The press coverage of Joe Biden and his son Hunter Biden’s business dealings in Ukraine shows that Americans struggle to comprehend Joe Biden’s ambitions and methods of operation. The essence of events in faraway places is rarely fully apparent to Americans. However, for someone who has been doing business in the region for thirty years, the situation cannot be clearer.
The cardinal rule is that if you are doing business in a country of criminals, you have to behave like a criminal. Never-ending redistribution and re-division of assets is a defining characteristic of the Ukrainian business environment. Businessmen are in constant threat from corporate raiders that attack businesses with guns, forged ownership documents or new laws and regulations. To protect themselves from these realities, businesses hire “roof.” In criminal jargon it means protection. Various entities offer protection; organized crime, police, high ranking government officials, etc. The necessity for “roof” is built into business planning.
In 2002 during the tenure of President Viktor Yanukovych, his ecology minister Mykola Zlochevsky registered on Cypress Burisma Holding Limited. Burisma managed to secure lucrative government licenses for gas field exploration and production to become the second-largest private gas company in Ukraine. And, not by an accident. De jure, the licenses for the exploration of natural resources are drafted as bilateral agreements between the government entities and private enterprises but de facto they are unilateral and revocable grants of privileges by a president and high ranking government officials to their cronies and supporters.
As long as President Yanukovych was in power Mr. Zlochevsky’s assets were secured from a hostile takeover. In a way, President Yanukovych was his “roof” and no doubt benefited from the arrangement somehow.
But, nothing is permanent in the Ukrainian wicked world.
In February 2014 Yanukovych was overthrown in a coup and fled the country. Zlochevsky followed him shortly. In a dramatic reversal of fortunes, Burisma overnight changed from one of the strongest to one of the weakest. The recourse of the weakest was to find a new “roof” before newly-elected Petro Poroshenko’s government would be sworn in on June 2014.
It is not known when and who approached Joe Biden and what was offered in exchange for lobbing and political support. But on April 22, 2014, Devon Archer a managing partner of Rosemont Seneca Partners, a $2.4 billion private equity firm co-owned by the stepson of John Kerry Christopher Heinz and Hunter Biden was put on Burisma’s board.
On May 13, 2014, Hunter Biden himself joined the board.
On the same day, Christopher Heinz emailed Matt Summers and David Wade, two of his stepfather’s top aides at the State Department, “I can’t speak why they decided to, but there was no investment by our firm in their company,” wrote Heinz. Whether Christopher Heinz intended to dissociate himself and the firm from the activity or to create plausible deniability, the passage clearly displayed Christopher Heinz’s concern regarding either the legality or the ethic of the undertaking.
For Burisma the impact of having Hunter Biden and Devon Archer on its board could not be overstated. It had acquired an ultimate “roof” — the Vice President of the United States of America. We must not be naïve; Burisma did not hire good-for-nothing drug addict Hunter Biden for his expertizes or business acumen. It did not hire obscured Devon Archer for his administrative genius either — they were simply bagmen. Their hiring sent a subliminal message to Poroshenko, who made no secret of his desire to add Burisma to his basket of assets, that it is protected by the United States government.
Poroshenko got the message, but the temptation was irresistible. As soon as he was sworn in, he directed his prosecutor general Vitaly Yarema to open a corruption investigation into Burisma. Investigations of corruption have been an effective instrument of the reallocation of assets in Ukraine where corruption is the way of life.
In January 2015 Yarema was replaced with Poroshenko’s close associate Viktor Shokin who continued the investigation. It is significant that Viktor Shokin did not investigate Hunter Biden per se. Prosecutor Shokin directed by president Poroshenko was building a case to forfeit the profitable gas licenses awarded to Burisma.
Concerned that the investigation may end up in an indictment, Joe Biden in spring 2016 stepped in to protect his client, Burisma Holding and requested Poroshenko to dismiss Shokin. Poroshenko tried to be clever, “Yes, I told him to stop, but he is such a stubborn prosecutor, he clung to it, nothing can be done with him,” he complained to Biden. Biden didn’t buy it and issued an ultimatum, “You have six hours to solve the problem, or Ukraine would lose a billion dollars in the US aid.” Poroshenko capitulated — Shokin was fired.
At this juncture, Poroshenko decided that it is better to have a percentage of something than a hundred percent of nothing. He made a deal with Zlochevsky and his trusted man Igor Kononenko joined Burisma’s board. The vanquished enemies became allies. A new prosecutor Yuriy Lutsenko closed the probe. There was no longer a need for investigation and no need for Joe Biden’s services. Hunter Biden and Devon Archer resigned from Burisma’s board. Zlochevsky returned to the country. The “roof” earned its pay.
Alexander G. Markovsky is a senior fellow at the London Center for Policy Research, a conservative think hosted at King’s College, New York City, which examines national security, energy, risk-analysis, and other public policy issues. He is the author of Anatomy of a Bolshevik and Liberal Bolshevism: America Did Not Defeat Communism, She Adopted It. Mr. Markovsky is the owner and CEO of Litwin Management Services, LLC. He can be reached at info@litwinms.com
Naturally when Hunter Biden was made a director in a Ukrainian firm they were not trying to buy influence. He was not qualified for the position and his father was Vice President of the USA and was in charge of affairs with the Ukraine.
Hunter Biden was paid substantially sums of money. This sounds like a bribe scheme for influence. He Hunter Biden admits he would never have gotten the position if it were not for is last name.