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(07/23/2004) Send this articlePrint this Article Send this articleSend this article
Kushner Fallout Unclear
Adam Dickter - Staff Writer
Charles Kushner: Freed on $4 million bail after conspiracy  charges. AP Photo

When mega-philanthropist Charles Kushner was charged last week with conspiring against his brother-in-law in a sex video scandal, New Jersey Sen. Jon Corzine wasted no time returning more than $80,000 of the billionaire developer�s campaign contributions. His New York colleague, Charles Schumer, gave some $4,000 of Kushner cash to charity, according to press reports.

The accusations against Kushner, one of the marquee names in American Jewish philanthropy, have also placed New Jersey Gov. James McGreevey in a bind, having received $1.5 million in donations from the embattled businessman over the years. McGreevey and a Democratic campaign committee this week gave a total of some $13,000 in donations from Kushner to a medical research foundation.

But while the toll on Kushner�s political ties is evident, it remains to be seen if the case will affect his stature in philanthropic circles. His eponymous charitable foundation supports an array of causes, from yeshivas and colleges to Catholic hospitals and medical research.

Kushner and his wife, Seryl, were to be among the guests of honor at an Aug. 9 reception at Shaare Zedek Hospital in Jerusalem to dedicate a new emergency room along with fellow benefactors Howard and Debbie Jonas and Fanya Gottesfeld Heller.

But Kushner, the 50-year-old chairman of Kushner Companies, surrendered his passport last week as a condition for being freed on $4 million bail, and his lawyer, Benjamin Brafman, told The Jewish Week that his client �has no present intention of leaving the United States until this case is resolved.�

The hospital�s New York office said this week that Kushner remained an honoree at the $300-per-person soiree.

Brafman said Kushner�s focus �is on his family and in dealing with the legal proceedings,� but predicted that �when this case is resolved I am confident that not only will Charlie emerge with his honor and dignity fully intact, he will also continue the important work he has undertaken for so many important institutions.�

Kushner is charged with conspiracy, obstruction of a federal investigation and interstate promotion of prostitution.

Brafman said Kushner has pleaded not guilty to all the charges, insisting the political figures who returned money had rushed to judgment.

�Those politicians who have elected to return contributions from Mr. Kushner will undoubtedly be the first politicians in line to ask for [his] help once this case is behind him,� said Brafman.

�It is important that all people, not just political leaders, not rush to judgment and allow the court to resolve this case before signing off on the allegations that have been raised.�

The New York Times reported that the Kushner empire is believed to be worth $1 billion. Kushner Companies manages more than 24,000 apartment units. Its holdings also include NorCrown Bank and the telecommunications company WestMin Tech, among others.

Since Kushner Companies has no publicly traded stock, it will not be affected by the scandal the way Martha Stewart�s legal woes have impacted the corporation she founded. While the legal problems may make it difficult to deal with government in the short term, observers said, the Kushner Companies� holdings are solid.

As corporate scandals and white-collar trials have increasingly erupted in recent years, some beneficiaries have been forced to reassess donations from embattled figures. Universities, including Seton Hall in South Orange, N.J., have stricken the names of donors from buildings dedicated in their honor because of illegal dealings.

Instances of returned gifts or reversals of honors are rare, said Stacy Palmer, editor of the Chronicle of Philanthropy, but a recipient may be forced to do so if it affects other fund raising.

�It depends on what the resolution of the scandal is, how bad it would be for them to continue accepting the money,� said Palmer. �People obviously would like to avoid criticism of their organization. Image is so important to a nonprofit.�

Kushner, who is known to write seven-figure checks to charity as easily as most people pay their phone bills, is unlikely to see one returned or uncashed in the near future, said Mark Charendoff, president of the Jewish Funders Network, which provides support services for grant makers.

�Our first response has to be the same response that the court is going to have, which is the presumption of innocence, until we as a community are convinced otherwise,� he said.

But, Charendoff stressed, �Whether any of this will have an adverse affect on his philanthropy is an open question. It would be a terrible loss.�

Kushner has been dogged by bad press; his political fund-raising prowess has been under federal scrutiny for years.

McGreevey nominated Kushner to head the Port Authority of New York and New Jersey, but Kushner withdrew his name from consideration amid questions about the use of his company�s funds for political contributions.

He has been sued by former colleagues and business partners, including his brother, Murray, with whom he recently settled a lawsuit. Kushner was ordered recently to pay more than a half-million dollars in penalties for violating campaign finance laws.

The allegations last week by U.S. Attorney Christopher Christie are tied to the ongoing investigation of campaign contributions.

According to the complaint, Kushner obtained a videotape of a cooperating witness in the probe having sex with a call girl and mailed the video to the man�s wife. The New York Times, citing federal investigators, identified the wife as Kushner�s sister, Esther.

Through the rough times, Kushner has maintained his stature as part of an elite group of charitable givers.

�If you look at the population of Jewish philanthropists who are committed to the Orthodox world, the Jewish world in general and the broader American community,� said Charendoff, �and then layer on that a deep commitment to the welfare of Israeli society, there�s an awfully short list of people who meet that criteria and have the resources of Charles Kushner.�

Some of the causes listed on a 2002 tax filing for the Charles Kushner Foundation include a $400,000 gift to Stern College; $250,000 to Harvard University; $50,000 to United Cerebral Palsy Foundation; and $50,000 to St. Barnabas Medical Center in Livingston, N.J.

Kushner is most closely associated with the Joseph Kushner Hebrew Academy in Livingston, named for his father, a Holocaust survivor, and the Kushner Hebrew High School. He is also a board member of Touro College in New York, the Rabbinical College of America in Morristown, N.J., Yeshiva University�s Stern College for Women and the United Jewish Communities of MetroWest New Jersey.

In a statement, the UJC�s president, Ellen Goldner, and executive vice president, Max Kleinman, said they �hope and pray that the family will weather this storm and be able to resume their lives and good deeds, which have helped so many other people in difficult circumstances.� n

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