Between the Rosemont entities and Burnham, Biden and Archer’s business dealings in Kazakhstan were extensive, although specific financial data remains undisclosed. What can be discerned from emails obtained through the Freedom of Information Act (FOIA) is that there was back-channel communication between Kazakh officials and then–secretary of state John Kerry via Devon Archer. Recall that Kerry’s stepson Chris Heinz was a business partner with Biden and Archer in some of their ventures. In an email from July 11, 2013, Kerry chief of staff David Wade writes to Devon Archer, “Devon: understand you spoke to the Secretary re having him call [Kazakh] Foreign Minister Idrisov today, can you let me know topics Idrisov wants to talk about/any requests he’ll have of the boss, so we can get paper prepared for a call. Hopefully, the situation on the home front will leave him time to do it.”99 This email alone makes clear that Archer had direct access to the secretary of state, without the knowledge of his chief of staff, and that Archer acted as a liaison for the Kazakh foreign minister with the secretary of state, all the while receiving funds for his and Hunter’s private deals.
In addition, two Chinese companies also became involved with Burnham. Kirin Global Enterprise Limited, a mysterious investment vehicle run by Xiangyao (or Yaojun) “Larry” Liu and Guo Jianfeng, was one that invested in Biden’s company. Very little is known about Kirin or its two principals, other than the fact that they invest heavily in mainland Chinese real estate.100 Another firm, Harvest Global Investors, a Chinese investment firm linked to the government in Beijing, also worked with Burnham, although it is unclear whether they invested money.101
Kazakhstan and China aside, Burnham Asset Management became the center of a federal investigation involving a $60 million fraud scheme against one of the poorest Indian tribes in America, the Oglala Sioux. Devon Archer was arrested in New York in May 2016 and charged with “orchestrating a scheme to defraud investors and a Native American tribal entity of tens of millions of dollars.” Other victims of the fraud included several public and union pension plans.102 Although Hunter Biden was not charged in the case, his fingerprints were all over Burnham. The “legitimacy” that his name and political status as the vice president’s son lent to the plan was brought up repeatedly in the trial.103
The scheme was explicitly designed to target pension funds that had “socially responsible investing” clauses, including pension funds of labor union organizations that had publicly supported Joe Biden’s political campaigns in the past. Indeed, eight of the eleven pension funds that lost their money were either government employee or labor union pension funds.104 Joe Biden has “a long-standing alliance with labor.” He closely identifies with organized labor. “I make no apologies,” he has said. “I am a union man, period.”105 And many public unions have endorsed him over the years.
The defrauded pension funds included:
Birmingham (Alabama) Water Works Pension Plan
Chicago Transit Authority
Management International Longshoreman’s Association
Milk Drivers Local 246 (an affiliate of the Teamsters)
Omaha, Nebraska, School Employees’ Retirement Fund
Philadelphia Housing Authority
City of Richmond (Virginia) Retirement System
Washington Suburban Sanitary Commission106
Transcripts from Devon Archer’s trial offer a clearer picture of Hunter Biden’s role at Burnham Asset Management, in particular the fact that he used his father’s name and political status as a means of both recruiting pension money into the scheme and alleviating investors’ concerns.107
Hunter Biden had an office at Burnham’s New York City offices on Fifty-Seventh Street.108 During the trial, numerous witnesses came forward describing Hunter’s involvement with the firm. Tim Anderson, a lawyer who did legal work on the issuance of the tribal bonds, recounts seeing Hunter while visiting the Burnham office in New York City to meet with Bevan Cooney, who was later convicted in the case.109
The political ties that Biden and Archer had were considered key to the Burnham brand. As stated in an August 2014 email, Jason Galanis, who was convicted in the bond scheme, agreed with an unidentified associate who also thought the company had “value beyond capital” because of their political connections.110
In the closing arguments at the trial, one of Devon Archer’s defense attorneys, Matthew Schwartz, explained to the jury that it was impossible to talk about the bond scheme without mentioning Hunter Biden’s name. “Mr. Archer responded to further questions. They wanted to know about this too, and one of the reasons—by the way, it was perfectly sensible—was because Hunter Biden was part of the Burnham team. You remember that. You saw on that Teneo slide deck he was going to be the vice chairman. You heard testimony that he was in the office. Mary Moynihan from the BIT board told you they had questions about his commissions and how much he was going to bring in in terms of clients. He was part of this deal. It was sensible to talk about him.” Beyond son Hunter, other family members saw their commercial fortunes rise as they leveraged Joe Biden’s position for their personal benefit.111
* * *
It would be a dream for any new company to announce their launch in the Oval Office at 1600 Pennsylvania Avenue.
StartUp Health is an investment consultancy based out of New York City, and in June 2011 the company barely had a website. The firm was the brainchild of three siblings from Philadelphia. Steven Krein is CEO and co-founder, while his brother, Dr. Howard Krein, serves as chief medical officer. Sister Bari serves as the firm’s chief strategy officer. A friend named Unity Stoakes is a co-founder and serves as president.112
StartUp Health was barely up and running when, in June 2011, two of the company’s executives were ushered into the Oval Office of the White House. They met with President Barack Obama and Vice President Joe Biden.113
It was an “amazing moment,” recalled Unity Stoakes. “We were pinching ourselves.” The following day the new company would be featured at a large health care tech conference being run by the U.S. Department of Health and Human Services (HHS). The meetings at the White House were crucial. Afterward, according to Stoakes, they felt “the wind to our backs.”114
StartUp Health would continue to enjoy access to the highest levels of the White House as they worked to build up the business. Indeed, StartUp Health executives became regular visitors to the White House. According to 2011 White House visitors’ logs, Howard Krein attended the China State Dinner, a White House Staff barbecue, and President Obama’s Motown event. His brother, Steven, had half a dozen other meetings with White House officials.115 Executives were back in June 2014 for a meeting with sixty “health transformers.”116 Howard even had another visit with President Obama on September 25, 2015.117
That first White House meeting in the Oval Office would remain an important touchstone for the company and was a key component in the way they presented themselves to potential investors and partners. In 2019, they were still touting it publicly as part of the company’s mythology.118
How did StartUp Health gain access to the highest levels of power in Washington? Their status as a health care incubator was hardly unique. In fact, there were thirty-one similar companies operating in the state of California alone, and another eleven in the state of New York.119
So how did the hookup actually happen? At this point, it is important to point out that the chief medical officer of StartUp Health, Howard Krein, is married to Joe Biden’s youngest daughter, Ashley.
“I happened to be talking to my father-in-law that day and I mentioned Steve and Unity were down there [in Washington, D.C.],” recalled Howard Krein. “He knew about StartUp Health and was a big fan of it. He asked for Steve’s number and said, ‘I have to get them up here to talk with Barack.’ The Secret Service came and got Steve and Unity and brought them to the Oval Office.”120
Advancing the commercial interests of StartUp Health using the Oval Office and Air Force Two would continue over the next half-decade while Biden wa
s in office. Dr. Krein, who started dating Ashley in 2010 and married her in 2012, joined the Biden inner circle, even serving as a pallbearer at Beau Biden’s funeral in 2015.121
StartUp Health describes itself as an investor in health care companies and an incubator. This is no charity. The firm offers to provide new companies technical and relationship advice in exchange for a stake in the business. Newly launched health-technology companies that want help from StartUp Health are expected to offer the firm 2 to 10 percent equity in their company.122 Demonstrating and highlighting the fact that you can score a meeting with the president of the United States certainly helps prove a strategic company asset: high-level contacts.
Vice President Joe Biden continued to help Krein promote his company through his last months in the White House. In 2016, the vice president took his son-in-law to the Vatican for a conference on regenerative medicine attended by Pope Francis. Hunter Biden was also on the trip. After arriving on Air Force Two, Vice President Biden gave a keynote speech. Pope Francis also offered his thoughts on the challenges of health care and decried profit-driven research. Conference attendees included a who’s who of scientific researchers in medicine from around the world.123
The vice president was still not finished helping to boost his son-in-law’s business.
The following month, Krein was given the honor of introducing Vice President Biden at a major data conference first organized by the Obama administration in 2016 called Health Datapalooza.124 Then, in October 2016, Biden made a joint appearance with StartUp Health’s Steve Krein at the Cleveland Clinic’s Medical Innovation Summit.125 In January 2017, in his final days in the Obama administration, Biden made a surprise appearance at the StartUp Health Festival in San Francisco. The corporate event, which is open only to StartUp Health members, included the vice president chatting in a closed session with the 250 people in attendance.126
Once Biden left the vice presidency, he continued to speak for his son-in-law’s company. In January 2018, the now-former vice president delivered the keynote at the StartUp Health Festival. The following year it was Jill Biden’s turn to deliver a speech there.127
* * *
Joe Biden’s younger brother, James, has been an integral part of the family political machine from the earliest days when he served as finance chair of his 1972 Senate campaign. Joe and James have remained close. After Joe joined the U.S. Senate, he would bring his brother James along on congressional delegation trips to places like Ireland, Rome, and Africa.128
James Biden’s beach house on Keewaydin Island, Florida, was a Biden gathering place during the vice presidential years. An exclusive island off the coast of Naples, Florida, the five-acre property became known locally as the Biden Bungalow. During the Christmas 2013 holiday, for example, the vice president and the Biden family gathered there.129 As might generally be expected, James was welcome as well to the White House, including attending the visit of Pope Francis in September 2015. How many times James Biden visited the White House is not clear even by examining the White House visitors’ logs. In 2011, for example, he was photographed attending a state dinner at the White House, but his name did not appear in visitors’ logs for the event.130
Where James Biden’s visits to the White House become pertinent to this analysis is where Joe secured James’s inclusion at important White House functions that dovetailed with James’s overseas business dealings. As we will see, James Biden’s commercial opportunities flourished when his brother became vice president, continuing to show a pattern of Joe’s public power being leveraged for his family’s material gain. As with Hunter and Ashley, James profited handsomely during Joe’s tenure as vice president.
Consider the case of HillStone International, a construction firm created in 2010 as a subsidiary of Hill International. Hill International began losing money in 2011. It had been launched back in 1976, and founder Irv Richter quickly became a major campaign contributor to the New Jersey Democratic Party. He was not shy about the fact that political connections had built his construction business. As he once told the Philadelphia Inquirer: “If your competition has access because they’ve been political contributors, and you don’t, you’re going to be at a serious disadvantage.”131
The president of HillStone International was Kevin Justice, who grew up in Delaware and was a longtime Biden family friend. He was friends with lots of Bidens, especially Joe’s sons Hunter and Beau. On November 4, 2010, according to White House visitors’ logs, Justice visited the White House and met with Michele Smith in the Office of the Vice President. Smith was an advisor to the vice president.132 Less than three weeks later, HillStone announced that the vice president’s brother James would be joining the firm as an executive vice president. James appeared to have little or no background in housing construction, but that did not seem to matter to HillStone. His bio on the company’s website noted his “40 years of experience dealing with principals in business, political, legal and financial circles across the nation and internationally” that “enable him to understand the needs and perspectives of government, financial and development leaders to effectively negotiate and implement low-cost housing objectives both domestically and abroad.” His company bio added that at “the age of 22, [James] Biden was the finance chairman of his then 29-year-old brother’s bid for a U.S. Senate seat in Delaware and successfully enlisted the support of national unions, political leaders and financiers across the country.”133
James Biden was joining HillStone just as the firm was starting negotiations to win a massive contract in war-torn Iraq. Six months later, they announced a contract to build 100,000 homes. It was part of a $35 billion, 500,000-unit project deal won by TRAC Development, a South Korean company. HillStone also received a $22 million U.S. federal government contract to manage a construction project for the State Department.134
David Richter, founder Irv’s son, was not shy in explaining HillStone’s success in securing government contracts. It really helps, he told investors at a private meeting, to have “the brother of the vice president as a partner,” according to someone who was there.135
David Richter talked about having James Biden on the payroll and what it meant. “He knows how to deal with government officials; that’s his skill,” he said. “He makes people from foreign countries comfortable we’re not going to steal their money. After all, he’s also been with his brother a long time.”136
The Iraq project was massive, perhaps the single most lucrative project for the firm ever. In 2012, Charlie Gasparino of Fox Business reported that HillStone officials said that the Iraq project was expected to “generate $1.5 billion in revenues over the next three years.” That amounted to more than three times the revenue the company produced in 2011.137
A group of minority partners, including James Biden, would split about $735 million. “There’s plenty of money for everyone if this project goes through,” said Irv Richter.138
A South Korean construction company won the contract on which Hill and HillStone would work. Only months after the deal’s announcement, James Biden and his wife, Sara, showed up at the White House as guests for an official state dinner. It just happened to be a state dinner honoring the then-president of South Korea, Lee Myung-bak.139
The deal was all set, but HillStone made a crucial error. In 2013, the firm was forced to back out of the contract because of a series of problems, including a lack of experience by Hill and TRAC Development, according to Irv Richter. But it continued doing significant contract work in the embattled country, including a six-year contract with the U.S. Army Corps of Engineers.140
James Biden remained with Hill International, which accumulated contracts from the federal government for dozens of projects, including projects in the United States, Puerto Rico, Mozambique, and elsewhere.141
The Bidens leverage political power not only for generating deals, but also for the opportunities to quietly develop the financial resources of wealthy friends for the benefit of the family. Friends that
help the Bidens can count on Joe to grant them governmental favors. Consider the case of a businessman named John Hynansky.
A car dealer from Delaware, Hynansky and his family have officially poured tens of thousands of dollars into Joe Biden’s campaign coffers over the years. More than just a donor, he is a Biden friend and has helped the Biden family out financially as well.
On July 22, 2009, Vice President Biden was in Kyiv, Ukraine, as part of his first visit to the country during the Obama administration. A large crowd of citizens and businessmen gathered on a beautiful warm summer morning to hear him speak. During his speech, Biden singled out John Hynansky as “my very good friend,” describing him before the large crowd as “a very prominent businessman from Delaware . . . I had breakfast with him the other day.”142
Hynansky is well known in Ukraine. Shortly after the fall of communism, he moved into the country as an automobile importer and car dealer.143
Hynansky had ambitions to expand his business in Ukraine and the Obama-Biden administration was willing to help. Three years after that speech, in July 2012, the federal government’s Overseas Private Investment Corporation (OPIC) announced that it was providing Hynansky’s company with a $20 million loan so that he could grow his import dealership in Ukraine. According to OPIC, the loan was to “expand Winner Import Ukraine’s automobile business, [and] construct and operate ‘Winner Autocity,’ which will have two new, state-of-the-art dealership facilities for Porsche and Land Rover/Jaguar Automobiles.” What is unusual, and as OPIC made clear, is that the loan would not actually create any American jobs; the cars to be sold in Ukraine were European luxury vehicles built in other countries. The best it could claim was that the taxpayer-backed loan would not cost any American jobs.144
Profiles in Corruption Page 7