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Hunter
Biden’s business interests often show up in unexpected
places. Now, they are at the centre of the biggest political crisis
of the Trump presidency and the fourth impeachment inquiry in US
history.
The
son of Joe Biden, former vice-president and 2020 presidential
candidate, Hunter Biden’s business ties are under scrutiny after Donald
Trump leaned on the president of Ukraine to investigate his activities
in the country. Mr Trump has also publicly called on China to
investigate the Bidens.
The
Ukraine revelations have led House Democrats to open an impeachment
inquiry against the president, but the nature of Hunter Biden’s business
dealings in Ukraine, China and further afield raise questions about
potential conflicts of interest while his father was in office. The
Bidens have denied any wrongdoing.
In addition to his ties to Ukraine through Burisma, the scandal-plagued gas company, and politically connected business ventures in the US, public records show that Hunter Biden still sits on the board of BHR Partners, a private investment fund backed by a number of Chinese state entities including Bank of China, China Postal Savings Bank and China Development Bank.
Here, the Financial Times examines Hunter Biden’s business ties at home and abroad:
Burisma Holdings
NATURAL GAS | UKRAINE
Hunter’s Role: Board member 2014-April 2019
Remuneration: Reportedly $50,000 per month
Remuneration: Reportedly $50,000 per month
Burisma,
Ukraine’s leading privately owned natural gas producer, obtained some
of its most prized production assets while its founder Mykola Zlochevsky
headed a ministry that doled out gas licences under the
kleptocratic administration of ex-president Viktor Yanukovich. After Mr
Yanukovich fled to Russia in 2014, investigators started probing the
company.
That
year Burisma appointed prominent westerners to its board, including
Hunter Biden, who reportedly earned $50,000 per month for this role. Mr
Trump’s calls for his Ukrainian counterpart Volodymyr Zelensky to
investigate Burisma over links to Joe Biden, his potential Democratic
rival in next year’s presidential election, triggered the impeachment
probe.
In
tweets and in a July phone call with Mr Zelensky, Mr Trump and Rudy
Giuliani, his personal lawyer, alleged that Joe Biden protected Burisma
and his son’s interests while he was vice-president. Ukraine’s western
backers deny this narrative.
Paradigm Companies LLC
HEDGE FUND | US
Hunter’s Role: 2006-2010
Remuneration: Reportedly $1.2m annual salary
Remuneration: Reportedly $1.2m annual salary
In
2006, Hunter Biden acquired a stake in Paradigm, a hedge fund group,
following a failed attempt to buy the entire company through LBB, a
limited liability partnership set up with his uncle James Biden. Hunter
Biden recently told the New Yorker that, while the failed deal sounded
“super attractive”, it fell apart after he and his uncle learned that
the company was worth less than they had thought.
Both
James and Hunter Biden faced a lawsuit from Anthony Lotito Jr, a former
business partner, who accused them of defrauding him over the failed
deal. The Bidens countersued Mr Lotito, accusing him of hiding company
debts and falsely claiming he held securities licences. An independent audit
of the fund conducted in 2008 found accounting problems at the firm
including “failure to timely prepare financial statements” and “failure
to reconcile Investment Advisors reimbursement of fund expenses”.
Paradigm
itself was founded by James Park in 1991, the son-in-law of one of the
founder’s of the Korean Unification Church, which some have called a
cult. In 2009, a fund run by Paradigm became associated with Allen
Stanford, a Texas financier, who was later convicted of running an $8bn
Ponzi scheme. Stanford’s company was responsible for marketing one of
Paradigm’s funds of hedge funds, and also invested millions of dollars
in it. At the time, a lawyer representing Paradigm said neither Hunter
nor James Biden had ever met Stanford.
The Bidens filed for voluntary liquidation of the company in 2010.
Seneca Global Advisors
CONSULTING | US
Hunter’s role: Founder, 2008 onwards
Remuneration: Unknown
Remuneration: Unknown
Hunter
Biden launched his consultancy in September 2008, weeks after his
father Joe Biden had been announced as Barack Obama’s running mate on
the Democratic presidential ticket. Mr Obama was elected president in
November 2008, with Joe Biden as his vice-president.
The
consultancy pitched itself as a firm that could help small and midsized
companies expand across the US and into foreign markets. Clients included Achaogen,
a pharmaceutical company focused on anti-bacterial treatments that
filed for bankruptcy in April 2019, and GreatPoint Energy, an energy
technology start-up.
In
2012, GreatPoint received a $420m investment from China Wanxiang
Holdings, an industrial conglomerate. It was the largest venture capital
investment into the US that year. It is unclear if Hunter Biden was
directly involved in securing this investment.
Rosemont Seneca Partners
INVESTMENT FUND | US
Hunter’s role: Co-founder, since 2009
Remuneration: Unknown
Remuneration: Unknown
Hunter
Biden co-founded Rosemont Seneca Partners in 2009 with Christopher
Heinz, stepson of John Kerry, the former secretary of state, and scion
of the Heinz processed food fortune, and Devon Archer, a financier and
former Abercrombie & Fitch model who attended Yale with Mr Heinz.
In
2014, Rosemont Seneca was involved in an attempted $1.5bn fundraise for
a new fund launched by Harvest Fund Management and Bohai Industrial
Group, the Chinese asset manager, according to a Wall Street Journal
report at the time. The Bank of China International Holdings was one of
the biggest stakeholders in Bohai at the time.
Mr
Archer first connected with Mykola Zlochevsky, co-founder of the
Ukrainian gas company Burisma, in 2014 when he travelled there to pitch a
Rosemont-linked real estate fund that he managed. Mr Archer joined
Burisma’s board in 2014. Hunter joined soon after.
BHR Partners
INVESTMENT | CHINA
Hunter’s role: Director, 2013 to present
Remuneration: Unknown
Remuneration: Unknown
BHR
Partners, of which Hunter remains a director, is a private investment
fund backed by some of China’s largest state banks, local government and
the national pension fund.
At
its inception in 2014, BHR listed Rosemont Seneca Thornton LLC, an
investment firm co-founded by Hunter Biden, as a shareholder that owned
30% of the fund.
A
year later, the two partners in RST, a consortium of Rosemont Seneca
and Thornton Group, a Massachusetts-based firm with local political
ties, split their shares in BHR. Rosemont Seneca took 20% and Thornton
10%. Rosemont Seneca unloaded its BHR stakes in 2017, while Thornton
kept its shares.
BHR
is known for being an early investor in some of the fastest-growing
technology start-ups, including Didi Chuxing, the digital transport
group. It has also invested in Megvii, a facial recognition start-up
whose technology has been used in Chinese government surveillance of
Uighur populations in China’s western provinces.
Li
Xiangsheng, CEO of BHR, told local media that the fund’s strong
government background would allow it to make super-big investments,
saying the fund could take loans from its shareholders such as China
Development Bank and Bank of China to complete transactions.
The New Yorker reported in July that Hunter and his partners said they had not yet received a payment from BHR.
Additional reporting and production by Adrienne Klasa
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