How Politics Have Complicated Business For Kushner Companies

Jared Kushner is both a Senior Advisor and son-in-law to President Trump, and, like the president, he and his family were in the real estate business before getting into politics. The Kushner Companies' troubled development on 5th Avenue in New York City shows how politics have complicated that business.

KELLY MCEVERS, HOST:

I'm Kelly McEvers, and this is EMBEDDED.

Hello, hello. Can you hear me?

DANIEL GOLDEN: Hi. How are you?

MCEVERS: Hey, I'm good. This is Kelly.

This is Daniel Golden.

GOLDEN: Oh, this is a trip down memory lane here. Oh, I remember the...

MCEVERS: Love it.

GOLDEN: I remember the Kaspersons (ph). Let's see - they gave money...

MCEVERS: And back in 2003, he started doing all this reporting on how the children of wealthy people were getting into these really good colleges and universities, like Harvard, because their parents were making big donations. And at one point, he gets this list.

GOLDEN: I had been given, by a source of mine, a list of the 400 or so members of Harvard's Committee on University Resources, which is its committee of sort of big donors, big prospective donors. And so that's where I came across the Kushners.

MCEVERS: Charles and Seryl Kushner, a very wealthy family that runs a big real estate company in New Jersey and New York. Their son Jared Kushner started at Harvard in 1999.

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MCEVERS: Jared Kushner is now, of course, the son-in-law of the president of the United States and one of his closest advisers. Back when Daniel Golden was doing this research, though, Jared Kushner was just the son of wealthy parents, neither of whom had gone to Harvard themselves, which meant it was unusual for them to end up on this big donor committee. So Daniel Golden started calling people who knew Jared Kushner at his high school, this private Jewish school in New Jersey called The Frisch School.

GOLDEN: It didn't take long to find out that he didn't have the kind of outstanding record that you would normally expect, you know, a Harvard student to have.

MCEVERS: Yeah. I just want to read the quote from the official that you spoke to at The Frisch School. "His GPA did not warrant it. His SAT scores did not warrant it. We thought for sure there was no way this was going to happen. Then lo and behold, Jared was accepted."

He was accepted, Daniel Golden found out, after his father Charles pledged a major donation to Harvard.

GOLDEN: And, you know, I learned that Charles Kushner had given Harvard - had pledged $2.5 million in 1998, which was, you know, around the time Jared would have been beginning the college admission process.

MCEVERS: The implication, Daniel Golden says, is that Charles Kushner used this pledge, a quarter of a million dollars each year for 10 years, to help his son get into Harvard, a pattern Golden saw over and over in his reporting, which eventually became a book and won him a Pulitzer Prize. And it seems to fit a pattern we will see later in Charles Kushner's career, using money to get what he wants for him and his family, something you will hear more about in this episode.

A spokesperson for Kushner Companies told Daniel Golden the idea that this donation to Harvard was related to Jared Kushner's application, quote, "is and always has been false." Quote, "Jared Kushner was an excellent student in high school," the spokesperson said, "and graduated from Harvard with honors."

And here's what Harvard told us when we asked about the Kushners. We consider a range of academic and personal factors as part of a whole-person admissions process. Philanthropy is not part of our review. They also said they would not answer any questions about donations. After Harvard, Jared Kushner went to the NYU law school. Charlie Kushner also donated to NYU around that time, though Charlie is an NYU alum. So that raised fewer questions.

And after that, Jared Kushner starts running his father's real estate company. And this is all a pretty typical story for a wealthy family. But Jared Kushner is now in an atypical position.

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JARED KUSHNER: My name is Jared Kushner. I am senior adviser to President Donald J. Trump.

MCEVERS: And he has a lot of duties in the White House.

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MICHELLE KOSINSKI: Kushner has gone from son-in-law to close adviser to the president's go-to guy on you name it.

Kushner seems to be at the head of nearly every table at the White House.

UNIDENTIFIED REPORTER #1: And tackle issues like veterans care and opioid addiction.

SARA MURRAY: We see Jared Kushner in nearly every meeting with a foreign leader that passes through this White House.

HALLIE JACKSON: President's son-in-law and top adviser in Iraq tonight on a surprise trip...

ADRIENNE BANKERT: Kushner is heading to the Mideast to meet with Israeli and Palestinian leaders in hopes of forging a peace plan.

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PRESIDENT DONALD TRUMP: He is so great. If you can't produce peace in the Middle East, nobody can.

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MCEVERS: So we wanted to go back into Jared Kushner's record to see what we could learn about this person who has no previous experience in government but who now has this big government job. And what we're going to do is we're going to tell you a bunch of stories. We're going to look at Jared's family so we can understand more about his father Charles and see how Jared and Charles do business and how, if at all, the way they do business has changed now that Jared is in the White House.

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MCEVERS: To understand Jared Kushner, you have to understand his father, Charles Kushner. And to know Charles Kushner, you have to know the story of his parents. Their names were Rae and Joseph Kushner. They're both now deceased. But back in the '80s, Rae told her story to the Holocaust Resource Center of Kean University in New Jersey. You're about to hear some of that interview. And Rae Kushner's story has been told before. But there's some of it that we found was pretty surprising.

Rae Kushner and her family lived in what was then Poland and is now Belarus.

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RAE KUSHNER: The whole family was maybe 200 people. Like, my father had seven sisters, one brother. My mother was one from four children.

MCEVERS: Rae Kushner's father made hats, mostly men's hats out of fur. The family was middle class, and they were comfortable.

And then came the Nazis.

Rae Kushner's town was bombed. Jews were forced to wear yellow stars and then eventually forced to live in a ghetto. And then one day, this terrible thing happened. Nazi soldiers gathered 50 young girls from the ghetto.

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R. KUSHNER: Like, one Saturday they came, and they asked for 50 nicest-looking girls, young girls. They needed 50 girls to work.

MCEVERS: Rae was one of those 50 girls. The Nazis brought them to the town square.

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R. KUSHNER: They took us on the square, and music was playing - a whole orchestra.

MCEVERS: The Nazis were drunk and cheering. And they had gathered the city's Jewish intellectuals.

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R. KUSHNER: He gathered all the intelligent people

MCEVERS: People these girls knew.

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R. KUSHNER: Like the doctors, professors, teachers, lawyers - he brought them, about a hundred, 150 people. And he shoot them by the music on the square. And the blood was running on the square, on the stones. And we supposed to wash the stones.

MCEVERS: The girls were told to wash the blood off of those cobblestones.

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R. KUSHNER: And we washed the stones from the square. And we helped to put on the bodies...

MCEVERS: The 50 girls were also told to pick up bodies...

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R. KUSHNER: ...On the wagon.

MCEVERS: ...And put them on a wagon.

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MCEVERS: In the beginning of the Nazi occupation, there were thousands of Jews living in the ghetto where Rae and her family lived. But as time went on, more and more people disappeared and were killed, including Rae's mother. So the young boys of the ghetto decided they had to find a way to escape. There was only one entrance to the ghetto, and it was heavily guarded. So they decide to dig a tunnel.

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R. KUSHNER: And they tried to do tunnel, a mile and half underground.

MCEVERS: So every night, they dug. And they hid the dirt under beds and in walls so the Nazis wouldn't know what they were doing.

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R. KUSHNER: And we decided one evening that they must get out of here.

MCEVERS: The night they got out, it was raining.

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R. KUSHNER: It was pouring and thundering buckets of water on you.

MCEVERS: Rae says 250 people crawled out of that tunnel, away from the ghetto and into the woods. Rae and her father and her sister went from farmhouse to farmhouse and eventually met up with a group of Jews who survived by living in pits during the day and foraging for food at night.

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R. KUSHNER: We lived day by day.

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MCEVERS: After the war, she meets up with Joseph Kushner, and they get married in Hungary. Joseph had survived the Nazis living in the woods, too. The two end up in a refugee camp, and they're stuck there for three and a half years.

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R. KUSHNER: Nobody wanted to take us in. Three and a half years, we were waiting to get the visa.

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MCEVERS: And eventually, their cousins in the U.S. sponsored them, and they got visas.

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R. KUSHNER: In 1949, we got papers. The visa came to go to the United States.

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MCEVERS: Of those original 200 members of Rae's family, only a handful of them had survived. Rae and her father, her sister, and her husband Joseph moved to New York City and then settle in New Jersey.

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R. KUSHNER: We have four children, and we love America.

MCEVERS: And this is one of the interesting things about Rae's story. She made it here on a visa as a refugee. And now her grandson works in an administration that has worked to curb the number of refugees coming to the U.S. We tried to ask Jared Kushner about this, but his spokesman declined to comment.

And when she first came to the U.S., Rae didn't want to tell her story. But then, like so many Holocaust survivors, she decided to record it.

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R. KUSHNER: People left have got to tell somebody what happened. People should know what happened to us. If we're not going to tell now, in 20 years, I don't know who's going to be to tell.

MCEVERS: She says it's her duty to warn the world to be careful, to not let someone like Hitler come to power ever again.

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R. KUSHNER: Should not come up a crazy guy like this, like Hitler to kill Jewish people for nothing.

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MCEVERS: And here's the other interesting part of Rae's story. As she's talking about how history cannot repeat itself, she starts talking about this rally by the Ku Klux Klan in front of the White House in 1982. We actually found some archival type of NPR's coverage at the time.

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UNIDENTIFIED REPORTER #2: Thom Robb, who is head of the Arkansas branch of the Knights of the Ku Klux Klan, told reporters that the purpose of the Klan march was to show that there are still Americans willing to stand up for the Christian faith and the values upon which this nation was founded for white people.

MCEVERS: And this is what Rae Kushner says about watching a rally like this as a Holocaust survivor.

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R. KUSHNER: What kind of feelings we have when I came to Washington and Nazis are going with the swastikas in front of the White House? And they’re going on free. And this scares us. This is very painful.

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MCEVERS: Members of the Kushner family have said that what Rae and Joseph survived means the family should do everything they can to prevent anti-Semitism. We tried to ask Jared Kushner about the recent neo-Nazi rally in Charlottesville, Va., and how Donald Trump said there were very fine people on both sides. But Jared Kushner's spokesman declined to comment.

Last year, Jared Kushner did write an op-ed about his grandparents and about his father-in-law in the newspaper he owns, the New York Observer. And he says Donald Trump is not a racist and is not anti-Semitic. He says holding the president responsible for the racist views of some of his supporters isn't fair.

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MCEVERS: Jared Kushner's grandmother Rae Kushner died in 2004. We're going to take a break.

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MCEVERS: OK. So we heard how Charles Kushner, Jared's father, made these major donations to universities at the time of his son's attendance. We heard how Charles's parents survived the Holocaust and came to the U.S. Charles's real name is actually Chanon after Rae's younger brother. This younger brother made it out of the tunnel that night but got separated from the family and didn't survive.

So now we're going to talk about what the Kushners did once they settled in New Jersey.

DAVID KOCIENIEWSKI: I was at the Times from '95 until 2014.

MCEVERS: Oh, wow.

David Kocieniewski has reported on the Kushners for decades. He was with The New York Times. And he's now with Bloomberg. And he says the family of Rae and Joseph Kushner was part of this group known as the refugee builders, this handful of families of Holocaust survivors who went on to run construction and real estate companies in New Jersey. And the Kushners did well from the beginning.

KOCIENIEWSKI: They had 4,000 or 5,000 apartments. And you know, it's not flashy but incredibly profitable. You know, those little cookie cutter apartments - they're a cash machine if they're well-run. And those were well-built and well-run.

MCEVERS: And it was a family business. In the '80s, Jared's father Charles Kushner, who actually goes by Charlie, starts Kushner Companies with his father Joseph, then Joseph dies and Charlie takes over. And the company grows - a lot.

KOCIENIEWSKI: The business thrived under Charlie. He was aggressive. He expanded it and got a lot more apartment complexes and built it into an even more profitable venture. But the family members thought that he would play it fast and loose with the expenses, and that caused friction.

MCEVERS: One of the things Charlie Kushner did with the company's money was to donate to places like schools and to the political campaigns of Democrats.

KOCIENIEWSKI: Charlie Kushner became one of the biggest known political donors in the U.S. There was one day in 2000 where he bundled a million dollars to the Democrats, which - that was a lot of money back in those days. So he became a stop on the fundraising tour for Democrats. You know, the Clintons would visit him. And Charlie was one of the ones who was quickest to pull out his checkbook.

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MCEVERS: Over the years, David says, these donations pay off. Remember - this is right around the time the Kushners pledged $2.5 million to Harvard and Jared gets into Harvard. Charlie Kushner also donates to the governor of New Jersey.

KOCIENIEWSKI: He was the No. 1 donor to Jim McGreevey, who was elected New Jersey governor in 2001. His Cabinet was larded with Kushner people. The chief of staff, the chief counsel - were all people who had worked with or close to Charlie Kushner.

MCEVERS: Around this time Charlie Kushner gets nominated to be the chairman of the Port Authority of New York and New Jersey.

KOCIENIEWSKI: Which you know, to most people, sounds like a boring thing that just collect your tolls - but it's a multibillion-dollar agency that controls the bridges, controls the tunnels, controls the airports in New York. And if you're a real estate developer, it controls all kinds of land and access. And it is a way to make the kind of connections that can do your business incredibly well, and you can make a ton more money.

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MCEVERS: So at this point, Charlie Kushner has wealth. He's got the real estate business. It's doing well. He has influence through his connection with the New Jersey governor. And he's about to get real power with this job at the Port Authority.

And then something happens. The accountant for Kushner Companies sues Charlie Kushner. His brother, Murray, had already sued him. The accountant claims Charlie has been cooking the books and has taken money from the company and used it for his own interests. The accountant says Charlie paid Israeli leader Benjamin Netanyahu $100,000 of company money to speak at Charlie's synagogue and at an event honoring Charlie. And the accountant says Charlie is funneling company money into these political campaigns and that he used company money to pay Bill Clinton a $125,000 speaking fee.

David Kocieniewski says all of this gets the attention of New Jersey's top federal prosecutor.

KOCIENIEWSKI: The U.S. attorney starts getting reports that there's money being misallocated and misused by one of the biggest democratic political donors in the country. He started to investigate.

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CHRIS CHRISTIE: Good afternoon.

MCEVERS: That U.S. attorney was Chris Christie.

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CHRISTIE: My name is Christopher J. Christie. I'm the United States attorney for the district of New Jersey. To me immediate right is Joe Billy.

MCEVERS: And this is pretty early in Christie's career as a federal prosecutor. And at the time, he's going after big corruption cases and working to take down these big New Jersey political players who've been misusing their office.

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CHRISTIE: We're here today to announce filing of criminal complaint against Mr. Charles Kushner.

MCEVERS: So Christie spends months investigating Charlie Kushner. And by the time he has enough evidence to announce charges against Kushner, the case has gotten a lot more complicated than just the misuse of company money.

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CHRISTIE: Criminal complaint alleges aiding in the interstate travel to promote prostitution, obstruction of justice and witness retaliation.

MCEVERS: You heard it - prostitution, obstruction of justice and witness retaliation.

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MCEVERS: Prosecutors laid out a pretty crazy story, and reporters later published who all the characters in that story were. Here it is.

At some point during the investigation, Charlie Kushner had found out that his sister, Esther, was cooperating with federal investigators.

KOCIENIEWSKI: And he goes rogue.

MCEVERS: He decides to go after his sister's husband.

KOCIENIEWSKI: Well, he was going to try to set a honey trap for him and tried to get an accomplice to find a prostitute and wanted to set him up.

MCEVERS: Right. So prosecutors claim Charlie Kushner hires two guys to hire a prostitute, then he ends up going to New York City to do it himself. And he hires this prostitute to sleep with his sister's husband.

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CHRISTIE: The co-conspirators and the prostitute were paid $25,000 in cash by Mr. Kushner, as alleged in the criminal complaint.

MCEVERS: The prostitute and the sister's husband go to a motel.

KOCIENIEWSKI: They have their encounter, which is then videotaped. Charlie then decides to get back at his sister. The way to maximize the effect of it was that he arranged to have the videotape delivered to her house at the day of a family party.

MCEVERS: At that same press conference, an FBI agent says Charlie was clearly trying to intimidate his sister.

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JOSEPH BILLY JR: This arrest and ongoing investigation highlights some of the lowest forms of blackmail an individual can use to attempt to dissuade an individual from cooperating with law enforcement authorities.

MCEVERS: But his tactic doesn't work. His sister gave the tape to the FBI. So on the day of the news conference, Charlie Kushner is taken into custody.

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BILLY JR: And I think at approximately 11 o'clock this morning, he voluntarily surrendered himself to FBI headquarters in Newark, where they have processed him.

KOCIENIEWSKI: And this took what had been an interesting case and turned it into tabloid manna from heaven because you have big New Jersey developer, politically connected Democrat, huge bundler for the Democratic Party nationally involved in this crazy revenge sex scheme.

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MCEVERS: Charlie Kushner eventually pleads guilty to assisting the preparation of false tax returns, witness retaliation and making false statements to the Federal Election Commission. He does not plead guilty to the prostitution charges or to obstruction of justice. He goes to federal prison in Alabama for 14 months.

At this point, his oldest son Jared is at NYU law school. He's 24. And Jared and Charlie were really close.

KOCIENIEWSKI: It was almost like an Old World sense of family loyalty. So when Charlie was in prison, Jared would go every weekend to go visit him.

MCEVERS: In Alabama.

KOCIENIEWSKI: In Alabama.

For years, he would carry this wallet. People said it was kind of an odd, you know, rough-hewn wallet. And it turns out that it was something that his father had made for him in the shop in the prison.

MCEVERS: Charlie eventually gets out of prison and does some time at a halfway house in Newark. Jared takes over operations at his father's business, Kushner Companies. And the company keeps doing well.

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MCEVERS: And, David Kocieniewski says, Jared and Charlie continue to defend what Charlie did.

KOCIENIEWSKI: They've made statements about it. And I think they viewed it at the time that they were the victims. The thinking - you know, Charlie inherited this medium-sized company and turned it into a big company, made it far more profitable. He helped make his siblings richer. And here are these ingrates who I made rich, who I took the family legacy and kept them from ruining it and built it to something even bigger. And they're going to question me? And they're going to go to the cops on me? And you know, so they view it - and Jared Kushner later said this - as, you know, the U.S. attorney overstepped his boundaries in getting involved in what was essentially a family squabble.

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MCEVERS: So, yeah, here you have Charlie Kushner - this tough son of Holocaust survivors who works really hard to make his business thrive and who is willing to videotape his sister's husband with a prostitute who he hired. And you have his son Jared, who is very loyal to Charlie - so loyal he would later tell New York Magazine this. All he did was put the tape together and send it. Was it the right thing to do? At the end of the day, it was a function of saying, you're trying to make my life miserable. Well, I'm doing the same.

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MCEVERS: And then, years later, when both Jared Kushner and that U.S. Attorney, Chris Christie - the guy who put Jared's father in prison - we're both up for jobs in Donald Trump's White House, Jared got a job. Chris Christie didn't. Both Chris Christie and Jared Kushner say Christie's prosecution of Charlie Kushner had nothing to do with this. After the break, we will pick up where we left off. Charlie Kushner has finished his sentence, and the Kushner Companies go in a new direction.

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MCEVERS: All right, so Jared Kushner and his father, Charlie, are reunited. And they're working together at Kushner Companies. Jared is the front man for the company. Charlie's more behind the scenes. And the company is doing really well. Right now it has about 25,000 apartments...

CALEB MELBY: Mostly located in New Jersey and Pennsylvania - states around New York, but mostly not in New York.

MCEVERS: That's Caleb Melby. He and David Kocieniewski, who you heard earlier, are now going to tell us how Charlie and Jared decided to take their company in a whole new direction. They're both reporters for Bloomberg. And they're going to talk about 2006 when the Kushner's decided they wanted to expand.

KOCIENIEWSKI: They wanted to say, bye, bye, New Jersey, and to say we're bigger than you. We can leave New Jersey behind and make money on the big stage.

MCEVERS: And when you leave New Jersey for the big stage, you go to New York City. David says this was especially important to Jared.

KOCIENIEWSKI: He wanted to kind of rebrand them into kind of hipper New York's spaces like in Dumbo - very fashionable. He talked about this is Kushner 2.0. They were looking for a big trophy property.

MCEVERS: But getting one of these properties is not easy because remember, at this point, 2006, we're getting to the peak of the housing boom. Everybody has cash. And the sellers want to get the highest price they can.

MELBY: You had insurers. You had pension funds. People knew that they could get a loan together really quickly. So to say you were going to go into business with this family who was really mostly famous for Charlie's criminal proceedings before was a big bet. And it took them - they looked at more than like two dozen buildings.

MCEVERS: Oh, wow. The Kushners finally settle on a building they want - 666 Fifth Avenue.

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MCEVERS: All right, yeah, so we are standing in front of 666 Fifth Avenue. There are these like perforated steel panels. Like, you'll have, like, window, panel, window, panel, window, panel, window, panel. And it's kind of like a brushed steel. And it's just a big tall rectangle.

David says the Kushners loved a lot about this building - the minimalist design, the artwork in the lobby and, most important, the prestigious location on Fifth Avenue. So it's the fall of 2006. Charlie Kushner has gotten out of prison. And the Kushners decide to make an offer on 666.

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MCEVERS: Charlie had his staff work the weekend after Thanksgiving to put the financial package together.

KOCIENIEWSKI: They main people who knew the books of the company, who knew the company's cash position, who knew the market, were skeptical and said, look, I don't know that this is the right price. I don't know that we can do the financing. But Charlie told his accountants and his finance people, I make the decisions. You make them work.

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MCEVERS: What was the price? What was the final price?

KOCIENIEWSKI: $1.8 billion.

MCEVERS: Wow.

KOCIENIEWSKI: Which was a record at the time.

MCEVERS: $1.8 billion was the most that had ever been paid for a building in Manhattan. The Kushners only had to put down $50 million in cash. The rest comes from some high-interest loans and a $1.2 billion mortgage. Remember that - a $1.2 billion mortgage.

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MCEVERS: After they close on the deal, the Kushners have this big party at a swanky Manhattan restaurant with a $250-per-person tasting menu.

KOCIENIEWSKI: They went to Per Se, and everyone got these gold cufflinks - everyone involved in the deal - to kind of celebrate. And they thought that this was their great moment.

MCEVERS: You mean, like, the people who stayed up late to make the numbers work?

KOCIENIEWSKI: Yes. And some...

MCEVERS: They all got cufflinks out of it?

KOCIENIEWSKI: Some of the other - and the cufflinks were made to look like the metal facing on the side of the building.

MCEVERS: So, yeah, 2007, everyone's flying high. And we all know what happens next...

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UNIDENTIFIED REPORTER #3: You know what? Right now, breaking news here, stocks all around the world are tanking because of the crisis on Wall Street.

MCEVERS: ...The Great Recession.

(SOUNDBITE OF MEDIA MONTAGE)

UNIDENTIFIED REPORTER #4: And we are expecting a tsunami of foreclosures and short sales.

UNIDENTIFIED REPORTER #5: Increasing weakness in the housing market.

UNIDENTIFIED REPORTER #6: Getting a signal that commercial real estate is weak around the...

UNIDENTIFIED REPORTER #7: Still major concerns about the health of commercial real state.

UNIDENTIFIED REPORTER #8: The state of commercial real estate. Maybe the next shoe is going to drop?

MCEVERS: And suddenly, 666 Fifth Avenue is this huge money suck.

KOCIENIEWSKI: And they started scrambling.

MCEVERS: They sell off half the retail. Then they refinance the mortgage. This other big real estate company, Vornado, buys half the office space in exchange for cash. And Vornado assumes half the debt. And in the end, they make it. 666 will not go under. In 2011, there's another company dinner to celebrate. But this time, it's not at that fancy restaurant.

KOCIENIEWSKI: They go to some little restaurant in the East Village, like, a cash-only Italian restaurant, which is a little different ambience. People were all glad that they made it out by their fingernails.

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MCEVERS: The problem is still that $1.2 billion mortgage. The refi (ph) package did give them some interest forgiveness.

MELBY: But with each successive year, some of that interest forgiveness went away and the debt got more and more expensive. And even after that forgiveness, they were still in the red, which is how we get to their plan to just raze the whole thing and start over, I guess.

MCEVERS: Tear down the existing building at 666 and build a whole new thing. They called it the megaproject. At this point, it's 2014. And there is another real estate boom in New York City. And Vornado, which by now owns a big chunk of 666, says let's play it safe, rent the building out, hope to refinance again. For Vornado, this is just one of its many buildings. For the Kushners, this is their big signature thing.

KOCIENIEWSKI: And the Kushners go the other direction. They say, well, what if we knock it down and put up a big gleaming huge tower and make it twice as big and twice as expensive and bring in other investors? And instead of one floor of retail, which is profitable, we'll have five floors like the Time Warner Center on steroids.

MELBY: And a hotel on top of that.

KOCIENIEWSKI: And a hotel on top of that. And then...

MCEVERS: Whoa, five floors of retail plus a hotel.

KOCIENIEWSKI: Yes.

MCEVERS: Plus condos to be sold at a higher price than anything else on the market.

KOCIENIEWSKI: So the Kushners decide after buying an expensive dream of their own, they'd knock it down and have an even more expensive, more galactic dream. And at the end, I think it would take $8 billion to build.

MCEVERS: So here's, like, what I just (laughter), you know, I think anyone listening would maybe not understand. It's like, if you can't afford the mortgage you have - the $1.2 billion mortgage you have - how on earth could it even possibly make sense to then want to do an $8 billion project?

MELBY: You got to find a partner to pay that loan down before you do anything else.

MCEVERS: OK.

KOCIENIEWSKI: You got to find, also, a partner - someone who sees your vision, this grandiose vision.

MCEVERS: Someone for whom this, like, prestigious spot is also equally as important to them, maybe too, to have a foot on Fifth Avenue? Is that what it is?

MELBY: And maybe someone who wouldn't mind overpaying.

MCEVERS: Yeah.

KOCIENIEWSKI: Right.

MCEVERS: Well, who would that be?

(LAUGHTER)

KOCIENIEWSKI: A lot of it is fuel of foreign money - people trying to get their money out of countries with currency controls like Argentina or China.

MCEVERS: So it's not as crazy as I think?

KOCIENIEWSKI: Oh, it's still crazy.

(LAUGHTER)

KOCIENIEWSKI: But there are ways. So one...

MCEVERS: But people do do this is what you're saying?

KOCIENIEWSKI: People do do this.

MCEVERS: People come in with a lot of cash and overpay for real estate.

MELBY: Well, and that's the part where it gets crazy - right? - is there's theoretically people out there who would overpay to get in the New York real estate. But this is just so many magnitudes beyond that that it doesn't even look like a good deal. So the Kushners did go on a global hunt.

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MCEVERS: The Kushners start courting wealthy people all over the world. The pitch includes sketches of a building designed by one of the world's most famous architects.

KOCIENIEWSKI: It looks like something from the Emerald City in Oz or Abu Dhabi. They sent out these stunning drawings. And they started to circulate some proposals to investors that had these nice pictures. But where are the numbers? They didn't put any numbers...

MCEVERS: Really?

KOCIENIEWSKI: ...Because you don't lead with your weak point.

MCEVERS: They go to the richest man in France.

MELBY: He didn't buy it.

MCEVERS: They go to a Saudi mall developer. Nope. They go to companies in Israel run by folks who'd worked on Kushner projects in the past.

MELBY: But not this one.

MCEVERS: South Korea's Sovereign wealth fund. Nope. A Qatari businessman. Nope.

KOCIENIEWSKI: They're going everywhere. They're Willy Loman from "Death Of A Salesman." You know, they were liked, but not well-liked, right? They got their briefcase, and no one's going to take it.

MCEVERS: A lot of time, the Kushners can't even get meetings. The megaproject is not looking good. But then...

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TRUMP: They're bringing drugs. They're bringing crime. They're rapists. And some, I assume, are good people.

MCEVERS: ...Everything changes.

KOCIENIEWSKI: 2015, all of a sudden, Jared and Donald Trump begin their rise toward the White House.

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UNIDENTIFIED REPORTER #9: Donald Trump wins big.

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TRUMP: We are going now to South Carolina. We're going to win in South Carolina.

KOCIENIEWSKI: Jared is the right hand man of Trump.

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UNIDENTIFIED REPORTER #10: Party panic as Donald Trump wins big on Super Tuesday.

KOCIENIEWSKI: And by late spring, it's clear that he's going to be the nominee.

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TRUMP: Lying Ted. I'm killing him on states. And I'm up 2 million votes or more than that, 2 million votes.

KOCIENIEWSKI: So all of a sudden, it's a little different calculation. Like, do you want to just completely slam the door on these people's face or at least give them a certain amount of protocol?

MCEVERS: The Kushners start getting meetings and some real conversations about possible investments for the megaproject. Then things start looking up even more. Donald Trump wins the election. During the transition, last fall, the Kushners start making real progress with one foreign company.

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UNIDENTIFIED REPORTER #11: Anbang Insurance...

UNIDENTIFIED REPORTER #12: Anbang now has...

UNIDENTIFIED REPORTER #13: Anbang.

KOCIENIEWSKI: Anbang, which is the famous Chinese insurance company, which is so closely tied to the Chinese government and the Chinese party officials that the U.S. has forbidden them from making certain purchases. Like, there was one in San Diego. They wanted to buy something near a military base. And it was forbidden because it's not owned by the government, but it's so closely allied with the government.

MCEVERS: So after all this interest from Anbang, Donald Trump is sworn in. And Jared Kushner's officially appointed to the White House. And Jared Kushner divests his stakes in some of the Kushner companies and other projects. And he resigns as chief executive of the company. Then in March of this year, David and Caleb do some new reporting for Bloomberg on this Anbang deal. And the story kind of blows up.

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UNIDENTIFIED REPORTER #14: A developing $4 billion deal between China's Anbang insurance and New-York-based Kushner Company.

UNIDENTIFIED REPORTER #15: Kushner Company stands to get $400 million in a cash payout.

UNIDENTIFIED REPORTER #16: In a real estate deal that many experts are calling unusually favorable. The payout from the Anbang Insurance...

MCEVERS: Critics and ethicists say a deal like this between a company close to the Chinese government and a company with the same name as a White House adviser could create major conflicts of interest. A White House spokesman declined to answer our questions about this. But in the past, they have said Jared Kushner will recuse himself from issues that might create conflicts. Either way, after all this scrutiny, the Anbang deal falls apart.

Anbang pulls out. The Kushner Companies will no longer get $400 million in cash for 666 Fifth Avenue. And this is the most interesting thing that David and Caleb have found. Jared Kushner's being in the White House has actually hurt the family business, not helped it.

MELBY: Like I think David said earlier, it helped in getting meetings. It helped get that foot in the door.

MCEVERS: And getting some promises and assurances.

MELBY: Right. But in the end, it didn't get him any checks.

MCEVERS: And it maybe hurt them because some people were maybe afraid that there is more scrutiny being placed on their financial dealings if they do business with somebody in the White House than if it was just some other random developer.

KOCIENIEWSKI: The other thing is we only know a small piece of this one building. We dont know - there are a lot of private investments and partnerships in both the Kushners and elsewhere in the real estate world that we dont know.

MCEVERS: Like, even after the Anbang deal fell through, Jared Kushner's sister was in China pitching potential investors to sign up for a visa program that provides a path to U.S. citizenship in exchange for a $500,000 investment.

The Kushner Companies were looking to raise $150 million for another building project in New Jersey. But this gets a lot of scrutiny. Again, critics say it's a potential for conflict of interest. The China meetings are canceled. The Wall Street Journal and New York Times have reported that federal prosecutors are now investigating the Kushners use of the EB-5 program.

The Kushner Companies have said the company did nothing improper. And a White House spokeswoman has said Kushner will recuse himself from any matter where his impartiality could be reasonably questioned, including an examination of the EB-5 program.

So, yeah, all this scrutiny is changing things for Kushner's business dealings. And we're seeing a similar thing happening with some of Donald Trump's businesses. Revenue at some of Trump's golf courses is down. The Washington Post reports that charities and sports teams are canceling events and stays at Trump resorts like Mar-a-Lago. We should say business is booming at the Trump Hotel in D.C., where it has exceeded revenue projections.

As for 666 Fifth Avenue, that $1.2 billion mortgage is due in February 2019. David and Caleb did talk to the president of Kushner Companies, and he says the building still has a lot of potential investors. But David and Caleb have also reported that Vornado, that other major partner in 666, is signaling to brokers that a much less grand renovation than the megaproject is underway. Vornado declined to comment for this story. And all this could mean that the Kushners eventually lose control of 666 and that the overall business takes a big hit.

Caleb and David say there are still a lot more questions about 666 and all kinds of other projects. And now that these wealthy families are in public office, they're going to keep asking those questions.

KOCIENIEWSKI: For those who make an argument that we need to have more disclosure in real estate, this is example one of how, you know, sunlight is the best disinfectant.

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MCEVERS: This episode was written and produced by Chris Benderev, Tom Dreisbach and me with help from Selena Simmons-Duffin. The episode was edited by Neal Carruth with help from Arnie Seipel. Fact checking by Greta Pittenger. Our technical director is Andy Huether. And we had help from Patrick Murray. Our lawyer is Micah Ratner.

We had help getting archival tape from the amazing NPR library team and especially Susie Cummings, Nicolette Khan, and Camille Salas. Our theme song is by Colin Wambsgans. Other original music in this episode by Jonathan Hirsch and Ramtin Arablouei. Digital help is from Alex McCall. EMBEDDED is executive produced by me, Chris Turpin and Anya Grundmann.

Huge thanks to David Kocieniewski and Caleb Melby of Bloomberg News. Thanks also to the American Archive of Public Broadcasting and to Daniel Golden who is now a senior editor at ProPublica. His new book is "Spy Schools: How The CIA, FBI And Foreign Intelligence Secretly Exploit America's Universities."

You can see all of Rae Kushner's interview with the Kean University Holocaust Resource Center on the website of the U.S. Holocaust Memorial Museum. You can hear more NPR on your local public radio station on another show I host called All Things Considered.

Next week on EMBEDDED, another building in Manhattan. This one has Donald Trump's name on it. And the story involves a man with a criminal past.

UNIDENTIFIED MAN #1: He'd smashed this heavy margarita glass. And he just cut this guy's face open.

UNIDENTIFIED MAN #2: I believe the very final email of the day is, I spoke with Donald, he's fine with me.

MCEVERS: OK. That's it. Till next week. Thanks for listening.

(SOUDNBITE OF MUSIC)

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