Hunter Biden also promised not to do any work for foreign firms if his father, Joe Biden, is elected US president.
Hunter Biden, facing increasing questions about his work for a Chinese investment company, will step down from his position as a board director this month and promised not to do any work for foreign firms if his father, Joe Biden, is elected president, his lawyer said Sunday.
The lawyer’s statement underscored how Hunter Biden’s foreign work has become a major issue in the presidential campaign, raising questions about whether Joe Biden failed to understand the potential for a conflict of interest with his son’s work and setting in motion a chain of events that have led to an impeachment inquiry about President Donald Trump.
Hunter Biden served, starting in 2014, as a paid board member for a Ukrainian gas company, Burisma Holdings, at a time when his father was shepherding US policy in that country, including advocating for increased gas production. He left that position when his father announced his presidential candidacy earlier this year but has retained his role as a director and part owner of the Chinese company.
Trump asked Ukraine’s president in a July 25 phone call to “look into” the Bidens, referring to allegations that Joe Biden pressured Ukrainian officials to fire a prosecutor who was looking into the company where Hunter Biden served as a director. Former Ukrainian and US officials say the prosecutor’s investigation into the company was dormant.
Democrats have launched an impeachment inquiry to determine whether Trump withheld military aid and a White House meeting with the Ukrainian president in a quid pro quo effort to get Ukraine to find dirt on a political opponent.
Trump has denied making a quid pro quo offer. In recent days, Trump has sought to highlight questions about Hunter Biden, asking on Twitter and at a campaign rally last week, “Where is Hunter Biden?”
Hunter Biden’s lawyer, George Mesires, said in the Sunday statement that his client has been the subject of allegations that bear “little resemblance to the public record.”
Mesires did not say how much Hunter Biden earned in his work for Burisma. Some reports have said he was paid as much as $50,000 a month for a directorship that lasted for five years. Mesires said Hunter Biden was paid nothing for his service as a director for the Chinese company and has yet to make a profit from his 2017 purchase of a 10 percent stake in that company, which he said is worth $430,000.
Mesires said that if Joe Biden is elected president, Hunter Biden will abide by any ethics laws imposed by his father’s administration and will not work for foreign companies.
“Hunter makes the following commitment: Under a Biden Administration, Hunter will readily comply with any and all guidelines or standards a President Biden may issue to address purported conflicts of interest, or the appearance of such conflicts, including any restrictions related to overseas business interests,” Mesires said. “In any event, Hunter will agree not to serve on boards of, or work on behalf of, foreign owned companies.”
While Mesires said Biden “intends to resign” from the Chinese company’s board of directors by Oct. 31, he did not say whether Biden would sell his stake in the company. The statement only notes that “he still holds” that stake in a Chinese private equity fund called Bohai Harvest RST Partners, or BHR. Mesires did not immediately respond to questions on Sunday.
Trump also has asked China to investigate the Bidens. As Trump tells it, Hunter Biden “walks out of China with $1.5 billion in a fund, and the biggest funds in the world can’t get money out of China, and he’s there for one quick meeting and he flies in on Air Force Two. I think that’s a horrible thing.” Biden’s lawyer, however, said his client has yet to make a penny.
Some analysts said Hunter Biden created at least the appearance of a conflict of interest by taking his board position at BHR while his father was dealing with China policy.
“It highlights the need for the United States to make disclosure by adult children of officials more transparent,” said Yoshiko Herrera, professor of political science and international relations at the University of Wisconsin at Madison.
Herrera noted Hunter Biden was not required to report that he was a board member of a company connected to the Chinese government when he joined BHR in 2013. But she said such firms “are hiring adult children of officials in order to get access. Even if it is not illegal, it creates an appearance of conflict of interest and in some cases is a conflict of interest.”
Much about Hunter Biden’s China dealings is unknown because many records of the company are not public, and Biden has declined interview requests to discuss his work for the company.
Hunter Biden’s involvement in the company has its roots in 2012, when his father was running for re-election for vice president.
Jonathan Li, a Chinese businessman who would become the chief executive of BHR, was friendly with an American investor named Devon Archer. At the time, Archer was a partner in an investment company with Biden and Chris Heinz, the stepson of Secretary of State John Kerry. Archer had been a co-chairman of Kerry’s 2004 presidential campaign.
Archer saw an opportunity when China announced that it was creating a free-trade zone in Shanghai, creating a test for liberalizing China’s capital accounts. Li, the Chinese investor, would become general manager of BHR, the “first cross-border investment private equity firm” to be registered in Shanghai’s free-trade zone, according to Chinese business-credit record search engine Tianyancha.
In 2012, Li visited Archer in New York City to find a suitable investment partner. He met with Archer, who recommended himself.
“Don’t you think that I’m the most suitable business partner for you?” Archer told Li as they smoked cigars in a Manhattan bar, according to an account in the 21st Century Business Herald, a Communist Party-owned newspaper.
Archer was “very convincing,” the story said, in part because Archer’s company “has a deep network of contacts in US political circles. R. Hunter Biden, the son of US Vice President Biden, is one of the company’s executives.”
In the end, Archer created a new company, which he wholly owned, to form a joint partnership with a Chinese firm run by Li, according to those involved in the deal. Heinz didn’t want to become involved in foreign investments that might raise questions about conflicts of interest and was not part of the China deal, contrary to some reports, according to his spokesman.
It’s not clear whether Hunter Biden did anything other than provide a high-profile name – and a connection to the vice president of the United States – that might lure investors.
“Companies globally all like to have powerful people on the board as these connections help raise capital, smooth joint ventures, and add outside insight,” said Andrew Collier, managing director of Orient Capital Research, a Hong Kong-based consulting firm.
“China is particularly connection-heavy because government relations often spell the difference between success and failure, both in raising money and in getting contracts,” he said. “It’s not clear that Hunter Biden did anything more than put his name on the door of this particular company.”
Li did not respond to phone calls, a fax, emails or a hand-delivered letter requesting comment. BHR took down its website after Trump’s comments attracted attention to the fund. The Washington Post sought to reach Archer for comment through his lawyer, who did not respond to the request.
The joint venture took months to be finalized, but approval was near when Joe and Hunter Biden arrived aboard Air Force Two in Beijing in December 2013. The vice president was in the country for talks with China’s president. He later summarized his talks with the Chinese leader, Xi Jinping, by dismissing the notion that China posed an economic threat to the United States.
“I love reading these stories about how the Chinese are doing so well and the Chinese are going to eat our lunch,” Joe Biden said. The United States is “so much better positioned,” he said, casting China as customer, not a competitor.
The day after Vice President Biden held talks with Xi, he and Hunter were at the hotel where the American delegation stayed. Hunter Biden had arranged to meet with Li, the Chinese investor who would become chief executive of BHR. He introduced Li to his father, according to an account given earlier this year to the New Yorker.
“How do I go to Beijing, halfway around the world, and not see them for a cup of coffee?” Hunter Biden was quoted as saying when asked why he saw Li in Beijing.
Twelve days after the Bidens arrived in Beijing, the BHR business filing was completed. Archer was named vice chairman, and Hunter Biden became a director.
The company had four owners, with a firm run by Archer holding a 30 percent stake. The other partners included Chinese entities with ties to the communist government, including the Bank of China, one of the biggest state-owned commercial banks in the country.
The establishment of the investment fund in China drew attention because state enterprises are usually reluctant to participate in joint funds, regardless of whether they are with local or foreign investors. Li told the 21st Century Business Herald that BHR was not following orders from the government but was a purely market-oriented, for-profit investment fund with decisions made by the board.
Li told Chinese media in 2014 that BHR would invest only in big and influential international projects that are valued at no less than $100 million. The equity firm would not have to worry about funding because “shareholders, including China Development Bank and Bank of China, will be supplying loans to facilitate these massive investment and acquisition projects that other companies would find too expensive to handle,” Li said.
It was particularly important, Li told a Chinese newspaper in 2015, that “because we have US funders, we can solve the problem of the credibility of Chinese investment overseas.” He noted Archer had become a director of the sovereign fund for the Central Asian nation of Kazakhstan, which he said had “opened up our network of contacts.”
An archived version of the company’s website said BHR would focus on mergers and acquisition of business in various countries, which meant that “Chinese companies will … obtain advanced technologies, develop into international brands and expand into overseas markets.”
Shortly after the company was formed, a BHR executive was quoted in the Wall Street Journal as saying the company planned to raise $1.5 billion to invest overseas – a figure that Trump has cited when alleging that Hunter Biden walked away with that much money for the fund.
The archived website shows a picture of Hunter Biden, identified as a director, alongside Archer, the vice chairman, and a number of Chinese executives.
During Hunter Biden’s time as a director of BHR, the company made several deals that have drawn attention from Republicans.
In September 2015, BHR and a partner, Aviation Industry Corp. of China, acquired Henniges Automotive, a US-based company that made parts for high-end cars. BHR bought a 49 percent stake, and Aviation Industry Corp. bought the rest.
The deal drew the attention of Sen. Charles Grassley, R-Iowa, who wrote to the Treasury Department in August saying he was concerned about how the deal was approved.
Grassley raised the possibility that such decisions are subject to political influence. He cited a study that showed that, during the Obama administration, Chinese companies were routinely granted permission to buy US companies by the Committee of Foreign Investment in the United States, a federal panel that reviews transactions involving foreign investment in the United States.
From 2014 to 2016, the last two years of Obama’s second term, the committee approved 99 of 103 China deals, according to a database of publicly known transactions compiled by a law firm that tracks the committee’s decisions.
By comparison, from 2017 to 2018, the first two years of the Trump administration, only 19 of 41 deals were approved. Amid concern that China was gaining too much access to US technology, Congress passed legislation in August 2018 giving the administration more authority to reject foreign investment deals.
Decisions by the committee are confidential, and no records are publicly available about how a decision was approved or whether Hunter Biden played any role. Committee officials did not respond to a request for comment. Henniges did not respond to a request for comment.
Grassley, expressing concerns about the national security implications of the deal, has sought information from Treasury about why the committee approved the Henniges deal. He has not received the requested documents, a Grassley spokesman said.
BHR also has acquired interests in coal mines, petroleum projects and a chemical company. In 2017, BHR purchased a stake in a Chinese firm called Megvii, which created advanced facial-recognition technology, according to a Megvii website.
On Oct. 7, the Trump administration blacklisted Megvii, among others, from doing business in the United States. It said the technology from Chinese companies poses “a significant risk of being or becoming involved in activities contrary to the national security or foreign policy interests of the United States,” citing “human rights violations” against the Uighur ethnic minority, which is mostly Muslim, in the Xinjiang region.
Two days later, Joe Biden criticized Trump for being soft on China, citing what he called that country’s “human rights abuses that are staggering, cause for enormous concern,” citing Muslims who are “imprisoned in so-called re-education camps.” He made no reference to BHR’s connection to the Chinese company, or the Trump administration’s blacklisting of it.
Mesires said in his statement that “Hunter played no role in directing or making BHR’s investments,” leaving it unclear what Biden did in his position. BHR did not respond to repeated requests for comment.
Megvii said in a statement that Hunter Biden is not a direct investor in the BHR funds that own a stake in the company. “It is our understanding, through conversations with BHR, that Biden has not been involved in any aspect of BHR’s investment into Megvii,” according to the statement.
Megvii also said its inclusion on the blacklist “reflects a misunderstanding of our company and our technology.” The company said it is “in compliance with all laws” and that it requires “our clients not to weaponize our technology or solutions or use them for illegal purposes.”