A Picture Paints 1000 Words, the Kushner Affect, Kodak, Chemdas and Covid-19…

FOIA Request to the DFC, dated May 12, 2020

Eastman Kodak, A Loan From the U.S. International Development Finance Corporation, a Fabulous Share Price, Kushner and a Donation

The underlying premise of the following opinion analysis is that there was and has been a relationship between Jared Kushner and Kodak’s board member George Karfunkel. That relationship, as we see it, is one based in real estate holdings and transactions, between well connected religious families that travel in the same circles, either directly or indirectly strengthened to religious connections; and then fostered by Kushner’s lifelong political elite status. This is a relationship that, when accompanied by a “you scratch my back, I’ll scratch yours” approach, offers Trump significant access to donations and religious Jewish bloc voting as well as the ear of officials in countries like Israel and the Ukraine. It’s all about money and Jewish geography.

It is our belief that the $750M loan to Kodak by a little known US government development corporation whose head is a former Kushner college roommate was no coincidence and was a means to filter money to Kodak, couched in a brain trust Kushner was tasked with building to try to overcome a formidable opponent, Covid-19. Whether or not the company’s head knew of the seeming lack of propriety of the Kodak deal remains open to debate. He spoke frequently about the deal and seems to have sincerely believed he was going to both rebuild a company and slow or even stop the spread of Covid-19.

He has claimed that Covid-19 made the entire loan idea completely reasonable. We beg to differ. Regardless, Kodak had been lobbying the US government for months and while somewhat questionable, Kodak’s ability to re-define itself might have been palatable, or at least was not exquisitely unfathomable. Had monumental increase in share price and corporate greed not come to lay waste on the transaction in the form of some dubious stock trades, including a donation, that loan probably would have materialized.

On August 7th, 2020 it was put on hold. We do not believe it should be provided.

We opine that the metioric rise of Kodak share price on the announcement of the Kodak loan was well-timed by Kodak’s board member, also the Director of Amtrust, George Karfunkel who used a single moment in time to run a significant donation through a mysterious [” virtually non-existent”] yeshiva, Chemdas Yisroel, effectively maximizing gains in the stock which otherwise would not have materialized. The parenthetical in the previous sentence regarding the status of Chemdas Yisroel is based upon a complete lack of paper for the mysterious Yeshiva, an address which is an unlikely place to hide a Yeshiva with a newly acquired $100+Million and corporate filings that seem inconsistent with a company that donates or that fosters young minds. The board of directors is also not easily found but word is that it is a group of people, family members of Karfunkel, who are oft involved in monumentally profitable loophole-based transactions.

Not coincidentally, the Yeshiva was incorporated by a signatory located at an address in Monsey, New York, 25 Robert Pitt Drive, a location that is the alleged principal location for dozens of seemingly opaque companies, nearly all in the hard money lending, real estate, finance and not-for-profit charities and Yeshivas industries. The Char 440 Registration Statement for Chemdas Yisroel, Inc. can be found here.

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The Announcement That Set Off a Stock Frenzy and the DFC

“President Trump, with great fanfare, announced the loan [to Kodak] on July 28, 2020. Trump said from the White House that the loan would help luanch Kodak Pharmaceuticals ot pay for Kodak’s entry into the business of producing “critical ingredients” for Covid-19 treatments.”

The Los Angeles Times, click here.

It was that announcement that set off the Kodak stock buying frenzy and the corresponding triggers of the stock exchange shut-down mechanism coinciding with the questionable donation.

What Trump did not provide in that announcement, information which has been published since, is that the Kodak loan was being sourced by the U.S. International Development Finance Corporation or DFC, a little known government run company, ostensibly intended to partner with private sector investors and contractors to solve some of the “developing world’s” most pressing problems.

DFC’s “Who We Are” page reads:

U.S. International Development Finance Corporation (DFC) is America’s development bank DFC partners with teh private sector to finance solutions to the most critical challenges facing the developing world today.

Presumably, the DFC was created for projects outside of the United States that, under Trump’s inconsistent policy-making, would help both Trump’s inner circle; but might have the collateral benefit of altering the world’s most vulnerable populations for the better. That last point we believe is the unintended consequence of the Trump agenda.

The DFC’s “Where We Work” page, notably, does not list the United States as a beneficiary of any projects, consistent with the optics of the stated purpose. So, how exactly did the United States and Eastman Kodak wind up on the list of beneficiaries of DFC Loans, along with countries like Benin, Guinnea-Bissau, Senegal, Timor-Lest, Ukraine, Uzbekistan and so many other “developing” nations, remains a giant question mark? It is also the subject of this post.

With the current US Government’s management of finances, it feels a bit like misappropriating funds for the sole purpose of pulling a rabbit out of a hat and handing it to an old friend, all while cloaking it in humanitarian aid. It is a surreal mix of Trumpisms, his Jewish family, a pandemic set to kill thousands more, and unimaginable wealth.

The Chief Executive Officer of the DFC, Adam Boehler was appointed to head the DFC by President Trump and unanimously confirmed by the Senate on September 26, 2019. Few in the finance/investment industry can question Boehler’s credentials, his connections, his creativity or his accomplishments. What raises red flags on that pick, however, is that Adam Boehler shared a dormitory room with Jared Kushner. It was likely Kushner’s relationship with Boehler that put him on the slate of possible appointees for the DFC position. It was widely reported that Kushner went to him for help in, to summarize, hoping perhaps to actualize his father-in-law’s magical disappearing act for Covid-19. Boehler is not unqualified for the DFC position if the “intended purpose” of the DFC is as stated. As to helping solve Kushner’s Covid-19 magical thinking problem, we don’t see it, except to the extent that Boehler is creative and may be far enough removed from Trump’s White House to avoid drinking from the same Kool Aid.

As reported by Business Insider on July 31, 2020, Jared Kushner asked his college roommate to create a national coronavirus testing plan, according to a new report. That was pulled from a Vanity Fair, article published the day before. In Vanity Fair‘s scathing report about the dubious work of the Kushner effort in containing Covid-19, Vanity Fair outlined in unsettling detail the Kushner brain trust and how its activities materialized. Among the list of questionable activities included but were not limited to:

  • test kits were brought to the US with unverifiable providence from the UAE and ultimately contaminated,
  • the US government department of health and human services refused to render payment for the kits due to misspellings on the invoices,
  • there was no notable motivation on the part of President Trump to contain the pandemic which, at the time, was affecting blue states and therefore good for Trump’s campaign optics;
  • and then the short-arm of the choices to fill Kushner’s brain trust raised eyebrows.

The Vanity Fair, article mentions the “newly created U.S. International Development Finance Corporation” and, as it were, the DFC’s CEO, Adam Boehler, insofar as Boehler does not appear to have a medical or pharmaceutical background, despite his other accolades.

Contrary to our first impression, namely that the DFC was created to provide not-quite-so-transparent funding to Covid-19 related projects, it happens the announcement regarding the new Development Finance Corporation was made on July 12, 2019, therefore belying our first impression:

White House Intends To Nominate CEO For New U.S. Development Finance Corporation

White House names intended nominee for top job at new U.S. DFI

“The White House plans to nominate Adam Boehler to be the CEO of the new U.S. Development Finance Corporation, a move that would put an entrepreneur and development outsider at the helm of the country’s new development finance agency. Boehler, who is a relative unknown to the development community, has been serving as the director of the Center for Medicare and Medicaid Innovation and is a senior adviser to the secretary of the Department of Health and Human Services. He is also reportedly close with White House adviser Jared Kushner, who was his roommate for a summer in college…” (Saldinger, 7/12).

KFF.orgWhite House Intends To Nominate CEO For New U.S. Development Finance Corporation”

Having said that, if the optics of the DFC and its stated purpose are to be believed as genuine, it still raises questions regarding why the DFC would have been tapped for domestic purposes when Jared Kushner has friends in the medical space who might have been better suited for his vision and most certainly for helping with the Covid-19 initiative in the US. Why the DFC was brough on board remains a mystery, from where we sit.

According to the Vanity Fair article:

Kushner’s brain trust included Adam Boehler, his summer college roommate who now serves as chief executive officer of the newly created U.S. International Development Finance Corporation, a government development bank that makes loans overseas. Other group members included Nat Turner, the cofounder and CEO of Flatiron Health, which works to improve cancer treatment and research.

Vanity Fair “How Jared Kushner’s Secret Testing Plan “Went Poof Into Thin Air””- Click here

According to Vanity Fair:

Kushner’s team hammered out a detailed plan, which Vanity Fair obtained. It stated, “Current challenges that need to be resolved include uneven testing capacity and supplies throughout the US, both between and within regions, significant delays in reporting results (4-11 days), and national supply chain constraints, such as PPE, swabs, and certain testing reagents.”

The Vanity Fair article further stated:

The gamble that son-in-law real estate developers, or Morgan Stanley bankers liaising with billionaires, could effectively stand in for a well-coordinated federal response has proven to be dead wrong. Even the smallest of Jared Kushner’s solutions to the pandemic have entangled government agencies in confusion and raised concerns about illegality.

Vanity Fair

Eastman Kodak? A DFC Pairing?

How did the United States coupling with Eastman Kodak seem like the right pairing to help with Covid-19 such that a $750M “loan” was justified and more-to-the-point how was the stated purpose of the DFC consistent with this objective? It should be noted that the DFC’s site still does not include the United States as one of it’s beneficiary countries.

For those of us both critical of the Trump Administration’s handling of, well… just about everything, and rather unsettled by the power Jared Kushner wields in the White House, placing Kushner in charge of an initiative for which he does not have the “kishkes” to be successful seems unsurprising. By our estimation, in order to take major strides in efforts to combat the pandemic Kushner needs the skill to sway Republicans in the White House circle to believe that Covid-19 could be a unifying force and should be taken seriously – to effectively de-politicize it. In May that may have been possible. Today that ship has sailed.

While Trump is the consummate cheater, not altogether dissimilar from Charlie Kushner – Jared’s father, Covid-19 is non-denominational and has its own playbook. Making strides against a biological agent doesn’t leave room for chicanery. Kushner had a golden opportunity which he squandered.

And, anyone in the Trump circle, as wide or as narrow as that circle may be, who is too gutless to take a stand against Trump and his bullying, boorish behavior, particularly where Covid is concerned is collaterally responsible for the death of well over 200,000 people and the destruction of billions of dollars in middle to lower-class family income and savings. Of course Trump, Kushner and their circle of political and religious elites need not worry about that problem; but had the financial and health-related implications of Kushner’s position been better understood by Kushner, he could have used some of his clout to save hundreds, if not thousands of lives. That would also have had a collateral benefit on the economy.

But, as described by an article in The Atlantic, Jared Kushner, while having access to some brilliant minds and endless sums of money, is Trump’s greatest enabler. He simply cannot maneuver the political dance floor required to do a tango with Trump, as noted in “The Good Son” an article in The Atlantic, so why Kodak? As we see it Kushner resorted to what he knows well, keeping an ace up his sleeve and never afraid to use it. That hack was, in our view, Kodak.

Why Kodak

On the absurdity tracker scale of 1-100, Kodak’s need for a $750M loan for the purposes of creating Kodak Pharma seemed like a 99. The modicum of believability can be derived from the understanding that Kodak as a company is, when it all boils down to a molecular level, familiar with chemicals and compounds. Could the company have been able to repurpose as a Covid-19 producer of something related to a vaccine? Likely not, at least not with a straight face. Would those of us who grew up with an Instamatic Camera strapped to our childhood belts like to think so? Absolutely. But make no illusions, this was not about Kodak as a company achieving greatness in the Covid-19 world, at least not to our view. It was about killing two birds with one stone: fulfilling Kodak’s lobbying efforts and obtaining access to the men behind Kodak and their circle of wealthy elites.

To that point, the DFC loan was about the principals at Kodak, well-financed and from Kushner’s circle of the East Coast religious elites. They are cushioned by political clout and wear pants with very, very deep pockets. These men alone have the power to change the Covid-19 optics, just by changing the parameters for Covid-19 safety measures and compliance. But, they too have their own religious benefactors to whom they must pander and ultimately they are greedy. George Karfunkel tripped over the green-eyed monster when he made the Chemdas Yisroel donation.

The NSA Connection? Hopefully Not.

The relationship between Kodak principals and a superstar in the NSA should have made that pairing a non-starter. Anne “Chani” Neuberger is the daughter of George Karfunkel, something that few news reports have highlighted. She is also the heir apparent to many of his ventures and likely to his stock transactions. Kodak as a government led investor should have been pulled out of the running on the Karfunkel relationship alone.

Neuberger is a well-educated and deeply religious woman who is juggling a world governed largely by men. She is in pertinent part a career government employee who has sat in some position related to US security under, if we have this right, 4 presidents: George HW Bush, Obama, Clinton and now Trump.

Were Neuberger to have been solely a Trump appointee, her place in the Kodak scandal would seem an integral part of a pattern and practice of questionable choices by Trump and his administration. We do not think it is a coincidence; but we also think that any nefarious activity likely was without her knowledge or at least lacked her stamp of approval. She has worked hard to straddle different worlds and that should not be undermined here, nor should it be undermined by the Kushner/Karfunkel/Kodak deal. She was quoted in 2014 as having said:

“My family history,” she said, “instilled in me almost parallel value systems – fear of potential for overreach by government, and belief that sometimes only government, with its military and intelligence, can keep civilians safe. Those tensions shape the way I approach my work each day. I fully believe that the two seemingly contradictory factors can be held in balance. And with your help I think we can define a future where they are.”

The National Security Agency, she pointed out, actively fosters the growth of valuable new communication and computing technology and at the same time “needs the ability to detect, hopefully deter, and if necessary disable lethal threats.” To maintain those abilities over decades and foster a new social contract with the public, Neuberger suggested contemplating 5 tensions, 3 scenarios, and 3 challenges

The Long Now Foundation – Seminars about Long Term Thinking, Inside the NSA

To our view, the Kodak choice was the perfect example of government overreach gone wrong. It is entirely possible that the entire DFC was created to allow lines to be blurred in the government accounting books.

Neuberger’s position within the NSA and her unbridled access to information and to the political elite likely did not hurt when Kushner and the DFC were trying to find a company that might (albeit unlikely) be able to help in the Covid-19 efforts. Neuberger’s status as an uber-wealthy member of Baltimore’s religious elite may have assisted on all fronts because she has the financial wherewithal to move mountains, and access to the people ballsy enough to try and part the Red Sea. It is likely that this was part of the appeal for Kushner. It should have been what made the deal an impossibility.

From her 2014 statement about the “potential for overreach by government” one would think that sitting in a Trump government universe would be wholly unpalatable. But, to her credit, which cannot be understated, she has both seemingly remained non-political and climbed the rungs of the government-employee ladder for years. Her backround was outlined in an interview with CBS News in August of 2020. Surprisingly, or perhaps not, she was not asked any questions about the Kodak deal in that interview.

And Chemdas Yisroel

Setting aside other arguments against the “kashrut [health] of this deal” Kodak’s place in the loan-to-product-to-market space with respect to Covid-19 is, in our opinion, misplaced when there are dozens of companies better equipped for the same job. It seemed at the time, and does now, like a waste of resources. There are dozens of small, struggling US pharma or neutraceuticals companies that likely could have used $750M to a public health advantage. Repurposing Kodak seemed like taping a toilet paper roll to a horse and calling it a unicorn.

In light of the donation of shares by George Karfunkel to Chemdas Yisroel, the whole thing feels like a well-played laundering of huge amounts of money. We can’t say it better than an Opinion piece in The Financial Times.

“Three main issues deserve scrutiny. First, why did authorities choose Kodak over more experienced pharmaceutical companies, even as recently as May it admitted there was “substantial doubt” about its ability to continue as a growing concern? And what role did a reported surge in Kodak’s lobbying spending play in convincing politicians to transform its fortunes in such spectacular fashion?

The Financial Times [Opinion] “The Curious story of Kodak’s pivot to pharma

“Finally, investors need an explanation for the windfall paper profits executives made on shares they bought or were granted strikingly close to an announcement that clearly stood to transform the company’s valuation. Jim Continenza, Kodak’s CEO, bought stock in June which rocketed in value to $2.8M at the peak. He was awarded a further 1.75m stock options the day before the announcement which made them instantly profitable.

The Financial Times [Opinion] “The Curious story of Kodak’s pivot to pharma

George Karfunkel, Kodak, Chemdas and the Movement of Shares

On May 22, 2020 Wallmine reported that as of January 8, 2020 George Karfunkel had a net worth of at least $59.9 Million dollars with ownership of 52,817 units of Eastman Kodak Company stock worth over $58, 668,022 and in the prior 7 years he had sold Kodak stock (KODK) worth over $1M. As of May of 22 he was earning $250,003 as an Independent Director of Eastman Kodak Co. To that date he had made over 15 trades in Kodak shares since 2013 (or about 2/year); and on January 8, 2020 he had exercised 52,817 units of stock worth $486,973. On December 3, 2019 he bought 4,437,605 units of Eastman Kodak.

None of this is particularly notable until the December 3, 2019 purchase and the donation of 3 Million shares by both George and his wife to Chemdas Yisroel, a virtually non-existent Yeshiva.

According to a report in Mother Jones published Tuesday, those shares may have been worth as much as $180 million on July 29, the day Karfunkel gave them to the synagogue, which was registered as a corporation in Delaware in December 2018 and as a nonprofit in New York shortly thereafter. The donation would lower Karfunkel’s ownership of the company’s stocks enough that he would not have to report his stock transactions and would be eligible for a tax deduction.

Jewish Telegraphic Agency, A mysterious synagogue is in the middle of the Kodak insider trading investigation

The donation was valued at somewhere between $116M and $180M as it was fortuitously timed with the sudden jump in value of Kodak shares following the announcement of the granting of a loan to “begin producing pharmaceutical ingredients to treat Covid-19” made on July 29, 2020, as reported in the Financial Times. It should be noted that on July 29, Kodak shares rose nearly 1000%, an extraordinary jump. The stock exchange’s trigger had stopped trading numerous times and “The Stock donation [will] entitle the Karfunkels to take a sizeable tax deduction.” (See the Financial Times)

Kodak’s Investors and Investigators – a Perspective

We believe that investigators should be focused on probing the relationship between Jared Kushner and George Karfunkel. We further believe that any insider who made a trade during the days immediately prior to the July 29th announcement should have been “blacked out” from taking any shareholder action. This includes actions by CEO Jim Continenza who earns well over $10M/Year in total compensation for his position as Chairman of the Board and Principal Executive Officer. For a failing company, and one being considered for any type of loan to help rebuild, this salary and compensation package is excessive.

We believe that the donation to Chemdas Yisroel, when the quantifiable dust settles should not be permitted to benefit George Karfunkel who sits on the board of both companies. He basically gave himself as “Chemdas Karfunkel”, an alter-ego of “Kodak Karfunkel” an astronimical gift. And, that should not be permitted as a tax matter or a securities matter.

While the SEC has not, at least as far as we know, ruled that a donation is akin to a trade (which is the argument we would make for insider trading purposes), the donation was far too fortuitously timed. In all of the years Karfukel had held Kodak shares, he had never donated any of those shares to Chemdas Yisroel or quite honestly, it doesn’t appear anywhere else. If he knew that he could not legitimately time a sale of shares (knowing full well that the shares would rise meteorically) the donation is a way around the loophole. And with Mr. Karfunkel sitting on the board of Chemdas Yisroel, he should not be permitted to gift himself financial benefits.

The SEC filing of the Chemdas Yisroel gift can be found here or here.


It is our understanding that Kodak’s counsel has conducted a review of the Kodak transactions and come to the conclusion that there was no wrongdoing. It is hard to imagine that they would have come up with an alternative conclusion.

As of August 2020 the House of Representatives was planning to investigate the deal. It was reported that:

“Companies and individuals that receive federal funds in response to the coronavirus crisis must follow the law and not engage in abusive practices.” 

The SEC will also look into the timing of the stock transaction and Kodak’s leaking of information prior to the formal announcement. 

Spectrum News: House of Representatives To Investigate Kodak Pharma Deal

Senator Elizabeth Warren called for the SEC inquiry

And, as of September 17, 2020, Congresswoman Maloney’s web page released a press statement. That can be found here. Below please find the images of the release and note that there are comments made directly by Maloney on her page. You will note, she does not focus on the donation, only on the focus of board activities in and around the time of the announcement.

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