The actors involved in the construction of the hotel at the location of the General Staff in Belgrade are "politically exposed persons" and as such, by definition, represent a greater risk of being involved in corruption due to their position and influence, and the entire project is taking place in Serbia, which ranks poorly on Transparency International's global corruption perception scale. . But, experts say, corruption is difficult to prove and it is necessary to engage institutions in elucidating the work around the General Staff - which is not happening on either side of the Atlantic for the time being.Voice of America" (VOA).
According to what is known so far, Donald Trump's son-in-law intends to build a luxury complex on the site of the General Staff, the conceptual solutions of which he presented on social networks. Serbia would cede that land to him for 99 years without compensation, with the option to become the owner of the land after that period, shows the proposal of the conclusion of the Government of Serbia published by the Environmental Uprising, and confirms Kushner's statements to the New York Times. He also stated that the project is worth about 500 million dollars and that Serbia will receive 22 percent of the profit from this work.
According to the claims of both parties, the Investment Agreement on the "revitalization" of the General Staff has not been signed, but from the published document it can be seen that there is a Memorandum of Understanding between the Government of Serbia and the American firms Atlantic Incubation Partners LLC and Kushner Realty LLC. The Minister of Transport, Infrastructure and Construction of Serbia, Goran Vesić, denied that the memorandum was signed and promised that the public will be informed about everything when it is finished.
What are the red lights in America?
In the US, there are foreign business laws that apply to ordinary people, famous sons-in-law and politicians, as well as companies, so Jared Kushner would have to adhere to them as well.
One is the Foreign Corruption Practices Act, and the other is the Foreign Extortion Prevention Act, according to which everyone must ensure that their actions do not encourage corruption. For example, the Anti-Corruption Act makes it illegal for US individuals or companies to give or promise money to foreign officials in order to get or keep a job. The Anti-Extortion Act targets the other side – that is, it allows US authorities to prosecute those who accept bribes from US individuals and companies.
"In cases like Kushner's business, a lot depends on how many steps are taken to thoroughly investigate and vet a business partner before making a deal with them." Because Kushner falls under this law, regardless of whether he licenses someone to do business on his behalf, or whether he does it himself," Jodi Vitori, a professor at Georgetown University and an expert on corruption and national security, explains to Voice of America.
She says that the Kushner project in Belgrade reminds her of the case of Trump's luxury complex in Azerbaijan. Namely, in 2012, Trump agreed with the son of the Azerbaijani Minister of Transport, Anar Mammadov, to build hotels and apartments in Baku. The Mamadov family was called the "Caspian Corleone family" by the American Foreign Policy, and the New Yorker wrote that they are connected to the Iranian Revolutionary Guard. That didn't stop the Trump Organization from doing business with the Mamados, but his lawyers said he didn't break the law because he didn't bribe anyone.
The project in Baku was not realized and was suspended when Trump became president. By the way, in 2012, Trump called the Law on Prevention of Corruption in Business with Foreign Countries "terrible" and said that it makes it difficult to conclude business deals.
"The famous author Mark Twain said that 'history may not repeat itself, but it often does.' And there is a lot of overlap between the two jobs. And the job in Baku was offered by the Azerbaijani minister of transport, the main contractor of the construction works was a company owned by the minister's son, I see that in Serbia one of the actors is the minister of transport. Both countries are known for high corruption, Serbia has a score of 36 on the Corruption Perceptions Index, it is 104th on the list of the most corrupt countries out of 180. And when you have some business in a country like Serbia, you should take even more care of the Law on Prevention of Corruption, especially if one of the main actors is a minister in the government - that is, a politically experienced person - who is more susceptible to corruption because of his position and influence," says Vitori.
Photo: Twitter/Jared KushnerProjection of buildings at the location of the General Staff
Donald Trump, according to all reports, is not involved in the General Staff project. Allegedly, in 2013, he was interested in investing in that location before he became president, which was confirmed by the current Minister of Foreign Affairs in a technical mandate and the Prime Minister at the time, Ivica Dacic, but after that he was not involved in any agreements or deals.
Kushner's firm did not respond to VOA's inquiry about whether it had taken all necessary actions in accordance with anti-corruption and anti-extortion laws. But Jared Kushner told The New York Times earlier that he would do business in accordance with the law, while denying that anyone is giving him jobs or special treatment because he is Trump's son-in-law.
According to Professor Vitori, the fact that it is mentioned that Kushner will be given land at the General Staff for 99 years without compensation, as well as the two companies Atlantic Incubations Partner LLC, founded in 2023 and registered in Delaware (a state known for offshore companies), also raises doubts. and Kushner Realty LLC, incorporated in 2022 and incorporated in Maryland. Voice of America did not get an answer from Kushner whether these firms are related to his company.
"We're talking about someone who was the son-in-law of the president and who is the son-in-law of maybe the next president, and you're offering them a very valuable location practically for free, with the option to become the owner of that land." Every time a "politically exposed person" is given something very valuable for free, all the red lights should go off. When the names of companies, limited liability companies (LLCs) that no one has ever heard of appear in such a large project, it also raises suspicion. Further investigation is needed to determine what is happening," says Professor Vitori.
He explains that violations of the Foreign Corrupt Practices Act are being investigated by the US Department of Justice, but notes that these are complex investigations that take years. Another option, in theory, could be a congressional investigation.
Conflict of interest?
Businessman Jared Kushner was Trump's adviser from 2017 to 2021. Among other things, he dealt with the Middle East and developed close ties with Saudi Arabia. After leaving office, he continued his real estate business and founded Affinity, which is worth $3,1 billion according to Bloomberg. Two billion came from the Public Investment Fund of Saudi Arabia. Affinity will be an investor in Serbia and Albania.
That business-political connection of Kushner with the Middle East is now under the scrutiny of the Democrats in the House of Representatives, who are asking for an investigation to be launched, the American media reported.
Democratic members of the House Government Oversight Committee are calling for an investigation into $2 billion that they say Affinity received from Saudi Arabia six months after Kushner left the White House. They want to examine Kushner's influence and whether there was a "favor for favor" principle that influenced American foreign policy towards the Middle East.
"We are writing to you in light of the new business that Kushner intends to implement abroad, at a time when his father-in-law, Donald Trump, is again running for president," stated the Democratic members of the Oversight Committee in the lower house of Congress. This comes as the Republican majority in the House of Representatives tries to impeach President Joe Biden over his son Hunter's foreign dealings.
"When I first heard about Kushner's plans, it occurred to me that there was an extremely high probability that there was a conflict of interest. A conflict of interest, at least here in the US, doesn't necessarily mean a crime. But it usually implies a suspicion that an individual in a business has other interests besides the public one," says Professor Vitori, commenting on the planned investment in Belgrade.
Photo: Marko Kecman/XaocphotoThe bombed General Staff is a tourist attraction and a monument to the turbulent recent Serbian history
The ethical regulations of the White House stipulate that officials, after leaving the government, cannot engage in lobbying in various aspects for two years, but it is not specified how business with foreign countries is treated.
The name of a former White House official - Richard Grenell, special envoy for dialogue between Serbia and Kosovo and acting director of the US National Intelligence Service in the Trump administration - is also mentioned in the work surrounding the General Staff.
It is not clear whether he has a stake in this project, and what his potential role is. Grenell spoke highly of Kushner's project in the Serbian media. Kushner said in an interview with the New York Times that "Rick is a big supporter of investing in the Balkans and that he wanted to attract him to invest there since he founded his fund."
Richard Grenell often visited Serbia and Albania after leaving the Trump administration, as evidenced by his posts on social networks from Belgrade and the Albanian coast.
He did not hide his close relations with Serbian officials, such as Finance Minister Sinisa Malog - whom Serbian President Aleksandar Vučić said "discussed large investments" in the context of the General Staff.
In August 2021, Grenel told the Kosovo online portal that he was engaged in promoting foreign investments and economic cooperation in the region, but he did not say for whom he was doing it. He later denied that he was lobbying for the Serbian government.
"I am in the private sector and we are looking for opportunities to create a private sector for foreign investment in the Balkans," said Grenell at the time, who was honored by the President of Serbia in October 2023 for his contribution to the dialogue between Belgrade and Pristina.
Grenell has remained close to Donald Trump, often publicly supports him and, according to the New York Times, has said privately that he hopes for a position in the new administration, although he has never publicly confirmed it.
What are the red lights in Serbia?
In Serbia, the information that a luxury complex is being built on the site of the ruins of the General Staff caused stormy reactions - due to the public's sensitivity to NATO bombing, but also because the project reminded many of the controversial Belgrade on the water.
According to the statements of Serbian officials, the deal with Kushner was not agreed upon. The Minister of Transport, Construction and Infrastructure, Goran Vesić, denied that a memorandum was signed with Kushner's company and said that negotiations were being held with "several companies". But, from the document published by the Ecological Uprising, it can be seen that the Government authorized Minister Vesić to sign the Investment Agreement and undertake the implementation of the obligations arising from the Memorandum of Understanding between the Government and the American firms Atlantic Incubation Partners LLC and Kushner Realty LLC. Voice of America contacted the Government of Serbia and the Ministry of Transport, Infrastructure and Construction for comment, but no response has yet been received.
"From the point of view of Serbian laws, nothing seems to be right here, and for now we do not have answers to several key questions," said Nemanja Nenadić, program director of Transparency Serbia, in an interview with Voice of America.
First, he says, it concerns urbanism and the fact that the General Staff building has been declared a cultural monument that enjoys certain protection, which means that you cannot just demolish and build there. According to the procedure, the protected status can be canceled only by the Institute for the Protection of Cultural Monuments, and as reported by that institute, no request for that has been received.
Photo: Tanjug/Sava RadovanovićAn uncertain future
Another issue, says Nenadić, concerns the state's decision to enter into some kind of public-private partnership, which can be concluded from the published memorandum that envisages the establishment of a joint venture between Serbia and Atlantic Incubation Partners LLC. In this joint venture, the state of Serbia enters with land as its share, while the private partner enters with money.
But this is where the problem arises - because the private partner was chosen without a public competition, which does not guarantee that the state got the best for itself. According to what Kushner told the New York Times, Serbia would receive 22 percent of the profit from the deal, and the profit is usually divided according to the ownership share in the joint venture, explains Nenadić.
"When a direct contract is made with one company, there are no guarantees that the state will receive the best possible offer." So why 22 percent, why not 42, for example? By way of comparison, in Belgrade on the water, which we criticized for similar reasons, the state got 32 percent of the ownership in the joint venture. Experience has shown that this business model is not something that is profitable for the state, we have seen that the state has so far received very little income from the joint venture", says the program director of Transparency and adds that this form of partnership carries numerous corruption risks. "Because then the majority partner has the opportunity to exaggerate costs, extract profits, and the state does not receive the expected income from its share of ownership."
Finally, says Nenadić, the question arises as to why the state does not sell a site that it clearly does not need and thus enter into a "clean business".
"The state would get the money immediately." The counter argument, if Minister Vesić were to consider this issue, would be that the company will be profitable and that the state will collect the profit, so we will get more money. That may or may not be true, we don't know. But, the state does not exist to enter into business risks and to deal with business".
However, although there are many red lights in this business, corruption is difficult to prove and would imply the work of institutions that are independent from the government - which is not the case in Serbia according to reports by international organizations.
"Perhaps there is no corruption, perhaps none of the participants in the business is corrupt, but if that is the case - then it is very difficult to understand what other motive they could have had to enter into a business that will harm the budget, benefit the private partner, and they are responsible for all that. If they themselves receive no benefit, it is difficult to explain why they are doing something that is clearly harmful. And why I say that it is harmful - because, if what this company offers was really the best possible offer, then that option would get the job even in an open competition", concludes the director of Transparency Serbia.
