Kushner Real Estate Empire Subpoenaed in Brooklyn

BROOKLYN, N.Y. (CN) – The real estate empire run by the family of White House adviser Jared Kushner, the president’s son-in-law, confirmed Thursday that it was served with a federal subpoena in New York.

As reported first by The Wall Street Journal, the subpoena from a grand jury in Brooklyn came in mid-March, shortly after the Associated Press uncovered records that appeared to show that The Kushner Cos. lied on government housing forms.

Three years earlier, according to the AP report, Kushner Cos. bought three buildings in Astoria, a gentrifying neighborhood in Queens, and reported to regulators that the properties had no rent-regulated tenants, when in reality nearly 100 of the tenants had rent-stabilization protections.

Kushner Cos. then drastically raised rents in the Astoria buildings, pushing out tenants who could not afford to stay, the AP exclusive continued. It renovated and two years later sold for $60 million, earning an approximately 50 percent profit.

New York City Councilman Robert Cornegy Jr. emphasized in a statement Friday that rent regulation “is critical to maintaining a stock of affordable housing in New York City.”

“When developers knowingly misrepresent the number of rent regulated units in their buildings to skirt the law and turn larger profits, they need to be held accountable,” said Cornegy, who chairs the council’s Committee on Housing and Buildings. “I am appalled by the actions of the Kushner Cos. and am looking into ways to increase penalties for this kind of activity to ensure bad actors like them are deterred from submitting false paperwork like this in the future.”

A day after the AP report appeared, the subpoena followed, a spokeswoman for the company told the Wall Street Journal on Thursday, adding that Kushner Cos. has complied fully.

“Kushner Companies has nothing to hide and is cooperating fully with all legitimate requests for information, including this subpoena,” the Kushner Cos. statement says.

The Associated Press documented hundreds of rent-regulated tenants in Kushner-owned buildings across the city but found that the company repeatedly reported to the government on construction permits that it had zero.

The company denies any intentional wrongdoing. It said the paperwork is filled out by third parties and then reviewed by independent counsel, and that any mistakes are corrected “immediately.”

“Kushner would never deny any tenant their due-process rights,” the company said in a statement in March.

The tenant-rights group Housing Rights Initiative said at least 80 permit applications filled out and signed by Kushner employees were falsified.

“We entrust the U.S. Attorney’s office in Brooklyn with getting to the bottom of this,” Aaron Carr, founder and executive director of the Housing Rights Initiative, said in a phone interview Friday. “It’s something the Department of Buildings should have looked into a long time ago.”

Kushner stepped down from his role as CEO of the company last year per White House ethics rules when he took a job as a top adviser to his father-in-law.

“At the end of the day, from a local perspective, we want the Department of Buildings to properly enforce the law and to ensure that landlords like Kushner Cos. aren’t categorically and systematically falsifying building permits,” Carr said.

Representatives for the Department of Buildings, New York City Council Housing and Buildings Chair Robert Cornegy, and New York City Councilman Ritchie Torres, with whom Carr said they partnered on the probe, did not immediately return requests for comment Friday. A spokesman for the U.S. Attorney’s Office in Brooklyn said he could neither confirm nor deny any investigation.

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