around. 30:41 Still major concerns about the health of commercial real estate. 30:44 Christopher J. Christie The state of commercial real estate. 30:47 Maybe the next shoe's going to drop. 30:49 Kelly McEvers And suddenly, 666 Fifth Avenue is this huge money suck. 30:54 David Koshinevsky And they started scrambling. 30:57 Kelly McEvers They sell off half the retail. 30:59 Then they refinance the mortgage. 31:01 This other big real estate company, Vornado, buys half the office space in exchange for cash. 31:06 And Vornado assumes half the debt. 31:09 And in the end, they make it. 31:10 666 will not go under. 31:14 In 2011, there's another company dinner to celebrate, but this time it's not at that fancy restaurant. 31:19 David Koshinevsky They go to some little restaurant in the East Village, like a cash-only Italian restaurant, which is a little different ambience. 31:26 People are all glad that they made it out by their fingernails. 31:30 Kelly McEvers The problem is still that $1.2 billion mortgage. 31:36 The refi package did give them some interest forgiveness. 31:39 Caleb Melby But with each successive year, some of that interest forgiveness went away and the debt got more and more expensive. 31:48 And even after that forgiveness, they were still in the red, which is how we get to their plan to just raise the whole thing and start over, I guess. 32:01 Kelly McEvers tear down the existing building at 666 and build a whole new thing. 32:07 They called it the Mega Project. 32:10 At this point, it's 2014, and there is another real estate boom in New York City. 32:15 And Vornado, which by now owns a big chunk of 666, says, let's play it safe. 32:21 Rent the building out, hope to refinance again. 32:23 For Vornado, this is just one of its many buildings. 32:27 For the Kushners, this is their big signature thing. 32:30 David Koshinevsky And the Kushners go the other direction. 32:32 They say, well, what if we knock it down and put up a big, gleaming, huge tower and make it twice as big and twice as expensive and bring in other investors? 32:44 And instead of one floor of retail, which is profitable, we'll have five floors, like the Time Warner Center on steroids. 32:52 Caleb Melby And a hotel on top of that. 32:53 David Koshinevsky And a hotel on top of that. 32:55 Kelly McEvers Five floors of retail plus a hotel. 32:57 Yes. 32:57 Plus condos to be sold at a higher price than anything else on the market. 33:01 David Koshinevsky So the Kushners decide after buying an expensive dream of their own, they'd knock it down and have an even more expensive, more galactic dream. 33:10 And at the end, I think it would take $8 billion to build. 33:15 Kelly McEvers So here's like just, you know, I think anyone listening would maybe not understand. 33:19 It's like if you can't afford the mortgage you have, the $1.2 billion mortgage you have, how on earth could it even possibly make sense to then want to do an $8 billion project? 33:30 Caleb Melby You got to find a partner to pay that loan down before you do anything else. 33:35 David Koshinevsky OK. You got to find also a partner, someone who sees your vision or this grandiose vision. 33:40 Kelly McEvers Someone for whom this, like, prestigious spot is also equally as important to them, maybe, too, to have a foot on Fifth Avenue? 33:48 Is that what it is? 33:49 Caleb Melby And maybe someone who wouldn't mind overpaying. 33:51 Kelly McEvers Yeah. 33:52 David Koshinevsky Right. 33:53 Kelly McEvers Well, who would that be? 33:55 David Koshinevsky A lot of it is fueled of foreign money, people trying to get their money out of countries with currency controls, like Argentina or... 34:01 Kelly McEvers So it's not as crazy as I think. 34:04 David Koshinevsky Oh, it's still crazy. 34:06 Kelly McEvers But people do do this. 34:08 People do this. 34:09 People come in with a lot of cash and overpay for real estate. 34:12 Caleb Melby Well, and that's the part where it gets crazy, right, is there's theoretically people out there who would overpay to get into New York real estate. 34:21 But this is just so many magnitudes beyond that that it doesn't even look like a good deal. 34:27 So the Kushners did go on a global hunt. 34:32 Kelly McEvers The Kushners start courting wealthy people all over the world. 34:35 The pitch includes sketches of a building designed by one of the world's most famous architects. 34:39 David Koshinevsky It looks like something from the Emerald City in Oz or Abu Dhabi. 34:43 They sent out these stunning drawings and they started to circulate this proposal to investors that it's nice pictures, but where are the numbers? 34:50 They didn't put any numbers. 34:52 Kelly McEvers Really? 34:52 David Koshinevsky Because you don't lead with your weak point. 34:55 Kelly McEvers They go to the richest man in France. 34:57 He didn't buy it. 34:58 They go to a Saudi mall developer. 35:01 Nope. 35:01 They go to companies in Israel run by folks who'd worked on Kushner projects in the past. 35:06 Caleb Melby But not this one. 35:07 Kelly McEvers South Korea's sovereign wealth fund. 35:09 Nope. 35:10 A Qatari businessman. 35:11 David Koshinevsky Nope. 35:11 They're going everywhere. 35:12 They're Willy Loman from Death of a Salesman. 35:14 You know, they were liked, but not well liked, right? 35:16 They got their briefcase and no one's going to take it. 35:19 Kelly McEvers A lot of time the Kushners can't even get meetings. 35:22 The megaproject is not looking good. 35:26 But then... 35:27 Soundbite They're bringing drugs. 35:28 They're bringing crime. 35:30 They're rapists. 35:31 And some... Everything changes. 35:33 David Koshinevsky 2015, all of a sudden, Jared and Donald Trump begin their rise toward the White House. 35:38 Soundbite Donald Trump wins big two decisions. 35:41 We are going now to South Carolina. 35:44 We're going to win. 35:45 David Koshinevsky Jared is the right-hand man of Trump. 35:52 And by late spring, it's clear that he's going to be the nominee. 35:57 Soundbite I'm killing him on states, and I'm up two million votes or more than that. 36:05 David Koshinevsky So all of a sudden, it's a little different calculation. 36:08 Like, do you want to just completely slam the door in these people's face or at least give them a certain amount of protocol? 36:15 Kelly McEvers The Kushners start getting meetings and some real conversations about possible investments for the megaproject. 36:21 Then things start looking up even more. 36:24 Donald Trump wins the election. 36:26 During the transition last fall, the Kushners start making real progress with one foreign company. 36:32 David Koshinevsky which is the famous Chinese insurance company, which is so closely tied to the Chinese government and the Chinese party officials that the U.S. has forbidden them from making certain purchases. 36:45 Like there was one in San Diego. 36:46 They wanted to buy something near a military base, and it was forbidden because it's not owned by the government, but it's so closely allied with the government. 36:53 Kelly McEvers So after all this interest from Anbang, Donald Trump is sworn in and Jared Kushner is officially appointed to the White House. 37:01 And Jared Kushner divests his stakes in some of the Kushner companies and other projects. 37:06 And he resigns as chief executive of the company. 37:09 Then in March of this year, David and Caleb do some new reporting for Bloomberg on this Anbang deal. 37:16 And the story... 37:19 Soundbite kind of blows up. 37:37 Kelly McEvers Critics and ethicists say a deal like this between a company close to the Chinese government and a company with the same name as a White House advisor could create major conflicts of interest. 37:48 A White House spokesman declined to answer our questions about this, but in the past they have said Jared Kushner will recuse himself from issues that might create conflicts. 37:58 Either way, after all this scrutiny, the Anbang deal falls apart. 38:05 Anbang pulls out that Kushner companies will no longer get $400 million in cash for 666 Fifth Avenue. 38:13 And this is the most interesting thing that David and Caleb have found. 38:18 Jared Kushner's being in the White House has actually hurt the family business, not helped it. 38:24 Caleb Melby Like I think David said earlier, it helped in getting meetings. 38:28 It helped get that foot in the door. 38:30 And getting some promises and assurances. 38:33 Right. 38:33 But in the end, it didn't get them any checks. 38:36 Kelly McEvers And it maybe hurt them because some people were maybe afraid that there's more scrutiny being placed on their financial dealings if they do business with somebody in the White House than if it was just some other random developer. 38:47 David Koshinevsky The other thing is we only know a small piece of this one building. 38:50 We don't know. 38:51 There are a lot of private investments and partnerships in both the Kushners and elsewhere in the real estate world that we don't know. 38:59 Kelly McEvers Like even after the Anbang deal fell through, Jared Kushner's sister was in China, pitching potential investors to sign up for a visa program that provides a path to U.S. citizenship in exchange for a $500,000 investment. 39:12 The Kushner companies were looking to raise $150 million for another building project in New Jersey. 39:18 But this gets a lot of scrutiny. 39:21 Again, critics say it's a potential for conflict of interest. 39:25 The China meetings are canceled. 39:27 The Wall Street Journal and New York Times have reported that federal prosecutors are now investigating the Kushner's use of the EB-5 program. 39:33 The Kushner companies have said the company did nothing improper. 39:38 And a White House spokeswoman has said Kushner will recuse himself from any matter where his impartiality could be reasonably questioned, including an examination of the EB-5 program. 39:50 So yeah, all this scrutiny is changing things for Kushner's business dealings. 39:56 And we're seeing a similar thing happening with some of Donald Trump's businesses. 40:01 Revenue at some of Trump's golf courses is down. 40:04 The Washington Post reports that charities and sports teams are canceling events and stays at Trump resorts like Mar-a-Lago. 40:12 We should say businesses booming at the Trump Hotel in D.C., where it has exceeded revenue projections. 40:18 As for 666 Fifth Avenue, that $1.2 billion mortgage is due in February 2019. 40:28 David and Caleb did talk to the president of Kushner Companies, and he says the building still has a lot of potential investors. 40:35 But David and Caleb have also reported that Vornado, that other major partner in 666, is signaling to brokers that a much less grand renovation than the megaproject is underway. 40:48 Vornado declined to comment for this story. 40:51 All this could mean that the Kushners eventually lose control of 666 and that their overall business takes a big hit. 41:03 Caleb and David say there are still a lot more questions about 666 and all kinds of other projects. 41:12 And now that these wealthy families are in public office, they're going to keep asking those questions. 41:18 David Koshinevsky For those who make an argument that we need to have more disclosure in real estate, this is example one of how sunlight is the best disinfectant. 41:36 Kelly McEvers This episode was written and produced by Chris Benderev, Tom Dreisbach, and me with help from Selena Simmons-Duffin. 41:42 The episode was edited by Neil Carruth with help from Arnie Seipel. 41:45 Fact-checking by Greta Pittenger. 41:46 Our technical director is Andy Huther. 41:48 And we had help from Patrick Murray. 41:50 Our lawyer is Micah Ratner. 41:51 We had help getting archival tape from the amazing NPR library team and especially Susie Cummings, Nicolette Kahn, and Camille Salas. 41:59 Our theme song is by Colin Wamsgand. 42:01 Other original music in this episode by Jonathan Hirsch and Ramteen Arablui. 42:05 Digital help is from Alex McCall. 42:07 Embedded is executive produced by me, Chris Turpin and Anya Grundman. 42:11 Huge thanks to David Koshinevsky and Caleb Melby of Bloomberg News. 42:15 Thanks also to the American Archive of Public Broadcasting and to Daniel Golden, who is now a senior editor at ProPublica. 42:22 His new book is Spy Schools, How the CIA, FBI and Foreign Intelligence Secretly Exploit America's Universities. 42:28 You can see all of Ray Kushner's interview with the Kean University Holocaust Resource Center on the website of the U.S. 42:34 Holocaust Memorial Museum. 42:37 You can hear more NPR on your local public radio station on another show I host called All Things Considered. 42:42 Next week on Embedded, another building in Manhattan. 42:46 This one has Donald Trump's name on it. 42:49 And the story involves a man with a criminal past. 42:52 Soundbite He smashed this heavy margarita glass 42:56 And he just cut this guy's face open. 42:58 I believe the very final email of the day is, I spoke with Donald. 43:03 He's fine with me. 43:04 Kelly McEvers Okay, that's it. 43:05 Till next week. 43:05 Thanks for listening.