The troubling reason why Biden is so soft on China
The troubling reason why Biden is so soft on China
Perhaps Bidenâs insouciant attitude toward the Chinese government has to do with the fact that his family does not consider them competitors but business partners.
Why is Joe Biden so warm toward China?
Last week, Biden raised eyebrows when he shrugged off concerns over the China threat. “Come on, man,” Biden said. “I mean, you know, they’re not bad folks, folks. But guess what, they’re not competition for us.”
Perhaps Biden’s insouciant attitude toward the Chinese government has to do with the fact that his family does not consider them competitors but business partners.
In 2013, then-Vice President Joe Biden and his son Hunter Biden flew aboard Air Force Two to China. Less than two weeks later, Hunter Biden’s firm inked a $1 billion private equity deal with a subsidiary of the Chinese government’s Bank of China. The deal was later expanded to $1.5 billion. In short, the Chinese government funded a business that it co-owned along with the son of a sitting vice president.
If it sounds shocking that a vice president would shape US-China policy as his son — who has scant experience in private equity — clinched a coveted billion-dollar deal with an arm of the Chinese government, that’s because it is.
Until the publication of my book, “Secret Empires,” no one knew the deal took place. Indeed, it took me and a team of seasoned investigators nearly two years to unearth and report the facts.
Without the aid of subpoena power, here’s what we know. The businesses of Hunter Biden and his partners created a series of LLCs involved in multibillion-dollar private equity deals with companies owned by the Chinese government.
The centerpiece of these deals is Rosemont Seneca Partners, an investment firm controlled by Hunter Biden and his associates: Chris Heinz, who is John Kerry’s stepson, and Heinz’s longtime associate Devon Archer. The trio founded Rosemont Seneca in 2009 and quickly began making deals through a series of overlapping entities under the Rosemont name.
Less than a year after opening Rosemont Seneca’s doors, Hunter Biden and Archer were in China meeting with top Chinese officials. To assist in their new venture, they partnered with a Massachusetts-based consultancy called the Thornton Group, headed by James Bulger, son of former Massachusetts state Sen. Billy Bulger. James Bulger has the dubious honor of being named after his uncle, the notorious mob hitman James “Whitey” Bulger.
The Thornton Group’s account of the meeting on their Chinese-language Web site is telling: Chinese executives “extended their warm welcome” to the “Thornton Group, with its US partner Rosemont Seneca chairman Hunter Biden (second son of the now Vice President Joe Biden).”
The purpose of the meetings was to “explore the possibility of commercial cooperation and opportunity.” Curiously, details about the meeting did not appear on their English-language Web site.
The timing of this meeting was also notable. It occurred just hours before Hunter Biden’s father, the vice president, met with Chinese President Hu Jintao in Washington as part of the Nuclear Security Summit.
Twelve days after Hunter stepped off Air Force Two in Beijing, his company signed a historic deal with the Bank of China, the state-owned financial behemoth often used as a tool of the Chinese government. The Bank of China had created a first-of-its-kind investment fund called Bohai Harvest RST (BHR). According to BHR, one of its founding partners was none other than Rosemont Seneca Partners LLC.
It was an unprecedented arrangement: the government of one of America’s fiercest competitors going into business with the son of one of America’s most powerful decisionmakers.
Chris Heinz claims neither he nor Rosemont Seneca Partners, the firm he had part ownership of, had any role in the deal with Bohai Harvest. Nonetheless, Biden, Archer and the Rosemont name became increasingly involved with China. Archer became the vice chairman of Bohai Harvest, helping oversee some of the fund’s investments.
Troublingly, some of those investments had major implications for national security.
In December 2014, BHR became an “anchor investor” in the IPO of China General Nuclear Power Corp. (CGN), a state-owned energy company involved in the construction of nuclear reactors. In April 2016, the US Justice Department would charge CGN with stealing nuclear secrets from the United States — actions prosecutors said could cause “significant damage to our national security.”
Of particular interest to CGN were sensitive, American-made components that, according to experts, resembled components used by the US on its nuclear submarines.
That Hunter Biden had no experience in China, and little in private equity, didn’t dissuade the Chinese government from giving his company a business opportunity in place of established global financial brands like Morgan Stanley or Goldman Sachs. In fact, the Chinese government wasn’t done funding deals with Hunter Biden.
Also in December 2014, a Chinese state-backed conglomerate called Gemini Investments Limited was negotiating and sealing deals with Hunter Biden’s Rosemont on several fronts. That month, it made a $34 million investment into a fund managed by Rosemont.
The following August, Rosemont Realty, another sister company of Rosemont Seneca, announced that Gemini Investments was buying a 75 percent stake in the company. The terms of the deal included a $3 billion commitment from the Chinese, who were eager to purchase new US properties. Shortly after the sale, Rosemont Realty was rechristened Gemini Rosemont.
Chinese executives lauded the deal.
“Rosemont, with its comprehensive real-estate platform and superior performance history, was precisely the investment opportunity Gemini Investments was looking for in order to invest in the US real estate market,” declared Li Ming, Sino-Ocean Land Holdings Limited and Gemini Investments chairman. “We look forward to a strong and successful partnership.”
The plan was to use Chinese money to acquire more properties in the United States. “We see great opportunities to continue acquiring high-quality real estate in the US market,” one company executive said. “The possibilities for this venture are tremendous.”
Finally, in 2015, BHR joined forces with a subsidiary of Chinese state-owned military aviation contractor Aviation Industry Corporation of China (AVIC) to buy American precision-parts manufacturer Henniges. Because Henniges manufactured technology with possible military applications, the transaction required approval by the Committee on Foreign Investment in the United States. CFIUS reviews are required for business transactions that have potential national security implications.
The Biden-Bank of China fact-pattern is arresting in its bravura and scale. Moreover, it turns out that the Biden dealings didn’t just take place in China, but in Ukraine, as well.
Consider the facts. On April 16, 2014, White House records show that Devon Archer, Hunter Biden’s business partner in the Rosemont Seneca deals, made a private visit to the White House for a meeting with Vice President Biden. Five days later, on April 21, Joe Biden landed in Kiev for a series of high-level meetings with Ukrainian officials. The vice president was bringing with him highly welcomed terms of a United States Agency for International Development program to assist the Ukrainian natural-gas industry and promises of more US financial assistance and loans. Soon the United States and the International Monetary Fund would be pumping more than $1 billion into the Ukrainian economy.
The next day, there was a public announcement that Archer had been asked to join the board of Burisma, a Ukrainian natural-gas company. Three weeks after that, on May 13, it was announced that Hunter Biden would join, too. Neither Biden nor Archer had any background or experience in the energy sector.
The younger Biden, for his part, tried to put the best possible face on the deal. He claimed that by joining the board of the natural-gas producer, he would “contribute to the economy and benefit the people of Ukraine.”
The choice of Hunter Biden to handle transparency and corporate governance for Burisma is curious, because Biden had little if any experience in Ukrainian law, or professional legal counsel, period. But that didn’t stop Burisma from paying the younger Biden what The New York Times has reported was as much as $50,000 a month while the company was under investigation by officials in both Ukraine and abroad.
Joe Biden’s trip to Kiev in March 2016, and his threats to withhold $1 billion in foreign aid if Ukrainian officials didn’t dismiss the country’s top prosecutor, Victor Shokin, take on added meaning when you consider that Shokin’s office had been leading an investigation into Burisma’s owner.
According to a recent New York Times report, Biden helped recruit an American consulting firm as well as former Deputy Attorney General John Buretta to help Burisma fight corruption charges. In an interview with the Kyiv Post, Buretta described his negotiations with Yuriy Lutsenko. Lutsenko became Ukraine’s general prosecutor after Joe Biden had lobbied for his predecessor’s removal. Apparently, the negotiations worked as the case was dismissed in the fall of 2016.
Joe Biden later bragged about his efforts to get Shokin removed, though he claims Shokin’s removal was needed due to his mishandling of a number of cases in Ukraine. Hunter Biden insists he never spoke to his father about the investigation into Burisma.
Will the Senate investigate Joe and Hunter Biden’s actions in China and Ukraine? We don’t know, but they should. If a two-year investigation of President Trump, Russia and the Trump family was justified to ensure the president isn’t compromised, an investigation into Joe Biden, China, Ukraine and the Biden family is imperative.
Peter Schweizer is the author of “Secret Empires: How the American Political Class Hides Corruption and Enriches Family and Friends” (Harper). His newest project is The Drill Down, an investigative video project dedicated to exposing cronyism and corruption.