Eastern Railroad Discussion > STB Filing: Brookfield acquisition of G&W-Qatar & Kushner

Perhaps the most provocative STB filing I've ever seen:

Victoria Dalrymple, a principal in Dalrymple Finance ("Dalrymple Finance provides deep fundamental research to hedge funds and other institutional investors. Our research focuses on finding gaps between public perception and reality. Dalrymple Finance also founded the Responsible Governance and Investment Council.  RGIC focuses on corporate governance issues particularly as they relate to and have an impact on investors in public securities."), files a 242 page Support Statement for Samuel J Trasca's (SMART Transportation Division union) November 18, 2019 Petition for Reconsideration and/or to Revoke the Surface Transportation Board’s October 28, 2019 decision to allow Brookfield Asset Management’s notice of exemption for the acquisition of Genesee & Wyoming Inc. to become effective.

Dalrymple's reason's for protesting Brookfield's acquisition of G&W are:
"...The support petition rests on two facts that directly invalidate the exemption by violating the main governing law of the transaction, the Staggers Act both in its intent and its specific provisions as detailed below:
I. The Pyramid Structure of the Acquirer Is Proven to Be A Priori Anticompetitive
II. There is Evidence of Significant Influence of Foreign Governments over the Acquirer ..."

It's Dalrymple's 2nd point where things get interesting:

"...Qatar’s sovereign wealth fund (QIA) is the largest investor in Brookfield Property Partners, (BPY), a Brookfield Asset Management controlled entity. The QIA’s $1.8 billion investment is guaranteed by Brookfield Asset Management. QIA is also joint venture partners with Brookfield Property Partners on two large real estate developments. On August 3, 2018 a Brookfield controlled investment vehicle closed on the purchase of 666 Fifth Avenue from Jared Kushner for $1.4 billion in cash. The deal was “larger than expected” and controversially viewed as a “bailout” of Kushner’s bad investment. Press reports at the time questioned whether Brookfield was acting on behalf of the Qataris given the extensive relationship. At the time, Brookfield told reporters that the Qataris “had no knowledge of the deal before its public announcement”. Management’s disclosure seems impossible given the terms of the Qatari investment...."

and "...A lawsuit filed in United States District Court, Middle District of Florida contains testimony from a Canadian business man describing how Brookfield was knowingly used as a conduit for the government of Qatar to pay the Kushner family $1.4 billion. It states that the government of Qatar told Brookfield to “find a way to pay Jared Kushner without going by the book”. Brookfield executives did not want to purchase the property because it was “people’s money” and a bad investment. However, the government of Qatar “assured the company of Brookfield that they would ensure the purchase of 666 Fifth Avenue for $1.4 billion if it failed”. The testimony establishes a direct line of influence from a foreign government to Brookfield’s U.S. operations...."

Finally, attached to the STB filing letter is a lengthy transcription of a recorded deposition in front of Toronto Court Reporters Ltd, of Alan Bender, a Kuwait-born Canadian businessman, who has recently attained fame by levying many unverified allegations against U.S. politicians, from Democratic Rep. Ilhan Omar to Kushner (see https://foreignpolicy.com/2019/11/27/qatar-mbs-alan-bender-ilhan-omar-and-jared-kushners-latest-accuser-has-shady-saudi-ties/). 
Not only is the Qatari government involvement with Brookfield's purchase of Kushner real estate to gain White House influence discussed, but several other familiar names pop-up: Giuliani, Ilhan Omar, Linda Sarsour, Hezbollah...

Who would have thought these international politcal machinations would be documented at the US Surface Transit Board? Of course, one wonders how much of Bender's assertions are true? We live in interesting times...

Link to the Dalrymple filing at the STB: https://dcms-external.s3.amazonaws.com/DCMS_External_PROD/1575689279338/300113.pdf



Edited 1 time(s). Last edit at 12/07/19 03:20 by JPB.

Sovereign wealth funds own a significant amount of US company shares. Most are passive, but offending an owner can get sticky.

The SEC database is a treasure trove of dots. Connecting them can be fun.

Posted from Android

In a while we might be watching this play out on national TV.

John.