Jonathan Ernst/Reuters
- A report claims Jared Kushner used a loophole to obscure a huge Saudi investment in his firm.
- It renews focus on the relationship between Donald Trump's son-in-law and the Saudis.
- Saudi Arabia's de-factor ruler Mohammed bin Salman once boasted of his close ties to Kushner.
The seemingly cozy relationship between Donald Trump's son-in-law, Jared Kushner, and Saudi Arabia's strongman ruler, Mohammed bin Salman, is once again under scrutiny.
The Washington Post on Sunday claimed that Kushner exploited a legal loophole in reporting a $2 billion Saudi Arabian sovereign wealth fund investment for his private equity firm to the Securities and Exchange Commission (SEC).
According to the Post, the firm structured the funds in such a way that it did not have to disclose their source to the SEC, using a strategy other equity firms have used to avoid transparency.
It's a move that, even if technically legal, appears designed to help obscure Kushner's financial relationship with the Saudis, and fuels longstanding suspicions over Kushner's relationship with the crown prince.
Since leaving his role at the White House, Kusher has been trying to establish himself as a financial powerhouse, but that could now be under threat.
The vast payment to Kushner's company certainly has the appearance of a reward, John Pelissero, an expert on government ethics at the Markkula Center for Applied Ethics at Santa Clara University, told Insider.
"Whereas it is not clear if Kushner was trading on his former government position and contacts to obtain a financial benefit from a sovereign wealth fund to help launch his new company, reasonable people may believe that is what took place," he said.
During his time as a senior advisor in his father-in-law's administration, Kushner's relationship with the Saudi ruler repeatedly raised alarm among top US officials.
He was accused of using his position to shield Crown Prince Mohammed from blowback over the assassination of Saudi dissident Jamal Khashoggi in 2018, and for helping push Trump to prioritise Saudi ties.
Government ethics experts say this latest development raises urgent questions about whether former officials should be free to profit from wealthy foreign contacts they made while working in public service.
"Any changes in ethics rules should ensure that the public interest is being served, rather than personal, financial interests of former government officials," Pelissero said.
House Democrats this week renewed calls for information from Kushner. Insider has contacted representatives for Kushner for comment. Kushner declined to comment on the Post report.
Inside Kushner's friendship with Saudi Arabia's de-facto ruler
During the early years of his father-in-law's presidency, Kushner formed a close working relationship with Crown Prince Mohammed, who at that time, was considered a modernizer seeking to liberalize the conservative Islamic kingdom.
According to a 2018 New York Times report, the pair were on first name terms and frequently chatted by text.
Like his father-in-law, Kushner was a foreign policy novice, and among his briefs was securing a peace deal in the Middle East between Israel and the Palestinians.
Saudi support was viewed as crucial for the success of this mission.
But the frequency of their private conversations reportedly began to alarm US officials, reports at the time said, and speculation swirled that Crown Prince Mohammed was leveraging the relationship to exert undue influence.
After the 2018 murder of Saudi dissident Jamal Khashoggi by Saudi agents in Istanbul, Kushner refused to condemn the atrocity, and the Trump administration offered at best minimal pushback.
Trump later bragged of Crown Prince Mohammed that he had "saved his a**," after he opposed congressional action against the Saudi ruler in response to the Khashoggi killing, according to a 2020 book by journalist Bob Woodward.
Jabin Botsford/The Washington Post via Getty Images
A report by The Intercept in 2018 claimed that Crown Prince Mohammed boasted about having secured an extraordinary level of influence over Kushner, reportedly remarking that he had Kushner "in his pocket."
The report said that Kushner may have even handed US intelligence on internal critics to Crown Prince Mohammed.
Kushner denied the report.
Kushner Saudi deal could erode trust in government, expert warns
In the years since Trump's 2020 defeat, concern about Kushner's ties with the Saudis has intensified.
The Saudi investment in the company Kushner set up after leaving government first came to light last year. Trump has since launched a new bid for the presidency, raising the possibility that Kushner could return to government if Trump wins.
Pelissero said cases such as Kushner's undermined trust in the government.
"What is troubling here is that it involves a former top White House official who happens to be the son-in-law of the former president," said Pelissero.
"Trust is an important ethical virtue, and trust in the government can be eroded if the public believes that those who serve in government have used their positions to obtain personal benefits when they leave government service."