Banana Republic

Chasing After the Kushners in China
By JAVIER C. HERNÁNDEZ

Jared Kushner’s sister Nicole Meyer (third from left) urged wealthy Chinese in Shanghai on May 7 to invest in a Kushner Companies luxury apartment complex in New Jersey.

BEIJING — The tip came in the form of an advertisement posted in the elevator of a Beijing apartment building.
“New Jersey Central Tower,” it said above a rendering of a gleaming housing complex. 

“Government supports, star family builds.”
The “star family” referred to relatives of Jared Kushner, Trump's son-in-law and senior adviser.

The ad gave the details of a meeting at the Ritz-Carlton Hotel in Beijing where investors would learn how they could obtain permanent residence in the United States by investing $500,000 in a project called “Kushner1.”
On Saturday, May 6, I showed up at a ballroom in the Ritz-Carlton, doing my best to blend in with a crowd of Chinese investors.
After about a half-hour, the keynote speaker took the stage: Nicole Meyer, Kushner’s sister and a leader of Kushner Companies, the family real estate business.
I listened attentively, jotting down her opening words: “This project means a lot to me and my entire family.” 

But about a minute into her speech, a public relations executive blocked my view.
“This is a private event,” she said. 

“I have to let you go. We don’t want to make a scene.”
I noted that the meeting had been publicly advertised. (A colleague in the Beijing bureau of The Times, Jonathan Ansfield, had spotted the notice inside the compound where he lives.)

But it was clear that the handlers were going to block me from hearing the rest of Meyer’s remarks. 

I left the ballroom, but my colleague Cao Li, a journalist in the Beijing bureau of The Times, managed to stay inside for a few more minutes.
Outside the ballroom, a team of about half a dozen public relations executives and security officials grew hostile, threatening to take us into a private room. 

They followed us throughout the hotel, trying to discourage investors from speaking out.
As journalists in China, we are accustomed to dealing with harassment. 

But we don’t typically encounter bullying at events where American companies hold court.
After the meeting, we ran after Meyer, asking whether she worried her business activities in China might create ethical issues for her brother. 

She wouldn’t answer but tried to calm down her irritated husband, Joseph Meyer, chairman and publisher of Observer Media, who shouted three times, “Please leave us alone!”
Later that evening, we broke news that Meyer had dropped her brother’s name and his White House role during her sales pitch at the Ritz-Carlton.

In the days that followed, Kushner Companies apologized; U.S. senators called for an end to the investor visa program that the company was using; and the mayor of Jersey City, N.J., where the housing development is expected to be built, said he opposed tax breaks for the company.
By Friday, Kushner Companies seemed to have grown tired of the controversy. 

The company announced that Meyer and other executives would leave China early, withdrawing from the rest of their roadshow.

Banana Republic

Kushner Companies EB-5 Activities in China Constitute Securities Fraud
BY GARY CHODOROW

As has been widely reported, Kushner Companies recently put on a roadshow to market to Chinese investors a New Jersey real estate project called One Journal Square. 

The investments are structured such that investors may qualify for green cards through the EB-5 program, which requires a minimum $500,000 investment resulting in the creation of at least 10 U.S. jobs.
Initial reporting about the roadshow led the Kushner Companies to apologize last week for boasting about their ties to White House adviser Jared Kushner during the roadshow. 

“In a sector where investors are wary of failing projects and policy changes that would jeopardize their visas,” writes Alexandra Harney for Reuters, such boasts are meant to “reassure potential investors their EB-5 projects will be successful.”
Reuters is now reporting that Kushner Companies’ activities may have crossed the line from boasting to misrepresentation, making the company vulnerable to charges of securities fraud by the U.S. Securities and Exchange Commission (SEC). 

Specifically, advertisements by the company’s marketing agent in China contain multiple misrepresentations about the safety of the investment.
Kushner Companies’ marketing agent, QWOS Group, also known as Qiaowai, produced an online advertisement claiming that the investment “in a real sense guarantees a permanent green card and the safety of the investment principal.” 

After Reuters asked Qiaowai for comment, the advertisement was deleted. 

Other advertisements for the project made similar false claims.
The SEC enforces Section 10(b) of the Securities and Exchange Act of 1934, and Rule 10b-5, codified at 17 C.F.R. 240.10b-5, which target securities fraud. 

EB-5 investments are frequently structured as a type of “security” subject to the antifraud provisions of federal securities laws, according to SEC congressional testimony. 

Rule 10b-5 makes it unlawful to “make any untrue statement of a material fact or to omit to state a material fact necessary in order to make the statements made, in the light of the circumstances under which they were made, not misleading.”
Qiaowai’s advertisements violate the rule in two ways. 

1. First, EB-5 investments are financially risky, not guaranteed. The immigration law specifically prohibits investments where the money is not at risk. 
2. Second, there is no guarantee that an investor will actually get a green card. There are a host of reasons why an investor could be denied a green card. 

Some are related to the investor, such as health issues, membership in the Communist Party, inability to prove that the funds invested were earned legally, prior U.S. immigration violations, etc. 

Some are related to the project, such as failure to employ the required number of U.S. workers, or delays or changes to the project.
In a jointly issued Investor Alert, USCIS and SEC warn against precisely these types of misrepresentation:
Beware if you spot any of these hallmarks of fraud:
Promises of a visa or becoming a lawful permanent resident. 

Investing through EB-5 makes you eligible to apply for a conditional visa, but there is no guarantee that USCIS will grant you a conditional visa or subsequently remove the conditions on your lawful permanent residency. 

USCIS carefully reviews each case and denies cases where eligibility rules are not met. 

Guarantees of the receipt or timing of a visa or green card are warning signs of fraud.
Guaranteed investment returns or no investment risk. 

Money invested through EB-5 must be at risk for the purpose of generating a return. 

If you are guaranteed investment returns or told you will get back a portion of the money you invested, be suspicious.
Kushner Companies may not be shielded from liability just because they hired Qiaowai rather than doing the marketing themselves. 

They may be liable for the actions of their agents, sometimes referred to in the industry as “finders.” Securities lawyers advise that developers should know the parties marketing their deal abroad. 

The best practice is to have a clear agreement with the agent in which the agent agrees to comply with securities laws and to provide all marketing materials to the developer’s securities counsel for review before publication.
The SEC did not respond to questions by Reuters about Qiaowai’s ads.
Besides the One Journal Square project, Qiaowai previously helped the Kushner Companies raise funds for Trump Bay Street, an apartment complex in Jersey City, New Jersey, that The Trump Organization licensed its name to.

Banana Republic

Kushner Companies Backs Out of Chinese Investor Events After Furor
By JAVIER C. HERNÁNDEZ

Nicole Meyer, a sister of the senior White House adviser Jared Kushner, at a promotional event in Shanghai on Sunday. Critics pointed to the roadshow, which sought to solicit $150 million in financing for a Jersey City housing development, as an example of the conflicts of interest in the Trump administration.

BEIJING — The real estate company owned by the family of Jared Kushner, son-in-law and senior adviser to Trump, said on Friday that its employees would no longer take part in a cross-country roadshow in China this month.
Executives from Kushner Companies, including Nicole Meyer, Kushner’s sister, were expected to appear in the southern cities of Shenzhen and Guangzhou and the central city of Wuhan this month, according to ads for the events.
But after an uproar, the company and its Chinese partner said on Friday that Kushner Companies would no longer be present at those events, although it will continue to actively court investors.
The company is seeking $150 million in financing for a New Jersey housing development through a program that gives foreigners who invest at least $500,000 a shot at green cards, which allow permanent residence in the United States. 

The overall sum represents about 15 percent of the total cost of the property project.

But the effort to raise money in China drew widespread criticism, with ethics experts saying it presented a conflict of interest. 

Kushner continues to benefit from a stake in his family’s real estate business and other investments worth as much as $600 million.

On Friday, Risa B. Heller, a spokeswoman for Kushner Companies, said its employees would no longer participate in the roadshow after taking part in meetings in Beijing and Shanghai last weekend.
“No one from Kushner Companies will be in China this weekend,” she said in a statement, which was earlier reported by The Washington Post.
The Chinese partner of Kushner Companies, an immigration agency named Qiaowai, said on Friday that the meetings this month would go forward, but that no one from Kushner Companies would attend. 

Qiaowai had marketed the Kushner family’s visit as a five-city tour over two weeks, ending in Wuhan. 

The Chinese firm will still give presentations on the New Jersey project, field questions on the investor visa program and solicit investments.
Meyer added a star turn to efforts by Kushner Companies to raise money in China. 

Kushner is married to Trump’s elder daughter, Ivanka. 

Since Trump took office in January, fascination with his family has grown in China, especially as Kushner has become a power broker in relations between Washington and Beijing.
Speaking at the Ritz-Carlton Hotel in Beijing on Saturday, Meyer said the New Jersey project, called One Journal Square, “means a lot to me and my entire family.” 

She said Kushner, who resigned as chief executive of the company in January, was now serving in the White House.
Meyer’s remarks drew intense backlash in the United States, with critics seizing on the roadshow as a stark example of the conflicts of interest in Trump’s White House.
The company later apologized, saying Meyer did not intend to use her brother’s name to lure investors. 

Sean Spicer, the White House press secretary, said Kushner was in compliance with ethics rules and had “nothing to do” with the company’s work in China.
Adding to the fallout, the mayor of Jersey City, N.J., where One Journal Square is set to be built, said on Sunday that he opposed the Kushner family’s request for hefty tax breaks for the project.
The roadshow also raised questions about the investor visa program known as EB-5, which has been plagued by fraud and abuse scandals and is likely to be overhauled this year.
Even in China, where business and politics often mix, there was a hint of indignation. 

State-run news media published reports asking whether the company was benefiting from unfair competition.
“Caution urged on Kushner project,” read a headline in the Global Times newspaper.
But Hao Junbo, a lawyer in Beijing, said Meyer’s emphasis on family connections would probably prove to be a winning message in China.
“Chinese people have a tradition of worshiping powerful officials,” he said. 

“It’s an innate attraction to Chinese investors. They will automatically label the program as one with official backing after they hear the name of Trump’s son-in-law.”

The Chinese Connection

What do Kushner talks with China's Anbang mean for Trump?
BBC News

Kushner's company is under the spotlight over a possible property deal with a Chinese firm

A company part-owned by Donald Trump's son-in-law and now senior White House adviser, Jared Kushner, is negotiating a deal with a Chinese company to redevelop 666 Fifth Avenue in New York City.
The 41-floor ageing property, which occupies a full block that fronts Fifth Avenue between 52nd and 53rd Street, was purchased by Kushner Companies in 2006 for $1.8bn (£1.5bn). 

At the time, it was the highest price paid for a single building in Manhattan.
But does Chinese interest in the building, just a few blocks south of Trump Tower, raise questions over a conflict of interest with someone so personally and professionally close to the US president? 

And would a possible sale to China's Anbang Insurance Group pose security risks?

Deal or no deal?
On Monday, Bloomberg reported that Anbang was planning a $4bn (£3.3bn) investment deal with the owners of 666 Fifth Avenue. 

The agreement, the news agency reported, would make Kushner Companies, owned by Jared Kushner and his father Charles, more than $400m (£327m).
The report says that some real estate experts consider the terms of such a transaction unusually favourable for the US company.

Kushner Companies is in "discussions" involving 666 Fifth Avenue in New York City

On Tuesday, however, Anbang said that reports circulating of its investment in the Fifth Avenue property were "not correct".
"There is no investment from Anbang for this deal," the company wrote in a statement.
Kushner Companies later confirmed that it is in "active discussions" over the building in Manhattan, but did not name Anbang specifically.
"Nothing has been finalised," company spokesman James Yolles told Reuters news agency.

What are the conflicts of interest?
After Kushner was given a senior role inside the White House, his lawyer told the New York Times that he "would recuse from particular matters that would have a direct and predictable effect on his remaining financial interests".
As an owner of Kushner Companies, and with close ties to Mr Trump, investment deals under negotiation between his company and firms such as Anbang do raise questions.
Responding to these concerns, company spokesman Mr Yolles said that Mr Kushner sold his ownership stake in 666 Fifth Avenue to family members, meaning that any transaction would pose no conflict of interest with his role at the White House.
"Kushner Companies has taken significant steps to avoid potential conflicts and will continue to do so," Mr Yolles said in a statement.

What do we know about the Kushners?
Jared Kushner, 36, is married to Mr Trump's daughter, Ivanka. 

In 2006, at just 25, the softly-spoken millionaire bought the once-venerable New York Observer newspaper.
Although he shares with Trump a complete lack of political experience, last year he exerted a powerful influence over the Trump campaign -- including digital strategy and top-level hires -- and carried that clout into the White House.

Kushner, who is married to Ivanka Trump, is a senior White House adviser
His father, Charles, founded Kushner Companies in 1985 and made his fortune as a New Jersey property mogul.
A controversial figure, Kushner senior received a prison sentence in 2005 for tax evasion, illegal campaign contributions and witness tampering.
At the time, he admitted setting up his own brother-in-law with a prostitute, secretly filming the liaison, and sending the tape to his sister in an effort to dissuade them from testifying against him.
The man who prosecuted Charles Kushner was the former US Attorney for New Jersey and 2016 Republican presidential candidate Chris Christie.
Jared Kushner is reported to have been involved in counselling Trump to choose Mike Pence as his running mate, over Mr Christie.

What do we know about Anbang?
China's Anbang Insurance Group was founded in 2004. 

It is now one of the country's corporate goliaths with an increasingly large international portfolio and interests ranging from banking to traditional Chinese medicine.
The firm first came to prominence in 2015 when it bought New York's landmark Waldorf Astoria hotel for $1.95bn (£1.35bn), then the biggest US real estate deal by a Chinese buyer.

Barack Obama refused to stay at the Waldorf Astoria after it was sold to Anbang in 2015

Following the acquisition, then President Barack Obama refused to stay at the Waldorf Astoria during a UN general assembly gathering, citing security concerns.
Anbang has been making an aggressive push into the US property market over the last few years but little is known about the company.
In April 2016, the firm unexpectedly abandoned a $14bn (£9.75bn) takeover offer for Starwood Hotels, ending a three-week bidding war with Marriott. 

According to reports at the time, there were questions over its financing sources.
The company now claims to have total assets of more than 1.9tn yuan ($300bn, £240bn).

What are Angbang's political connections?
Anbang chairman Wu Xiaohui is considered one of the best politically-connected men in China, having married the grand-daughter of former leader, Deng Xiaopeng.

Anbang chairman Wu Xiaohui (left) is one of China's most politically-connected businessmen

Mr Wu, 49, is considered "reclusive" but in 2015 he appeared at a Harvard event in Beijing, where he spoke about his firm's investment strategy.
"We must win the first battle and every battle thereafter, as we are representing Chinese enterprises going global," he said.
Company records have also shown members of the board to include the son of a top military commander under former leader Mao Zedong and the son of China's former prime minister Zhu Rongji.

Are international deals a problem for Trump?
Trump's overseas business interests invite questions of whether his foreign policy decisions are directed by US interests or by his own -- or his family's -- business interests.
A section of the US Constitution known as the Emoluments Clause restricts what US presidents can accept from foreign governments.
America's founding fathers included this to prevent US leaders from being beholden to foreign governments.
After Mr Trump was elected in early November he spoke over the phone with Argentine President Mauricio Macri. 

After that call, the Trump Organization issued a press release indicating that Trump Tower Buenos Aires -- which had been waiting permit approval to be built -- was a done deal.
In January, Donald Trump said he had formally given "complete and total" control of the Trump Organization's businesses to his two sons in a bid to avoid conflicts of interest.
But meetings with Indian business partners and current projects in places like the Philippines and Brazil are also raising questions about what the power of the presidency could do for the Trump brand's international negotiating power.