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Jared Kushner’s Firm to Pay $3.25M for Deceiving & Cheating Tenants in Baltimore’s “Kushnerville”

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A property management company partly owned by Donald Trump’s son-in-law Jared Kushner has agreed to pay a $3.25 million fine to the state of Maryland and to reimburse potentially tens of thousands of tenants in Baltimore. The state of Maryland sued the Kushner-owned company after ProPublica published a 2017 investigation that exposed how the company hounded low-income tenants with a barrage of lawsuits, eviction notices and late fees — even when residents had the legal right to continue living there. We speak with Alec MacGillis, the author of the 2017 ProPublica report, who describes how Kushner was the leading architect in the housing scandal that left many residents paying for uninhabitable units riddled with pests and sewage issues. He says while the settlement is a “relative pittance” for Kushner, it has delivered some “solid form of accountability” for his company’s wrongdoings, and the money will likely make a difference in the lives of those tenants who were harmed.

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StoryJun 12, 2017The Beleaguered Tenants of “Kushnerville”: Jared Kushner Accused of Slumlord Practices in Baltimore
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This is a rush transcript. Copy may not be in its final form.

AMY GOODMAN: This is Democracy Now! I’m Amy Goodman, with Juan González.

A property management company partly owned by Donald Trump’s son-in-law Jared Kushner has agreed to pay $3.25 million to the state of Maryland and to reimburse tens of thousands of tenants in Baltimore. Maryland’s Attorney General Brian Frosh said, quote, “This is a case in which landlords deceived and cheated tenants and subjected them to miserable living conditions.” The state of Maryland sued the Kushner-owned company after ProPublica detailed how the company hounded low-income tenants with a barrage of lawsuits, eviction notices and late fees, even when the tenants were in the right.

ProPublica’s 2017 investigation was written by Alec MacGillis, who joins us now from Baltimore. He’s an award-winning reporter and editor-at-large at The Baltimore Banner.

Welcome back to Democracy Now!, Alec. Why don’t you lay out what the settlement is about and, most importantly, the behavior of the Kushner company?

ALEC MacGILLIS: Sure. This is really big settlement. It’s really hard to find precedent for a settlement this big in a case like this — more than $3 million, as you said. Residents are going to be able to file claims for rent that they had to pay on these incredibly shoddy units. I was in units back in 2017 that had holes in the wall, that had leaks all over the place, that were riddled with mice. One woman had raw sewage coming out of her kitchen sink. She had maggots coming out of her carpet, appliances not working, gas leaks — just these endless problems that tenants had to deal with, and they were still having to, of course, pay their rent and being constantly taken to court by the Kushners.

What my article described was just this constant hounding of tenants for alleged missing rent and broken leases, where they would just, for years and years and years, go after tenants and former tenants, even garnishing their wages. Sometimes residents, tenants would find their bank accounts suddenly just cleared out, because the company had just gone in and gotten a court order to take all their money away. And they, of course, were utterly powerless often to fight back, even when they were in the right. There were tenants who had left the complexes, these complexes in Baltimore, before the Kushners bought them in 2012, 2013, in that range, and nonetheless the company was coming after them for alleged broken leases and unpaid rent from prior years. They basically saw these tenants as a profit center that they were going to squeeze as much money out of as possible.

JUAN GONZÁLEZ: And, Alec, what are we talking about here in terms of the numbers of units that the Kushners owned? And can you talk about how this payout was enabled? What was the process like of the lawsuit?

ALEC MacGILLIS: Sure. There are thousands of these units. It’s a whole — really kind of a whole hidden world of these, what I called “Kushnerville.” At the time when I wrote the article, it was 15 large complexes, all sort of across the Baltimore suburbs. This is not in the sort of, you know, urban core of Baltimore. These are not the old row houses that you know from The Wire. These are complexes built in the ’60s and ’70s that kind of sprawl all around the inner suburbs of Baltimore, about 9,000 units in all. The attorney general estimates that 30,000 people, different tenants, lived in these units during the time in question. So, you now have thousands of people who are going to be able to file claims.

The way it’s going to work is that if tenants had major maintenance problems in their units and were having to pay rent anyway, they’re now going to be able to file a claim for that rent and try to get some of it back. And starting in three months, they’re going to be able to start filing these claims. They’ll have a year to do so. There’s going to be a, quote, “special master” appointed who’s going to oversee sort of assessing these claims. Then, on top of that, the Kushners are going to have to automatically reimburse tenants and former tenants for the fees that they were unjustly charged over and over, these late fees and court fees that were often not merited and not allowed. So they’re going to have to basically automatically disburse that money to people. People are not going to have to file separate claims for that. But they can now file claims for the rent that they paid on these very shoddy units.

And this is uncapped. So that means that the Kushners are paying a $3.25 million fine to the state. Part of that, $800,000 of that, is sort of a down payment on the claims they’re going to be paying out to tenants. But those claims can go as high — you know, the sky’s the limit, basically. If a whole bunch of claims come in, they’re going to have to pay them all.

JUAN GONZÁLEZ: And to what extent has your investigation or the court record revealed the extent that Jared Kushner himself was either directly involved, or was he largely a passive investor when it comes to this, to all of these units?

ALEC MacGILLIS: He was very, very involved. He was still running the company back in 2012, 2013, when the company decided to make the — decided to buy most of — start buying these complexes. That was his decision to — basically, these complexes were providing this incredible cash flow for this big real estate company that had become very highly leveraged, highly in debt with very fancy purchases that it was making in New York, these big investments in New York, the gleaming towers in Manhattan that it owned. Meanwhile, its real core business was the revenue that was coming in from these thousands of units in these very sort of humble areas of Baltimore.

So, that was his decision to make, to make that investment, and then his decision to pursue these people as aggressively as they did, really to be — to sort of see these tenants as this incredible source of revenue that you wanted to squeeze as much out of as you possibly could. When he became an adviser to the president in 2017, his father-in-law, Donald Trump, and moved into the West Wing, he gave up — he stepped back from that title as president of the company, but he all along has — now again has retained a very strong hand in the company. This is his project.

AMY GOODMAN: Alec, final question, just to put the $3.25 million in some perspective, The New York Times reporting in April Saudi Arabia contributed over $2 billion to Jared Kushner’s new investment fund, and you have New York’s attorney general suing Donald Trump, as well as his three kids, including Jared’s wife, Ivanka Trump, accusing them of widespread financial fraud, that could possibly lead to the disbanding of the Trump empire in New York. Your final thoughts?

ALEC MacGILLIS: Certainly, the $3.25 million, in the sort of scale of Kushner and their wealth and the Saudis and all that, is a relative pittance for them. However, it still represents a really solid form of accountability for these wrongs that we exposed back in 2017. It took five years to get here, but still there’s now some real accountability here for the way these tenants were treated. And for the tenants who are now able to file claims and are going to get some money back, even if it’s just a few hundred, couple thousand dollars, for a lot of these tenants, that means a lot, because these tenants are living in a world, in a universe, where — in a whole different kind of scale of finances than the Kushners.

That’s what I always found so stunning, was that you had one of the most powerful people in the country sitting in the White House, and just 40 miles away, he and his company were hounding these people who lived in an entirely different world, who often didn’t even know that the landlord who was squeezing them for so much money was in fact Jared Kushner, son-in-law to President Trump.

AMY GOODMAN: Well, Alec MacGillis, we thank you for your work, a reporter for ProPublica. We’ll link to your new piece, “Kushner Company Agrees to Pay at Least $3.25 Million to Settle Claims of Shoddy Apartments and Rent Abuses.”

We’re going to continue on the issue of renters. We’ll look at a fight for affordable housing in Philadelphia, speaking to two residents facing eviction in Philadelphia, plus Bishop William Barber of the Poor People’s Campaign, organizing to stop the evictions. Back in 30 seconds.

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