Biden wrong not to call out his son
Ukrainian natural gas company Burisma hired Hunter Biden for one reason, and one reason only: his last name.
Companies have long recruited relatives of the powerful to win favors and impress others. But what’s despicable is that politicians still find it acceptable, and we have not made it illegal.
Hunter Biden, by his own account in the New Yorker magazine, started playing on his surname in 1998 when he joined President Bill Clinton’s Commerce Department. After the 2000 election, Biden became a lobbyist, where he gained access to exclusive business and political deals.
After his father became vice president in 2008, Biden dropped his lobbying practice and became a consultant, advising companies seeking to expand in the United States. In 2012, he entered into a partnership involving Chinese businessmen and in December 2013, arranged for one
of his partners to shake hands with Vice President Joe Biden.
Hunter Biden flew to Kyiv in 2014 to recruit investors for a real estate fund, knowing full well the vice president oversaw U.S. policy toward Ukraine. He met Mykola Zlochevsky, the co-founder of Burisma, and the subject of a corruption investigation.
Zlochevsky wanted to improve his and his company’s image, so Biden suggested hiring Boies Schiller Flexner, a politically connected law firm where Biden sometimes worked. Soon after, Burisma asked Biden to join the board of directors to help improve the company’s “transparency” and repair its reputation.
Throughout this period, Biden was in and out of treatment for alcoholism and addiction, missing weeks of work. He had no experience in the energy business.
Journalists at the time asked about this apparent conflict of interest, but the State Department replied that it was fine because Hunter Biden was a private citizen. Hunter Biden told the New Yorker that he and his dad had agreed not to discuss Burisma.
The U.S. government and Joe Biden saw nothing wrong with this picture. This is where my friends in Africa laughingly say to me: “And you call us corrupt?”
There is no evidence Joe Biden used his influence to help his son’s employer, or that Hunter Biden violated any laws. But frankly, that’s not what matters.
If Joe Biden truly cared about ethics, he would have asked his son to find a job that didn’t involve politics. Not become a political appointee, not work as a lobbyist and not serve on the board of a foreign company under investigation for corruption.
If his son did it anyway, Biden should have told the world that he considered his son’s behavior shamelessly opportunistic and cut him off. How many gigs do you think Hunter Biden would have gotten then? He would have had to make it through the world on his own merits, as most of us do.
Sadly, we don’t live in a world where that kind of integrity is common. Companies routinely recruit board members for their surnames or celebrity, not for their expertise. CEOs know giving a well-paying job to a well-connected person will yield results.
“If you want to have access to U.S. markets, then having someone connected to the vice president definitely doesn’t hurt,” said Praveen Kumar, finance professor at the University of Houston’s Bauer College of Business. “If the firm has been undergoing a lot of troubles, with financial problems or other malfeasance, having a well-known political name signals that things can’t really be that bad.”
International research shows that companies with frequent government dealings make higher profits when they employ politically-connected board members, said Kumar, who studies corporate boards.
“From a social welfare perspective, you see a conflict there, because while it helps the shareholders of the company, it’s not really clear that society as a whole is benefiting,” he added. “It’s possible, or even likely, the politically connected person is getting regulations relaxed or less oversight.”
Companies would not recruit the politically connected if they did not see a benefit. Every corruption investigation I conducted in Africa and the Middle East involved a well-connected family member. But most nations, including the United States, consider it perfectly acceptable.
All political parties are equally guilty. Donald Trump Jr. has certainly profited from his name. So do many others.
Politicians are unlikely to pass a law that would make it more difficult for this kind of back-scratching. That leaves companies to selfregulate. But why would they if it boosts shareholder returns?
Trying to influence policy by hiring a know-nothing child of a powerful politician is not illegal. But that doesn’t mean we should not publicly chastise all of those involved.