Home Business Insider Biden faces DOJ ‘litmus test’ in Hunter Biden tax probe

Biden faces DOJ ‘litmus test’ in Hunter Biden tax probe


  • President-elect Joe Biden has promised to restore independence and public trust in the Justice Department upon taking office and wall himself off from any civil or criminal investigations.
  • Now, that pledge faces its biggest test as federal prosecutors scrutinze Biden’s son, Hunter, over his financial dealings.
  • “It’s not just an associate of Joe Biden that we’re talking about here,” said one former federal prosecutor. “This is his son. So the proof is in the pudding on this one, on if Joe Biden can keep his hands off the Justice Department.”
  • Trumpworld seized on news of the Hunter Biden tax investigations to heap credibility on a widely discredited New York Post story about a mysterious laptop and the Bidens’ Ukraine ties.
  • But DOJ veterans warned against conflating the tax probes with the Post’s allegations.
  • “If Hunter Biden didn’t pay his taxes, that’s serious and he should be investigated for that. But that doesn’t mean there’s some sort of international cabal run by Joe Biden,” said one former prosecutor. “Only a lazy mind makes that kind of a leap.”
  • Visit Business Insider’s homepage for more stories.

Weeks before President-elect Joe Biden is set to be sworn into office, his son announced that he is the focus of a federal criminal investigation into his “tax affairs.” Hunter Biden’s announcement came after CNN reached out to the transition team for comment when it learned that federal prosecutors were probing the younger Biden’s financial dealings.

Subsequent media reports said the investigation was broader in scope than Hunter Biden initially indicated, with The New York Times revealing that the tax probe grew out of what started off as a money laundering investigation in late 2018.

Politico also reported, citing one source, that in addition to Delaware prosecutors, the securities fraud unit at the Manhattan US attorney’s office investigated Hunter Biden’s finances, and as of early 2019, prosecutors in both Delaware and Washington, DC, were examining possible foreign ties and money laundering.

The Times reported that the money laundering inquiry has since fizzled out from a lack of evidence, but that investigators with the Internal Revenue Service are continuing to scrutinize Hunter Biden’s taxes.

The biggest question since the news dropped is how the investigation into his son may complicate the early months of the elder Biden’s presidency, particularly given his pledge to restore independence and trust in the Justice Department following a period of extraordinary politicization under the Trump administration.

A ‘stark litmus test’ for Joe Biden

“I’m not going to be telling them what they have to do and don’t have to do. I’m not going to be saying go prosecute A, B or C,” Biden told CNN last week. “It’s not my Justice Department. It’s the people’s Justice Department.”

Jeffrey Cramer, a former federal prosecutor who spent 12 years at the Justice Department and has a background in white-collar criminal cases, told Business Insider that the investigation into Hunter Biden will be a “stark litmus test” for the incoming president.

“It’s not just an associate of Joe Biden that we’re talking about here,” Cramer said. “This is his son. So the proof is in the pudding on this one, on if Joe Biden can keep his hands off the Justice Department.”

Elie Honig, a former federal prosecutor from the Southern District of New York, echoed that view, telling Business Insider that ideally, the Hunter Biden probe shouldn’t pose any complications for the Biden presidency.

“If he was sincere about his promise not to interfere, then this will be the first test of that,” he aid. “And if he meant what he said, then he will be hands-off and he will make clear to those around him and to whomever he chooses as the attorney general that they should make decisions and handle this, and that the White House will not have any communications with the department about it. So we’ll see if they stand by that.”

The Biden transition team did not immediately respond to a request for comment.

Hunter Biden’s tax issues and foreign dealings draw scrutiny

The younger Biden has not been charged in any criminal activity, and the president-elect is not known to be a subject of interest in the tax probe. Joe Biden also said last year that if he were elected president, he would not place his family members in government roles, as President Donald Trump did.

That said, Hunter Biden has faced a series of legal issues related to his taxes and questions about his foreign business dealings.

“Putting politics aside, it’s a fact that Hunter Biden was earning money from foreign companies,” Cramer said. “He also had a series of tax-related legal problems, though he wasn’t criminally charged. So it’s not surprising that prosecutors would be looking into him. And you have to say that if you’re Hunter Biden, you’re in an unenviable position right now.”

What we know about the Hunter Biden’s financial dealings

  • In 2017, Hunter Biden and his then-wife Kathleen hadn’t paid $313,970 in taxes, and the IRS issued a lien against the couple for $112,805 in unpaid taxes the following year. By that point, Hunter and Kathleen Biden had divorced, and the taxes appear to have been paid off by March 2020.
  • In July, Washington, DC, issued liens against Biden for more than $450,000 in unpaid taxes in 2017 and 2018. Those taxes appear to have been paid off the following week, when the liens were released, according to tax records reviewed by The Times.
  • Until 2019, he served on the board of the Ukrainian natural-gas company Burisma Holdings and was paid up to $50,000 per month for the role. George Kent, a deputy assistant secretary of state overseeing Ukraine policy, testified to Congress that he raised concerns about the optics of Hunter Biden working for Burisma while the Obama administration was focusing on getting the Ukrainian government to avoid conflicts of interest, but that he was rebuffed by one of then-vice president Biden’s staffers.
    • There was nothing illegal about Hunter Biden’s position at Burisma and there is no evidence that he leveraged his father’s government role to protect himself when the company was being investigated. But Biden later acknowledged that he may have shown “poor judgment” by taking the job.
  • Hunter Biden and some of his associates, including his uncle James, also discussed making a business deal with the Chinese company CEFC China Energy in 2017, though the negotiations fell through before a deal was finalized. Hunter Biden told The New Yorker that he met with the founder and former chairman of CEFC, Ye Jianming, that year and that Ye later sent a 2.8 karat diamond to his hotel room as a gift.
    • Hunter Biden told The New Yorker that the situation made him uncomfortable, adding, “I knew it wasn’t a good idea to take it. I just felt like it was weird.”
  • The New York Times reported that Hunter Biden invested in and previously sat on the board of a Chinese equity firm called BHR, which has said its biggest shareholder is the state-controlled Bank of China. Biden resigned from his board position in April but still held a 10% stake in the company as of July.

For a typical tax case, two years may be considered a long time. But because Hunter Biden engaged in a significant number of international business ventures, the timeline could be different.

“Investigations that involve foreign countries and foreign entities naturally take longer because you have to go through an arduous bureaucratic process called the MLAT process,” Honig said, referring to mutual legal assistance treaties. “It’s burdensome and it requires a whole bunch of paperwork in order to serve and effectuate subpoenas in foreign countries.”

Cramer agreed, saying that because the case involves foreign monies, a lengthier timeline is expected because in order to prove such cases, prosecutors need to obtain financial records from different jurisdictions. “It’s harder to get records from overseas than it is from domestic companies,” he said.

Trumpworld seizes on the Hunter Biden probes

President Donald Trump and the right-wing media sphere seized on news of the Hunter Biden tax probe as soon as it broke this week, with many suggesting that it lent credibility to an earlier New York Post story about a laptop purportedly belonging to the younger Biden containing incriminating material about his personal life and business dealings.

The pro-Trump Fox News commentator Laura Ingraham ran a chyron on her Wednesday night program that read, “Hunter Biden Caught In a Lie Over His China Dealing.”

Fox News ran another op-ed accusing the “liberal media” of having “snuffed out” coverage of Hunter Biden before the election to deliver the White House to the elder Biden.

“In the final weeks of the campaign, there was an unprecedented media blackout of the explosive reporting from the New York Post that shed light on Hunter Biden’s questionable business dealings overseas,” Fox News’ Brian Flood wrote. “The scandal that was once dismissed by members of the media as ‘too disgusting’ to cover and a ‘baseless conspiracy theory’ now appears to be newsworthy in the eyes of the networks’ decision-makers.”

Ohio Republican congressman Jim Jordan made a similar comparison, accusing the media of telling the public that the “Hunter Biden story was Russian disinformation.”


‘Only a lazy mind makes that kind of a leap’

Former prosecutors said they weren’t surprised by Trumpworld’s conflation of the Hunter Biden tax investigations and the Post’s story.

However, the former has been matched by multiple credible news sources and confirmed by Biden himself, while the latter relied on a thumb drive provided to the Post by Rudy Giuliani, Trump’s personal lawyer who has spent the last several years meeting with Russian intelligence operatives, spreading conspiracy theories on national television, and more recently, trying to overturn the results of the election.

The FBI seized the laptop at the center of the Post’s story in late 2019, according to a computer repair shop owner who talked to the right-wing tabloid. And NBC News later reported that the FBI is investigating whether the laptop was part of a foreign influence operation. But there is no evidence that the machine is connected to the two tax investigations into Hunter Biden.

“It’s one thing to suggest that someone may have — and we don’t even know if this is true because there haven’t been criminal charges — but that someone may have broken tax laws, and it’s another to say there’s some sort of international conspiracy taking place involving Joe Biden,” Cramer said. “That’s a huge jump. If Hunter Biden didn’t pay his taxes, that’s serious and he should be investigated for that. But that doesn’t mean there’s some sort of international cabal run by Joe Biden. Only a lazy mind makes that kind of a leap.”

There are several other reasons why details of the tax investigations into Hunter Biden should be taken more seriously than the Post’s reporting, experts said.

For one, Honig pointed to media reports that said the first investigation started in late 2018, before Attorney General William Barr was confirmed to lead the Justice Department. Barr has been at the center of several controversial decisions that sparked allegations that he was showing leniency toward the president’s friends while wielding the department as a sword against Trump’s foes. But he doesn’t appear to have been involved in launching the Hunter Biden investigations.

More importantly, Honig added, the Justice Department adhered to the longstanding rule against making public announcements or taking overt, investigative steps on politically sensitive cases before an election.

“If DOJ really had bad intentions here, then they could have violated that rule,” he said. “They could have put out a search warrant or made an announcement in the weeks leading up to the election. And the fact that they didn’t — that’s a good thing.”

Indeed, CNN reported that the Hunter Biden inquiries were temporarily paused in the run-up to the election. And in a remarkable twist, The Wall Street Journal reported that Barr himself knew of the existence of the investigations in the months before the election but worked to keep them under wraps.

The news earned Barr rare praise from Justice Department veterans who had sounded the alarm about his leadership for months. But it likely won’t win him any points from the president, who has expressed deep frustration toward the attorney general for not undertaking politically motivated investigations against his rivals to help him win reelection.

The White House did not immediately respond to a request for comment.

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