Profiles in Corruption

by Peter Schweizer

  SEIU leaders hated Prime Healthcare. The nonprofit chain had a good working relationship with many unions, including the California Nurses Association, but SEIU was not among them. SEIU wanted full unionization of all of Prime’s California hospitals. They also wanted to unionize the nurses under their UHW, but the CNA already represented the nurses at Prime.139

  Public hearings were held in the affected communities by Daughters of Charity, and there was “overwhelming support” for the sale of DCHS to Prime.140

  But the nonprofit chain refused SEIU’s demands.141

  According to a lawsuit file by Prime Healthcare, SEIU officials boldly told the head of Prime Healthcare that unless they allowed their union to take over representation of the nurses, Harris would not approve the deal. If true, it was an extraordinary statement from union officials: they would dictate the regulatory approval of the transaction.142

  Prime Healthcare also alleged that Harris’s office informed advisors for DCHS that the attorney general would approve the deal only if Prime allowed SEIU-UHW to unionize the chain.143 The Daughters of Charity ended up filing a lawsuit against the SEIU-UHW accusing the union of extortion.144

  The Prime Healthcare complaint against Harris claimed that on February 20, 2015, Harris publicly “approved” the transaction, but put impossible conditions on the deal. These were essentially “poison pill” requirements that her office knew would not be approved by Prime Healthcare. Indeed, the list of three hundred conditions was seventy-seven pages long. Furthermore, those conditions were nonnegotiable. The attorney general of California had never imposed such conditions on a hospital sale before. The consultant that Harris had brought in to review the deal had not suggested these conditions, according to the complaint. Indeed, senior executives from Harris’s office allegedly informed Prime Healthcare that the conditions “were from the Attorney General, herself.”145

  This was not the first time Harris had allegedly blocked a deal involving Prime Healthcare, which claimed that back in 2011, SEIU officials took credit for getting Harris to block Prime Healthcare’s acquisition of Victor Valley Community Hospital (VVCH). Although the independent consultant hired by Harris’s office had allegedly recommended approving the deal, the attorney general said no.146

  Instead, the complaint alleged that Harris wanted Victor Valley Community Hospital to support a bid by a competitor, KPC Global. She placed no conditions on the KPC Global purchase—even on fees or reimbursements—even though VVCH was a nonprofit hospital. When Victor Valley Hospital board members protested the decision, Harris allegedly threatened them with criminal investigations from her office and possible termination from the hospital board.147

  SEIU leaders bragged to hospital executives about their power. On July 24, 2014, union boss Dave Regan told Dr. Prem Reddy, head of Prime Healthcare, that as long as the nonprofit resisted his efforts to unionize the hospitals, there would be no Prime Healthcare deals in California. He allegedly told Reddy that Harris was “his politician” and she “would do what [he] told her to.”148

  For the Daughters of Charity deal, SEIU favored a strange alternative, which, as alleged by Prime Healthcare, demonstrates where their interest actually stood. They did not push for a nonprofit chain like Prime Healthcare to take over the Charity hospitals; instead, they pushed for a New York City–based investment fund called Blue Wolf Capital Partners. The private equity firm had zero experience in operating hospitals. What they did have was close ties to organized labor and the Democratic Party.149

  The Blue Wolf deal never materialized, but Harris had other ideas.

  Having squelched the purchase of a nonprofit hospital chain by another nonprofit chain, Harris then jumped and offered conditional approval for Blue Mountain Capital to manage the hospital through one of its subsidiaries.150 The deal was quite extraordinary and frankly bizarre, even though, unlike what Prime Healthcare had proposed, it would maintain the hospitals as nonprofit entities. Blue Mountain Capital had a hard-charging reputation in financial circles and had been neck-deep in the credit swap debacle back in 2008.151 And in this particular case, Harris was approving a deal that was far worse for patients, according to Prime Healthcare’s complaint. She allowed Blue Mountain to cut services that Prime Healthcare had promised to keep open. For Prime Healthcare, she had said that women’s health services were required to remain open, for example, something that Prime Healthcare said it would do. Harris was allegedly allowing Blue Mountain Capital to close such services.152

  Harris’s approval of the purchase was remarkable. “I cannot recall a hedge fund incursion of any scale, let alone on this scale,” said Richard B. Spohn, a partner in the law firm Nossaman LLP’s health care practice. “It’s anomalous and it’s portentous in sort of an ominous way. The monetization of nonprofit assets in this fashion is worrisome.”153

  Blue Mountain Capital is headed by Andrew Feldstein, who has donated hundreds of thousands of dollars to the Democratic Party. His wife, Jane Veron, is also a major donor to the party, contributing tens of thousands of dollars.154

  Harris has used her powers as a prosecutor to leverage her rise to power, and protect corrupt allies and friends. But sometimes leverage is exercised through the proxy of family.

  3

  Joe Biden

  Gritty Joe Biden from Scranton, Pennsylvania, has been part of America’s political life since 1972, when at just age twenty-nine he was elected to the U.S. Senate. America watched Joe Biden bury his first wife and daughter following a tragic automobile accident right after his election and shortly before Christmas.1 America’s heart went out to him again as Vice President Biden buried another child, son Beau Biden, when he died from brain cancer in 2015.2

  Joe Biden has been on the stage—sometimes in a lead role—in every major national political drama since Watergate. As he recounts in his memoir: “As a United States senator I’ve watched (and played some small part in) history: the Vietnam War, Watergate, the Iran hostage crisis, the Bork nomination, the fall of the Berlin Wall, the reunification of Germany, the disintegration of the Soviet Union, 9/11, two wars in Iraq, a presidential impeachment, a presidential resignation, and a presidential election decided by the Supreme Court.”3Although not as ideological as some, he has largely remained “a progressive Democrat to his core.”4

  To any American paying attention to politics, Biden was a familiar figure even before becoming Barack Obama’s choice for vice president in 2008. In part this was because he had served as the longtime chairman of two powerful Senate committees—Foreign Relations and Judiciary—so as Salena Zito notes, “We really have seen Biden’s career unfold on television.”5

  At least we have seen the television-friendly portions of Joe Biden’s political career unfold. Other aspects involving his family’s complex and obscured international deals, leveraged on Joe’s political status and power, have rarely been explored. The Biden family partners are often foreign governments, where the deals occur in the dark corners of international finance like Kazakhstan, China, Costa Rica, Jamaica, Ukraine, and Russia. Some deals have even involved U.S. taxpayer money. The cast of characters includes sketchy companies, violent convicted felons, foreign oligarchs, and other people who typically expect favors in return. Joe’s public power positions Biden family members for highly lucrative deals they likely would not otherwise get. These deals also often occur with the appearance that Joe Biden has done favors for the partners who welcome such family members. These are not a few disparate enterprises, but rather moneymaking ventures that appear to be part of a well-organized family business.

  Joe Biden has insisted in absolute terms that he never discusses family members’ business activities.

  The Biden family’s apparent self-enrichment depends on Joe Biden’s political influence and involves no less than five family members: Joe’s son Hunter, daughter Ashley, brothers James and Frank, and sister Valerie.

  When this subject came up in 2019 he declared, “I never talked with my son or my brot
her or anyone else—even distant family—about their business interests. Period.”6 As we will see, this is an impossibility.

  Biden’s political identity rests on his hardscrabble and humble roots, which create the impression that both he and his family are not interested in money. As one admiring newspaperman puts it: “Biden sweats humanity.”7 Still, he does not necessarily like pedestrian labels. “I am always labeled as the ‘middle class Joe,’ ” he groused in 2014. “In this town, that is not a compliment. It means you are not sophisticated.”8

  The Bidens started out in blue-collar Scranton, Pennsylvania, but in the face of financial hardship, moved to Delaware when he was still young. After first attending the University of Delaware and then law school at Syracuse University, he jumped almost immediately into politics. By the age of twenty-seven, Joe was running for New Castle County Council in Delaware.9 From that beginning, Joe’s political career was a family affair. His younger brothers James and Frank “organized a volunteer army of young people who worked the strong Democratic precincts.”10 When he ran for the U.S. Senate just two years later, James, then just twenty-two years old, was his finance chairman.11 His sister Valerie was his campaign manager. She would go on to lead every one of his political campaigns over the next three decades until his vice presidential run with Barack Obama.12

  From his earliest foray into politics to the present day, Biden’s political life has been fused with his family. From the beginning, the Biden family, as one admiring biographer puts it, “formed the nucleus for [Joe Biden’s] political operations.”13

  The notion of family was deeply embedded in the Biden psyche at an early age. “The single best thing [I learned from my father] is,” Joe’s son Hunter once said, “family comes first. Over everything.”14 This otherwise admirable character quality crosses the line into corruption when political position and vested power become the locomotive of the family money train. Love of family is not a legitimate excuse for the abuse of power.

  The 1972 run for the U.S. Senate was pivotal. Young and little known, Joe was elected to the New Castle County Council just two years earlier. That made him an unusual commodity. In a 1974 interview he described his situation in terms that he now probably regrets. “I’m like the token black or the token woman,” he explained on the PBS program The Advocates. “I was the token young person. I’m a 29-year-old oddball. The only reason I was able to raise the money is that I was able to have a national constituency to run for office, because I was 29.”15

  Biden was remarkably candid in that interview about raising money and his willingness to “prostitute” himself to do it. “You run the risk of deciding whether or not you’re going to prostitute yourself to give the answer you know they want to hear in order to get funded to run for that office,” he explained. “I went to the big guys for the money. I was ready to prostitute myself in the manner in which I talk about it, but what happened was they said, ‘Come back when you’re 40, son.’ ”16

  Despite those early struggles, Biden was able to raise $276,000 for the Senate campaign, a significant sum in 1972 for an election in a small state like Delaware.17 Much of the coordination work was done by his brother James, who as finance chairman worked to enlist “the support of national unions, political leaders, and financiers around the country.”18

  Joe’s opponent was Congressman J. Caleb Boggs, a two-term Republican incumbent for the state of Delaware. He was a World War II veteran who had earned endorsements from labor. In 1972, Joe beat him, winning a close election by 3,000 votes out of 230,000 cast statewide.19

  Thus began his thirty-six years as a U.S. senator until he became vice president.

  Weeks after his 1972 electoral victory and entrance onto the stage of national politics, tragedy struck when, as mentioned earlier, his wife and daughter were killed in a car crash; his two sons were injured. His sister Valerie moved in to help with his boys, Hunter and Beau. Joe would commute home to Delaware from Washington almost every day on Amtrak to be home with them.20 Riding the rails would become a powerful symbol of “Six-Pack Joe.” According to Biden, he has made more than eight thousand trips on Amtrak—although not always in the commuter car. “I can say this now, since they can’t do anything about it, I used to ride in the cab a lot with the engineers.”21 If he was running late, Biden pulled rank. “On many days” he would call the train conductor and the train would be held “until Joe came aboard.” Other rail commuters would just have to wait.22

  The clouds parted in Joe’s personal life a few years later when his younger brother Frank gave him a phone number and suggested he call a girl named Jill. The two had met at school. “You’ll like her, Joe,” Frank said. “She doesn’t like politics.”23

  Joe and Jill quickly became serious, and it was clear that this was going somewhere. The family noticed and brothers James and Frank took her to dinner for some straight talk. “They told me,” Jill later recalled, “it was a dream of this family that Joe would be president, and did I have any problem with that?”24 The dinner was a testament to how the family viewed its fortunes as being tied to Joe’s political rise. Clearly, Biden’s political career was very much a family operation.

  In 1988, when Joe was running for president, he looked to be a favorite. But his campaign was derailed by allegations that he had plagiarized a speech from British politician Neil Kinnock. With the campaign in crisis, his wife Jill, brothers Frank and James, sister Valerie, his parents, and his children all gathered around Joe. The choice to withdraw from the race was a family decision.25

  A Catholic priest married Joe and Jill in 1977 in a ceremony held at the United Nations chapel in New York City.26 They had a daughter, Ashley, in 1981. As the kids grew, they moved into a mansion once owned by the DuPont Company in Greenville, Delaware.27

  * * *

  For the next three decades, Senator Joe Biden became a Washington fixture, accumulating a progressive voting record on a wide variety of issues.28 Other aspects of his voting record suggest the pull of his family’s commercial interests. Senator Biden pushed for the passage of a new bankruptcy law that put him out of step with most of his Democratic Party colleagues.29 He voted against a bill that would require credit card companies to provide better warnings about the perils of making only minimum monthly payments. He was only one of five Democrats to do so.30 During the same period (between 2001 and 2005), son Hunter was receiving consulting fees from the MBNA Corporation, a major Delaware bank and credit card company.31 While sitting on the Senate Judiciary Committee, Senator Biden also worked hard on legislation to deal with asbestos-damage lawsuits.32 It just so happened that son Beau was working for a Wilmington, Delaware, law firm that was handling asbestos litigation cases.33

  In 2001, son Hunter jumped in with both feet when he became a lobbyist with the firm Oldaker, Biden & Belair LLP, with offices on Connecticut Avenue just blocks from the White House.34 Their founder, William Oldaker, also served as a legal advisor to Joe Biden. The boutique firm specialized in “appropriations” lobbying, which meant shaking money loose from the federal government for their clients. They represented lawyers, American Indians, as well as the health care industry. It was located in the same office was the National Group lobbying firm, also run by Oldaker, whose clients included the University of Delaware. Part of their job was submitting “targeted spending items called ‘earmarks’ to Biden’s office.” The arrangement seemed to work quite well until 2006, when the Senate passed an ethics bill requiring senators to verify in writing that they or their families would not benefit from spending items or earmarks that they were pushing. Hunter had to shift gears and leave the appropriations lobbying game.35

  However, Hunter was not done with other types of lobbying.

  An online gambling company run out of Gibraltar named PartyGaming was under federal scrutiny. The Department of Justice had issued subpoenas to more than a dozen banks working with the company. The company needed help in Washington and hired Hunter Biden to lobby on their behalf. It probabl
y did not hurt that his father was the chairman of the Senate Foreign Relations Committee and a senior member of the Senate Judiciary Committee, with oversight of the Department of Justice. In 2008, Hunter eventually dropped his lobbying clients when his dad was announced as Obama’s running mate. Months later, a cofounder of PartyGaming pleaded guilty to violating the Wire Act and agreed to pay a $300 million fine to the U.S. government.36

  * * *

  During his years in the Senate, Biden’s family benefited financially in other ways as he leveraged political power. Joe’s sister Valerie ran all of his senate campaigns, as well as his presidential runs in 1988 and 2008. But she was also a senior partner in a political messaging firm named Joe Slade White & Company; the only two executives listed at the firm were Joe Slade White and Valerie.37 The firm received large fees from the Biden campaigns that Valerie was running. Two and a half million dollars in consulting fees flowed to her firm from Citizens for Biden and Biden For President Inc. during the 2008 presidential bid alone.38 Keep in mind that Joe Slade White & Company worked for Biden campaigns over eighteen years.39

  When Barack Obama selected Joe Biden as his running mate in 2008, it boosted the Biden family fortunes to another level. Now suddenly there were opportunities on a global scale. The executive branch offered an abundance of power to leverage, and the value of the Biden family’s commercial deals, especially those of Hunter, James, and Frank, would skyrocket.

  * * *

  With the election of his father as vice president, Hunter Biden launched businesses fused to his father’s power that led him to lucrative deals with a rogue’s gallery of governments and oligarchs around the world. Sometimes he would hitch a prominent ride with his father aboard Air Force Two to visit a country where he was courting business. Other times, the deals would be done more discreetly. Always they involved foreign entities that appeared to be seeking something from his father. Often, the countries in question, including Ukraine, Russia, and Kazakhstan, had highly corrupt political cultures. In short, Hunter Biden was not cutting business deals in Japan or Great Britain, where disclosure rules and corporate governance might require greater scrutiny.40 These were deals in the truly dark corners of the world.