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Guardian

The Problem With Hunter Biden’s Business

The Atlantic

www.theatlantic.com › ideas › archive › 2023 › 08 › hunter-biden-burisma-ukraine › 675081

Attorney General Merrick Garland’s decision to convert the federal prosecutor investigating Hunter Biden into a special counsel ensures that Democrats will be fielding uncomfortable questions throughout the 2024 presidential campaign. They would do well to think before they speak. Asked one such question in a television interview in May, President Joe Biden insisted, “My son’s done nothing wrong.”

But is that true?

It now seems quite likely that Hunter Biden has violated one or more U.S. laws. And that’s not all the wrong he has done. There is a difference between what is technically illegal and what is wrong.

Some context may help explain the chasm that has opened up between the two—the gulf between what most ordinary Americans understand as corruption and the mincing definition that reigns in the professional spheres of politics, the law, and big business.

Since 1987, and most recently in May of this year, a series of Supreme Court cases has relentlessly narrowed the legal definition of corruption. This is the body whose cavalier attitude toward its own ethics has disenchanted many Americans. The Court has whittled down what was once our right to the “honest services” of our public servants to a rule outlawing only the trade of “official acts” performed as part of government duties for money or material gifts. Then the Court chipped away at what counts as an “official act.” Pressuring subordinates or hosting an official lunch? Closing traffic lanes on the busiest bridge in the United States to pursue a political vendetta? In decision after decision, each of these was disqualified.

Almost as stunning as the facts of these cases has been the unanimity of the votes. After John Paul Stevens’s stinging dissent in the first of this series, McNally v. United States, all of the Court’s liberal justices have joined in every decision. Ruth Bader Ginsburg wrote the 2010 opinion in the case of Enron CEO Jeffrey Skilling that limited the honest-services law (which applied to business executives as well as government employees) to bribery and kickback schemes only.

This jurisprudence, as a federal prosecutor once remarked to me, has “made it so only bad criminals can be convicted.” He didn’t mean perpetrators of terrible corruption. He meant perpetrators who are hopelessly incompetent.

[Franklin Foer: Trump thinks he’s found Biden’s greatest vulnerability]

Thanks in part to the Court, a breeding ground has thus opened for activity that does not count as illegal but is wrong. Much of Hunter Biden’s professional life seems to have played out in this arena. That verdict leaps from the pages of his former business associate Devon Archer’s recent testimony to the House Committee on Oversight and Accountability.

Let’s start with the bare fact of Burisma, the Ukrainian energy company that put Archer and Hunter Biden on its board of directors. It did so in the spring of 2014, shortly after the Maidan Revolution toppled the government of Viktor Yanukovych—“a man whose corruption had to be seen to be believed,” as The Guardian later put it. Burisma’s owner was Mykola Zlochevsky, who had been Yanukovych’s minister for natural resources. Zlochevsky had been a target of investigation by Ukraine’s top prosecutor since 2012, for suspected money laundering and self-dealing at Burisma. Some months after the ouster of his former boss, Zlochevsky fled Ukraine. (Ukrainian authorities have effectively suspended their investigation because they were unable to determine his whereabouts.)

I have studied how corruption works in fossil-fuel-rich countries of this ilk and have repeatedly noticed the role of energy or natural-resources ministers. The petroleum minister in Nigeria when I was working there, for example, has been implicated and found liable in multiple bribery schemes. In 2013, the country’s central-bank governor provided evidence to the Senate that close to $1 billion a month in oil revenues had disappeared before reaching the federal treasury.

Other characters, alongside the Ukrainian oil-ministry oligarch, should also have raised red flags for Joe Biden, who was at the time the U.S. vice president—and had just taken on the task for the Obama administration of pressing Ukraine to tackle its endemic corruption. Archer himself is one such character. He was sentenced last year for the crimes of fraud and conspiracy in an unrelated $60 million scheme that launched in early 2014—right about the time that he and Hunter joined Burisma.

Among Archer’s associates was Yelena Baturina, who was the richest woman in Russia and had recently done real-estate business with a company founded by Archer and Hunter Biden. She was married to a former mayor of Moscow named Yuriy Luzhkov, whom the U.S. ambassador to Russia described in a 2010 leaked cable as sitting atop a “pyramid” of corruption and criminal behavior during his time in office. Also in the circle, per Archer’s testimony, was his “good friend” Karim Massimov, who served as intelligence chief and prime minister under Kazakhstan’s notoriously corrupt dictator, Nursultan Nazarbayev, and was investigated in connection with suspected bribery involving both a U.K.-listed Kazakh minerals company and the European aircraft manufacturer Airbus. (Massimov was not charged in either case but was arrested for treason in Kazakhstan in 2022, and received an 18-year sentence earlier this year.)

[Richard V. Reeves: The shame deficit]

Archer’s descriptions of the associates’ activities illustrate what I have found to be the typical modus operandi of such networks. His own corporate holdings, as well as those in which Hunter Biden had a stake, were subdivided and recombined in a dizzying array of similarly named entities that makes any attempt to trace money flows exceedingly difficult. The principals looked outside Europe, the U.S., and Singapore for markets “that were less sensitive,” Archer explained, to public scrutiny of questionable business practices—such as Kazakhstan. “It was pretty wild,” he bragged, citing a hastily assembled lucrative drilling project. “We pulled off a lot.”

According to Archer’s testimony, Massimov and Baturina were among the people present at one of the dinners to which Hunter Biden invited his father; at other gatherings, Hunter would put his dad on speakerphone. Nothing substantive was discussed, Archer testified. But that’s not the point.

The point emerges in the awkward way that the questioners and their witness seemed to talk past each other. Republicans tried to make the Bidens’ behavior fit the narrow definition of corruption under U.S. law, while Archer was candidly describing how it actually works.

Asked whether Hunter might have been explicitly “using his dad [to] add value in the eyes of Burisma officials,” Archer explained the impact of nonverbal signaling. “He would not be so overt,” he said. “It’s pretty obvious if you’re, you know … the son of a vice president.”

I spent a decade in a country where this sort of signaling was the primary mode of communication among members of a corrupt ruling elite. I watched Afghanistan’s President Hamid Karzai send opposing messages to separate audiences during a single speech in 2010. To his international backers, he spelled out his willingness to tackle corruption by calling for new legislation (calculated to appeal to wordy Westerners who love drafting laws). To members of his network, Karzai indicated his intent to keep providing protection by sharing the platform with two notorious warlords, members of his cabinet who were involved in drug trafficking and spiriting away millions of dollars in national revenue.

That Afghanistan experience makes plain to me what was wrong about the Bidens’ behavior, even if it wasn’t illegal. There is absolutely no evidence that Joe Biden, as vice president, changed any aspect of U.S. foreign policy to benefit Burisma or any of its principals. But Hunter Biden’s position on that board of directors served to undermine the very U.S. anti-corruption policy his father was promoting. As George Kent, who then headed the U.S. embassy’s anti-corruption effort in Kyiv, put it in a classified cable:

Hunter’s presence on the Burisma board undercut the anti-corruption message the VP and we were advancing in Ukraine, b/c Ukrainians heard one message from us then saw another set of behavior, with the family association with a known corrupt figure.

To Ukrainian oligarchs, in other words, the U.S. seemed to be sending the same type of conflicting messages Karzai sent: statements for the benefit of a Western audience and nonverbal signaling that conveyed Washington’s real meaning.

“People send signals,” Archer told the House committee. “And those signals are basically used as currency.” Then came his chilling assessment: “And that’s kind of how a lot of D.C. operators and foreign tycoons … work.”

This assessment does not put Kazakhstan or Yanukovych’s Ukraine in a positive light; it puts Washington in a negative one. Archer was saying that our system has come to operate much the same way theirs does. Is that what we want?

[David A. Graham: The Biden White House is following an ugly Trump precedent]

Biden was supposed to be different. Yet his unconditional public support for everything his son has done serves to sanitize and reinforce a business model that provides image-laundering services for foreign kleptocrats and monetizes access to power—or the appearance of such access. For a president and a political party whose brand stresses integrity, that’s a self-inflicted wound.

As tenderly as a father may love his struggling son, the president can do better than parrot the “nothing wrong” chorus. When controversy over Hunter Biden’s work for Burisma erupted during the 2020 presidential campaign, I expressed the hope that his father would use his moral and potential future executive authority to curb that business model. He still can.

Biden can send several clear signals. He should state, as other Democrats have, that not even his son is above the law. He should never again participate in an occasion that Hunter might use to impress his business associates. And he should push for legislation that would close some of the loopholes that Supreme Court decisions have blown in U.S. anti-corruption laws.

As the barrage of discomforting questions intensifies, Biden and his party’s best defense is to take a stand not only for what is legal but also for what is right. Blurring the lines and sending double messages will only add to their difficulties. Worse, it will breed more corruption in our politics.