Marc Kasowitz and a Maelstrom over Collusion with Russia – The Leviev Connection and The old NY Times Building


Trump’s Russia lawyer faces conflict-of-interest questions over $296m Kushner deal

The lawyer privately advising Donald Trump on the investigation into Russia’s interference in the 2016 election is head of a law firm that was involved in the sale of a prestigious piece of New York real estate to Jared Kushner, the US president’s son-in-law, in a deal that could fall under the spotlight of the same inquiry.

Marc Kasowitz, a member of the New York bar who has represented Trump in his business dealings for 15 years, was brought on board by the president last month to provide personal legal advice relating to the Russian inquiry now being conducted by special counsel Robert Mueller. The appointment has placed Kasowitz at the center of the legal maelstrom over the investigation into potential collusion between Russia and elements of Trump’s presidential campaign.

An investigation by the Guardian has found that Kasowitz’s law firm, Kasowitz Benson Torres, legally represented the owners of the former New York Times building in Times Square, Manhattan, in a 2015 deal in which part of the property was sold to Kushner for $296m.

The Washington Post has reported that a subsequent loan of $285m from Deutsche Bank to Kushner Companies, relating to the purchase of the building, could fall under the remit of the Mueller investigation given Deutsche Bank’s scandal-riven reputation. The involvement of Kasowitz’s firm as a key legal player in the initial sale adds a further possible twist as the special counsel’s inquiry gathers momentum.

Questions have already been raised about possible conflicts of interest between the lawyer’s role as Trump’s private attorney in the Russian inquiry and his work for various other clients, among them Russia’s largest bank OJSC Sberbank, which he represents in a corporate dispute lodged in US federal court.

The Guardian asked Kasowitz, via his spokesman, to respond to the potential conflict of interest relating to his firm’s role as attorney on the sale of the Times Square building to Kushner but he did not respond before publication. After publication, the spokesman send in a statement: “There are no conflicts under any standard or by any definition.”

Trump’s connections with Kasowitz’s law firm go much further than just his personal attorney, raising other potential conflict of interest issues. Another of its partners, David Friedman, was appointed by the president as ambassador to Israel; its senior counsel, Joe Lieberman, was considered by Trump as replacement director of the FBI after the president fired James Comey but pulled out of the running, citing potential conflicts of interest with Kasowitz as the president’s private legal counsel; and yet another partner, Edward McNally, is reportedly in the running to replace Preet Bharara as US attorney for the southern district of New York, following a similar Trump sacking.

ProPublica has alleged that Kasowitz himself bragged to friends that he played a role in having Bharara fired, by telling Trump: “This guy is going to get you.” One of the major investigations conducted by the southern district of New York under Bharara was allegedly to look into Deutsche Bank’s involvement in alleged Russian money-laundering.

The Guardian invited Kasowitz to confirm or deny the ProPublica account, but he did not respond.

The old New York Times building is a neo-gothic styled building fronting Times Square, which had been a home to printing presses since the first year of Woodrow Wilson’s presidency. Located at 229 West 43rd Street in Manhattan, the building was declared a New York City designated landmark in 2000.

At the time of the sale to Kushner, the building was owned by Lev Leviev, an Israeli citizen born in the former Soviet Union in what is now Uzbekistan. His company, Africa Israel Investments, bought the Times Square property in 2007 for $525m.

State records show that Africa Israel’s Delaware LLCs, including its subsidiary that bought the former New York Times building, are registered at 40 Wall Street, Trump’s property over the road from the New York Stock Exchange. The office block has “The Trump Building” emblazoned over its entrance in gold capital letters, and was also the home of the now defunct Trump University.

Leviev is one of Israel’s richest businessmen, having made a fortune partly in diamond mining in Africa. He has claimed that he is a “true friend” of the Russian president, Vladimir Putin.

In a statement to the Guardian, the Leviev Group of Companies said that Leviev had indeed met Putin a few times though only in his capacity as president of the Federation of Jewish Communities of the Commonwealth of Independent States (the former Soviet Union). Leviev “does not have a personal relationship with the Russian premier” and the comment that he was a “true friend” referred to Putin’s help to the “Jewish community in Russia”.

Leviev’s company has had a number of contacts with the Trump family circle that go further than Kushner. Rich Marin, a former chairman and CEO of Africa Israel USA, has told the Guardian that he had a meeting with Trump himself as well as his daughter Ivanka about the possibility of creating a Trump hotel inside the Times Square property.

That deal never materialized, and it was several years later that Ivanka’s husband, Jared Kushner, stepped into the breach. Filings with the Securities and Exchange Commission (SEC) show that the sale of the retail portion of 229 West 43rd Street to Kushner was made in an off-market transaction of the sort normally used by owners desiring a quick sale, where speed is more important than price.

Given the lack of competition inherent in such trades, they often give an advantage to the purchaser seeking to acquire property at a bargain.

Kushner acquired the building for $296m from Africa Israel USA and its partner in the deal Five Mile Capital, with Kasowitz’s law firm representing the sellers. The transaction included four storeys of retail space and two sub-basement floors.

The upper 12 floors of the old New York Times building, which are used for offices, were sold to Blackstone in 2011 for $160m. When both sales are put together, Leviev let go of the entire building after owning it for eight years and committing millions of dollars in renovations for a total price that was beneath the $525m he had originally paid for it.

The Guardian contacted Kushner Companies and Five Mile Capital about the sale, but neither commented.

In a statement to the Guardian, the Leviev Group of Companies said: “The Kushner Companies’ offer for the retail space was the most attractive offer ever submitted, and was higher than the building’s appraisal.”

Kushner sealed the refinancing deal with Deutsche Bank and SL Green over his half of the former New York Times building last October, in the dying days of the presidential campaign. The package, reported by Kushner’s own news magazine, Commercial Observer, amounted to $370m – $74m more than Kushner had paid for it.

The president of Kushner Companies, Laurent Morali, told the Washington Post that the discrepancy in price was a result of the “dramatic turnaround” that they had effected in filling up vacant rental units with high-profile outlets. “We had a vision for the property when we purchased it that no one else had, and are proud to say that we executed on it,” he said.

Deutsche Bank is the biggest lender to Trump, having provided $364m in loans. The German bank has been hit by a series of scandals including Russian money laundering, and was ordered earlier this year to pay more than $600m in fines for failing to prevent the secret and improper transfer of more than $10bn out of Russia.

The Guardian revealed in February that Deutsche Bank had itself conducted an investigation of Trump’s personal account to see whether there were any suspicious links to Russian entities.

Senior Democrats in Congress have raised concerns about possible conflicts of interest relating to the Trump administration and the president’s own financial debts to Deutsche Bank. In March, a group of Democrats on the House financial services committee wrote a joint letter saying that such links “raise serious concerns about whether the president and his inner circle will direct the Department [of Justice] to steer clear of issues that could implicate those who benefited from Deutsche Bank’s trading scheme.”

On Tuesday the Guardian reported that a different Trump lawyer, Jay Sekulow, had approved plans to push poor and jobless people to donate money to his Christian nonprofit, which since 2000 has steered more than $60m to Sekulow, his family and their businesses.

To read the article in its original format please click here.




Tricky Government Contracts and the Kushner Empire – Ethicists Welcome News…


Kushner Companies scraps planned Orthodox Jewish community in Jersey City

Had it been granted the $150M bid, the company could have built 8,100 homes at formerly contaminated Bayfront site

UPDATED, May 10, 12:30 p.m.: Kushner Companies was the leading bidder on an industrial site called Bayfront in Jersey City that would become home to a planned Jewish community geared toward members of Orthodox sects who are being priced out of Williamsburg, Brooklyn.

But when Bloomberg reporters asked company spokesperson James Yolles about the bid on Tuesday, Yolles said that the company already dropped any intentions it had to buy the site from Honeywell and Jersey City for $150 million. An unnamed Kushner employee also told the news site that these plans were dropped late last year, but the office of Jersey City Mayor Steven Fulop said it was unaware of this and has yet to receive any word of Kushner’s withdrawal from consideration.

It’s unclear if the Kushners decided to abandon the project for ethics reasons, but Honeywell, a Fortune 100 list conglomerate, has billions in government contracts that could prove tricky in any dealmaking tied to the Kushners. The development would likely also require federal subsidies to improve the infrastructure within and surrounding the site. “It’s a good sign that they are pulling out,” Larry Noble, general counsel of the Campaign Legal Center, told Bloomberg. “Though the question is whether or not it’s just because of the publicity or because they actually see there is a potential conflict of interest in these situations.”

In a statement to The Real Deal, Yolles said “a decision was made late last year not to pursue the project because the company was not persuaded by the economics of the deal.”

Last weekend, the company made front page news when White House senior adviser Jared Kushner’s sister Nicole promoted a Jersey City project at One Journal Square to Chinese investors. The sales pitch made mention of Kushner Companies’ ties to the White House and Nicole told the audience the project was “important” to her entire family. It was later reported that the project in question is going through a rough spot, losing an anchor tenant in WeWork and at risk of losing a key 30-year tax abatement.  [Bloomberg]  — Will Parker


To read the article in TheRealDeal click here.


See Also:

National Real Estate Investor:

de Blasio “confident” “legally” “ethically” “disclosure”???

“I’m confident of the fact that we handled everything legally and ethically, that we did the things I wish more people would do in public service—we sought guidance from an ethics board, we followed that guidance and disclosed everything we did,”…

Mayor de Blasio, May 2016

Whose “Guidance” Did He Seek???

The Observor – for full coverage click here.

As Investigations Swirl, Bill de Blasio Sticks to His Talking Points

“Some of those words seemed to come up over and over: “confident,” “legally,” “ethically,” “disclosure.” Mr. de Blasio endeavored to look non-nonplussed by the fact that investigations into his administration and campaigns are stacking up so quickly it will soon be impossible to count them on a single hand.

There’s the investigation into his State Senate fundraising—subject of a leaked state Board of Elections memo and several subpoenas. There’s the investigation into corruption at the NYPD, where officers accepted gifts from two business who also donated handsomely to Mr. de Blasio. Then there’s the look into Rivington House, a former AIDS hospice where the city lifted a deed restriction that will ultimately allow for the development of lucrative condos at the site, where developers were at times represented by a lobbyist tight with Mr. de Blasio. And there’s also inquiries into Mr. de Blasio’s non-profit, the Campaign For One New York, and whether donors got favors from City Hall.

In response to every one of these inquiries, Mr. de Blasio has argued he’s followed the law and the advice of his attorneys—and, in soliciting donations to State Senate candidates or using a non-profit to collect hefty donations for his priorities, that he’s doing things other politicians do but is, for some reason, being singled out.

“I don’t conjecture. I can say, I think there should be a fair standard. I think there should be a consistent and fair standard,” Mr. de Blasio said. “We’re convinced that things were done legally and appropriately, and I think it’s a very important fact when someone discloses voluntarily. It suggests comfort that they have that they’re doing things the right way.”

Mr. de Blasio’s campaign has indeed voluntarily disclosed the donors to his non-profit, something that is not required by law and that others have not chosen to do. But whether it was appropriate to accept the donations—which came from unions who have contracts with the city, real estate firms with interests in re-zonings and others matters, activists calling for a horse carriage ban and others—has been questioned.

Last night, NY1 reported on a letter from the Conflicts of Interest Board advising Mr. de Blasio not to solicit any donations from entities that have matters “pending or about to be pending” before the city. But in a story last year, Politico New York reported that 62 percent of donors had business or labor contracts before the city, or were trying to get a project approved—including the union DC37, which was negotiating a contract, and a manufacturer of scented garbage bags who eventually got a contract to provide them to the city.

Mr. de Blasio would not offer an explanation of how accepting donations from those people squared with COIB’s advice, other than to say everything was reviewed by his attorneys.

“This is a very important thing to get the definitions right on, which is why we went to the Conflicts of Interest Board, got a definition on it, and then had lawyers determine how to follow that definition,” Mr. de Blasio said.

The mayor repeatedly referred to how frequently he spoke with lawyers about donors and the fundraising issues now under the microscope—which of course, to some, might raise the question of whether he or his team suspected they were running up against the law. (When a reporter posited that the legal advice the mayor had gotten may have been up against the line, which would seem to be a given since it’s led to formal criminal inquiries, Mr. de Blasio accused him “editorializing.”)

The mayor has argued that there are problems in the laws governing campaign finance—but said that even if he doesn’t like the current rules and thinks the laws should be change, he will play by them as long as his enemies are. So, while he’s decried the role of money in politics and called for publicly funded campaigns and the overturning of Citizens United, he’s solicited large donations to county committees that are then passed on Senate candidates, who would not legally be able to accept those donations directly. And he set up his non-profit to take larger donations than he could accept to his re-election account, though he repeatedly singled himself out for praise for taking the extra step of disclosing those donors.

That argument—that the conduct might be ugly but it isn’t against the law, and everybody else does it—might sound familiar: it was what former Assembly Speaker Sheldon Silver’s lawyers said when U.S. Attorney Preet Bharara indicted him on accepting kickbacks disguised as outside income. (It is not illegal to earn outside income while serving in the State Legislature; many pols do.) Mr. Silver was convicted and was sentenced to 12 years in prison today.

Did Mr. de Blasio think Mr. Silver was unfairly targeted?

“I don’t know the details of the case,” Mr. de Blasio said of the trial, which consumed the city’s press corps for weeks and was closely watched by politicians and lawyers. “I think it’s a tragedy what happened, I think it’s exceedingly sad, but again I’m not a lawyer. I don’t know the detail of the case. I think it’s clear something was done wrong.”

But does the mayor worry that his argument might remind some New Yorkers of Silver’s defense?

“No. I think these are entirely different matters,” he told the Observer. “And first of all, to the credit of everyone involved in this discourse, no one’s talking about anyone lining their pockets—which unfortunately has happened in way too many instances. The thing we’re talking about is what we were trying to achieve working with outside colleagues, things like pre-k for all, affordable housing programs, a Democratic State Senate that we thought would better serve the people of New York State and New York City. So I think that’s apples and oranges to begin with.””