Wall Street Journal, “Trump Adviser Kushner’s Undisclosed Partners Include Goldman and Soros”, 3 May 2017

Investments show ties to major finance and technology names

Jared Kushner, the president’s son-in-law and senior adviser, didn’t identify on his government financial disclosure form that he is currently a part-owner of a real-estate finance startup and has a number of loans from banks on properties he co-owns, according to securities filings.

Mr. Kushner’s stake in Cadre—a tech startup that pairs investors with big real-estate projects—means the senior White House official is currently a business partner of Goldman Sachs Group Inc.GS 0.47%▲ and billionaires including George Soros and Peter Thiel, according to people close to the company.

The Cadre stake is one of many interests—and ties to large financial institutions—that Mr. Kushner didn’t identify on his disclosure form, according to a Wall Street Journal review of securities and other filings. Others include loans totaling at least $1 billion, from more than 20 lenders, to properties and companies part-owned by Mr. Kushner, the Journal found. He has also provided personal guarantees on more than $300 million of the debt, according to the analysis.

Jamie Gorelick, a lawyer representing Mr. Kushner, said in a statement that his stake in Cadre is housed in a company he owns called BFPS Ventures LLC. His ownership of BFPS is reported in his financial-disclosure form, although it doesn’t mention Cadre.

Ms. Gorelick said the Cadre stake is described in a revised version of his financial-disclosure form that will be made public after it has been certified by ethics officials. She said Mr. Kushner has previously discussed his Cadre ownership with the Office of Government Ethics and that Mr. Kushner has “resigned from Cadre’s board, assigned his voting rights, and reduced his ownership share.” A spokesman for the Office of Government Ethics didn’t immediately respond to a request for comment.

Ms. Gorelick added that it is “very normal” for a financial disclosure form to be revised and that the form was prepared by Mr. Kushner’s lawyers on his behalf.

Trevor Potter, a Republican former chairman of the Federal Election Commission, and other ethics experts said investments such as Mr. Kushner’s ownership of Cadre typically need to be disclosed.

They said Mr. Kushner didn’t appear to violate disclosure rules by not publicly reporting his business-related debts and guarantees. But they said such arrangements ideally should be disclosed, in part because they could force Mr. Kushner to recuse himself from certain issues involving the lenders.

“Anything that presents a potential for the conflict of interest should be disclosed so that the public and the press can monitor this,” Mr. Potter said.

Ethics experts’ concern is that Mr. Kushner’s business connections could jeopardize his impartiality in certain areas and that, absent disclosures, the public is in the dark about potential conflicts. His rapidly expanding responsibilities range from working on a Middle East peace deal to making federal bureaucracy operate more efficiently. As a senior federal official, Mr. Kushner is bound by ethics laws that require him to recuse himself from matters that would directly affect his financial interests.

Ms. Gorelick, who was deputy attorney general in the Clinton administration, said Mr. Kushner will “recuse consistent with government ethics rules.”

Mr. Kushner, the 36-year-old scion of a real-estate family, agreed with federal ethics officials to divest more than 80 assets after he and his wife Ivanka were hired by her father, President Donald Trump, to be senior aides. White House officials have said some of the sales were needed to avoid potential conflicts between Mr. Kushner’s far-reaching job duties and his personal financial interests.

He is retaining more than 200 other assets, worth a total of at least $116 million, according to his disclosures. These are mostly apartments and office blocks around the U.S. Like his father-in-law, Mr. Kushner has declined to put these assets in a blind trust, which ethics experts regard as the cleanest way to avoid conflicts of interest. Someone close to Mr. Kushner said there are practical problems that made a blind trust not a realistic option.

A White House spokeswoman referred questions to Mr. Kushner’s lawyer.

Mr. Kushner co-founded Cadre in 2014 with his brother Joshua and Ryan Williams, a 29-year-old friend and former employee of Kushner Cos., the family-controlled business that Mr. Kushner ran until recently. Cadre markets properties to prospective investors, who can put their money into specific buildings or into an investment fund run by Cadre, which collects fees on each deal.

To get off the ground, Cadre turned to a Goldman Sachs fund and a number of high-profile investors. Among them were the venture-capital firms of Mr. Thiel, Silicon Valley’s most prominent supporter of Mr. Trump, and Vinod Khosla, a co-founder of Sun Microsystems Inc., according to Cadre’s website. Other backers include Chinese entrepreneur David Yu, co-founder with Alibaba Group HoldingLtd.’s Jack Ma of a Shanghai-based private-equity firm, hedge-fund manager Daniel Och and real-estate magnate Barry Sternlicht, people close to Cadre said.

Cadre also secured a $250 million line of credit from the family office of George Soros, a top Democratic donor whom Mr. Trump criticized during his presidential campaign, the people close to the company said. Mr. Soros’s family office is also an investor in Cadre.

The investors declined or didn’t respond to requests for public comment on their backing of Cadre, but a person familiar with Mr. Soros’s family office said it had invested in early 2015, before Mr. Trump declared his presidential candidacy.

Cadre has solicited money from investors for several Kushner Cos. real-estate projects, according to information sent to prospective investors and reviewed by the Journal. Jared Kushner personally has stakes in some of the real-estate projects for which Cadre has raised money, according to Cadre documents and his disclosure form.

While Mr. Williams acts as the public face of Cadre, Mr. Kushner remains one of the owners, with the power to “influence the [firm’s] management or policies,” according to the latest public information on file with the Financial Industry Regulatory Authority. Jared Kushner’s company JCK Cadre LLC is shown as owing 25% to 50% of Quadro Partners Inc., which owns at least 75% of RealCadre LLC, which does business as Cadre. Mr. Kushner has reduced his ownership stake to less than 25%, his lawyer Ms. Gorelick said.

Mr. Williams, chief executive of Cadre, said the company has been working with regulators to update its public filings to “reflect Jared’s non-operational, non-management relationship with the company, which has been in place since the inauguration.”

BFPS Ventures, the company that Mr. Kushner’s lawyer says holds his Cadre stake, is shown on his financial disclosure form as owning unspecified New York real estate valued at more than $50 million. The form adds that “the conflicting assets of this interest have been divested.”

Beyond Cadre, some of the assets Mr. Kushner is holding on to are hard to pinpoint, partly because they are housed in entities with generic names such as “KC Dumbo Office,” according to the disclosure form.

The Journal matched many of the assets to specific real-estate investments. An analysis of the debts on those properties, using real-estate data services PropertyShark and Trepp LLC as well as property records, found ties to a broad swath of U.S. and foreign banks, private-equity firms, real-estate companies and government-owned lenders.

Lenders to Mr. Kushner, either directly or via properties he co-owns, include Bank of America Corp. , Blackstone Group LP, Citigroup Inc.,UBS Group AG, Deutsche Bank AG and Royal Bank of Scotland GroupPLC. Royal Bank of Scotland didn’t immediately respond to requests for comment; representatives of the other firms declined to comment.

Mr. Kushner will recuse himself from matters to which Deutsche Bank or RBS are parties, because he has provided personal guarantees on their loans, said a person familiar with his ethics arrangement.