Given the Trump administration’s stance on immigration—both legal and unauthorized—and the President’s professed wariness of the People’s Republic, it comes as some surprise that Trump son-in-law and senior advisor Jared Kushner stands to gain millions from an anticipated partnership with Chinese company Anbang Insurance Group. Still more surprising is the related refinancing deal, which relies on $850 million in investment from wealthy Chinese citizens who, through an oft-criticized federal program, hope to trade millions in private investment for green cards.
Although Jared Kushner reportedly sold his interest in the property, Kushner Companies, in which he retains an interest, may soon receive $400 million from Anbang as part of an investment deal related to a Manhattan office tower at 666 Fifth Avenue. In addition to the $400 million payout, the total planned transaction, worth approximately $4 billion, would make Kushner Companies and Anbang business partners, and would slash an existing mortgage owed by the Kushners to about a fifth of its current amount. It’s a great deal for Kushner Cos, which has seen the investment property struggle financially—and indeed teeter on the edge of insolvency—since acquiring it in 2007 for $1.8 billion.
The refinancing plan relies in part on the EB-5 investor visa program, through which hopeful immigrants can obtain visas and a path to citizenship by investing at least $500,000 in U.S. development projects that create American jobs. As we’ve noted before, the EB-5 program has a lot going for it—when functioning as intended, the program is a job-creator that costs taxpayers nothing—but it’s also an easy target for fraud. The Fifth Avenue project’s refinancing plan seeks $850 million in Eb-5 funding, making it the largest EB-5 project to date.
As we’ve noted, previous EB-5 projects, have ended in failure, lost money, and frustrated green card plans. In other words, scams not only rob investors of cash, but also effectively negate the benefit investors hoped to gain: an increasingly difficult to obtain green card and a fast track to U.S. citizenship. Failed projects have also prompted regulators to levy serious fraud charges, freeze assets, and make arrests.
Anbang’s past purchase of other properties, including the Waldorf Astoria Hotel in Manhattan, placed the company—which reportedly has “murky links to the Chinese power structure”—under federal scrutiny. In that case, officials cited potential security risks, most likely involving Chinese eavesdropping and cyber espionage. It’s unclear whether the same scrutiny will apply here.
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