Valerie Jarrett, a top adviser to President Obama, purportedly saved $200,000 on a Chicago real estate deal by taking advantage of a tax loophole she openly opposes and actively worked to eliminate, according to a watchdog investigation.
The investigation, conducted by the Chicago-based Better Government Association (BGA), focused on the 2013 sale of a $160 million luxury high-rise in which Jarrett pocketed more than $1 million in profits.
Jarrett served as an executive at a Chicago real estate development firm called the Habitat Company prior to joining the White House as a senior adviser to Obama in 2009. While there, Jarrett helped develop a 46-story apartment complex called Kingsbury Plaza that was owned under the name of Grand Kingsbury LLC.
Habitat Grand Kingsbury, LLC--a Habitat Company offshoot--was the managing partner of the high-rise’s development. Jarrett, along with other Habitat executives, co-owned the offshoot and had 20 percent vested interest in the complex -- Jarrett herself owned 10.67 percent of the 20 percent. The remaining 80 percent was owned by the GE pension fund, The Blaze reports.
In 2013, the luxury tower sold for $160 million, according to Illinois land records obtained by BGA. GE received $67.2 million of the sale with $17.4 million going to Habitat. Jerritt walked away from the deal with $1.85 million in profit.
Habitat president Matthew Fiascone told BGA that all executives involved in the deal received carried interest – including Jarrett.
The Blaze further reports:
Jarrett disclosed the earnings in her White House financial disclosure form, checking the $1 million to $5 million category on the form for earnings. Habitat President Matthew Fiascone told the BGA that the partners, including Jarrett, received a carried interest in the deal. Earnings of more than $1 million would be tax discount of $200,000, according to the BGA’s calculations based on land a mortgage records.
The "carried interest tax loophole" is one that she and President Obama have openly opposed for years. Obama says the loophole unfairly helps the "wealthy and well-connected."
The Better Government Association further notes that other federal appointees have been made to divest themselves of any assets that could potentially lead to a conflict.
"Other federal appointees have been forced to divest themselves of assets that could cause a conflict. White House lawyers who reviewed Jarrett’s finances allowed her to keep her interest in the development project that brought her the tax perk, according to records and interviews. There is no record of a White House waiver allowing Jarrett to work on the issue," BGA wrote.
"Jarrett is one of the president’s key point people on the yet-unsuccessful effort to eliminate the loophole enjoyed by executives of hedge funds, private equity businesses and real estate development firms."
The White House responded to an inquiry by The Blaze by stating that Jarrett is against the tax loophole as a policy matter. However, they did not deny that Jarrett had used the loophole.
"Since the beginning of the administration, Valerie Jarrett has been crystal clear about her position when it comes to closing tax loopholes," White House spokeswoman Jen Friedman told The Blaze.
"Like President Obama, she believes that we need to simplify our tax code and make it fairer by eliminating some of the biggest loopholes, and use the savings to responsibly pay for the investments we need to help middle class families get ahead and grow the economy."
"This includes closing wasteful tax loopholes—including the carried interest loophole—which let hundreds of billions of dollars escape taxation each year, to ensure that the wealthiest Americans pay their fair share."