"None of it's been him. It's been his dad."
Jared Kushner's second act
His father-in-law is moving into the White House, and he's got a seat at the table.
BY vicky ward | Mar 26, 2017 | Culture
In the spring of 2011, right around the time Donald Trump was humiliated by Barack Obama during the president's speech at the annual White House Correspondents' Dinner, Jared Kushner, Trump's son-in-law, placed a call to Richard Mack. Kushner was thirty years old, a decade and a half younger than Mack, but in many respects the men were peers. They were both scions of prominent real estate families, and in 2009 Mack and his wife had attended Kushner's wedding, to Ivanka Trump. The two men were also business associates: Mack held some of the debt on 666 Fifth Avenue, a gleaming thirty-nine-story office building in midtown Manhattan for which Kushner had paid a record USD1.8 billion in 2007.
Now, four years later, Kushner was calling about the tower, a symbol of immense importance for him and his family. Under the leadership of Jared's father, Charles, the Kushner Companies had made hundreds of millions of dollars building and buying properties in New Jersey. But in 2004, future Trump surrogate Chris Christie, who was at the time the U. S. Attorney for New Jersey, indicted Charles in federal court on charges that included tax evasion, making false statements about campaign contributions, and hiring a prostitute to retaliate against his brother-in-law. After Charles pleaded guilty and was sentenced to two years in prison, Jared, who was just twenty-four, took over the family business. He sold the Kushner holdings in New Jersey and bought 666 Fifth Avenue. The significance of the deal lay not only in its size but in its location. Much as Trump's renovation of the Grand Hyatt hotel three decades earlier had carried his family's real estate empire across the East River from Queens, Jared's purchase of 666 Fifth Avenue, just three blocks from Trump's own trophy skyscraper, was an unmissable sign of the Kushners' arrival in Manhattan.
Jared Kushner (Getty)
By the time he spoke to Mack in 2011, Jared and his younger brother, Josh, had established a social and business beachhead in New York. Besides running the Kushner Companies, Jared was also the owner of the New York Observer, a once venerable newspaper. Josh had already started Vostu, a profitable social-game developer, and a venture firm called Thrive Capital.
Despite his evident success, however, Jared was in trouble: After the financial crisis led to a downturn in the rental market, the Kushner Companies risked an imminent default on the loans that had financed the firm's purchase of 666 Fifth Avenue. Jared's lenders were at his throat, and he stood to lose hundreds of millions of dollars, if not the entire building.
According to a source familiar with the call, Jared appealed to his friendship with Mack—"I am a really good person," he insisted—and asked him to accept a substantial write-down of the loan.
Mack held firm. He had been unhappy with some aspects of how the Kushners managed the building, and, as he reminded Jared, he had a fiduciary responsibility to his investors.
Jared did not take the news well. According to the source, he began shouting into the phone, "I've been working my ass off!"
Mack was unimpressed. "I don't know who the hell you think you're talking to," he said, and hung up the phone.
Jared was just twenty-six when he bought the thirty-nine-story tower at 666 Fifth Avenue for a record $1.8 billion. A subsequent downturn in the market caused him to scramble to preserve control of the building.
Jared was eventually able to preserve his control of the tower by ceding 49.5 percent of the building's equity to Vornado, a publicly traded real estate investment trust. Mack, who is forty-nine, remained dimly aware that Jared had not forgotten their disagreement, but it was not until this past summer, when Elizabeth Spiers, a former editor of the Observer, wrote on her website about what she called "the Big Dick Mack Story," that he realised the extent of Jared's lingering animosity.
Spiers wrote that during her tenure as editor, in 2011 and 2012, Kushner had pushed for a hit piece on Mack. "If the tip he'd given me had checked out, it would have been a good story," she wrote. "So I agreed to put a reporter on the story." She gave the assignment to Dan Geiger, the Observer's real estate beat reporter. Kushner called Geiger and furiously complained that Mack was a "bad fiduciary" who'd moved money around to enrich himself at the expense of his investors. (Kushner declined to comment on the record for this article, but through his publicist he denied that his pursuit of the Mack story was related to the loan on 666 Fifth Avenue.)
Geiger phoned his contacts—as Spiers wrote, he "called everyone within a hundred-mile radius"—and found nothing. He sent Kushner a detailed email outlining what his sources had said.
For a week, Geiger heard nothing. Then Kushner called him and said, as if they had not already spoken, "There's a guy named Richard Mack, and we've got to get this guy."
Geiger was bewildered. He went to Spiers, who, he says, recognised Kushner's obsession as the "illicit powder keg" it was. "Jared insisted that it was a reporting problem," she wrote in the blog post. To humour her boss, Spiers assigned a second reporter to the story. He, too, got nowhere; once again, nothing in the story checked out. But even this was not the end of it. Jared told Spiers to ask one more reporter, who did not work for the Observer, to look into Mack. That reporter was me.
I turned down the assignment, even though I had been friendly with Jared for many years. At the time, I knew him to be bright, charming, and polished, a pious son of a devout Orthodox Jewish family. I had never been exposed to this side of him. As it turns out, however, this side of him exists. Geiger, who now works for Crain's, has told people that the first thing that came to mind when he found himself embroiled in the vendetta was "This guy is like his dad."
Over the past year, Jared Kushner's profile has risen alongside the mind-bending trajectory of his father-in-law's presidential bid. Though Jared has no previous experience in electoral politics, he has become one of Donald Trump's chief advisors, and much of the attention he's received has focused on the many ways in which he's been useful to the campaign. It was Jared who helped prepare Trump for an appearance before the American Israel Public Affairs Committee (AIPAC) in March, and Jared who helped broker a truce with Fox News when Trump fought with Megyn Kelly, the network's star anchor. After Trump fired Corey Lewandowski, his campaign manager, in June, it was reported that Ivanka had demanded Lewandowski's dismissal for trying to marginalise Jared's influence. A month later, after Trump tweeted an image of Hillary Clinton and a Star of David set against a backdrop of dollar bills, Jared took to the Observer to defend his father-in-law against charges of anti-Semitism. Most recently, Jared was on hand to help Trump choose Indiana governour Mike Pence as his running mate—over and above, it did not go unnoticed, the great nemesis of the Kushner family, Chris Christie.
There is a sense among Jared's friends and business associates that he sees the gold-plated vision of a Trump White House as the ultimate step in a carefully plotted ascent to redemption.
And yet for all that Jared has helped Trump, there is a sense among Jared's friends and business associates that he sees the gold-plated vision of a Trump White House as the ultimate step in a carefully plotted ascent to redemption, one that began when his father's scandal tarnished the family name. In this respect, it seems more than usually significant that both Kushner brothers have photographs of John F. Kennedy prominently displayed in their offices. Just as Kennedy's father was forced to yield his ambitions to his sons' generation after uttering controversial remarks during World War II, so too did the scandal that sent Charles Kushner to prison open the door for his sons—and especially for Jared—to launch their charm offensive on society at a very early age.
Jared, who is thirty-five, and Josh, thirty-one, along with their sisters, Dara, thirty-seven, and Nicole, thirty-three, grew up privileged and sheltered in Livingston, New Jersey. Their paternal grandparents, Joseph and Rae, escaped Poland during the Holocaust and immigrated to the United States in 1949. They moved to the suburbs around Newark, where they helped create a tight-knit community of Holocaust survivors known as the Builders. ("My grandfather was a carpenter," Josh likes to tell people.) The elder Kushners belonged to the Jewish Federation of Greater MetroWest NJ, which supported Jewish charities and schools. "That generation were cohorts," says Andrew Silow-Carroll, the editor in chief of the Jewish Telegraphic Agency, the New York–based news service. "They were very collegial."
Joseph and Rae had four children, two boys and two girls. Charles, who earned a bachelor's degree and an MBA from NYU and a law degree from Hofstra, was less academically gifted than his older brother, Murray, who graduated summa cum laude and has a law degree from Penn. But Charles's drive was remarkable. He took to heart the mantra passed down from one Kushner generation to the next—"Think like an immigrant, act like an immigrant"—which was at once an exhortation to work hard and a warning not to take anything for granted.
Before the scandal, Charles and his pretty dark-haired wife, Seryl, were seen as the standout ambassadors of their Orthodox community. Charles became known as the Dapper Don thanks to the natty tailoring he preferred and to his growing reputation as a New Jersey power broker. As he built his real estate company into an empire worth a reported $2 billion, he contributed significantly to Jewish charitable causes as well as to political campaigns. He supported New York mayor Rudolph Giuliani but tended to favour Democrats, including senators Hillary Rodham Clinton, Charles Schumer, and Jon Corzine. In 2001, he was the largest donor to the successful gubernatorial campaign of Jim McGreevey, a New Jersey Democrat who later appointed him to the board of the influential Port Authority.
Jared attended the Orthodox Frisch School, in Paramus, New Jersey. By some accounts, he worked hard in school, but he was not especially academic. In The Price of Admission, Daniel Golden notes that officials at Frisch were "dismayed" when Jared was accepted to Harvard, since, as one former school official put it, "his GPA did not warrant it, his SAT scores did not warrant it." Other students in Jared's class, the official said, were far more deserving. But Jared had a weapon that his classmates did not: his father. According to Golden, Charles donated $2.5 million to Harvard the year his son applied. Just to be safe, he also donated to Cornell and Princeton.
The disgrace that followed, for Charles and for his family, was profound.
All this lobbying to establish his family in the upper echelons of power was expensive. The scandal that eventually sent Charles to prison began in 2001, when Murray discovered that his brother had used several of the family partnerships to make political contributions without informing his relatives. Murray sued Charles in court, and not long after Chris Christie became the U. S. Attorney for New Jersey, in 2002, he launched a criminal investigation.
As Christie's case gained traction, Charles attempted to blackmail one of his sisters and her husband to keep them from cooperating as government witnesses. He paid a prostitute $10,000 to have sex with his brother-in-law, and then sent a videotape of the encounter to his sister. The vindictive effort was for naught: In August 2004, in the face of overwhelming evidence that he had evaded taxes, made illegal campaign contributions, and retaliated against a federal witness, Charles pleaded guilty to eighteen felony counts.
The scandal made for a chilling affair, one that was severely at odds with the gracious public-service-oriented persona Charles had cultivated for public view. The disgrace that followed, for Charles and for his family, was profound. "It was very embarrassing," says Silow-Carroll. The community, he notes, has "a self-image, largely deserved, as philanthropists and Jewish communal lions. They felt that all this nasty stuff sullied that."
Compared with Charles, whose temper is legendary, Jared has a notably calm demeanor. "He's calm, he's smooth and sharp, and he knows how to court people," says Doug Harmon, a veteran New York broker. Yet there is also an undercurrent of hostility that belies his polite veneer. Jared was described to me as "a little bit bullheaded" and "a little bit of a bully" by one person; another said that when he gets mad, "the loss of composure is the shock because he's always so completely controlled."
Five buildings owned by the Jehovah's Witnesses will become part of the larger Brooklyn Tech Triangle. They were sold to Jared Kushner, the Kushner Cos. CEO, and RFR. (Getty)
Several sources told me that in 2015, Jared tried to thwart a real estate negotiation that involved J. Walter Thompson, a subsidiary of WPP, the advertising conglomerate led by his friend Martin Sorrell. Jared had no financial stake in the matter, but he insisted, following many hours of due diligence, that WPP was headed down the wrong path. After WPP's board ignored his advice and approved the deal, Jared attended a meeting at the company and told a senior executive at WPP, "You're the stupidest person I've ever met in this business." (A spokesman for WPP would neither confirm nor deny the incident.)
Then there is Jared's standoff with Steve Roth, the CEO of Vornado, the $20 billion real estate investment trust that acquired 49.5 percent of 666 Fifth Avenue in 2011. The deal allowed Jared to keep control of the building but valued it at a mere $820 million, a steep decline from its $1.8 billion purchase price. According to the New York Post, Jared believes that the tower should be converted to a retail mall beneath luxury condos, and he is committed to a proposal from the firm of the late Zaha Hadid. Other sources, however, say that Roth believes the building is worth more as office space. Roth, who is seventy-four, and who recently joined Donald Trump's economic advisory team, did not respond to a request for comment, but he has told people in private that he despises what he sees as Jared's arrogance. According to several sources, meetings between Vornado and the Kushner Companies regularly become shouting fests, though one source says that most of the screaming is done by Charles Kushner. Meanwhile, the building is stagnating, and its fate is unlikely to be settled until one party buys out the other.
For those involved in the ruthless world of New York real estate, none of this unpleasantness is surprising. But overt aggression has not gone over well in the more sensitive environs of the New York Observer. A source close to Jared says that he did not understand, when he bought the company, how much resistance he would face from the journalists who worked there. In 2007, he appointed Bob Sommer, the Kushner Companies' publicist, as the newspaper's president. Sommer was given instructions to "rein in" the paper's much-revered editor, Peter Kaplan. (Kaplan and Sommer both resigned in 2009; Kaplan died four years later.) At a holiday party for the Observer a few years after he bought the newspaper, Jared implored the staff to redouble its efforts, adding that worse economic times were to come. When Aaron Gell, the editor at the time, took the microphone and thanked everyone for their hard work, the gesture seemed to irritate Jared. (Jared's publicist says that he liked Gell and cannot recall Gell's speech or his own.) Ken Kurson, a Kushner family friend—and longtime business columnist for Esquire—is the current editor of the Observer, its fifth in seven years.