Donald Trump’s son-in-law Jared Kushner was named senior adviser to the president on Monday, an appointment that would further entangle the incoming White House team in a web of potential conflicts of interest and accusations of nepotism.
For months, Kushner has had Trump’s ear in an informal role alongside the businessman’s three grown children: Donald Jr, Eric and Kushner’s wife, Ivanka. In a statement, Trump’s transition team said that Kushner had “formed an effective leadership team” with the president-elect’s chosen chief of staff, Reince Priebus, and his chief strategist, Steve Bannon.
Kushner, 35, will need to argue that a federal anti-nepotism law does not apply to him. The law, enacted in 1967 after John F Kennedy appointed his brother as attorney general, prohibits any federal official from hiring family members to an agency or office which he or she leads.
The law has loopholes, however. Ethics experts say that Kushner could retain a technically unofficial role, for instance as a “consultant”, in order to skirt the law. Trump’s transition team said Kushner “has chosen to forego his salary while serving in the administration”.
Attorneys for Kushner reportedly want to argue that the White House is technically not an agency, and that therefore Trump and Kushner would be exempt from nepotism rules. Trump’s transition team has argued that this loophole would also make Trump exempt from his own possible conflicts of interest.
WilmerHale, a law firm contracted by Kushner, has said in a statement that he is “committed to complying with federal ethics laws” and has coordinated with the Office of Government Ethics.
Trump could also try to argue that he has wide authority to select his advisers, using Hillary Clinton’s work in the White House in the 1990s as a precedent. At the time, an appeals court ruled that Clinton could work in government because she already held an official title, first lady.
More traditional conflicts of interest also appear strewn across Kushner’s path to the White House. More so than his father-in-law, who has for years turned away from real estate in favor of branding deals, Kushner is a major figure in New York real estate, the scion of an extraordinarily wealthy family with business interests around the world.
Kushner Companies has invested billions in real estate around the US in the last decade, and relies heavily on foreign investment and lenders.
Experts have said that even should Kushner place holdings in a blind trust, he would still test ethics laws. Kushner will be required to make some financial disclosures, and would continuously test the limits of the law in the White House.
<>Kushner Companies is in talks with a huge Chinese conglomerate, Anbang Insurance Group, the New York Times reported on Saturday. A spokeswoman for the real estate firm said the US government had not determined that Anbang is a state-owned company, despite its possible links to Beijing, which could threaten to break the constitution’s emolument clause. That rule bars payments and gifts from foreign governments. <>The spokeswoman also said Kushner intends to resign from his post as head of the company, and to substantially divest.The Kushner family has a sprawling web of businesses and creditors, and its lenders include Goldman Sachs, Blackstone and Deutsche Bank. Last month the German bank agreed to pay the US government $7.2bn for its part in selling toxic mortgage securities in the run-up to the 2008 financial crisis. Deutsche Bank also holds about $300m of debt owed by Trump.
Kushner also has stakes in private equity and venture capital firms co-founded by his brother and a tech company which counts Russian and Chinese billionaires as investors. He also owns the New York Observer, a small New York City paper.
Norman Eisen, the former lead ethics attorney for Barack Obama, told the Guardian that he and his predecessor Richard Painter, who served George W Bush, “think the anti-nepotism law is murky”.
<>“We take a strict approach, but reasonable people may disagree,” Eisen said, adding that Kushner “should submit himself to all ethics, conflicts and disclosure laws. His representatives say he will do that. That is a positive step, and I welcome it.“That said, we need to see the details of how he will do that. And I hope his father-in-law takes a page from his book and does the same, as presidents have for the past four decades, by divesting into a blind trust or the equivalent.”
Painter added that, should Kushner take the post with his real estate investments and financial holdings intact, “it will be important for him to recuse from matters involving financial services regulation and the proposed repeal of Dodd-Frank”.
“Too many financial bubbles have been caused by loose regulation of bank lending secured by real estate,” Painter said. “I believe the conflict of interest statute would prohibit a real estate developer with substantial bank debt from getting involved in that area.”
Trump’s son-in-law played a large role throughout the campaign, for instance cutting out one of the businessman’s early allies and advisers, New Jersey governor Chris Christie. Kushner’s father, convicted more than a decade ago on counts of tax evasion and illegal campaign donations, was sent to prison by Christie, then a prosecutor.
Kushner has advised Trump to bring Wall Street veterans into his team, and the president-elect has suggested that his son-in-law could help lead talks in foreign relations. In November, he said Kushner, an Orthodox Jew, could help “do peace in the Middle East” .
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