Kushner Charges Have Wider Implications

Beyond the details of the federal charges, the matter has broad implications for his company, the real estate and banking industries in the Garden State, and reaching all the way to the statehouse in Trenton. His companies' holdings, which are valued in the $2-billion range, include more than 25,000 apartment units, 7.5 million sf of office, retail and industrial space, a fledgling boutique hotel chain and ownership of NorCrown Bank, among other things.

Indeed, most of New Jersey's major real estate players have had dealings with Kushner at one time or another in this close-knit market, and none of the individuals contacted by GlobeSt.com would comment for attribution.

"If you're looking for a professional industry comment, I don't even want to go there," one broker, who has transacted several investment sales deals on behalf of Kushner Cos., told GlobeSt.com. "This is a very sad day," was all one industry spokesperson could say.

All calls to Kushner Cos. and its representatives were referred to Kushner's lead attorney, Benjamin Brafman, a New York celebrity lawyer who has represented such entertainers as Michael Jackson and rapper P. Diddy. Brafman's office declined to answer any questions, issuing only a brief written statement: "Charles Kushner is one of the most respected leaders in the community and widely known as a generous philanthropist.

"The charges filed today are entirely baseless," the statement continues. "Mr. Kushner is confident that once the facts are fully disclosed in a courtroom he will be completely exonerated."

As far as the impact of the scandal on Kushner's real estate empire, "in today's world, it's very difficult to recover from such news," says Dale Anne Reiss, global director of real estate for consulting firm Ernst & Young. "It's very difficult, and I'm not being facetious here.

"Having said that, it's easier to recover if the business is private real estate, as opposed to a REIT, because in private real estate a tenant can think anything they want about a landlord," Reiss continues, noting that Kushner Cos. is a privately held company. "All the tenants care about ultimately is how the HVAC works and how good the security is."

At the same time, Kushner has been a major contributor to the campaigns of Gov. James McGreevey and others, and this latest in a series of legal issues could have a major effect on the statehouse and politics in general. The latest federal charges follow a $508,000 fine Kushner agreed to pay earlier this month relating to alleged federal election campaign violations. And two years ago, Kushner withdrew as McGreevey's hand-picked chairman of the Port Authority of NY/NJ because of the then-pending federal investigation.

"If you combine this with the other problems other people close to McGreevey have had recently, the governor could be in real trouble politically," one developer, who did not want to be identified, tells GlobeSt.com. "This could change the whole landscape. And for Charlie Kushner, this combined with his family problems, is all a real mess."

"Family problems," of course, relates to Kushner's very public feud with older brother and former development partner, Murray Kushner, over matters entangled with the federal investigation.

Given Kushner's financial support of McGreevey, another political factor is US attorney Christopher Christie, who has been leading the investigation into Kushner's affairs. Christie is a rising Republican star in the Garden State and has been mentioned as a possible candidate to challenge Democrat McGreevey next year.

After he was charged, Kushner, who entered federal court in handcuffs and shackles, was released on $5-million bond. The maximum penalty for the charges he faces is 10 years in prison.