Say what?! That was my reaction when I saw the article below my name in the Pesach issue of QJL. It was Goldy Krantz’s column, which was also under her name in another part of the paper. Considering how empty the streets were during Pesach, I doubt many people even read the paper. The correct article is in the online version if anyone is interested. Since it was about Passover, I cannot use it this week and must write something new. (Editor’s note: We apologize to Mr. Hecht for that terrible error and will be more careful in the future.)
A few weeks ago, I wrote about the appearance of a conflict of interest regarding public officials and that it is totally legal for family members of elected or appointed officials to use the official’s name to enrich their own pockets.
The Trumpians have forever gone after Hunter Biden for engaging in this conduct. Just to show that graft is nonpartisan, Jared Kushner ends up with a deal to manage funds for Saudi Arabia.
To understand what happened, since we are in baseball season, I would like to give an analogy. There is a minor league outfielder in A ball, which is the lowest level in the minor leagues. The New York Mets sign this player to be a starting pitcher and be the ace of the staff. He is given a salary higher than past Cy Young award winners Jacob deGrom and Max Scherzer. Not surprisingly, the baseball people in the organization were against it. The owner overruled them. This minor league player happened to have worked in the SEC (Securities Exchange Commission) when the team owner was under fire for claims that he might have engaged in securities fraud. The head of the SEC, who would make the decision whether to prosecute the owner, is the player’s father. Although the father no longer heads the SEC, he would get back his job if there is a change in administrations. Meanwhile, the father has immense power over others in his party who could push for an investigation. You can imagine what the outcry would have been by Mets fans and, hopefully, all baseball fans. This was a fictional situation.
Jared Kushner’s experience is limited to real estate investments and management. Nevertheless, his newly-formed fund, Affinity Partners, was hired by the Saudi government to manage two billion dollars of government assets. A panel of experts in the Saudi government were against the deal, citing the inexperience of the Affinity Fund management; the possibility that the kingdom would be responsible for the bulk of the investment and risk; due diligence on the fledgling firm’s operations that found them unsatisfactory in all aspects; and a proposed asset management fee that seems excessive. They were overruled by an MBS (Mohammad Bin Salman) led panel. This was the same individual who it was determined had ordered the killing of journalist Jamal Khashoggi during the Trump administration. Kushner was working for the Trump administration, and it was reported that he opposed MBS being sanctioned. There were many calls to punish MBS that were rejected by the Trump administration.
Although Trump is no longer president, he could run again in 2024 and win. In any event, Trump has control over most of the Republican Party, including members in Congress who could pass legislation concerning MBS.
Kushner’s firm was given a 1.25 % managing fee for the account plus a percentage of the profits. In other words, Kushner’s fund will be paid $21 million a year based on the current value of two billion dollars plus and a percentage of the profits. Former Treasury Secretary Steven Mnuchin only received a 1% fee and one billion dollars in assets for his new fund. Mnuchin, besides being a former treasury secretary, had an extensive background, including being a partner at Goldman Sachs and managed various hedge funds.
If I had a fund where such dealings occurred involving Kushner, I would cash out of the fund in a heartbeat. I would expect that the Trumpians would do the same.
We come full circle. The reason Hunter Biden and Jared Kushner engage in this conduct is that it is legal. When complaints are made, it is only about the person from the other party. Unless Democrats are willing to criticize Hunter Biden and fellow Democrats who engage in this conduct and Republicans are willing to criticize Jared Kushner and fellow Republicans, then nothing is going to happen.
There needs to be groundswell support for changing the laws. Those in power have no incentive right now to do anything. As long as we only complain about the other guy, nothing will change and the gravy train will continue.