Hunter Biden’s Perfectly Legal, Socially Acceptable Corruption
Donald Trump committed an impeachable offense, but prominent Americans also shouldn’t be leveraging their names for payoffs from shady clients abroad.
How did this get to be standard practice?
The whistle-blower scandal that has prompted the fourth presidential impeachment process in American history has put a spectacle from earlier this decade back on display: the jaw-smacking feast of scavengers who circled around Ukraine as Viktor Yanukovych, a Moscow-linked kleptocrat, was driven from power. Ukraine’s crisis was the latest to energize a club whose culture has come to be treated as normal—a culture in which top-tier lawyers, former U.S. public officials, and policy experts (and their progeny) cash in by trading on their connections and their access to insider policy information—usually by providing services to kleptocrats like Yanukovych. The renewed focus on Ukraine raises jangling questions: How did dealing in influence to burnish the fortunes of repugnant world leaders for large payoffs become a business model? How could America’s leading lights convince themselves—and us—that this is acceptable?
Voicing this question now invites an immediate objection: “false equivalence.” Let’s dispense with it. What Donald Trump has done—in this case, according to the summary of a single phone call, lean on a foreign president to launch two spurious investigations in order to hurt political rivals, offering the services of the U.S. Department of Justice for the purpose—is shockingly corrupt, a danger to American democracy, and worthy of impeachment.
But the egregiousness of these acts must not blind us to the culture of influence-peddling that surrounds and enables them. That culture is fundamental to the cynical state we are in, and it needs examining. All too often, the scandal isn’t that the conduct in question is forbidden by federal law, but rather, how much scandalous conduct is perfectly legal—and broadly accepted.
Let’s start with Hunter Biden. In April 2014, he became a director of Burisma, the largest natural-gas producer in Ukraine. He had no prior experience in the gas industry, nor with Ukrainian regulatory affairs, his ostensible purview at Burisma. He did have one priceless qualification: his unique position as the son of the vice president of the United States, newborn Ukraine’s most crucial ally. Weeks before Biden came on, Ukraine’s government had collapsed amid a popular revolution, giving its gas a newly strategic importance as an alternative to Russia’s, housed in a potentially democratic country. Hunter’s father was comfortably into his second term as vice president—and was a prospective future president himself.
There was already a template, in those days, for how insiders in a gas-rich kleptocracy could exploit such a crisis using Western “advisers” to facilitate and legitimize their plunder—and how those Westerners could profit handsomely from it. A dozen-plus years earlier, amid the collapse of the U.S.S.R. of which Ukraine was a part, a clutch of oligarchs rifled the crown jewels of a vast nation. We know some of their names, in some cases because of the work of Special Counsel Robert Mueller’s office: Oleg Deripaska, Viktor Vekselberg, Dmitry Rybolovlev, Leonard Blavatnik. That heist also was assisted by U.S. consultants, many of whom had posts at Harvard and at least one of whom was a protégé of future Treasury Secretary Larry Summers.
Burisma’s story is of that stripe. The company had been founded by Mykola Zlochevsky, who, as Yanukovych’s minister of ecology and natural resources, had overseen Ukraine’s fossil-fuel deposits. When Hunter Biden joined Burisma’s board, $23 million of Zlochevsky’s riches were being frozen by the British government in a corruption probe. Zlochevsky fled Ukraine. The younger Biden enlisted his law firm, Boies Schiller Flexner, to provide what The New Yorker describes as “advice on how to improve the company’s corporate governance.” Eventually, the asset freeze on Zlochevsky was lifted. Deripaska defeated U.S. sanctions with similar help from other high-profile Americans.
Recently, Hunter Biden told The New Yorker that “the decisions that I made were the right decisions for my family and for me” and suggested Trump was merely using him as the “tip of the spear” to undermine Joe Biden politically. There are no indications that Hunter’s activities swayed any decision his father made as vice president. Joe Biden did pressure Ukraine’s fledgling post-Yanukovych president to remove a public prosecutor—as part of concerted U.S. policy. So did every other Western government and dozens of Ukrainian and international pro-democracy activists. The problem was not that the prosecutor was too aggressive with corrupt businessman-politicians like Hunter Biden’s boss; it was that he was too lenient.
And Hunter Biden was hardly the only prominent American who did well for himself during Ukraine’s transition. Another Burisma director was Cofer Black, George W. Bush’s CIA counterterrorism chief. The Republican operative and future Trump campaign chair Paul Manafort worked for Yanukovych. So did Obama White House Counsel Gregory Craig. The millions he was grossing were paid by an oligarch allied with Yanukovich and routed to Craig’s firm, Skadden Arps, through a confusing series of offshore accounts. At the time, Craig was a director of the Carnegie Endowment for International Peace. I was just joining that organization, as the first senior fellow working on international corruption. (His work for Yanukovych was not widely advertised.)
Craig was prosecuted on the narrow count of lying to federal investigators. He was acquitted. To see the grin on his face that day, it was as though he had been absolved not just of criminal misconduct but also of moral wrongdoing.
When prominent Americans leverage their global reputations for financial gain, they attract almost no attention today. How many of us who consider ourselves well versed in U.S. politics and international relations know that alongside her consulting firm, former Secretary of State Madeleine Albright started an emerging-markets hedge fund, run by her son-in-law? In 2011, Albright Capital took a voting stake in APR Energy, specializing in pop-up electricity plants for developing countries. APR promotes itself to the mining industry in Africa, where resource extraction enriches a handful of kleptocratic elites and leaves locals mired in pollution and conflict. Some of APR’s business comes via the U.S. Agency for International Development, which works closely with the State Department once led by Albright.
Scratch into the bios of many former U.S. officials who were in charge of foreign or security policy in administrations of either party, and you will find “consulting” firms and hedge-fund gigs monetizing their names and connections.
Some of these gigs require more ethical compromises than others. When allegations of ethical lapses or wrongdoing surface against people on one side of the aisle, they can always claim that someone on the other side has done far worse. But taken together, all of these examples have contributed to a toxic norm. Joe Biden is the man who, as a senator, walked out of a dinner with Afghan President Hamid Karzai. Biden was one of the most vocal champions of anticorruption efforts in the Obama administration. So when this same Biden takes his son with him to China aboard Air Force Two, and within days Hunter joins the board of an investment advisory firm with stakes in China, it does not matter what father and son discussed. Joe Biden has enabled this brand of practice, made it bipartisan orthodoxy. And the ethical standard in these cases—people’s basic understanding of right and wrong—becomes whatever federal law allows. Which is a lot.
Who among us has not admired or supported people who have engaged in or provided cover for this kind of corruption? How did we convince ourselves it was not corruption? Impeachment alone will not end our national calamity. If we want to help our country heal, we must start holding ourselves, our friends, and our allies—and not just our enemies—to its highest standards.