Democracy 21 and CREW Request OGE Investigation Into Kushner’s Apparent Financial Conflicts Of Interest Regarding Israel And China

June 28, 2018 – In a letter sent today to David J. Apol, Acting Director of the Office of Government Ethics (OGE), Democracy 21 and Citizens for Responsibility and Ethics in Washington (CREW) urged the OGE to investigate “whether Jared Kushner’s extensive and ongoing personal business interests, including by attribution the extensive business interests of his spouse, Ivanka Trump, are in direct conflict with Kushner’s responsibilities as a Senior Adviser to President Donald Trump.”

The letter specifically requested investigation into Mr. Kushner’s apparent conflicts of interest between his financial interests and official responsibilities regarding two areas: Israel and China.

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According to the letter:

Mr. Kushner and Ms. Trump are in unique if not unprecedented positions. They are the son-in-law and daughter of a President. They both work in the White House, with Mr. Kushner having a broad portfolio of responsibilities. They both have chosen to maintain rather than divest their extensive business holdings that involve foreign and domestic interests.

This places them in a position where foreign interests seeking to curry favor with the Trump Administration can do so by providing financial benefits to Mr. Kushner and Ms. Trump in the form of business arrangements with private companies in which Mr. Kushner and Ms. Trump continue to maintain a financial interest. None of these issues would have arisen if Mr. Kushner and Ms. Trump had been willing to divest their business interests in return for the privilege of serving in the White House.

The letter stated:

As a result of their decisions to pursue private sector financial gain at the same time they are serving in the White House, the couple earned $82 million in outside income in 2017, according to a report in The Washington Post. The 2017 earnings appear to be unprecedented in size and scope for White House staff members. The Post report further noted that they “maintained large stakes in businesses with domestic and foreign ties.”

The letter cited reports published in The Washington Post and The New York Times noting Mr. Kushner’s financial ties to Israel and Ms. Trump’s trademark ties to China, which are attributed to Mr. Kushner for purposes of conflict of interest rules.

According to the letter:

At the same time that he retains personal financial entanglements with Israeli banks and investors, Mr. Kushner is playing a lead role for the United States in an effort to broker peace between Israel and the Palestinians.

This creates the appearance, if not the reality, of a conflict of interest on several levels.

The letter stated:

Mr. Kushner’s financial entanglements, and the likelihood of more to come in the future, create conflicts of interest that are unprecedented in scope, and appear to violate several fundamental ethical principles. His financial deals appear to “conflict with the conscientious performance of duty;” result in misuse of “public office for private gain;” impede his ability to carry out his duties with “impartially” and avoid giving “preferential treatment;” and constitute “actions creating the appearance” of “violating the law or ethical standards.” 5. C.F.R. § 2635.101(b)(2), (7), (8) and (14).

The letter continued:

Mr. Kushner’s entanglements with major Israeli financial institutions undermine his role in the Middle East negotiations, and he stands to potentially financially benefit from how American foreign policy is conducted in the region.

In addition, the Israeli interests to which Mr. Kushner is indebted could seek to use that indebtedness to influence or shape his diplomatic efforts in the region.  Furthermore, Mr. Kushner’s financial relationships with Israeli banks and financial interests create an obvious public appearance of bias towards Israel that, at a minimum, compromises Mr. Kushner’s ability to lead U.S. efforts and act as an honest broker between hostile nations.

The overall effect of these entanglements is to compromise the public’s trust in the Middle East peace process.  As a result, Mr. Kushner should be required to divest himself of any ongoing financial interests in Israel, or he should be recused from participating in U.S. diplomatic efforts in the Middle East.

The letter also stated:

Mr. Kushner’s formally assigned duties as Senior Adviser to the President include foreign policy matters involving a range of countries, including China.

Given Ivanka Trump’s extensive business interests in China, including her valuable trademarks, we believe that Mr. Kushner is required by the law and regulations either to recuse himself from all matters dealing with China, or Ivanka Trump has to divest herself of her financial interests in China, including trademarks issued by the Chinese government.

The Chinese government exercises complete control over the issuance of trademarks in China, and indeed, overall foreign business interests in the country.  Accordingly, any actions that Mr. Kushner takes, or any policy advice he gives, on any matter dealing with China is “likely” to affect his spouse’s business interests, by the effect his actions or advice might have on these interests as a result of his gaining favor with, or in alienating, the government of China.

Because of his spouse’s extensive financial interests in China, which inure to him, Mr. Kushner’s involvement in matters relating to China would also likely cause “a reasonable person with knowledge of the relevant facts to question his impartiality in the matter.”

The letter also noted that there is “no evidence in the public record that Mr. Kushner has agreed to, or has taken, any measures to recuse himself” from influencing Administration policy towards China, despite the fact that Mr. Kushner reportedly signed a written ethics agreement to avoid any conflicts of interest.

According to the letter:

By failing to take appropriate measures to guard against conflicts of interest arising from his spouse’s financial interests, Mr. Kushner has undermined public confidence in the development and implementation of U.S. trade and foreign policy with China.

The letter concluded by calling on OGE to investigate whether Mr. Kushner has violated OGE conflict of interest provisions “by failing to recuse himself from all matters relating to U.S. policy in China while his spouse maintains her extensive business interests in China.” The letter also called on OGE “to investigate whether Mr. Kushner has a conflict of interest between his personal financial entanglements with Israeli banks and financial institutions and his role in formulating and implementing U.S. policy in the Middle East.”

The letter stated:

If OGE determines that this matter is not within its purview to investigate, it should pursue any necessary corrective action to resolve the apparent violations.

The letter was signed by Fred Wertheimer, President of Democracy 21, and Noah Bookbinder, Executive Director of CREW.

Read the full letter here.