The Associated Press reported on Sunday that, during the time Jared Kushner was directly involved in managing his real estate company, the company “routinely filed false paperwork” with the city of New York, claiming dozens of its buildings had no rent-stabilized tenants when it actually had “hundreds.”
That move allowed the Kushner Companies to evade oversight of its construction work on those buildings, which is designed to prevent landlords from harassing tenants out of their homes. Free from such oversight, which can include unannounced checks by inspectors, the company pursued a campaign of “targeted harassment” at three Queens apartment buildings in gentrifying neighborhoods, the AP reported, including off-hours construction and leaking water.
One harassment campaign allegedly culminated in an actual bribe to leave:
“All of a sudden, there was drilling, drilling. ... You heard the drilling in the middle of night,” said one of the rent-regulated tenants, Mary Ann Siwek, 67, who lives on Social Security payments and odd jobs. “There were rats coming in from the abandoned building next door. The hallways were always filled with lumber and sawdust and plaster.”
A knock on the door came a few weeks later, and an offer of at least $10,000 if she agreed to leave the building.
“I know it’s pretty horrible, but we can help you get out,” Siwek recalls the man saying. “We can offer you money.”
Siwek turned down the cash and sued instead. She said she won a year’s worth of free rent and a new refrigerator.
(Mary Ann Siwek rules.)
Two years later, the three buildings in question sold for $60 million, 50% more than the company paid for them—a “remarkable” turnaround time, according to the AP.
So what will happen to Kushner because of this? The law, you might be shocked to hear, is a little toothless. According to the AP, submitting false documents is a misdemeanor that carries fines of up to $25,000, but even that small fine (remember, the Queens buildings sold for $60 million) is easily evaded:
Landlords who do so get off with no more than a demand from the city, sometimes a year or more later, to file an “amended” form with the correct numbers.
Housing Rights Initiative found the Kushner Cos. filed dozens of amended forms for the buildings mentioned in the documents, most of them a year to two later.
A New York City law allows tenants to sue their landlords for the kinds of harassment campaigns AP described; some of those lawsuits have generated huge settlements, but others, like Siwek’s judgment, seem a little paltry. And the force of that law depends on the ability of tenants to hire lawyers.
A spokesperson for the Kushner Companies issued the following statement to Splinter about the reports of falsifying documents and harassing tenants:
Kushner Companies values all of our tenants and takes our legal and ethical responsibilities very seriously. Our development team has renovated thousands of apartments with minimal complaints over the past 30 years. If mistakes or typographical errors are identified, corrective action is taken immediately with no financial benefit to the company. The investigation is trying to create an issue where none exists. Kushner Companies did not intentionally falsify DOB filings in an effort to harass any tenants.
Let’s compare this sordid tale to another instance in which the Kushner Companies and the criminal justice system collided.
A 2017 Baltimore Sun investigation revealed that the company and its affiliates have pursued the civil arrest of 105 former tenants for “failing to appear in court to face allegations of unpaid debt,” more than any other landlord in the state over the same time period. Twenty former tenants have been detained.
Worse still, the Sun wrote, “at least some tenants who have been targeted say they did not receive proper notice of the court appearances they were accused of missing,” or, if they did, they may have been confused by the notice:
Attorney General Brian E. Frosh, one of the advocates who has sought to limit the practice, says judges in small claims cases may act on informal evidence from landlords about the alleged debt and their attempts to notify tenants about court hearings. Frosh and others say tenants sometimes may be unaware of a debt because it has been sold to a company whose name they don’t recognize, and may miss notice of a court hearing because they have moved.
(In almost all states, tenants can’t be arrested for failing to pay rent, but these former tenants were being pursued for debts the company said they owed, plus the company’s legal fees.)
Judges in these cases have approved the garnishment of former tenants’ property and wages. Priscilla Moreno, a school bus driver and former tenant, declared bankruptcy, with debts of $60,000 on her annual income of $31,000. She told the Sun that the $7,100 judgment against her didn’t take into account her security deposit, which she had paid, and included charges that the landlord should have paid for.
So here we have two tales of people who did things that are punishable by law. In one, we have a massive corporation that makes millions by buying apartments in gentrifying areas, sprucing them up a bit, and selling them a couple years later, all while allegedly aiding that process by harassing the tenants and lying to the city government. In the other, we have poor people who got behind on their rent and failed to appear in court to pay it off.
The maximum penalty for the false documents that the Kushner Companies filed is $25,000. That’s only a little over three times the amount that the Kushner Companies was able to extract from the school bus driver who makes $31,000. While the company was allegedly harassing its tenants and trying to drive them out of their homes, it was also pursuing arrests against tenants whose crimes were largely being too poor to pay the rent, and in some cases not receiving notices to appear at court.
If we’re going to issue arrests for real estate-related infractions, what’s the more important target to pursue: A school bus driver who owed a few thousands dollars in rent, or the owner of a company that systematically tried to force residents out of their homes to make millions on their property, and lied about it to the government?
But that doesn’t matter—not under the American system of justice. The laws that are always applied so stringently and relentlessly to those who owe the rich money tend to overlook those whose crimes happen to have made them rich.