Before Ukraine, the president’s playbook seems to have worked like a charm in Romania.
Before Ukraine, the president’s playbook seems to have worked like a charm in Romania.
I t was the spring of 2014, and Kyiv was in tumult. For all its talk about democracy, the Obama administration had enthusiastically supported the mass protests in western Ukraine that, on February 21, had ousted the democratically elected president, Viktor Yanukovych.
Progressives have memory-holed much of this history. The Obama State Department and its European counterparts had an embarrassingly notorious hands-on role in the Maidan revolution and the new Ukrainian government that emerged in its aftermath. Predictably, this meddling in another nation’s domestic politics, to the point of toppling the elected government, was exploited by Vladimir Putin to rationalize Russia’s responsive aggression in eastern Ukraine — the annexation of Crimea and the border war that exploded into today’s full-out war when Moscow launched its February 2022 invasion.
Though more Euroskeptic than his political rivals in Kyiv, Yanukovych had leaned toward entering Ukraine into a political association and trade agreement with the European Union. As I detailed in Ball of Collusion, this prompted a furious reaction from the Kremlin, which was always in a natural position to leverage its neighbor’s dependence on Russian goodwill for energy supplies, safe commerce, and domestic tranquility. Putin thus threatened that if Yanukovych made his bed with the West, he would block Ukraine’s imports, slash its exports, cut off its energy lines, bleed its economy, and drive it into collapse. Yanukovych succumbed, ditching the European deal in favor of an alternative Russian pact. This accommodation, to fend off the bear on the border, triggered the internal strife that led inexorably to Yanukovych’s abdication and flight to safety in Moscow.
The post-Soviet history of Eastern Europe teaches that chaos is good for the profiteers.
Already one of the developed world’s most corrupt countries, Ukraine was in utter chaos when President Obama made his vice president, Joe Biden, an infamous hack with the pretensions of a geopolitical strategist, his point man for American policy there. Not exactly a boon for America, but it was a windfall for the Biden family business of cashing in on “the big guy’s” political influence.
In these badlands, standing up a new government — basically consisting of the people who were besieged by the ousted government — looks more like a battle of competing mafia protection rackets than an exercise in spontaneous democracy. For a corrupt company such as Burisma, it would mean new regulators demanding payoffs, in conjunction with the government’s existing extortionate demands.
As a confidential informant explained to the FBI (an explanation recorded in a Form 1023 report controversially made public this week), bribery is such a deep-seated part of business culture in Ukraine and Russia that businesses customarily account for it in budgeting — the Russian word for the line item is podmazat, which literally means to “oil, lubricate, or make things run smoothly.” Indeed, when Biden took the point on U.S. policy toward Kyiv, our close allies in Britain were about to pounce on Burisma’s well-heeled founder and CEO Mykola “Nikolay” Zlochevsky — in their ongoing bribery probe, the Brits would soon seize $23 million he’d squirreled away in London bank accounts, as Eastern European oligarchs were then wont to do.
Zlochevsky, then 48, had been a minister in Yanukovych’s government. He knew the long knives would be out for him — and not just from the new regime. The new Poroshenko government’s U.S. State Department patrons had put Zlochevsky on a “ban list,” preventing him from traveling to America. With his Ukrainian allies out of power, Zlochevsky would need new, potent allies to protect him and Burisma from his suddenly empowered Ukrainian rivals.
Joe Biden may not know much, but he knew that.
He also knew that the anti-corruption racket is a profitable one for people in power. The game works like this: You inveigh against corruption, ostensibly to encourage a corrupt but supposedly reforming regime to clean up its act; that, of course, increases the pressure on the regime’s corruption targets (e.g., those who’ve bribed their way to fortune); those targets, already no strangers to paying off whomever must be paid off, become more willing to pay the anti-corruption poseurs.
As the House Oversight Committee has shown (see preliminary report, pp. 11–17), Biden appears to have made this work like a charm in Romania.
In 2014 and 2015, when not railing at officials in Kyiv about corruption, he was railing at officials in Bucharest about corruption. At the time, one of their most high-profile corruption targets was Gabriel Popoviciu, a real-estate tycoon ultimately convicted of paying a bribe to acquire a highly desirable lot at a bargain price. While Vice President Biden pressured Romania to ratchet up anti-corruption prosecutions, Popoviciu paid Hunter Biden to use his connections to fend off the Romanian prosecutors.
As the committee documents, the payments were structured to conceal the fact that they were coming from Popoviciu: multiple payments over time by the Romanian tycoon’s business (Bladon Enterprises Limited) to the Bidens’ business partner, Rob Walker. Because smaller money transfers draw less regulatory attention, Walker parceled out Popoviciu’s transfers into smaller payments and doled them out, over time, to various Hunter Biden accounts and accounts of business associates, and even sent $10,000 to an account of Hallie Biden — Beau Biden’s widow with whom Hunter was romantically involved. All in the family.
Amazing how this works: After the vice president congratulated President Klaus Iohannis on the strides Romania was making to crack down on corruption, Hunter stepped up efforts for Popoviciu — the incumbent vice president’s son using his contacts to beseech State Department officials to help a Romanian corruption target’s lawyers get a meeting with Romanian anti-corruption prosecutors. In the midst of the payments from Popoviciu detailed by the committee (which stretched from November 2015 through the end of his father’s term in office), Hunter wrote in one email on behalf of his Romanian client, “He is in my estimation a very good man that’s being very badly treated by a suspect Romanian justice system” (emphasis added). I’m sure you’ll be shocked to hear that the Romanian courts didn’t see it that way, upholding Popoviciu’s nine-year prison sentence.
With Romania and the committee report as background, should we really be all that surprised about the allegations that emerged this week implicating Joe Biden in Ukrainian bribery schemes?
On April 16, 2014, with Kyiv still in upheaval, Vice President Biden was visited at the White House by Hunter and Devon Archer, Hunter’s longtime chum and business partner (who is now looking at prison time, in addition to tens of millions of dollars in fines and restitution costs, after recently losing the appeal of his 2022 federal fraud conviction over a $60 million fraud scheme). Just five days later, Vice President Biden was in Ukraine to conduct various meetings and — well, wouldn’t you know it — the very next day (April 22) it was announced that Archer had been named to the Burisma board of directors, with Hunter’s installation to that board already quietly in the works.
The press lauded Joe Biden as the face of American policy in Ukraine. We don’t know everyone he met with on his visit to Ukraine, nor everyone he spoke with about it. We do know, however, that Zlochevsky told the FBI’s informant he had spoken with both Joe and Hunter Biden about placing Hunter in a lucrative position on Burisma’s board — though the younger Biden, who’d just been ousted from a cushy Navy appointment over his cocaine use, had no experience in the energy sector.
Burisma’s chief financial officer was Vadim Pozharsky. That’s a name you want to remember. The FBI’s informant attended a business meeting with Burisma executives in late 2015 or early 2016, during which Pozharsky explained that the company had hired Hunter to “protect us, through his dad, from all kinds of problems.” As we shall see, this is completely consistent with statements we know Pozharsky has made.
Hunter did not formally join his partner Archer on the Burisma board until May 12, 2014. In the intervening three weeks, two important things happened. First, the aforementioned British seizure of Zlochevsky’s accounts in London on April 28. Second, well, Burisma started paying up.
As related in a report compiled by Senators Chuck Grassley (R., Iowa) and Ron Johnson (R., Wis.), the funds started rolling in with a quarter-million-dollar transfer on May 7 to the law firm Boies Schiller Flexner LLP, where Hunter (who went to law school) was “of counsel” (see report, pp. 66–68). Not coincidentally, Boies Schiller is the same firm used by Hunter in the Popoviciu caper. In all, Burisma paid Hunter Biden and Archer over $4 million combined. A big chunk of it came during Joe Biden’s vice presidency. And — mirabile dictu — it seems, for some unfathomable reason, that Hunter’s salary was halved once his father was out of office.
The day Hunter formally joined Burisma’s board, he and Archer were sent an “urgent issue” email by Pozharsky. After alluding to their recent meetings together in Lake Como in Lombardy, Pozharsky reminded his new partners about the new Ukrainian regime’s tormenting of Zlochevsky, which he referred to alternatively as “blackmailing” and as efforts to extort him for money. Because these tactics had been unsuccessful, the regime had now moved on to “concrete” legal actions aimed at “intimidating” Burisma’s commercial contacts and “destabilizing” its business. Consequently, Pozharsky stressed, “we urgently need your advice on how you could use your influence to convey a message/signal, etc., to stop what we consider to be politically motivated actions.”
Hunter responded that he was with Archer in Doha, Qatar, and asked for more information about “the formal (if any) accusations being made against Burisma.” “Who,” he asked, was “ultimately behind these attacks on the company? Who in the current interim government could put an end to such attacks?” Meantime, Hunter and Archer immediately began work on trying to get Zlochevsky removed from the State Department’s ban list in hopes of helping him obtain a visa — a project for which they enlisted Boies Schiller’s help.
By December, however, even with the U.S. vice president’s son on his board, Zlochevsky apparently decided to deal with his troubles the old-fashioned way: by paying a $7 million bribe to officials at the office of Ukraine’s prosecutor general, Vitaly Yarema. State Department official George Kent learned about the bribe, reporting it to his superiors and the FBI. He also raised the concern with the vice president’s office that Hunter Biden’s association with Zlochevsky was compromising the Obama administration’s anti-corruption efforts.
I know you’ll be stunned to hear this, but Vice President Biden took no action.
Hunter and Archer, of course, continued working for Burisma and Zlochevsky. In early 2015, they began planning a dinner party in Washington at which Vice President Biden would stop by and meet a number of their business associates. The dinner was held in the private Garden Room of Café Milano in Georgetown on April 16, 2015. Notwithstanding the mounting bribery allegations against Zlochevsky, Hunter invited Pozharsky. Thus did the Burisma CFO get a coveted meeting with the sitting U.S. vice president. Pozharsky gushed in an email the following day, “Dear Hunter, thank you for inviting me to DC and giving an opportunity to meet your father and spent [sic] some time together.” Pozharsky was soon headed to the airport but asked Hunter to meet for coffee before he departed.
Alas, Pozharsky was not gushing when he emailed Hunter, Archer, and their partner Eric Schwerin nearly six months later, on November 2. Instead, he was bemoaning the lack of “concrete tangible results that we set out to achieve in the first place” — referring, obviously, to Burisma’s installation of Hunter and Archer on its board in order to help Zlochevsky. Having looked at planning documents Hunter and his associates had just provided, Pozharsky complained that they failed to
offer any names of top US officials here in Ukraine (for instance, the US Ambassador) or Ukrainian officials (the President of Ukraine, chief of staff, Prosecutor General) as key targets for improving Nicolay’s [i.e., Zlochevsky’s] case and his situation in Ukraine.
Of course, Pozharsky conceded, maybe this was intentional. After all, one should avoid naming names in such documents. That said, what was written was unimportant only as long as “all parties in fact understand the true purpose of the [Burisma] engagement and all our joint efforts.” It was critical, he asserted, for everyone to “be on the same page re our final goals.” Pozharsky thus demanded a list of “concrete deliverables,” including “meetings/communications resulting in high-ranking US officials in Ukraine (US ambassador) and in US publicly or in private communication/comment expressing their ‘positive opinion’ and support of [Zlochevsky]/Burisma to the highest level of decision makers” — repeating that this meant Ukraine’s president, chief of staff, and prosecutor general.
Pozharsky concluded this remarkably blunt email with the hope that “widely recognized and influential current and/or former US policy-makers” would come to Ukraine in the coming weeks to help achieve this “ultimate purpose to close down for any cases/pursuits against [Zlochevsky] in Ukraine.”
These are not the demands, and this is not the tone, of friends who are seeking a favor but of hard men who are paying dearly for a service and who are running out of patience — wondering whether it’s worth continuing to pay.
In a few short weeks, Burisma appears to have gotten what Pozharsky was demanding. Vice President Joe Biden came to Kyiv in early December and met with Ukraine’s president and other top officials. He threatened to withhold $1 billion of U.S. funding unless, within six hours, the regime fired Viktor Shokin — the prosecutor who was investigating Zlochevsky and Burisma.
Mind you, at the time, Ukraine was under siege by Russia. Perhaps you recall Donald Trump’s being impeached by Democrats for withholding aid from Kyiv while it was struggling to fight off Putin’s aggression in the east. But Biden was going to withhold $1 billion . . . over a prosecutor?
We know Biden did this because he bragged about it in a 2018 interview at the Council on Foreign Relations. Never having been the sharpest tool in the shed, he thought this helped him by showing his toughness as he prepared for his presidential run. He claimed it was all about — all together now — fighting corruption! In character, moreover, Biden exaggerated his role in getting the prosecutor axed. Shokin was not fired in six hours; it took four months of arm-twisting, and the threat by Christine Lagarde, director of the International Monetary Fund, to withhold $40 billion of Ukrainian aid — again, to fight corruption, it was said — had more to do with it than did Biden’s gambit.
That said, here we have Biden beating his chest about how he strong-armed Kyiv to fire the prosecutor who was then investigating Zlochevsky’s company — which we now know was then beseeching Biden’s son to persuade top U.S. officials to weigh in on Burisma’s behalf with top Ukrainian officials. If Biden’s very clear admission was not on video, does anyone doubt that he would now deny having said any such thing, just like he vehemently denies ever discussing the business dealings he risibly continues to claim were his son’s and not his own?
In early 2016, when the FBI informant met with Zlochevsky in Vienna, he asked about Shokin’s investigation of Burisma, which had gone public. “Don’t worry,” the informant recalled Zlochevsky responding, “Hunter will take care of all those issues through his dad.” Subsequently, he elaborated that he’d paid $10 million in bribes to the Bidens — half for the then–vice president, half for his son.
Mind you, that wasn’t going to be enough. Though Zlochevsky said he found Hunter useless (his dog, he said, was smarter), Burisma still needed to keep the vice president’s son on the board “so everything will be okay.” If that’s true, then the already obvious is explicit: Hunter’s lucrative sinecure was part of the bribe. And we know Hunter was on the board and was paid millions.
In a later phone call, Zlochevsky told the FBI informant that he wasn’t worried about law-enforcement heat over the bribes he said he had been forced to pay the Bidens. He claimed to have saved texts and recordings that would prove the coercion. Did he really? We can’t say . . . but is it really that hard to believe? Not if you’ve read the WhatsApp message in which Hunter makes extortionate demands of a Chinese business partner with, he claims, his father sitting right there beside him and ready to make the partner’s life miserable.
And Zlochevsky says his payments to the Bidens were structured in such a labyrinthine manner, using multiple companies and bank accounts, that it would take investigators “ten years” to trace the bribe dollars to Joe Biden. Does that really sound so unbelievable once one has studied the House Oversight Committee’s preliminary report? Bear in mind the Popoviciu payment scheme and the dozens of others like it with Chinese and other “business partners”: transaction after transaction in which millions of dollars come the Bidens’ way in exchange for no apparent comparable value.
Nothing, that is, except Joe Biden’s political influence.