What the Bidens Did and Didn’t Do In Ukraine

A dysfunctional 24-hour news industry which has morphed into a civic poison is manufacturing an equivalence between Joe Biden and a man who runs a mafia family. Accusations being leveled by the Trump Administration are muddled nonsense. Joe Biden himself is making matters worse.

It’s not that Joe or Hunter Biden are innocent. They aren’t. Their handling of this matter reflects a serious, prolonged decline of ethics in our system. The problem with the coverage is that the scale, importance and severity of the Bidens’ actions are being distorted by a political entertainment complex which has abandoned its interest in journalism.

A far more significant story is being obscured by Trump’s babbling and the television media’s car-chase coverage of this mess. What the Bidens did and didn’t do in Ukraine is dull, complex, entirely legal, but indicative of the long rot in our democracy. As a result, you’ll never hear it explained on TV.

Joe Biden’s wayward son Hunter, took a token job on the board of a Ukrainian holding company, Burisma in 2014. Hunter was (is) the family wash-out, a struggling addict trapped in the shadow of his late brother. His only qualification for this $50,000/month gig was his last name. Burisma is owned by a Ukrainian oligarch named Mykola Zlochevsky, who owed his fortune to his ties to the old Russian-allied Ukrainian dictator, Viktor Yanukovych.

Burisma is one of those post-Soviet corporate monsters, a predatory front-company used to swallow formerly state-owned natural resource entities and carve them up among a group of friends. These entities have defined the new Russian political system, organizations engineered to meld the remnants of the Russian mafia and the KGB into a new shadow-government of Kleptocrats.

These companies don’t do anything beyond collecting rents. Most of their interests outside oil and gas have died of entropy and neglect. They don’t innovate. They don’t compete. They sit atop an existing complex of resources or factories growing fat as rentiers, funneling a percentage back to the government officials who protect their position. Business today in the Russian political and economic orbit is just like Communism, but without all the sharing.

This model spread across Russia, Belarus and much of Central Asia, crushing the development of market economies and feeding the rise of new, regional super-mafias. A democratic movement in Ukraine, close enough to Europe to benefit from proximity to liberal governments, has tried to fight the spread of this vampire squid. A careful destabilization effort from the Kremlin has thus-far fought them to standstill, gradually slicing up the country and thwarting reform with waves of outside money.

In 2014, Ukrainian reformers ousted the Kremlin’s puppet dictator, Victor Yanukovych. His exile left Russian-allied oligarchs like Zlochevsky in a dangerous bind. That’s when Zlochevesky recruited Hunter Biden to the board of his company, Burisma. That same month, prosecutors in the UK froze $23 million in Burisma’s assets in connection with a money laundering investigation. For a while, it appeared that a new democracy in Ukraine might successfully crack down on the Russian Kleptocratic machine. At the end of ’14, Zlochevesky fled Ukraine to Russia to escape prosecution.

Zlochevsky badly needed access to his loot in London. The keystone of his effort to regain it was Viktor Shokin, Ukraine’s new Prosecutor General. Shokin was appointed to pursue the corrupt businesses that had been raping the country. He didn’t do that. Instead, he dragged his feet on high-profile corruption cases while harassing anti-corruption activists.

A UK court in 2014 sent a summons to Ukraine for information supporting the case against Burisma. Shokin’s office refused to cooperate. A faction in the prosecutor’s office, led by anti-corruption crusaders, David Sakvarelidze and Vitaly Kasko, were pushing Shokin to pursue the case. They were also making progress on their own in high-profile anti-corruption cases that angered Shokin and Ukraine’s remaining pro-Russia bloc. It is likely that Shokin was being bribed to stonewall the case against Burisma, but in the absence of transparency it’s tough to make this case.

The Obama Administration put enormous pressure on the Ukrainian government to take action against kleptocrats like Zlochevsky, eventually making Joe Biden the Administration’s point-man in Ukraine. Shokin’s office did nothing, and in January 2015 the UK court was forced to release the embargoed funds. Zlochevesky immediately moved the money to Cyprus, where current US Commerce Secretary Wilbur Ross was still running a money-laundering operation through a Cypriot bank.

Geoffrey Pyatt, the US Ambassador to Ukraine, in September 2015, went so far as to call out Shokin directly in a speech and praise the work of Sakvarelidze and Kasko. A few months later Slokin responded by firing Sakvarelidze and framing him for corruption. Kasko resigned and was also accused of corruption. Kasko’s apartment was seized in March 2016 as part of the Prosecutor’s harassment campaign against reformers.

In February, Republican Senators Portman and Johnson joined several of their colleagues expressing concern about corruption in a letter to the Ukrainian President. The next month, Vice President Biden took matters into his own hands, threatening to withhold a billion dollars in US aid if the Ukrainian government failed to fire their corrupt Prosecutor General. They did. Things still haven’t changed much.

In 2018, Zlochevsky was finally able to return to Ukraine. With a Russian proxy in the White House and most of the anti-corruption pressure removed, Burisma had no more need for Hunter Biden. He resigned his lucrative position in February, 2019.

How does Trump even know about this episode and why does he care? Someone came away from this exchange very, very angry. Vladimir Putin.

Efforts to establish a responsible, accountable democracy in Ukraine are a threat to Putin’s plans for Russian expansion. Joe Biden’s riverboat gambler bluff to force reforms in Ukraine briefly dented Putin’s Ukrainian network. Biden’s efforts were almost universally welcomed across both parties in the US at the time, because in 2016 Putin still had no foothold on our political system.

Our President is once again taking Putin’s side in a battle between liberal democracy and Kleptocracy. Just a few years ago, Republicans were siding with the good guys in this battle. Now they have surrendered, forming America’s Vichy bloc in a campaign to undermine democracy. It’s unlikely that the Trump Administration would even know about this issue if it wasn’t being raised by the Kremlin.

What Joe Biden did in Ukraine was entirely appropriate. What he failed to do in his own family is a serious, though not-criminal problem. Americans, especially in the heart of Trumpistan, are facing a lethal wave of addiction. While their children died in McDonalds bathrooms, Joe Biden’s drug-addict son was collecting a 1% income from the enemies of liberal democracy. Biden’s role as America’s lead negotiator in Ukraine further cemented his son’s value to our enemies. This difference in outcomes between ordinary Americans, and politically powerful Americans, is hard to ignore.

It might have been possible for Biden to repair the damage from his earlier indifference to graft, right up to yesterday. He could have acknowledged the obvious – that his failure to either rein in his son or remove himself from leadership on this foreign policy effort created a disturbing conflict of interest. Instead, he demonstrated the indifference to basic ethics that helped create our culture of impunity for the wealthy and powerful.

Confronted by a reporter yesterday, he flatly denied that his son’s Ukraine payments created any conflict of interest. Pressed on this absurd evasion, he snapped, “I’m not going to respond to that.”

Biden could have opened up about his son and the challenges of his addiction. He could have acknowledged the undeniable skeevyness of his son’s role in Ukraine. Instead, he showed us the attitude of our powerful representatives that helped place us in this mess. Biden embraced the denial, evasion, and insistence on impunity we have come to expect from Donald Trump.

Liberal democracy didn’t find itself in crisis suddenly one night in November, 2016. This monster grew over decades, feeding on our leaders’ growing indifference to graft. Joe Biden hasn’t profited from a corrupt system in the manner of Donald Trump, but he’s done nothing to fight it. His response to this incident is his promise to do nothing about public corruption if elected. Joe Biden is the friendly smiling face of a coin whose other side is Donald Trump

47 Comments

  1. This is great stuff, and FWIW, I think Ukraine may teach us lessons for our own future. You’ve mentioned that in the future, we might not be voting for candidates or parties so much as alliances of billionaires and corporations e.g. Google/Nike/Apple/Soros vs Exxon/GM/Goldman Sachs/Koch Bros.

    Ukraine and much of the former Soviet Republics are at that stage already. The PM prior to Yanukovych was Yulia Tymoshenko. Her supporters will say she’s a pro-market reformer and anti-corruption crusader, while her opponents disagree. I don’t know enough about Ukrainian politics to know who’s right. But what’s not in doubt is that she was one of the original oligarchs that came out of the Soviet dissolution, and became one of the richest people in Ukraine off of being a rentier intermediary that imported gas from Russia to Ukraine. Her nickname was “gas princess”.

    The people of Ukraine have realized that voting for one party or another is really all about voting for one cabal of oligarchs against another cabal of oligarchs, each of whom then proceeds to feast on the public trough. As a result, in the latest 2019 presidential elections, they voted both of them out, and elected an actor who played the President of Ukraine in a comedy TV show, but otherwise has no political experience…

    For that matter, it pays to really understand Vladimir Putin. The reason why Putin was so popular in his early days was because he brought down the original set of oligarchs that grew around Boris Yeltsin. He re-nationalized various industries that had been given away to Yeltsin’s friends, and even jailed a few of the more prominent oligarchs like Mikhail Khodorkovsky. Of course, after that, he proceeded to install his own group of oligarchs who stash billions away for Putin.

    In the end, the Russian people have decided that if they’re going to be screwed by a group of oligarchs regardless, might as well vote for the one that promises to restore Russia’s former glory rather than kowtow to American and European interests. IOW, start with populism but if it fails, there’s always nationalism, a lesson every astute dictator since Julius Caesar has understood.

    Finally, I can’t leave without tweaking you about this one apt quote: “They sit atop an existing complex of resources or factories growing fat as rentiers, funneling a percentage back to the government officials who protect their position. Business today in the Russian political and economic orbit is just like Communism, but without all the sharing.”

    Sounds like America, no? 🙂 (Yes, I realize you believe the superheroes from Silicon Valley will save us all, but to that I have just one question: have you ever tried to buy a computer from Dell without Windows on it?)

    1. You are more kind than I am. Rudy has earned whatever consequences come his way.

      This lady, however, has been wronged. Former US Ambassador Maria Yovanovitch has served our country and those in which she was stationed with honor and commitment. Rex Tillerson began the hollowing out of our State Department; Pompeo is finishing the job.

      Here is the ten page statement Ambassador Yovanovitch presented to House Committee on Foreign Affairs. A class act. One of few remaining in this administration.

      https://www.documentcloud.org/documents/6467592-Marie-Yovanovitch-prepared-remarks-to-Congress.html

  2. My sense of deja vu continues to increase. At the time of Nixon’s resignation in 1974, I was in my final quarter at the University of Washington. I remember how seemingly daily there were new revelations that kept increasing the pressure on the dam, until it finally broke and the ensuing flood waters swept all before them, including Nixon. I actually got the news of Nixon’s resignation from a Seattle Times headline in the student Union Building. It was near the end of the quarter and the academic pressure was building with finals approaching. So there was little time to spend following the news. I think I had a midterm that day and had been up late studying.

  3. I’ve been reading into the bidens corruption, and I have to say, very on point article. I used to read you at goplifer, as a life long democrat, I enjoyed the unions are bad and we need a market based healthcare type of articles. I’d read them and then I’d read your next work on why Rick Perry is an awful human being. Your acknowledgement of the gops racist views while supporting the economic ideology always made me enjoy your work. Seriously you and George will were the two conservatives I would always read just to just to hear a counterpoint. But then we elected trump. And you and George will both hate him. All the pro trump articles I’ve read i find to be incredibly stupid. I miss disagreeing with you. Because you challenged me, but also because there was one fundamental thing we agreed on. And our disdain for the POTUS and that fundamental thing we agree on are deeply related. But I promise you as a Chicagoan I will rent a car and drive out of my lovely ravenswood apartment to knock on doors for both casten and underwiid, because this shit right now matters.

  4. Oh, and Chris, enough of your drivel about corporations being the new leaders creating and maintaining the social fabric. This is a New York Times tweet this morning:

    “Blizzard Entertainment said it was suspending a player of the online game Hearthstone for a year and was forcing him to forfeit prize money after he spoke out in support of the Hong Kong protests during a livestreamed interview.”

  5. And in somewhat larger news, the tyrant just turned thousands of combat hardened Kurd soldiers who were allies until 12 hours ago into people who now hate the U.S.

    These people have long long long memories. The Kurds are not the Taliban, but they will most certainly blame what is about to happen to them on the U.S. A year, 2 years, maybe 5 years from now the U.S. will experience another object lesson on what happens when you make enemies of people that were once allies. The Kurds are more capable than the Taliban too.

    You can talk all you want about the corruption of the tyrant, comparing it to other politicians, but this kind of thing is the real legacy of the tyrant and his regime.

    1. The Kurdish news is not surprising. The Kurds were thrown under the bus following WWI and then again after WWII. In both cases the US was one of the prime actors. We are setting ourselves up for blowback, as we have many times before. This particular time it’s particularly egregious. It will make Russia’s thrust towards the Middle East far easier. Turkey has been cozying up to Russia. Of course, one of Russia’s historical goals is to expand towards the Middle East.

      1. And yet, Mary, you say, “let the democratic process play out.”

        Do you seriously believe the world order can handle another 16 months of this? And the traitor from Kentucky laid out his plan to kill the impeachment process in the Senate, so any concept of the members of the fascist party doing what is right are a complete fantasy.

      2. Unfortunately, this goes way beyond mere messaging. America’s honestly abandoned a chief ally, even as they laid down their lives in the process, for what everyone around the world (and rightly so) interprets as our “president” having been bought out by Turkish and Russian interests.

        Photos of dead Kurds will be shoved down our throats from now until beyond any of our lifetimes. There’s no coming back from this. The United States of America has forfeited whatever remaining iota of credibility we had around the world.

    2. Also agree 100%. These are people who did much of the heavy lifting in fighting ISIS and this is a disgusting betrayal. The Kurds deserve better. I’m not shocked that Trump is doing this because betraying people is what he does and has always done, but I’m still disappointed in the tepid response from all those national security hawk GOPers.

  6. Thank you for this detailed description of this affair and tying it all together. This no doubt took considerable research. That research is difficult for the average person to do, even if they are well informed as most Orphans are. Journalism is so focused on the 24 hour news cycle, with no real investigative journalism and manufacturing an equivalence between both parties that it will of course totally miss the back story. I have certainly missed this backstory; though it roughly fits the pattern I expected.

    I would like to add one historical item regarding Ukraine. Its borders have moved westward and this brought in peoples that had greater historical connections to liberalizing trends in the West during the 18th and 19th Centuries. Much of the drive towards Ukrainian democratization is centered in the western and central regions. Whereas the Donbas region, where the Russian influence is so great and Crimea had been part of the 1st Russian Empire for much longer and are basically Russian in outlook. Accordingly, there is a division in Ukraine between East-West, which could be compared to the division between North-South in the U.S.

    Most of the ethnic Ukrainian population also resides in the western Ukraine, whereas the eastern Ukraine has a large population of ethnic Russians and that includes Crimea. With this historical legacy there is no wonder that western and central Ukraine wish to be associated with the European Union and the West. That is also why the drive to control corruption is largely centered in western and central Ukraine.

    To add to this already difficult situation, Putin is engaged in an effort to establish the 3rd Russian Empire. The primary targets are the states of the Soviet Union, which to a large extent correspond to areas that were part of the 1st Russian Empire, the one that collapsed in 1917. Note: I define the 2nd Empire to include all of the Soviet Union plus the Warsaw Block states. It is also important to realize that there were territorial adjustments after WWII which enlarged the Russian Federation westward. Furthermore there was much ethnic cleansing following WWII. These affected several states, including Poland, Ukraine and Byelorussia. Those are not covered much in the U.S. and finding information on them is not easy, but they do have a bearing on the developments in Ukraine.

    All in all the situation is a total mess and is having severe impacts on the U.S. politics because of the engagement of the Trump organization in money laundering, other less than ethical enterprises and its affinity for Russia and other authoritarian states.

  7. A question for you Chris- Rick Perry, who managed to keep his head down and make people forget that he was even in the cabinet, is headed for the exits. Trump is now floating the excuse that Perry has responsibility (blame) for those dealings with Ukraine. Can Rick avoid the underside of the bus???

    1. A better question might be: Will Perry cut and run if trump continues to double down on shifting blame. I have never thought Perry was very bright, but I hope he has enough survival skill to figure out that telling the truth is going to be way better for his retirement plans than capitulation to trump’s bullying tactics.

      1. An especially well written piece that examines where republicans are in this political situation. The GOP is placing all their bets on their well – oiled delay/disinformation machine. I grudgingly acknowledge how despicably effective it is even as I abhor what they are doing to our democratic institutions and rule of law. To say this is their greatest test is not an understatement.

        https://www.washingtonpost.com/politics/out-on-a-limb-inside-the-republican-reckoning-over-trumps-possible-impeachment/2019/10/05/8e2b73c0-e6ef-11e9-b403-f738899982d2_story.html

  8. “Biden could have opened up about his son and the challenges of his addition.”

    You mean “addiction”, right?

    I’m very disappointed in Joe Biden for the reasons you state at the end of the post. He had one more chance to fess up and start atoning, and he didn’t. That just killed off any chance that I’ll vote for him in the primary.

    From the POV of the Trumaloes, I’m one of those Ivory-Tower-of-touch-elites. I’m also an employee of the state of TX, and unlike people like Hunter and Joe Biden, I have to declare anything with even a hint of COI. Do I have a relative who works for a vendor that my Department might do business with? (And by relative they mean blood relatives 3 generations in both directions, including aunts, uncles, and cousins, plus spouses and their blood relatives). I have to recuse myself from that purchasing decision. Do I own stock in any of these companies? I had better disclosure every penny and also that’s a recusal. One of these companies offering compensation for giving a lecture? I’d better clear it first. People like Hunter Biden do absolutely make me want to vomit with the ease that they can brush aside COI concerns and pocket large sums of $ for little if any effort.

    I’m not officially committed to a Presidential candidate, but Warren looks better and better as these stories of permitted corruption play out.

    1. Retired, but work many decades for government. So I know what you are talking about. Comparing Biden’s corruption to Trump’s is like a water pistol to a fully open fire hydrant. For the same reason as you I will not vote for Biden in the primary.And I too am leaning Warren. But at this point I rather vote for a rhinoceros than Trump. So if he wins the primary I will hold my nose and vote for Biden in the general election.

      1. EJ

        Chris, you have written many times about large corporations taking over some of the functionality of elected government. Certainly, while corporate managers are not elected at all, they can often have as much if not more influence than those with electoral legitimacy do. The same is true for those who, like Elon Musk or Peter Thiel, are not corporate so much as wealthy people play-acting at being corporate. Still others blur the line between government and corporate: outsource companies and contractors are an enormous part of our post-capitalist world.

        Would you argue that these non-elected-but-equally-powerful people should sit under similar scrutiny? If so, why? If not, why not?

      2. My CEO’s pay is disclosed in the company’s quarterly 10K. Any income or assets of any kind that would constitute a conflict of interest have to be disclosed to the board. Failure to disclose would result in firing, a lawsuit and a pretty nasty potential SEC enforcement action.

        Except in the margins of shady companies or fly-by-night operations, the disclosure requirements on senior corporate leadership are pretty hefty. And any leaders in publicly traded companies face significant disclosure pressure.

        My Congressman can take in income from a wide array of sources with very limited constraints and disclosure requirements. If I get caught earning a salary from an undisclosed source I’ll be fired in about ten minutes.

      3. For the most part, widely held, publicly traded corporations have not been extremely bad for criminality and corruption. The real problems have been with the closely held corporations, such as the Koch owned corporations and of course the Trump Organization.

      4. I’ve never bought into the notion that there’s this big pool of Presidential talent in the business sector, but if I had to choose someone from that pool, being CEO of a publicly traded company where they had to be accountable to shareholders/ the board of directors would be a requirement.

      5. “Any income or assets of any kind that would constitute a conflict of interest have to be disclosed to the board. Failure to disclose would result in firing, a lawsuit and a pretty nasty potential SEC enforcement action.”

        The SEC is only as strong as the federal government makes it. The board is only as concerned about the CEO as the threat of the SEC. The stockholders don’t care as long as the board doesn’t care.

        Without evil bad ol’ government being all anti-business and hating winners and success, there is no corporate governance.

      6. The board cares. And the major shareholders, the ones who vote, care. A lot. It’s not quite as clean-hearted as it might sound. More of a balance of power/control issue. Frankly, the same kind of power logic that should inspire major political figures to demand disclosures from each other. We might get there soon.

      7. The board only cares because they believe third party, neutral arbiters of social norms have the power to affect their business. Remove the government, they might care because they are nice people who happened to be grouped on the board of a nice company, but that company will be mercilessly gutted by far more aggressive and cutthroat competition run by people who don’t care. We don’t even have to run the experiment of a governmentless country to prove it. ESG rated corporations underperform the market, countries with shit governance fall to kleptocracy, and countries with no governance cannot even get people a foothold.

        I’m not saying our government is even good at being so called neutral arbiters. They’re rapidly becoming kleptocracy, as you have also said. But when there is no SEC, there is no board concerned with an SEC. When there is no board concerned with an SEC, there is no board that competes without tossing aside any ‘values’ that don’t add to bottom line.

        Hell, most tech companies, the industry you like to cite as having a conscience, either a) don’t really once you look under the hood (Google or Amazon), or b) haven’t ever, won’t ever, and cannot make a profit, and are subsiding almost exclusively in a wash of private investors seeking alpha they can’t get from profit-earning companies using a flood of cheap cash from a zero and negative interest rates. The returns of those companies are paid for by historical levels of corporate debt rather than the creation of real capital.

        Cf WeWorks, such a caring, office sharing, beer bearing corporation that’s not with a dime and wouldn’t exist without that veneer of smiley-faced moral capitalism.

      8. We’re actually watching companies ‘take the lead’ in real time.

        The NBA. Starbucks. Activision.

        In a choice between money and democracy, they’re taking the money.

        Cf. Hong Kong protests.

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