June 13, 2019

Warren, Carper Demand Answers on Freddie Mac-Guaranteed $800 Million Loan to Kushner Companies

Senators Raise Concerns about Conflicts of Interest, Question Whether Company Connected to the President's Son-in-Law Received Special Treatment

Washington, DC - United States Senators Elizabeth Warren (D-Mass.) and Tom Carper (D-Del.) today sent a letter to Freddie Mac Chief Executive Donald Layton seeking information about an $800 million Freddie Mac-guaranteed loan given to Kushner Companies, a real estate company owned by the family of Jared Kushner, a senior White House advisor and son-in-law of President Trump.  

Freddie Mac is chartered by Congress to "provide liquidity, stability and affordability" in the mortgage market by purchasing and securitizing mortgages from primary lenders. According to reports, Kushner Companies received a large loan from Berkadia Commercial Mortgage, guaranteed by Freddie, to purchase over 6,000 apartments across 16 properties in Maryland and Virginia in what is the company's "biggest purchase in a decade." Although Mr. Kushner announced in January 2017 that he would resign as CEO of Kushner Companies and divest "substantial assets" in order to avoid conflicts of interest during his government service, he reportedly retains ongoing interests in the company and transferred other interests in the company to close family members.  

Senators Warren and Carper raised questions about the circumstances under which Freddie Mac approved the loan and whether Kushner Companies received favorable treatment due to Mr. Kushner's role in the White House, given Mr. Kushner's refusal to fully divest from his former company. Though there is presently no specific indication of wrongdoing by Freddie Mac, the senators also cited Kushner Companies' recent history of engaging in transactions that appear to raise conflicts of interest for Mr. Kushner.

"Mr. Kushner's status as a key White House advisor to President Donald Trump, his failure to effectively divest from Kushner Companies, and Kushner Company's history of using Mr. Kushner's position in seeking project funding raises serious questions about conflicts of interest and whether Kushner Companies may have received special treatment from Freddie," the senators wrote in their letter to Freddie Mac.

To address their concerns, the senators asked Freddie Mac to answer a series of questions about the circumstances under which Freddie guaranteed and Kushner Companies received the $800 million loan.

The senators' letter is the latest in a series of inquiries raising conflict of interest concerns regarding Mr. Kushner's sustained involvement in Kushner Companies. In March 2017, Senators Warren, Carper, Sherrod Brown (D-Ohio), Gary Peters (D-Mich.), and Representative Elijah E. Cummings (D-Md.) wrote to the Treasury Department raising concerns about an "unusually favorable" business partnership between Kushner Companies and the Chinese firm Anbang Insurance Group after Mr. Kushner dined with Anbang executives in relation to the transaction months earlier. In April 2018, Warren, Carper, Peters, and Cummings sent letters to Citigroup and Apollo Global Management seeking information on reports that the companies provided more than $500 million in loans to Kushner Companies. 

In August 2018, Senator Warren unveiled the Anti-Corruption and Public Integrity Act, a comprehensive bill that, among other ambitious measures, would require all White House staff to and advisors to comply with federal conflicts of interest rules, and require senior government officials and White House staff like Mr. Kushner to fully divest from large companies and commercial real estate.