The Other Biden Problem: James Biden Now Facing Allegations Of Influence Peddling [UPDATED]

If reports are accurate, influence peddling may be something of a family cottage industry. Biden and his business partners however insist that their business dealings have been widely misrepresented in the media. While Congress continues to look at the Hunter Biden contract and his effort to sell his name to foreign companies, the brother of Joe Biden is facing the same allegations in an expanding controversy over his selling of his connection to the former vice president. James Biden was anything but subtle in his pitching his connections to his brother. Update: after initially posting this blog, I heard from Michael Lewitt, friend and partner of “Jim” Biden, who offered some useful (and not widely known) details on the loan controversy in this litigation. I have offered their side of this litigation below, which makes some good points. It also gives a perspective of a core player who has found himself at the center of a swirling controversy during a vicious presidential election cycle.

While it has received little attention in the media, James Biden has leveraged his connection with his brother for years in open pitches for contracts with major business like Americore (which is now in bankruptcy and the subject of a FBI investigation that is not contacted to Biden). Biden arranged for Americore founder Grant White to meet his brother.

Former Americore executive Tom Pritchard and others allege that Biden promised a large investment from Middle Eastern backers while he openly referenced his access to his brother and his family name. Biden is facing a wide array of litigation over allegedly fraudulent activities as well as a personal loan acquired through Americore before it went into bankruptcy.

The effort of Hunter and James Biden to peddle access and influence with Joe Biden could become an even greater issue in the 2020 election. Joe Biden has bizarrely continued to claim that “no one has suggested that my son did anything wrong.” He seems to be drawing a distinction between what is criminal and what is not — as if the criminal code is the only measure of wrongdoing or unethical conduct. Now a pattern exists of not just his son cashing in on his influence but his brother. That is wrong regardless of whether it is criminal. The expanding litigation surrounding James Biden could force a broader debate about that distinction.

For decades, I have written against this form of corruption as family members receive windfall contracts as a way of circumventing bribery laws. This remains the preferred avenue of the Washington ruling class to cash in on their positions. When confronted, they then (as did Biden) object that critics are attacking their family or their children. For that reason, little has been done to crackdown on such deals. For some in the media, there is a tendency to look the other way when they support the candidate or oppose the other party. The fact is that it is all corruption and influence peddling and it is all perfectly legal . . . and perfectly wrong.

Update: Michael Lewitt was Biden’s partner on the deals that are the subject of the Tennessee litigation. He wrote me a detailed explanation of the loan and objected to the coverage by Politico and Fox as unfair and incomplete. He offered some details that I have not previously seen in coverage:

The Tennessee lawsuit is based on our failed efforts to invest in a company called Diverse Medical Management, Inc. (DMM) in Tennessee. My hedge fund, Third Friday Total Return Fund, L.P., loaned DMM ~$760,000 which was intended as a bridge loan to a final deal. DMM was unable to meet payroll and other obligations but had a promising business model and I agreed to make the loan to support the business pending completion of due diligence, arrangement of financing and documentation. Unfortunately, DMM didn’t make it through due diligence.  It was unable to provide accurate and complete financial data and failed to disclose that it made an acquisition of another healthcare company that quintupled its payroll during our negotiations (the deal was scheduled to close after the expected closing of our deal with them).  We also learned some troubling information about the principals that prevented us from moving forward.  We were willing to write-off the loan but the principals refused to even speak to us and demanded we fund their new higher payroll and then sued us despite lacking a signed agreement.  They then hired a law firm in Tennessee that filed an inflammatory lawsuit filled with slanderous allegations about Jim, myself and our other partner and contacted the press in violation of a local court rule in the Eastern District of Tennessee Federal Court to put pressure on us and especially Jim during the election.  The lawyer continued to violate this local rule to the point that I recently filed an ethics complaint with the Tennessee Bar Association.  I can assure you that the lawsuit is meritless (claiming detrimental reliance on oral promises) and would never have been filed but for Jim’s involvement.  Further, neither Jim nor any of the other individual defendants acted in his individual capacity and suing us personally was highly improper.  Jim never engaged in any influence peddling. 

He also added details on Americore and supported Biden’s claims that he never played a substantive role in management — a point the Politico seems to question.

As for Americore, Jim never played any management or operational role at the company. He introduced me to the former CEO, Grant White, who was removed as CEO on 2/19/19 at the demand of the U.S. Bankruptcy Trustee and my fund and other creditors.  Jim’s involvement ended in early 2018. Tom Pritchard, who was quoted, was a gopher for Mr. White and is, to put it politely, unreliable. My fund loaned Americore around $19 mm, so Mr. Pritchard’s comment that Jim’s introduction was “smoke and mirrors” is demonstrably false. The bankruptcy filing was made by Mr. White to try to save his job – he was already under investigation by federal and state regulators and I was working with these regulators to remove him in my capacity as senior lender and major shareholder.  Mr. White and his lawyer lacked the requisite shareholder authority under Delaware law to make the bankruptcy filing and never completed the required financial filings even after requesting multiple extensions. The company was not and is not insolvent and has more than enough receivables from Medicare, Medicaid and HMOs to repay all secured and unsecured creditors and pay its bills. A recent Ombudsman Report stated that the two operating hospitals are serving their patients and have sufficient medicines and supplies.  Jim had absolutely nothing to do with any of the problems at the company, which were entirely the fault of Mr. White, and the news reports suggesting otherwise are just nonsense.  Jim never engaged in any influence peddling at the company and did nothing more than make an introduction to help the company raise capital to buy rural hospitals and St. Alexius Hospital in a tough urban neighborhood in St. Louis. He should be applauded, not criticized, for what he did here.

While I continue to view Biden’s leveraging of his name as a serious problem in our system, Michael Lewitt offered this defense of his partner and friend:

Further, Jim Biden is not Hunter Biden.  Hunter has his own set of issues.  As someone who has dealt with friends with family members who suffered from addiction, maybe I am more sensitive than most people to what the Vice President has dealt with as Hunter’s son.  I don’t condone the appearance of impropriety in Ukraine but knowing what I know about the Trump’s, this is a case of the kettle calling the pot black.  If Trump thinks it is a good strategy to try to argue that he is less corrupt than Joe Biden, someone is giving him bad advice or, more likely, he is giving himself bad advice.  Families should be off limit anyway, especially when a family member suffers from addiction like Hunter does.

Finally, on a personal note, Lewitt offered an insight from a lifelong Republican who suddenly found himself the subject of exposes on Fox News and other outlets:

You know that Trump is trying to turn this stuff into the 2020 version of Hillary’s emails. I voted for Trump in 2016 and am a Republican.  I like his policies more than Democratic policies.  But I find the politics of personal assassinations abhorrent.  I don’t enjoy seeing myself on Fox News or reading my news in the paper and I have often been in the financial press because I write a widely read Wall Street newsletter and have written two books on the markets.  The negative reports don’t bother me – what bothers me is when people just make stuff up or don’t even bother to do five minutes of independent research to see if something is true or not. 

I appreciate Michael Lewitt being so direct on this issues. I asked him to allow me to post his views because they have been largely missing in any coverage. I particularly think the discussion of the loan and management questions are highly relevant to the public’s understanding of the controversy.

131 thoughts on “The Other Biden Problem: James Biden Now Facing Allegations Of Influence Peddling [UPDATED]”

  1. OT: For those that have continuously blamed the right for domestic terrorism. Our FBI seems to have failed in multpile areas since at least the start of the Obama administration and then spied on opposition rather than domestic terrorists inspired by al-Qaida and ISIS.

    FBI Weaknesses Left Openings for Homegrown Terrorists, DOJ Watchdog Says

    Department of Justice Inspector General Michael Horowitz testifies in front of the Senate Judiciary Committee in Washington on Dec. 11, 2019. (Charlotte Cuthbertson/The Epoch Times)
    The FBI has failed in its duties to identify and stop homegrown violent extremists in the United States, the Justice Department inspector general said in a report released last week.

    Many individuals identified as so-called homegrown violent extremists, or HVEs, weren’t stopped because the FBI failed to conduct follow-up investigations into individuals who had been flagged as potential threats, Justice Department Inspector General Michael Horowitz said in a 41-page report (pdf).

    “The FBI has not taken a comprehensive approach to resolving deficiencies in its counterterrorism assessment process,” Horowitz wrote.

    The report, which covered the time from November 2009 to January 2017, found shortcomings in the FBI’s efforts to prevent mass attacks by U.S. residents who were inspired by international terrorist groups such as ISIS and al-Qaida, which the agency says is its highest counterterrorism priority.

    For example, the FBI closed the cases of at least six terrorists who killed 70 people in separate attacks between 2009 and 2017 after the bureau determined they weren’t national security threats, Horowitz said. The FBI’s shortcomings allowed multiple HVEs to go on and commit deadly attacks, including the perpetrators of the 2013 Boston Marathon bombing and the 2016 Pulse nightclub shooting in Orlando.

    Since the Sept. 11, 2001, terrorist attacks, foreign radical groups have been able to recruit and indoctrinate homegrown violent extremists who have killed more than 100 people in the United States, according to the New America Foundation. More than 20 attacks have been carried out by American jihadis since, Horowitz added.

    “The FBI has acknowledged that various weaknesses related to its assessment process may have impacted its ability to fully investigate certain counterterrorism assessment subjects, who later committed terrorist acts in the United States,” Horowitz wrote in his report.

    Horowitz said that although the FBI seemed to recognize its shortcomings, it had “not taken sufficient action” to fix the issues. He added that roughly 40 percent of the bureau’s counterterrorism assessments went unaddressed for 18 months, although officials were aware of lapses in their investigations.

    The FBI “did not ensure that all field offices and headquarters implemented recommended improvements and subsequent policy requirements,” according to the report.

    In response to the report, the FBI sent a letter to Horowitz’s office saying it had accepted seven separate recommendations for amending how it conducts its investigations, and planned to implement them nationwide.

    Reuters contributed to this report.

    1. So what was the FBI doing while Americans were being killed by domestic terrorists? Answer: Playing leftist politics.

      “But in a little-noted passage in a recent order, U.S. District Judge James A. Boasberg, the new chief judge of the Foreign Intelligence Surveillance Court, took direct aim at the excuses and blame-shifting of these senior Obama administration FBI and DOJ officials.

      But in a little-noted passage in a recent order, U.S. District Judge James A. Boasberg, the new chief judge of the Foreign Intelligence Surveillance Court, took direct aim at the excuses and blame-shifting of these senior Obama administration FBI and DOJ officials….

      Judge Boasberg drew headlines last week for an order suspending all FBI and DOJ lawyers involved in the Russia collusion case from appearing before his court until it is determined whether they engaged in misconduct.

      But of greater long-term significance was his language pinning responsibility for FISA abuses squarely on senior officials, not just lower-level line agents and lawyers who prepared the warrant applications.”

  2. If Trump’s Taxes Don’t Matter..

    Why Should Biden’s Brother?

    By shattering so many norms, Trump has numbed our sense of shock. Consequently Joe Biden could benefit. The voters may not care about Biden’s son or brother. Trump has lowered the bar so much, nothing really matters.

    1. Trump and the Trump family earned their money in the private market.

      The Biden family earned their money selling America down the drain.

    1. What does that do with my comment: “Why don’t we speed the process up and have Trump add those 10 judges before his term expires?” You were talking about increasing the number, right?

  3. There is a town in CA named Corona. It has a virus going around called “the Bernie virus”.
    Sanders rejects that term and calls it the Corona Virus. Corona is the Latin word for crown. When I say Latin I do not refer to Latinos. The Dem primary convention will be decided on Corona issues. Corona is a sanctuary City.

  4. absurb x XXii — On the contrary. Your prejudice is showing as is your ignorance. Read first, then comment.

    — David B Benson

  5. An article in the latest issue of The Nation recommends adding 10 more justices to the Supreme Court. Jonathan Turley ought to be pleased.

    — David B Benson

    1. The Nation want’s replicas of RBG, who will be a menace to order, justice, and decency.

  6. Now that we know that Biden’s business partner explained everything and that it’s just a plot by Trump, everything’s cool.

  7. Profiles in Courage, by Hunter Biden.
    In a court filing trying to dodge a hearing in his paternity case:

    It is unsafe for [Hunter] to travel, as travel restrictions have been implemented both domestically and internationally, particularly on airlines, due to the coronavirus. Setting aside personal endangerment, [Hunter] reasonably believes that such travel unnecessarily exposes his wife and unborn child to this virus. California, in particular, has been the site of numerous reported cases of exposure.
    You’d think Joe would make sure that the baby gets taken care of financially, even if they’re going to disown it.

    As to Hunter’s concern for the health and well-being of others– does anybody want to take odds on whether he used a condom?

    Or am I just being a horse’s @ss?

  8. ian, book contracts go to those with a saleable story. No ‘play along’ required.

    I don’t know about the other activities.

    — David B Benson

  9. A related form of corruption that really bugs me is lavishly rewarding politicians after they leave office – book contracts, directorships, becoming network commentators. This is really a bribe directed at those who are still in office. The message to them is ‘play ball with me, and this will be yours too when you retire from office’.

  10. Joe Biden should have recused himself from his oversight role in Ukraine the instant Hunter accepted the director role with Burisma.

  11. The Bidens and Clintons have turned corruption and influence peddling into family businesses.

    It is perfectly normal for relatives of famous people to have some cache. Everyone wants to know the daughter of the movie star, the son of a president. JFK, Jr was famous for being a Kennedy and the son of slain JFK. Without those connections he would have been just another pretty rich boy.

    The problem is when this turns into pay to play. A way to bribe. Buying influence. Hypothetically, if a network wants to hire someone without experience, platform, or skill because her family’s fame might make people tune in, that’s a business decision. It’s novelty. But if the media outlet hired a relative while certain legislation was crossing a president’s desk that could impact the network, that’s bribery.

    It’s always pay to play. Politicians represent big donors and special interests more than constituents. When they pass jobs killing laws, the unions and other donors seek, and often get, exemptions. Why is that? Because politicians are for sale. We disdain American companies for paying the usual bribes operate in corrupt countries. But look at the bribes that are ignored here in the US.

    CA is a great example. Democrats catering to the crowd who buys their message that they can’t possibly take care of themselves better than government can, passed AB5, written by unions, who donated big money to Democrats. This is killing freelance work, like the music industry, festivals, etc. Instead of hiring freelancers as employees, they were laid off. Industries that donate money to politicians are trying for exemptions. Pay to play.

    1. Now you get it. Congratulations.

      From the top down, the singular American failure has been and continues to be the judicial branch with emphasis on the Supreme Court. The entire American welfare state, including corruption, is unconstitutional. Article 1, Section 8 and the absolute 5th Amendment right to private property preclude all taxation for any and all forms of redistribution of wealth. They also preclude any and all regulation other than that of money, the flow of commerce and land and naval Forces. Charity and regulation must be pursued in the free markets of the private sector.

      Affirmative action, quotas, welfare, food stamps, rent control, social services, forced busing, minimum wage, utility subsidies, WIC, TANF, HAMP, HARP, Agriculture, Commerce, Education, Labor, Energy, Obamacare, Social Security, Social Security Disability, Social Security Supplemental Income, Medicare, Medicaid, “Fair Housing” laws, “Non-Discrimination” laws, etc., are all unconstitutional.

      Karl Marx wrote the Communist Manifesto 59 years after the adoption of the Constitution because none of the principles of the Communist Manifesto were in the Constitution. Had the principles of the Communist Manifesto been in the Constitution, Karl Marx would have had no reason to write the Communist Manifesto. The principles of the Communist Manifesto were not in the Constitution then and the principles of the Communist Manifesto are not in the Constitution now.

      Starting with “Crazy Abe” Lincoln, “…courts of justice,…must…[have] declare[d] all acts contrary to the manifest tenor of the Constitution void.” Secession was and is not precluded by the Constitution and was and is, therefore, fully constitutional, just as suspension of Habeas Corpus, in a condition not of rebellion but secession as was the case in “Crazy Abe’s” era, was irrefutably unconstitutional.

      To wit,

      “[A] limited Constitution … can be preserved in practice no other way than through the medium of courts of justice, whose duty it must be to declare all acts contrary to the manifest tenor of the Constitution void. Without this, all the reservations of particular rights or privileges would amount to nothing … To deny this would be to affirm … that men acting by virtue of powers may do not only what their powers do not authorize, but what they forbid.”

      – Alexander Hamilton

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