09:35 GMT +314 November 2019
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    U.S. Vice President Joe Biden and his son Hunter Biden attend an NCAA basketball game between Georgetown University and Duke University in Washington, U.S., January 30, 2010.

    Unfortunate Son: Muddied Waters of Ukraine's Gas Company Burisma & Hunter Biden's Quid-pro-Quo

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    While it is not unusual for the offspring of prominent politicians to capitalise on their family's name, the story of Hunter, the son of former vice president and Democratic presidential candidate, Joe Biden, has all the hallmarks of an international political scandal ironically brought to light by the Dems' impeachment effort against Trump.

    "Don’t worry about investors - we've got people all around the world who want to invest in Joe Biden", according to Politico, these words were said by the politician's younger brother, James Biden, when he and his nephew Hunter embarked on a business venture in 2006.

    The two bought Paradigm Global Advisors, a hedge fund, at the time when Joseph Biden, who represented Delaware in the US Senate from 1973, was a few months away from assuming a position on the Senate Foreign Relations Committee and throwing his hat into the ring during the 2007/2008 presidential election cycle.

    By that time Hunter had behind him experience at the Delaware bank MBNA that hired him fresh from Yale Law School in 1996, a few years at the US Department of Commerce, and time spent as a lobbyist at Oldaker, Biden & Belair.

    Managing Paradigm Global Advisors was not smooth for the Bidens: the hedge fund repeatedly found itself in troubled waters, accused of both alleged and confirmed frauds. So, in 2010 the uncle and the nephew began unwinding the firm.

    Rosemont Seneca, the next endeavour co-founded by Hunter Biden, Christopher Heinz and Devon Archer in 2010 proved much more successful. It managed to strike a $1 billion private equity deal with a state-owned Bank of China subsidiary in December 2013 and gain over $3 million from Ukraine's Burisma Holding in 2015. The striking of lucrative deals by Hunter Biden coincided with his father's tenure as US vice president under Barack Obama.

    Vice President Joe Biden and President Barack Obama react after a heckler is removed from the East Room of the White House.
    © AP Photo / Evan Vucci
    Vice President Joe Biden and President Barack Obama react after a heckler is removed from the East Room of the White House.

    Burisma Holdings' Muddied Waters

    At the time Hunter Biden joined Burisma, the holding had been facing legal difficulties with the UK's Serious Fraud Office (SFO) freezing $23 million in accounts belonging to the company's co-founder, former Ukrainian parliamentarian and government official Mykola Zlochevskiy, under suspicion of corruption.

    Zlochevsky established Burisma as an off-shore company in Cyprus in 2002. While serving as a chairman of the State Committee for Natural Resources from 2003 to 2005 under president Leonid Kuchma and then as minister of environmental protection and minister of the environment and natural resources from 2010 to 2012 under President Viktor Yanukovich, Zlochevsky managed to get over three dozen licenses for hydrocarbon production. This allowed his company to embark on gas production in Ukraine’s main basins starting from 2006.

    The SFO insisted that the former politician's assets were "unlawfully acquired as a result of misconduct in public office".

    Burisma Holdings has always been anything but transparent. The company does not disclose its financial results, while its site does not contain any information concerning its asset history, registration data or financial accounts. While the holding names KPMG – one of the Big Four accounting organisations, along with Deloitte, Ernst & Young, and PricewaterhouseCoopers – as its auditor, it does not release audited statements of its financial condition.

    The New Yorker recalled that before joining the holding's board in April 2014, Hunter Biden recommended that New York-based law firm Boies Schiller Flexner where he was "of counsel" assessed Burisma's "history of corruption". To that end Boies Schiller hired the investigative agency Nardello & Co. Three months after Biden assumed a director position in Burisma Nardello warned in a draft report that Zlochevsky could be "vulnerable to investigation for financial crimes" and for "perceived abuse of power." However, none of this discouraged Hunter Biden from serving in the company.

    Why Burisma Wanted Hunter

    Burisma had good reasons to request help from the well-positioned American. The 2014 February coup in Ukraine, also known as Euromaidan, resulted in the ouster of Viktor Yanukovich and triggered the re-distribution of power and wealth among Ukrainian oligarchs and their cronies. Zlochevsky, who came to prominence as one of Yanukovich's top ministers, found himself on thin ice.

    As cited by Reuters, Oleksandr Onyshchenko, a businessman and former member of the Ukrainian parliament, alleged that Zlochevsky brought Biden as well his business associate Devon Archer and former president of Poland Aleksander Kwaśniewski to the board of Burisma "to protect (the company)" from potential prosecution.

    In addition, according to a New York Times' December 2015 story, just weeks before Burisma hired Hunter, then Vice President Joe Biden was assigned by President Barack Obama to oversee US-Ukraine relations.

    Zlochevsky loosened his purse to fund his "dream team": according to Ukrainian court documents obtained by Novaya Gazeta, between 18 November 2014 and 16 October 2015, the holding sent $3,404,712.82 to Rosemont Seneca for "consultation services", while a further €1,000,000 went to Aleksander Kwaśniewski, the media outlet says.

    While later both Joe and Hunter Biden denied that they had ever discussed the Burisma issue, a photo featuring the vice president, his son and Devon Archer, who served on the board of the Ukrainian holding together with Hunter, playing golf in August 2014, appears to prove the opposite.

    ​The Washington Post remarked at that time: "The appointment of the vice president’s son to a Ukrainian oil board looks nepotistic at best, nefarious at worst".
    U.S. Vice President Joe Biden and his son Hunter Biden (File)
    © AP Photo / Visar Kryeziu
    U.S. Vice President Joe Biden and his son Hunter Biden (File)

    Hunter Biden's Controversial Record

    According to Reuters, sources close to Burisma described Hunter's role in the company as that of a "ceremonial figure". They elaborated that then vice president's son had not visited Ukraine during his five-year contract with the holding, adding that twice a year he attended Burisma’s board meetings all of which were held outside of Ukraine.

    He was reportedly paid $83,333 per month having expertise neither in energy business nor in Ukraine's affairs.

    Hunter's actual responsibilities at the company also raise questions. On 12 May 2014, Burisma issued a press release saying that Hunter Biden "will be in charge of the holding's legal unit and will provide support for the company among international organisations". However, in his May 2019 interview with The New York Times, Hunter argued that the holding's release was not accurate saying: "At no time was I in charge of the company’s legal affairs".

    To add to the controversy shortly before getting the new job in Ukraine, Hunter was discharged from the US Navy Reserves on 18 February after urine tests indicated cocaine in his system.

    Moreover, according to Business Insider, since 2003, Hunter "was in and out of multiple rehab centers, achieving sobriety for periods of time before relapsing", ending up with being forced out of the Navy. Later his addiction problems became the trigger for a 2017 divorce from his wife Kathleen Biden, who he was married to for 22 years and had three children with.

    The Bidens' 'Shield' & 'Untouchable' Mykola Zlochevsky

    While Reuters argues that Hunter failed to shield the holding from a series of criminal investigations into Zlochevsky started by the Ukrainian and British authorities, the truth of the matter is that all of those probes mysteriously fell apart while Biden was at the helm.

    According to ex-Ukrainian Prosecutor General Yuri Lutsenko's recollection of events outlined in his May 2019 Facebook post there had been three criminal cases targeting Zlochevsky and Burisma, namely tax evasion allegations (Art. 212 of the Criminal Code of Ukraine), money laundering (Art. 209) and misuse of public funds (Art. 191).

    Ukrainian Prosecutor General Vitaly Yarema started looking into the Burisma owner's alleged misconduct in August 2014 and then passed it to Viktor Shokin who became Ukraine’s prosecutor general in February 2015.

    A month earlier, on 21 January 2015, the UK's SFO unblocked Zlochevsky's accounts. Although the British law enforcement agency continued the investigation it ultimately stalled after several months. Speaking to the Guardian in May 2015, a SFO spokesperson bemoaned the fact that the British agency "was not provided with the evidence by authorities in the Ukraine necessary to keep this restraint order in place."

    One of the cases overseen by Shokin – alleging that Zlochevsky had granted licenses to his own company while being a top government official – was suddenly re-directed to Ukraine's National Anti-Corruption Bureau (NABU) in contradiction to Ukraine's law. Lutsenko noted that NABU eventually swept the case under the rug and later closed it.

    According to Shokin's affidavit presented by Donald Trump's attorney Rudy Giuliani earlier this year, the then prosecutor general led a "wide-ranging corruption probe into Burisma Holdings… and Joe Biden's son Hunter Biden [who] was a member of the board of directors".

    Shokin was forced to resign in February 2016 "due to pressure from the US Presidential administration, in particular Joe Biden" who was "threatening to withhold $1 billion in subsidies to Ukraine until [Shokin] was removed from office". The prosecutor's affidavit was partly confirmed by Joe Biden himself who openly bragged about blackmailing Kiev into firing "the son of a b**ch".

    ​As Lutsenko noted in his Facebook post, out of three cases only one, concerning tax evasion, was fullfilled forcing Burisma to pay 180 million hryvnias ($7.17 million) to the state in autumn 2016.

    In a strange twist of fate, however, two years after Joe Biden stepped down, Ukrainian prosecutors opened a new probe into the firm linked to Hunter Biden in February 2019, according to The Hill's John Solomon. After that, in April 2019, Hunter Biden left Burisma's board of directors under the pretext of his father running for presidency.

    Being deprived of its "protection shield" presumably provided by the Bidens, Burisma came into the crosshairs of the new Ukrainian prosecutor, Ruslan Ryaboshapka, who signalled on 4 October that his office was reviewing 15 previous inquires related to Zlochevsky. For its part, NABU signalled on 27 September that its investigation into Mykola Zlochevsky was up and running, adding, however, that it is limited to the time period from 2010 to 2012.

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