The Kennedy, Kushner, and Trump Connection: A Curious Conversation and A Business Deal

by C’Zar Bernstein & Gabe Rusk

Oxford University

March 1st, 2017

A few moments after his first address to Congress on February 28th, President Donald J. Trump left the podium and began to work the crowd as he left the House Chamber. The President made his way to the five members of the United States Supreme Court in attendance. Seated by seniority, Trump began with Justice Kagan on the right and eventually made his way to Justice Anthony Kennedy. A curious and concise conversation took place between the two. To the best of our abilities, here is a transcript of the conversation picked up on camera:

Kennedy: [Inaudible]

Trump: Very nice, thank you, and coming from you. And say hello to your boy. Special guy.

Kennedy: Your kids have been very nice to him.

Trump: Well, they love him and they love him in New York. He’s a great guy. (Pointing to Chief Justice Roberts) Good swearing-in. You’ve got a good guy.

[Link to video. Readers can listen for themselves at 5:15 remaining]

All eyes have been on Justice Kennedy and his relationship with Trump for good reason. Although the confirmation of Judge Gorsuch would preserve the judicial status quo, this would not remain true if Justice Kennedy were to retire (or, heaven forbid, expire) during Trump’s presidency. Since the retirement of Justice O’Connor the Justice from California has consistently become the crucial and proverbial “swing vote” on the court. Not since 1969 has the court held a traditional “left” majority. After the judicial stalemate and subsequent GOP victory behind the nomination of Judge Merrick Garland the Democrats look at Justice Kennedy and Justice Ginsburg (age 83) as their redeeming stop gaps on the High Court. In short, the 81 year-old Justice and his potential replacement could cement the ideological trajectory of the U.S. Supreme Court for decades. The stakes have consequently led to many an opinion piece and unique take on Kennedy and Trump’s relationship. Recent articles on the subject have parsed everything from the hiring of his new clerks to the compatibility of his judicial philosophy with dark-horse winner Donald Trump. Some commentators have gone as far as to suggest that Judge Gorsuch was picked partly to nudge or aid his former boss into retirement. At this point all of us are trying to separate the signal from the noise. Last night’s conversation was no different.

Quickly after the twenty-second exchange was caught via CSPAN a few #appellatetwitter detectives began to speculate what relationships Kennedy’s children and Trump’s might have. Was this a “colloquial” back and forth or was there more of a history between the two families? This was not the first time that Justice Kennedy and the Trumps had interacted. Just last week at the invitation of Justice Kennedy, Donald Trump’s daughter and former businesswoman Ivanka Trump visited the High Court with her daughter to attend a Supreme Court argument. According to reports, Kennedy and Ivanka had met at the congressional lunch after the inauguration. Once again many in the community were intrigued at the gesture and speculated that the move might have an underlying meaning beyond mere kindness. Virtually everyone agreed that the latter was sure to be true. A simple answer to a simple question. Last night’s brief exchange between Kennedy and POTUS reignited those conversations. This time we discovered that there is more to the story: There may be a Kennedy, Kushner, and Trump business connection.

Justice Kennedy has two very successful sons in their own right, Gregory and Justin Kennedy. Gregory Kennedy, a Stanford Law graduate (a Stanford man like his father), was named CEO of Disruptive Technology Advisers in October of 2016. According to his LinkedIn page: Disruptive Technology Advisors is a “Los Angeles based merchant bank with an exclusive focus on mid to late stage growth companies.” While Gregory Kennedy is likely based out of New York City, at first glance, there is no public, professional, or personal connection between him or his company and any of the Trumps or their holdings. The same might not be said of his brother Justin.

Justin Kennedy, a graduate of UCLA and Stanford(again like his father), has spent his career in the world of banking, investment, and, interestingly, real estate. In particular, from 2010–2013 Justin Kennedy was the co-CEO of LNR Property LLC with Tobin Cobb. In the world of high-stakes NYC real estate it would be fairly improbable that the Trump or Kushner groups, monoliths in their own right, would not have mingled or done business with the LNR at some point in time. We were not surprised, therefore, to discover that there is a likely connection. Here’s what we know:

According the New York Times, in 2007 Kushner Companies purchased “an aluminum-clad office tower in Midtown Manhattan, for a record price of $1.8 billion.” At the time the NYT wrote that this deal was “considered a classic example of reckless underwriting. The transaction was so highly leveraged that the cash flow from rents amounted to only 65 percent of the debt service.” The Times continues:

“As many real estate specialists predicted, the deal ran into trouble. Instead of rising, rents declined as the recession took hold, and new leases were scarce. In 2010, the loan was transferred to a special servicer on the assumption that a default would occur once reserve funds being used to subsidize the shortfall were bled dry. But the story may yet have a happy ending for Kushner, a family-owned business that moved its headquarters from Florham Park, N.J., to 666 Fifth, its first major acquisition in Manhattan.”

Who came to the rescue? None other than LNR Property, the company whose CEO at the time was Justin Kennedy. According to the NYT and the Real Deal, Mr. Kushner and LNR “reached a possible agreement with LNR Property, a firm specializing in restructuring troubled debt and which oversees the mortgage, that would allow him to retain control of the tower by modifying the terms of the $1.2 billion mortgage tied to the office portion of the building.” A spokesman for Mr. Kushner told the Wall Street Journal in March of 2011 that “[t]he Kushner’s are ready and willing to invest more money into the property as soon as they can come to mutually satisfactory terms with the servicing agent.” In that same article Kushner’s father-in-law and the future President commented on the negotiations with Justin Kennedy’s company. Speaking about the deal, Trump told the WSJ that Kushner is “a very smart young man…I think it (loan renegotiations) will come out well for him and everybody.” At this point there is no doubt that there was a direct business relationship between LNR and Kushner Companies at the time Justin Kennedy and Jared Kushner were both CEO. Even the future President was aware of the deal and commented on its respective merits. (That being said, it is not impossible that Jared Kushner and Justin Kennedy did not meet in connection with the specific deal in question; however, given the stakes involved it does seem more than likely that the two CEO’s would have interacted as negotiations were being conducted.)

The connections between Kushner, Kennedy, and Trump do not end there. Coincidentally, in 2011, the year in which some of these negotiations took place, Justin Kennedy for the first time was ranked on the New York Observer’s 100 Most Powerful People in New York Real Estate at #36. Donald Trump clocked in at #12. The New York Observer was owned at the time by none other than Jared Kushner himself.

All of this is to say there is a possible web of personal and professional relationships between the Trump family and the Kennedy family. To our knowledge, Justin Kennedy has never donated to the Trump campaign, but we know that he is often a loyal Republican donor like his brother Gregory. According to FEC disclosures, Justin Kennedy has donated generously to the presidential campaigns of John McCain, Mitt Romney, Jeb Bush, and Marco Rubio. Trump, to our knowledge, is noticeably absent. Despite the fact that we found no obvious public political support by Justin Kennedy for the President, there are questions left for us to answer. The Justices and their families are now often under strict public scrutiny in terms of how they might influence politics outside of the High Court. Just this month Justice Thomas’s wife Ginni Thomas faced backlash for apparent political organizing on behalf of the President. During the campaign, Justice Ginsburg’s fervent negative comments about then-candidate Trump were perceived as partisan and unacceptable by journalist, jurist, and politician alike. The actions of the Justices and their respective families remain important balancing tests for the public in terms of the relationship between the Court and the rest of government. What does this potential and curious connection mean for that conversation?

The ostensible relationship between Mr. Kushner and Mr. Kennedy would explain the exchange between President Trump and Justice Kennedy. It would, for example, explain why, in the words of the President, ‘they love him.’ It would also further explain why Justice Kennedy invited Ivanka Trump to the Supreme Court. After all, Justice Kennedy himself acknowledged that the President’s ‘kids have been very nice’ to his son. Obviously, therefore, there is some kind of friendly relationship. Questions abound. We know what the Justice’s son may have done for Mr. Kushner, but what did the President’s children do for Justin Kennedy? How have they been nice to him? Evidently Justice Kennedy knows, and this may have had an impact on his opinion of the Trumps in general and the President in particular. This is perhaps a significant cause of concern for those who hope that Justice Kennedy will try and hold out until after Trump is replaced by a Democrat. Time will tell.