WASHINGTON — At an Oval Office gathering earlier this year, President Donald Trump began touting his administration’s new “Opportunity Zone” program that offers massive tax breaks to developers who invest in downtrodden American communities. He then turned to one of the plan’s strongest supporters.
“Ivanka, would you like to say something?” Trump asked his daughter. “You’ve been pushing this very hard.”
The Opportunity Zone program promoted by Ivanka Trump and her husband, Jared Kushner — both senior White House advisers — could also benefit them financially, an Associated Press investigation found.
Government watchdogs say the case underscores the ethical minefield they created two years ago when they became two of the closest advisers to the president without divesting from their extensive real estate investments.
Kushner holds a big stake in a real estate investment firm, Cadre, that recently announced it is launching a series of Opportunity Zone funds that seek to build major projects under the program from Miami to Los Angeles. Separately, the couple owns interests in at least 13 properties held by Kushner’s family firm that could qualify for the tax breaks because they are in Opportunity Zones in New Jersey, New York and Maryland.
There’s no evidence the couple had a hand in the selecting any of the nation’s 8,700 Opportunity Zones, and the company has not indicated it plans to seek tax breaks under the new program. But the Kushners could profit even if they don’t do anything — by potentially benefiting from a recent surge in Opportunity Zone property values amid a gold rush of interest from developers and investors.
Ivanka Trump’s advocacy for the Opportunity Zone program “creates a direct conflict of interest with her spouse’s investment in Cadre,” said Virginia Canter, chief ethics counsel for the nonprofit Citizens for Responsibility and Ethics in Washington.
The couple’s financial disclosures show their jointly held financial empire is worth between $200 million and $800 million, with much of it in real estate, including a stake of between $25 million and $50 million in a holding company with an ownership stake in Cadre. Those documents require recusal from dealing with policy matters that touch on real estate and “would have a direct and predictable effect on Cadre.”
Abbe Lowell, ethics counsel for the couple, said in a statement that Ivanka Trump “adheres to the ethics advice she has received from counsel about what issues she can work on and those to which she is recused.”
The Kushner Cos. did not respond to requests for comment.
President Trump was scheduled to attend an Opportunity Zone event in Washington on Wednesday that would depict the program as a boon to distressed communities. Deputy Press Secretary Hogan Gidley told the AP that individual state governors of both parties nominate communities for Opportunity Zone designation.
“The White House has nothing to do with those decisions,” he said.
The Investing in Opportunity Act, which became law last December as part of the Republican-sponsored tax overhaul, never gained traction when it was first proposed during the Obama administration, but it quickly found favor in a White House headed and dominated by real estate developers and investors.
A significant moment came when the law’s key GOP sponsor, South Carolina U.S. Sen. Tim Scott, met President Trump after the violence-plagued white supremacist rally in Charlottesville, Virginia, in August 2017.
Trump promised Scott his support for Opportunity Zones as a way to show his administration’s outreach to minority communities. But Scott had already found a supporter weeks earlier in Trump’s daughter, in conversations that grew out of previous meetings about passing a child care tax credit.
Political sponsors and lobbyists told the AP that Ivanka Trump played an important role in promoting the legislation, while Kushner was also quietly supportive behind the scenes.
Sean Smith, Scott’s communications director, said that after their first conversation, Scott and Ivanka Trump talked by phone and in person nearly a dozen times. He added that Scott also spoke to Kushner about the program, but noted, “It was much more Ivanka than Jared.”
There is no indication the Ivanka Trump and Jared Kushner directly intervened in the shaping of the Opportunity Zone program specifically to advance their financial interests. But backers of the program acknowledge that Ivanka Trump’s out-front role drummed up interest from public officials and financial stakeholders.
Along with the Kushner-tied Cadre Opportunity Zone funds, more than 50 real estate and private equity interests have made plans in recent weeks to create investment funds under the program.
Government officials have estimated the program would cost $1.5 billion in lost tax revenue over 10 years, but Treasury Secretary Steve Mnuchin has estimated the zones would attract up to $100 billion in renewal efforts.
While the Opportunity Zone program mostly targets census tracts of high poverty and unemployment, it also allows “contiguous” tracts that might not be low-income, but are close enough to deprived communities to be eligible.
Critics say that could allow developers to cash in by targeting zones already teeming with investment and gentrified neighborhoods. A study by the Urban Institute in Washington found that nearly a third of the more than 8,700 Opportunity Zones nationwide — and all 13 of the ones containing Kushner properties — were showing signs of heavy investment and gentrification.