The Knives Are Out For Kushner: Loans With Deutsche Under Scrutiny By Regulator

The knives are out for Jared Kushner.

After losing his top secret security clearance and reportedly falling under intense scrutiny by Robert Mueller's probe, the New York Department of Financial Services has asked Deutsche Bank two local lenders for information about their dealings with Jared Kushner, the Kushner companies and his family, according to Bloomberg

Letters were sent by department superintendent Maria Vullo to Deutsche Bank, Signature Bank and New York Community Bank last week, said a person who had seen the letter which seeks a response by March 5. Vullo was appointed by New York's Democratic governor, Andrew Cuomo.

The requested information is broad, and include the banks' processes for approving loans.

Vullo requested copies of emails and other communications between the Kushners and the banks related to financing requests that have been denied or are pending. She also asked whether the banks have conducted any internal reviews of the Kushners and their companies and the results of any such inquiries revealed.

The most detailed information about the Kushners’ finances can be found in their government disclosures. The couple had unsecured lines of credit of $5 million to $25 million each from Deutsche Bank, Signature Bank and New York Community Bank according to a late December filing. 

Deutsche Bank’s line of credit was extended to Kushner and his mother; lines from the other two banks were extended to Kushner and his father. Signature Bank also extended a secured line of credit to the couple of $1 million to $5 million, according to the disclosure. -Bloomberg

A spokeswoman for the Kushner Cos, Christine Taylor, said “We have not received a copy of any letter from the New York State Department of Financial Services," adding "Our company is a multi-billion enterprise that is extremely financially strong. Prior to our CEO voluntarily resigning to serve our country, we never had any type of inquiries. These type of inquiries appear to be harassment solely for political reasons.

Kushner's family business, the Kushner Companies, has had longstanding financial troubles related to 666 Fifth Avenue, "the most expensive building ever purchased", in New York City.

After Kushner bought the Fifth Avenue property in late 2006 for $1.8 billion - with zero skin in the game coming from Kushner, the building came under intense pressure during the financial crisis. Vornado Realty Trust stepped in with financing in exchange for a 49.5% stake in the building, which is now carrying over $1.4 billion in debt according to a March release by Vornado. 

The Kushner companies are also reportedly negotiating with Vornado to buy their stake back. 

While Jared has separated himself from his family's business and placed assets in a trust, he has fallen into the crosshairs of Special Counsel Robert Mueller. Of interest are discussions between Kushner and Chinese investors during the transition, according to sources familiar with the investigation. Kushner met with executives of troubled Chinese conglomerate Anbang Insurance which was recently taken over by China's insurance regulator. Talks between Kushner and Anbang's chairman, Wu Xiaohui, broke down in March 2017, according to the New York Times

Also of interest to Mueller are Kushner's dealings with a Qatari investor over the 666 property, for which Kusher reportedly sought financing from former Prime Minister Jassim Al Thani, according to The Intercept. The discussion apparently went nowhere, similar to the Anbang deal.

Kushner in the crosshairs

Dovetailing off of the reports of Kushner's meetings to shore up his finances, the Washington Post reported this week that officials from at least four countries - China, Israel, Mexico and the United Arab Emirates have explored ways to manipulate Kushner by taking advantage of his "complex business arrangements, financial difficulties and lack of foreign policy experience." The story cited current and former US intelligence officials - and noted that it is unclear on whether the cited countries took any action. 

Meanwhile, the presidential son-in-law's security clearance was downgraded from "Top Secret/SCI-level" to "secret" this week, walling him off from the most sensitive information. 

Many had expected that Trump would grant Kushner a waiver, even though Trump himself said Friday that he would let Chief of Staff John Kelly decide if such an exception should be granted. In a statement issued last week, Kelly said that any changes to Kushner's security clearance wouldn't impact his ability to do his job:

"As I told Jared days ago, I have full confidence in his ability to continue performing his duties in his foreign policy portfolio including overseeing our Israeli-Palestinian peace effort and serving as an integral part of our relationship with Mexico," Kelly said in the statement.

At the end of the day, unless Kushner or his company broke the law, it appears that this entire exercise is meant to embarrass the president's son-in-law over his troubled 666 property.