NEW YORK (AP) - A New York City council member launched an investigation Monday into the Kushner Cos.' routine filing of paperwork falsely claiming zero rent-regulated tenants in its buildings, saying that the deception should have been uncovered long ago because the documents are online for all to see.
Councilman Ritchie Torres said the city's buildings department should have spotted the falsified numbers because they were contradicted by tax documents filed with another city agency.
"The scandal is not only the deception of Kushner Cos., the scandal is the dysfunction of the city bureaucracy," said Torres, chair of the city council's investigations committee. "The right hand of city government didn't know what the left hand was doing."
The Associated Press reported Sunday that a tenants' rights watchdog found the Kushner Cos. had filed more than 80 construction permit applications for 34 buildings across the city from 2013-16 stating it had no rent-regulated units. However, tax documents showed more than 300 rent-regulated units.
The falsified documents allowed the Kushner Cos. to escape extra scrutiny during construction projects, when the family real estate developer was run by Jared Kushner, who is now senior adviser to his father-in-law, President Donald Trump. Housing Rights Initiative, a watchdog group, said the falsified documents made it easier for the Kushner Cos. to harass rent-regulated tenants so it could push out low-paying tenants and replace them with higher paying ones.
Current and former tenants of three buildings in Queens once owned by the Kushner Cos. told the AP they were subjected to extensive construction, with banging, drilling, dust and leaking water that they believe were part of targeted harassment to get them to leave.
"It was noisy, there were complaints, I got mice," mail carrier Rudolph Romano said, adding he also bristled at a 60 percent rent increase, a hike the Kushner Cos. contends was initiated by the previous landlord. "They cleaned the place out. I watched the whole building leave."
Tax records show rent-regulated units that numbered as many as 94 when Kushner took over fell to 25 by 2016. The Kushner Cos. sold the three Queens buildings last year for $60 million, nearly 50 percent more than it paid.
"Kushner Cos. made the lives of many of its tenants a living hell," said Aaron Carr, founder of Housing Rights Initiative, which is joining with the Torres committee in the Kushner investigation. Construction harassment is "a tool designed to make the lives of rent stabilized tenants so unbearable, so intolerable that they are forced to give up the most valuable thing one can have in the midst of an affordable housing crisis, affordability."
Also Monday, the office of New York Attorney General Eric Schneiderman said it was also looking into the issue and planned a meeting with tenants' representatives in coming days. Torres and Schneiderman are Democrats.
The Kushner Cos. said in a news release Monday that "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."
The company said it outsources the preparation of such documents to third parties and they are reviewed by independent counsel. "If mistakes or typographical errors are identified, corrective action is taken immediately with no financial benefit to the company," the news release said.
Nearly all the permit applications were signed by a Kushner employee, sometimes by its chief operating officer. None were signed by Jared Kushner himself.
For its part, the New York Department of Buildings said its investigation into the matter is ongoing and it has undertaken a series of steps to spot future false filings. Among them, the department last year launched a program in which examiners cross-check new construction applications against a database of rent-regulated buildings.
Submitting false documents to the city's Department of Buildings for construction permits is a misdemeanor, which can carry fines of up to $25,000. However, real estate experts said it is often flouted with little to no consequences. 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.
Councilman Torres said he would make a criminal referral if he uncovered evidence of criminal wrongdoing.
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.