Last May, Jared Kushner accompanied President Trump, his father-in-law, on the pair’s first diplomatic trip to Israel, part of Mr. Kushner’s White House assignment to achieve peace in the Middle East.
Shortly before, his family real estate company received a roughly $30 million investment from Menora Mivtachim, an insurer that is one of Israel’s largest financial institutions, according to a Menora executive.
The deal, which was not made public, pumped significant new equity into 10 Maryland apartment complexes controlled by Mr. Kushner’s firm. While Mr. Kushner has sold parts of his business since taking a White House job last year, he still has stakes in most of the family empire — including the apartment buildings in and around Baltimore.
The Menora transaction is the latest financial arrangement that has surfaced between Mr. Kushner’s family business and Israeli partners, including one of the country’s wealthiest families and a large Israeli bank that is the subject of a United States criminal investigation.
The business dealings don’t appear to violate federal ethics laws, which only require Mr. Kushner to recuse himself from narrow government decisions that would have a “direct and predictable effect” on his financial interests. And no evidence has emerged that Mr. Kushner was personally involved in brokering the deal.
But the deal last spring illustrates how the Kushner Companies’ extensive financial ties to Israel continue to deepen, even with his prominent diplomatic role in the Middle East. The arrangement could undermine the ability of the United States to be seen as an independent broker in the region. The Trump administration already inflamed tensions there when it said last month that it recognized Jerusalem as the capital of Israel and would move the United States Embassy there from Tel Aviv.
“I think it’s reasonable for people to ask whether his business interests are somehow affecting his judgment,” said Matthew T. Sanderson, a lawyer at Caplin & Drysdale in Washington who specializes in government ethics and was general counsel to Senator Rand Paul’s presidential campaign.
Raj Shah, a deputy White House press secretary, said the Trump administration has “tremendous confidence in the job Jared is doing leading our peace efforts, and he takes the ethics rules very seriously and would never compromise himself or the administration.”
Christine Taylor, a spokeswoman for the Kushner Companies, said the company has partners around the world. It “does no business,” she said, “with foreign sovereigns or governments, and is not precluded from doing business with any foreign company simply because Jared is working in the government.”
Menora, which is also Israel’s largest manager of pension funds, has done numerous other real estate deals, including several in the United States, said the Menora executive, Ran Markman, who is the company’s head of real estate. He said he had never met Mr. Kushner. In negotiating the deal with Kushner Companies, Mr. Markman said, he worked with Laurent Morali, the firm’s president.
The deal was “not done because of the so-called connections of Jared Kushner or Donald Trump,” Mr. Markman said. “The connection to the president was not an issue. It didn’t make us do the deal, it didn’t make us not do the deal.”
Mr. Kushner resigned as chief executive of Kushner Companies when he joined the White House last January. But he remains the beneficiary of a series of trusts that own stakes in Kushner properties and other investments. Those are worth as much as $761 million, according to government ethics filings, and most likely much more: The estimate nets out the significant debt accumulated by the firm, which has done about $7 billion of deals in the past decade.
The Baltimore-area buildings in which Menora invested were the subject of an article by a ProPublica reporter in the The New York Times Magazine last year that documented the poor living conditions and aggressive tactics used by Kushner Companies, including garnishing the bank accounts of low-income tenants and turning off heat and hot water.
The White House has said Mr. Kushner would work with his ethics advisers to ensure he recused himself from “any particular matter involving specific parties in which he has a business relationship with a party to the matter.”
But a White House official also said Mr. Kushner had sold stakes in properties that would present unique complexity. For example, he sold his stake in the company’s headquarters at 666 Fifth Avenue in Manhattan, which is seeking new investors around the world.
It is unclear why Mr. Kushner hasn’t applied that same principle to the buildings in Maryland that received an investment from Menora.
Abbe D. Lowell, a lawyer for Mr. Kushner, said in a statement: “Jared Kushner has not been involved in, nor spoken about any Kushner Companies’ activities or project, since shortly before the Inauguration. He has an ethics agreement, reviewed by lawyers, with which he is in full compliance. Connecting any of his well-publicized trips to the Middle East to anything to do with Kushner Companies or its businesses is nonsensical and is a stretch to write a story where none actually exists.”
But Mr. Sanderson, the lawyer who specializes in government ethics, said, “Their standard seems like some version of ‘It’s a conflict when I think it’s a conflict, and I’ll make that judgment myself.’”
One issue, said Robert Weissman, the president of Public Citizen, a nonprofit government ethics group, is that “the ethics laws were not crafted by people who had the foresight to imagine a Donald Trump or a Jared Kushner.”
“No one could ever imagine this scale of ongoing business interests, not in a local peanut farm or a hardware store but sprawling global businesses that give the president and his top adviser personal economic stakes in an astounding number of policy interests,” Mr. Weissman added.
The deal with Menora is one of many financial relationships that Kushner Companies has in Israel.
In April, The Times reported that the Kushners had teamed up with at least one member of Israel’s wealthy Steinmetz family to buy nearly $200 million of Manhattan apartment buildings, as well as to build a luxury rental tower in New Jersey. The family’s best-known member, Beny Steinmetz, is the subject of a United States Justice Department bribery investigation. Mr. Steinmetz has denied any wrongdoing.
Mr. Kushner’s company has also taken out at least four loans from Israel’s largest bank, Bank Hapoalim, which is the subject of a Justice Department investigation over allegations that it helped wealthy Americans evade taxes.
The firm also bought several floors of the former New York Times headquarters building in Manhattan from Lev Leviev, an Israeli businessman and philanthropist.
And the Kushner family’s foundation continues to donate money to a settlement group in the West Bank.
Mr. Kushner’s close relationship with Israeli officials has even come up in the investigation by the special counsel Robert S. Mueller III into Russian interference in the 2016 presidential election.
Michael T. Flynn, the former Trump national security adviser, spoke with the Russian ambassador ahead of a United Nations Security Council vote to condemn Israel’s building of settlements in late 2016, according to court documents filed by Mr. Mueller’s office. Prime Minister Benjamin Netanyahu of Israel had asked the Trump transition team to lobby other countries to help Israel, according to people briefed on the inquiry.
A “very senior member” of the presidential transition team directed Mr. Flynn to discuss the resolution, the court documents said. Mr. Trump’s lawyers believe that unnamed aide was Mr. Kushner, according to a lawyer briefed on the matter.
“A lot of people wonder whether the United States has ever been an honest broker in the Middle East, and given the positions of the Trump administration, it’s probably even more vulnerable to those claims,” said Richard W. Painter, who was the chief White House ethics lawyer for President George W. Bush and is a professor at the University of Minnesota law school.
Now, the United States is “sending over a special envoy who has already identified himself personally more with the hawkish views,” Mr. Painter said, and “he is getting money from wealthy citizens and businesses in one particular country.”
Mr. Painter added: “You’ve got a situation that is going to be abused by people who don’t like the United States. He’s going to make it that much worse.”