Bankers and financiers have long taken an interest in presidential relatives. Like so much else these days, President Donald Trump’s son-in-law, Jared Kushner, inspires a sense of historical déjà vu. In this case, his current situation harkens back to the wheeling and dealing of the late 19th century.
The New York Times reported on Feb. 28 that Apollo Global Management and Citigroup made large loans last year to the heavily indebted Kushner Companies, the family real estate business. That the financiers did so after meeting with Kushner is not unusual. That the meetings took place at the White House was. Supposedly, the meetings and loans were unconnected. The loans, Kushner’s lawyer insists, were never discussed.
Of course not. There was no need to discuss them. That was also the case with the “friendships” between plutocrats and politicians in the Gilded Age. It was never about quid pro quo. Friends simply had understandings; they did each other favors.
Kushner, according to the Washington Post, has also consulted Chinese companies and Russian bankers. It would strain credulity to think that they would ask him for specific favors in exchange for loans — it would also strain credulity not to think more than business was involved. And today, NBC News reported that investigators are looking into whether Kushner's discussions with foreign business contactsprior to the 2016 election later influenced White House policy in any way.
The parallel stories of the Kushners and the Grants revolve around the dangers of nepotism and how loyalties to individuals can replace loyalties to the republic.
The déjà vu here most recalls the troubled presidency of Ulysses S. Grant. The parallel stories of the Trump/Kushners and the Grants revolve around the dangers of nepotism, the mixing of public and private business and how loyalties to individuals can replace loyalties to the republic. They amount to far more than evidence of the persistence of sleaze.
Recent attempts to redeem Grant — as historian Ron Chernow aspired to with his biography “Grant” last year — cannot redeem his administration’s record of corruption. It remains a virtual encyclopedia of what happens when an administration is staffed with cronies, old friends and the occasional relative and when the administration of public affairs is coupled with a search for private profit.
As the insightful political commentator Henry Adams, grandson and great-grandson of presidents, famously claimed, “The progress of evolution from President Washington to President Grant, was alone evidence enough to upset Darwin.” Adams bemoaned the Grant administration’s confluence of presidential relatives, private business and public policy. He pilloried the former Civil War general — and particularly his family — while laying out the story of robber baron Jay Gould’s attempt to corner the gold market in 1869.
The notorious Gilded Age financier had cultivated Grant’s brother-in-law, Abel Rathbone Corbin, whose reputation for rectitude was already tarnished. They talked financial policy and its relation to U.S. trade.
“The progress of evolution from President Washington to President Grant, was alone evidence enough to upset Darwin.”
Gould later said he grew to appreciate Corbin’s “shrewdness and sagacity” — something that had not impressed the plutocrat before Corbin married the president’s sister. When Grant visited his sister’s home in New York, Corbin invited his friend Gould. The robber baron, in turn, later entertained the president.
Gould wanted Corbin to advocate policies to his brother-in-law that would help the financier corner the gold market. He then wanted Corbin to report back what the president thought about this. Gould was also seeking to have someone sympathetic to him appointed assistant Treasury secretary. He got all three.
Gould’s confidence in Corbin led him to proceed with his efforts on the gold front. The scheme was devised to yield a fortune — and Gould included Corbin, Grant’s sister and perhaps even Grant’s wife in the promised profits.
Grant himself was naïve and financially ignorant rather than personally corrupt. But the same could not be said of his relatives. Eventually, the president came to suspect Gould, who overplayed his hand. But Grant was always loyal to his relatives. So he sent advance word that he was planning on going after Gould to his wife, who communicated it to his sister — and Corbin relayed it to Gould. The plutocrat reversed course and Gould escaped the disaster that he had inflicted on so many others.
What is astonishing is that we have been actively unlearning the lessons that served us well.
Whatever the faults of the federal government, it became relatively honest in the 20th century. Americans ended fee-based governance, in which private parties conduct government services at a profit for a fee. We acted against nepotism. We demanded high-ranking public officials distance themselves from their private business dealings and reveal their holdings.
Public officials might advance the interests of the rich over those of the poor. But we still disapproved of their advancing private interests while in office.
What is astonishing is that we have been actively unlearning the lessons that served us well. It’s all back. From fee-based governance, to the “friendships” between the rich and public officials, to lack of transparency, we have reinstituted Gilded Age practices we once banished.
The excesses of Trump and his family, as well as his Cabinet — their first-class and private airline flights, extravagant furniture purchases and self-promotion — unfortunately serve as a kind of low-hanging fruit. It’s harder to discover how our second Gilded Age and its public policies yield deeper transformations that enrich the well-connected and hurt everyone else.
Kushner and Ivanka Trump get paid nothing for their White House positions. But in the information and connections they provide, their duties could be priceless.
Richard White is a history professor at Stanford who has written about the Gilded Age in his books “Railroaded: The Transcontinentals and the Making of Modern America,” and "The Republic for Which It Stands: The United States During Reconstruction and The Gilded Age, 1865-96."