Jared Kushner’s Firm to Pay $3.25M for Deceiving, Cheating Tenants in Baltimore

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. After the Kushner-owned business was sued by Maryland 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 who is the author of the 2017 investigation. ProPublicaReport that describes how Kushner, the principal architect in the housing scandal which left many residents paying for uninhabitable apartments plagued by 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.

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 investigationAlec MacGillis contributed the original text to this article. He is now with us from Baltimore. He’s an award-winning reporter and editor-at-large at The Baltimore Banner.

Welcome back 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 a huge 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 will be able file claims for rent they have paid on these extremely poor units. I was living in units in 2017 that had holes and leaks in the walls. They were also rife in mice. One woman was experiencing raw sewage from 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.

My article described a constant hounding of tenants about alleged missing rent or broken leases. They would continue to pursue tenants and former tenants for years, garnishing their wages, and then go after them for years. Tenants and residents would sometimes find their bank accounts suddenly cleared out after the company got a court order to seize all their money. They were often utterly powerless to fight back, even though they were in the right. There were tenants who had emigrated from the complexes. They were located in Baltimore before the Kushners purchased them in 2012, 2013. The company was still pursuing them for alleged breaches of leases and unpaid rent in previous years. These tenants were essentially a profit center they wanted to squeeze as much cash out of as possible.

JUAN GONZÁLEZ:Alec, what is this all about in terms of the number of units that the Kushners own? And how was this possible? How was the lawsuit handled?

ALEC MacGILLIS: Sure. There are thousands of them. 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 Baltimore’s urban core. These are not the row houses you remember. 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. According to the attorney general, 30,000 people lived in these units at different times during the time. There are now thousands of people who will be able 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. In addition, the Kushners will have to automatically reimburse former tenants and tenants for fees they were wrongly charged, such as late fees and court costs that were not allowed or merited. So they’re going to have to basically automatically disburse that money to people. This will not require people to file separate claims. However, they can file claims for rent they paid for these shoddy units.

This amount is uncapped. The Kushners will pay a $3.25million 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:How much of Jared Kushner’s involvement was revealed by your investigation or the court records?

ALEC MacGILLIS:He was 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. Its core business was the revenue it was generating from these thousands of units in these 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 dream.

AMY GOODMAN:Alec, last question, to help put the $3.25million in 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:It is clear that $3.25 million is a very small sum for Kushner and his family, as well as the Saudis’ wealth. This still represents a solid form accountability for the wrongs that were exposed 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:Alec MacGillis: We thank you for all your work as 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. Return in 30 seconds.