A Sunday New York Times report revealed that investors working for Saudi Crown Prince Mohammed bin Salman cautioned him against giving money to Jared Kushner for his new investment firm.
But the prince went through with it anyway -- and now Kushner's fund has around $2 billion in Saudi cash.
New York Times investigative reporters Kate Kelly and David Kirkpatrick appeared on MSNBC Monday to talk with Chris Hayes about their findings.
"Essentially, there was this board investment committee, Chris, that was tasked with looking in a great amount of detail at the potential investments," said Kelly.
She explained that there were case studies presented, but that most of the ideas submitted by Jared were real estate-specific. The fund may be broader now, but even now, it isn't completely understood where the investments will be.
"At the time they look at that, they look at the fee structure, they look at Kushner's experience, which as you know it's primarily real estate investing for his family company, with one particularly embarrassing black eye," Kelly recalled. "Which was top-ticking the New York City real estate market with 666 Fifth Avenue right before the recession hit. And they said — ew, this due diligence is unsatisfactory in all aspects. Due diligence, meaning, the work they do to review a potential investment."
Those on the committee included the former CEO of Dow Chemical in the United States and other major players in the investment community. They made it clear to the Saudi crown prince that they saw some red flags with Kushner's fund. They were ignored, however.
"This investment is basically the anchor investment for this new enterprise, right?" asked host Chris Hayes.
"What you are saying is more than that. Right now, it is not just the anchor investment it is virtually the only investment, said Kirkpatrick. "At this point, they're certainly looking for other investors, but at this point you have to say, 80 percent of their money comes from Saudi Arabia. Their job is primarily managing Saudi money."
Hayes compared Kushner to former Treasury Secretary Steve Mnuchin, who has an actual track record in the universe of investment funds. His fund was launched not long after leaving Donald Trump's administration. Yet, when he asked for Saudi money they gave him less cash.
"When you look at those two sets of investments and the management fees that come with them, side-by-side, it's hard not to feel like political considerations or soft power didn't play a role here, right?" said Kelly. "So, you look at Steven Mnuchin, who, as you said, strong investment track record, partner at Goldman Sachs, ran the mortgage desk there. Essentially [he] resurrected a failing bank in the depths of a financial crisis, although there were major ramifications for the bank's mortgage holders. But for the investors and for him it was very successful. Jared gets twice as much money and a higher management fee even though the due diligence is unsatisfactory."
"Essentially, the Trump administration sold the U.S. foreign policy, Jamal Khashoggi's life and American stated principle on liberal democracy and freedom of the press for, what? Two billion bucks that went straight into Jared Kushner's pocket," said Hayes.
He went on to note that the only thing Kushner has ever done was be an heir to his family's fortune and dabble in commercial real estate. He has no experience in running his own investment fund.
See the discussion below:
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