01 June 2017

Jaredgate Is Not About Russia It Is About Money

The drip-drip revelations continues as predicted.

This time it was a piece in the Washington Post (which has lately been eating the New York Times' lunch) which placed the president's son-in-law in the epicenter of the Trump-Russia investigation..
Jared Kushner and Russia’s ambassador to Washington discussed the possibility of setting up a secret and secure communications channel between Trump’s transition team and the Kremlin, using Russian diplomatic facilities in an apparent move to shield their pre-inauguration discussions from monitoring, according to U.S. officials briefed on intelligence reports.
The meeting took place in the Trump Tower in NYC in early December with ambassador Sergey Kislyak and Michael Flynn in attendance.
Ambassador Sergey Kislyak reported to his superiors in Moscow that Kushner, son-in-law and confidant to then-President-elect Trump, made the proposal during a meeting on Dec. 1 or 2 at Trump Tower, according to intercepts of Russian communications that were reviewed by U.S. officials.
In case it didn't sink in, The Bezos Daily is alleging that the presidential son-in-law asked the Russians to give him access to the embassy's secure communication apparatus so that he could discuss things freely with the Kremlin without risking interception by US intelligence agencies.

Well, this is rather remarkable, don't you think? And not for the obvious reasons.

First thing to note, how did the US intelligence folks know about the content of the meeting?

Clearly, the implication is that the person who leaked it to the Washington Post had access to Kislyak's "secure" channel. "He reported to his superiors," says the piece. The one, according the the same piece, Kushner was asking to use to evade US interception.

In that case, would the US intelligence agencies leak this and risk jeopardizing their access to what the Russians and Kushner believe to be a bulletproof channel?

So my money on intelligence agencies listening in on Trump transition team.

Two, how would that work? I mean, Jared going into the Russian embassy to discuss stuff with Putin?

Would he knock on the door wearing a Zuckerberg hoodie?

Pigeons flying into Russian embassy need code word security clearance or else they are waterboarded on their way out.

Are they kidding us?

Third, why would the Russian agree to that? If you were Sergey Kislyak would you show the president's son-in-law your state of the art encryption facility in the bowels of your embassy?

Don't get me wrong. I am not suggesting that there is no there, there.

There is. But not the "there" they imply.

To me, as the old pinko who always follows the money ("ne cherchez pas la femme, cherchez l'argent" Hercules Poirot fans) the relevant part of the story is the Trump Tower meeting between Jared Kushner and the CEO of Vnesheconombank Sergey Gordov right after Kislyak get together.

Which, incidentally, was also arranged by Kislyak.

Do you know why the bank's name rings a bell?

Just a week ago, I listed all the conflict of interest Trump projects and at the top of the list was Trump's Toronto Towers financed by, you guessed it, Vnesheconombank.

It is a bank controlled by the Kremlin and its CEO is a graduate of the FSB spy school and the bank has been doing some shady work on behalf of the Kremlin.
Between 2012 and 2014, Vnesheconombank was used as cover for Russian spy Evgeny Buryakov as he attempted to recruit New York City residents as intelligence sources for Moscow, according to the Department of Justice. Before that, Buryakov used Vnesheconombank as a cover to spy and recruit assets in South Africa.
What Gorkov needed was the lifting of sanctions as Vnesheconombank was very successful until sanctions killed its business.

For his part, Kushner needed serious financing to renovate his money loosing Fifth Avenue building.

From the Russian perspective:
Kushner was also the rare presidential-transition functionary whose family company was searching for hundreds of millions of dollars in loans to redevelop a struggling Manhattan skyscraper it owns. 
Hence the meeting with Gorkov.

My guess is that Kushner wanted a secure line to the Kremlin to discuss the lifting of sanctions. But in the end, his request was turned down by Moscow. Why would they do that if, as implied in the reporting, he was asking for a secure channel to pass on information to Russia?

It was about the money and the deal didn't go through because Vnesheconombank simply did not have the exorbitant sums Kushner was asking.

We know how much we was trying to get from his subsequent negotiations with another Eurasian power.

As a prelude to that, do you remember how China moved carefully in the early days of Trump presidency. They reached out to Ivanka who showed up for the Chinese New Year celebration at the Washington embassy.

Alibaba's Jack Ma met with Trump to promise to create one million US jobs.

Beijing leaned on Chinese courts to accelerate the approval of 38 Trump trademarks.

Instead of open confrontation, Xi Ping worked with Defense Secretary Mattis and Secretary of State Tillerson to get Trump to confirm the One china policy.

So in late March a shadowy Chinese company moved to save the Kushner building on Fifth Avenue with a "sweetheart deal."

The investor in question was the Anbang Insurance Group founded in 2004 and it now claims to have assets over $300 billion. Its financing sources are unknown and its CEO Wu Xiaohui (who married Deng Xiaopeng's grand daughter) is very politically connected.
Company records have also shown members of the board to include the son of a top military commander under former leader Mao Zedong and the son of China's former prime minister Zhu Rongji
666 Fifth Avenue is a building Jared purchased in 2007 for $1.8 billion, a record for a Manhattan property. When the 2008 crisis hit the building became the proverbial albatross around his neck. So much so that in 2011, a Trump partner, Vornado Realty Trust  acquired %49.5 of the office space for a capital injection of just $80 million. A year later Vornado purchased any available ground floor retail spaces for $707 million.

What is a "sweetheart deal" you might ask.
 The deal would value the 41-story tower at $2.85 billion, the most ever for a single Manhattan building: $1.6 billion for the office section and $1.25 billion for the retail section. The new partnership will refinance $1.15 billion in existing mortgage debt.
"This is a huge, huge exit strategy for an office building," said Joshua Stein, a New York real estate lawyer. "It does sound like a home run of a transaction for Kushner and his group.”
This is not all.
The deal would allow Vornado Realty Trust -- which is partnered with Trump in his two most valuable properties -- to exit a troubled asset with a 10-fold payout on its stake in the building’s offices and a doubling of its investment in its stores. 
There is also this:
An unusual consideration in the refinancing plan is the proposal to pay off a part of the mortgage known as a "hope note," which was for $115 million when Kushner Cos refinanced its debt in 2011. The loan, which was made by Barclays Plc and has since been sold off to investors, is now valued at more than $250 million because of compounded interest. But according to the deal documents, the Kushners will settle the debt for just $50 million. 
The deal would also give $400 million to Kushner and one fifth equity in the new building.

This was such an obvious conflict of interest situation that the outcry that followed the Bloomberg reporting killed the deal immediately.

But they are still looking as the building is losing money and a mortgage payment of $1.2 billion is due in two years.

And China is at the top of the Kushners list.

A couple of weeks ago, Nicole Meyer Kushner was in China looking to raise $150 million for another real estate deal. Just like the previous deal, this one also involved EB-5 visa scheme for the investors.

For its part, China is happy to oblige the Trump klan.

An undercover activist who worked China Labor Watch (CLW) was arrested while checking Ivanka Trump's shoe supplier.
In 17 years of investigating Chinese factories it was "the first time any our investigators have been detained under a criminal process," Mr Li said.
It is their way of saying that they will look after Trump family interests.

So the search for another sweetheart deal continues and either China or Russia will step up.

As I mentioned recently, grift is at the heart of the Trump Administration.

And everything, including American foreign policy, is subservient to that.

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