2008 Biden Family Accused Of Fraud
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The News Journal
Wilmington, Delaware
29 Aug 2008, Fri \u2022 Page 7
.==============BEGIN ARTICLE TEXT
Lobbying, financial dealings in Biden family face scrutiny
By JEFF MONTGOMERY ,
The News Journal
When Sen. Joe Biden's son Hunter needed investors to help buy a New York-based hedge fund. the first financier to step forward was a Chicago lobbying firm and one of the senator's top campaign contributors. After the first attempt to buy the fund soured, one of Joe Biden's top advisers, who co-owns a lobbying and communications firm, jumped in to provide public relations help, and was later identified in court papers as a new investor. Both deals came to light only after one of the parties - who describes himself as a longtime acquaintance of the Biden\u2019s -filed a fraud lawsuit against Hunter and James Biden, the senator's younger brother and a partner in the hedge fund.
The News Journal
Wilmington, Delaware
29 Aug 2008, Fri \u2022 Page 7
.==============BEGIN ARTICLE TEXT
Lobbying, financial dealings in Biden family face scrutiny
By JEFF MONTGOMERY ,
The News Journal
When Sen. Joe Biden's son Hunter needed investors to help buy a New York-based hedge fund. the first financier to step forward was a Chicago lobbying firm and one of the senator's top campaign contributors. After the first attempt to buy the fund soured, one of Joe Biden's top advisers, who co-owns a lobbying and communications firm, jumped in to provide public relations help, and was later identified in court papers as a new investor. Both deals came to light only after one of the parties - who describes himself as a longtime acquaintance of the Biden\u2019s -filed a fraud lawsuit against Hunter and James Biden, the senator's younger brother and a partner in the hedge fund.
The case, still working its way through New , York's courts, illustrates an often-mentioned vulnerability of Joe Biden after 36 years in the Senate: his ties with Washington lobbyists, including those of his son Hunter. Democrats were hoping to avoid Republican attacks and insider dealings when they chose the Delaware Democrat to join presidential hopeful Barack Obama and his message of political change. But the legal dispute has offered inside glimpses of the deals, including revelations that a corporate counsel working for the Hunter Biden-led venture was awaiting sentencing on a federal money-laundering charge, and allegations of drug abuse by one hedge fund's senior officers and prior owners.
Hunter Biden began his effort to buy control of the New York-based Paradigm hedge fund about the time his father began seriously campaigning for the Democratic nomination for president. The only party to put up any large amount of cash for the $21 million deal was Illinois-based Simmons Cooper LLC, a law and lobbying firm that agreed to chip in $2 million to Hunter's effort.
Paradigm controls hundreds of millions of investor assets, according to Securities and Exchange Commission records and New York State Supreme Court files. Simmons Cooper is a longtime supporter of Joe Biden, and contributed more than $146,300 to Biden through employees and political action committees in the 2007-2008 campaign cycle alone, making the company Biden's second-leading backer. David Wade, a spokesman for Biden and his vice presidential campaign said Tuesday that Joe Biden had nothing to do with the deal and knew nothing about it. Wade also said that Hunter Biden had a personal relationship with a partner in Simmons Cooper.
\u201cJeff Cooper is a longtime friend of Hunter Biden, for several years," Wade said. "Senator Biden was unaware of the business deal."
Sen. Biden has had plenty of dealings, however, that involved Simmons Cooper interests. Biden chaired the Senate Judiciary Committee and has been a staunch supporter of one of the law firm's main legislative priorities: opposition to so-called "tort reform" and attempts to limit payouts to victims in asbestos cases.
{PHOTO: Gannett News Service file Sen. Joe Biden (right) flies with his brother, James, in 2005. A man suing James and the senator's son Hunter says he was approached by James because Hunter was interesting in acquiring a hedge fund company to get out of lobbying. limit payouts to victims in asbestos cases.}
And when Hunter Biden's first Paradigm deal dissolved, another Joe Biden acquaintance was waiting in the wings. Boston-based public relations magnate Lawrence Rasky joined a second effort to buy the fund, this time for $8 million, according to the lawsuit. Rasky was the communications adviser for Joe Biden's failed presidential campaign and a Biden contributor. Details of Rasky's financial commitment to or participation in the Paradigm deal are unknown.
FIRST DEAL FAILS:
Hunter Biden and James Biden first tried to buy control of Paradigm Capital in 2006 for $21 million. Hunter Biden was still working as a Washington, D.C., lobbyist. And Joe Biden already was warming up for his run for the Democratic nomination for president.
According to claims filed as part of the New York case, Hunter launched the takeover bid partly as an effort to find a career outside of direct lobbying.
The senator's son's occupation and connections to two lobbying firms already had drawn some critical attention to his father as the younger Biden lobbied for health care and educational interests.
In 2006, Biden's campaign severed ties with one of the lobbying companies connected with Hunter, after reform measures passed obliging lawmakers to certify that they or their families would not benefit from votes before them.
At about the same time, the younger Biden started exploring other careers. Anthony V. Lotito Jr., an investment adviser who is now suing Hunter and James Biden and others, claimed in a suit filed last year that James Biden approached him in 2006 to help Hunter acquire Paradigm and get away from lobbying.
Lotito claimed to have known James Biden since 2002, and said the two were once co-investors in a different venture, Americore International Security Advisers.
In 2006, Lotito said in a complaint, James Biden reported that the senator was "concerned with the impact that Hunter's lobbying activities might have" on Biden's presidential primary bid.
Although Hunter and James Biden have a vastly different version of events from Lotito's, Lotito claimed that the three eventually formed a company to buy up Paradigm, a hedge fund investment company actually made up of other hedge funds, managed out of New York City.
According to the lawsuit, a partnership managed by Simmons Cooper put up most of the hard cash for the $21.2 million deal.
Simmons Cooper, a company ranked as one of the country's most active in asbestos injury lawsuits, paid $1 million toward the purchase in 2006 and had pledged another before the partnership fell apart amid allegations of fraud and deception.
In their response to the lawsuit, the two Bidens accused Lotito of misrepresenting his expertise in recruiting investors for the purchase. They also said that Lotito had failed to tell them about drug and absentee problems that a principal investor in Paradigm suffered, and about the fact that a corporate lawyer recommended for the new venture by Lotito was awaiting sentencing for a federal money laundering charge.
They also accused Lotito and the lawyer of plundering the company after the law firm handed over $330,000 and $670,000 payments toward their $2 million stake.
"Almost immediately after Simmons Cooper sent this second payment ... Lotito and Fasciana began submitting questionable expenses," Hunter Biden charged in an affidavit. They issued payments to themselves as reimbursements, he said.
Most of Simmons Cooper's money eventually was consumed by questionable legal fees, retainers and trips to California, where Lotito had a girlfriend, Biden said in his affidavit.
Lotito countered that Hunter Biden was unprepared to run the fund company, a job for which he was to have been paid $1.2 million a year. He claimed that Biden immediately began making mistakes in the business, and accused the two Bidens of elbowing him out of the company. The pair, he alleged, pressed him to sell out his piece of the company that was buying Paradigm, even as the two Bidens were setting up a different, and cheaper, side deal for the buyout.
Nicholas Gravante Jr., an attorney in New York who represents the Bidens in the lawsuit said Lotito's suggestions about any ties to Sen. Biden are "absolutely untrue." He also said the case had been moving slowly through the court system but predicted that it eventually will be dismissed - despite a judge's observation that the Bidens should have taken a closer look at their partner's claims before signing a deal.
BIDEN ADVISOR STEPS IN
By late 2006, the original deal was broken and Lotito was preparing a lawsuit.
Simmons Cooper pulled out after conferring with the Bidens and learning, according to Hunter, that Paradigm was "a in the original deal.
Hunter Biden claimed that he and his uncle incurred at least $1.3 million in debt over the course of the broken deal.
But a new tie to Sen. Biden emerged, in the person of Rasky. Lotito's lawsuit alleges that Rasky was an investor. Terms of Rasky's involvement in the actual purchase are unavailable, and Rasky could not be reached for comment.
Rasky is the principal in a company that was recorded as having $20,000 in lobbying expenses in 2006, including $10,000 to the lobbying company where the younger Biden worked. The same company also was paid more than $59,000 in the third quarter of 2007 alone for services to Biden's presidential bid.
"I know that Rasky Baerlein was hired to provide public relations for Paradigm, but Larry's not an investor, to the best of my knowledge," Wade said.
Rasky Baerlein Strategic Communications Inc.'s Web site identifies the company as having clients that "range from presidential candidates to C-level executives at prominent institutions across the country." The company also touts its expertise in "managing a crisis, securing legislation or winning a ballot campaign."
BIDEN\u2019S LOBBYIST TIES
The Biden family's dealings with lobbyists have dogged him for years.
Hunter Biden worked for a time as a vice president for credit card giant MBNA, and then was paid a retainer by the banking company after becoming a lobbyist. At the same time, Congress was debating bankruptcy reform legislation supported by the industry despite complaints that it reduced protections for smaller creditors. Biden voted for the changes: Obama opposed them.
In 2005, the Illinois Civil Justice League pointed out that Biden's son Beau was the youngest partner in a Delaware law firm that suddenly had a burgeoning business in asbestos lawsuits. The league accused Simmons Cooper of shifting its business to Delaware and increasing its involvement in campaigns that could lead to more favorable court appointments.
Biden, the group pointed out, was "a leading opponent" of a bill dubbed the "Fairness in Asbestos Injury Resolution Act." a measure also opposed by Simmons Cooper.
Wade said the hedge fund deal had nothing to do with the asbestos issue, which reached a crescendo in 2006 when Biden voted with a majority of the Senate to block legislation that would have created a trust fund for victims of exposure to the cancer-causing material.
Beau Biden went on to become a federal attorney and, currently, Delaware's attorney general. Contact left Montgomery at 678-4277 or This email address is being protected from spambots. You need JavaScript enabled to view it.
Hunter Biden began his effort to buy control of the New York-based Paradigm hedge fund about the time his father began seriously campaigning for the Democratic nomination for president. The only party to put up any large amount of cash for the $21 million deal was Illinois-based Simmons Cooper LLC, a law and lobbying firm that agreed to chip in $2 million to Hunter's effort.
Paradigm controls hundreds of millions of investor assets, according to Securities and Exchange Commission records and New York State Supreme Court files. Simmons Cooper is a longtime supporter of Joe Biden, and contributed more than $146,300 to Biden through employees and political action committees in the 2007-2008 campaign cycle alone, making the company Biden's second-leading backer. David Wade, a spokesman for Biden and his vice presidential campaign said Tuesday that Joe Biden had nothing to do with the deal and knew nothing about it. Wade also said that Hunter Biden had a personal relationship with a partner in Simmons Cooper.
\u201cJeff Cooper is a longtime friend of Hunter Biden, for several years," Wade said. "Senator Biden was unaware of the business deal."
Sen. Biden has had plenty of dealings, however, that involved Simmons Cooper interests. Biden chaired the Senate Judiciary Committee and has been a staunch supporter of one of the law firm's main legislative priorities: opposition to so-called "tort reform" and attempts to limit payouts to victims in asbestos cases.
{PHOTO: Gannett News Service file Sen. Joe Biden (right) flies with his brother, James, in 2005. A man suing James and the senator's son Hunter says he was approached by James because Hunter was interesting in acquiring a hedge fund company to get out of lobbying. limit payouts to victims in asbestos cases.}
And when Hunter Biden's first Paradigm deal dissolved, another Joe Biden acquaintance was waiting in the wings. Boston-based public relations magnate Lawrence Rasky joined a second effort to buy the fund, this time for $8 million, according to the lawsuit. Rasky was the communications adviser for Joe Biden's failed presidential campaign and a Biden contributor. Details of Rasky's financial commitment to or participation in the Paradigm deal are unknown.
FIRST DEAL FAILS:
Hunter Biden and James Biden first tried to buy control of Paradigm Capital in 2006 for $21 million. Hunter Biden was still working as a Washington, D.C., lobbyist. And Joe Biden already was warming up for his run for the Democratic nomination for president.
According to claims filed as part of the New York case, Hunter launched the takeover bid partly as an effort to find a career outside of direct lobbying.
The senator's son's occupation and connections to two lobbying firms already had drawn some critical attention to his father as the younger Biden lobbied for health care and educational interests.
In 2006, Biden's campaign severed ties with one of the lobbying companies connected with Hunter, after reform measures passed obliging lawmakers to certify that they or their families would not benefit from votes before them.
At about the same time, the younger Biden started exploring other careers. Anthony V. Lotito Jr., an investment adviser who is now suing Hunter and James Biden and others, claimed in a suit filed last year that James Biden approached him in 2006 to help Hunter acquire Paradigm and get away from lobbying.
Lotito claimed to have known James Biden since 2002, and said the two were once co-investors in a different venture, Americore International Security Advisers.
In 2006, Lotito said in a complaint, James Biden reported that the senator was "concerned with the impact that Hunter's lobbying activities might have" on Biden's presidential primary bid.
Although Hunter and James Biden have a vastly different version of events from Lotito's, Lotito claimed that the three eventually formed a company to buy up Paradigm, a hedge fund investment company actually made up of other hedge funds, managed out of New York City.
According to the lawsuit, a partnership managed by Simmons Cooper put up most of the hard cash for the $21.2 million deal.
Simmons Cooper, a company ranked as one of the country's most active in asbestos injury lawsuits, paid $1 million toward the purchase in 2006 and had pledged another before the partnership fell apart amid allegations of fraud and deception.
In their response to the lawsuit, the two Bidens accused Lotito of misrepresenting his expertise in recruiting investors for the purchase. They also said that Lotito had failed to tell them about drug and absentee problems that a principal investor in Paradigm suffered, and about the fact that a corporate lawyer recommended for the new venture by Lotito was awaiting sentencing for a federal money laundering charge.
They also accused Lotito and the lawyer of plundering the company after the law firm handed over $330,000 and $670,000 payments toward their $2 million stake.
"Almost immediately after Simmons Cooper sent this second payment ... Lotito and Fasciana began submitting questionable expenses," Hunter Biden charged in an affidavit. They issued payments to themselves as reimbursements, he said.
Most of Simmons Cooper's money eventually was consumed by questionable legal fees, retainers and trips to California, where Lotito had a girlfriend, Biden said in his affidavit.
Lotito countered that Hunter Biden was unprepared to run the fund company, a job for which he was to have been paid $1.2 million a year. He claimed that Biden immediately began making mistakes in the business, and accused the two Bidens of elbowing him out of the company. The pair, he alleged, pressed him to sell out his piece of the company that was buying Paradigm, even as the two Bidens were setting up a different, and cheaper, side deal for the buyout.
Nicholas Gravante Jr., an attorney in New York who represents the Bidens in the lawsuit said Lotito's suggestions about any ties to Sen. Biden are "absolutely untrue." He also said the case had been moving slowly through the court system but predicted that it eventually will be dismissed - despite a judge's observation that the Bidens should have taken a closer look at their partner's claims before signing a deal.
BIDEN ADVISOR STEPS IN
By late 2006, the original deal was broken and Lotito was preparing a lawsuit.
Simmons Cooper pulled out after conferring with the Bidens and learning, according to Hunter, that Paradigm was "a in the original deal.
Hunter Biden claimed that he and his uncle incurred at least $1.3 million in debt over the course of the broken deal.
But a new tie to Sen. Biden emerged, in the person of Rasky. Lotito's lawsuit alleges that Rasky was an investor. Terms of Rasky's involvement in the actual purchase are unavailable, and Rasky could not be reached for comment.
Rasky is the principal in a company that was recorded as having $20,000 in lobbying expenses in 2006, including $10,000 to the lobbying company where the younger Biden worked. The same company also was paid more than $59,000 in the third quarter of 2007 alone for services to Biden's presidential bid.
"I know that Rasky Baerlein was hired to provide public relations for Paradigm, but Larry's not an investor, to the best of my knowledge," Wade said.
Rasky Baerlein Strategic Communications Inc.'s Web site identifies the company as having clients that "range from presidential candidates to C-level executives at prominent institutions across the country." The company also touts its expertise in "managing a crisis, securing legislation or winning a ballot campaign."
BIDEN\u2019S LOBBYIST TIES
The Biden family's dealings with lobbyists have dogged him for years.
Hunter Biden worked for a time as a vice president for credit card giant MBNA, and then was paid a retainer by the banking company after becoming a lobbyist. At the same time, Congress was debating bankruptcy reform legislation supported by the industry despite complaints that it reduced protections for smaller creditors. Biden voted for the changes: Obama opposed them.
In 2005, the Illinois Civil Justice League pointed out that Biden's son Beau was the youngest partner in a Delaware law firm that suddenly had a burgeoning business in asbestos lawsuits. The league accused Simmons Cooper of shifting its business to Delaware and increasing its involvement in campaigns that could lead to more favorable court appointments.
Biden, the group pointed out, was "a leading opponent" of a bill dubbed the "Fairness in Asbestos Injury Resolution Act." a measure also opposed by Simmons Cooper.
Wade said the hedge fund deal had nothing to do with the asbestos issue, which reached a crescendo in 2006 when Biden voted with a majority of the Senate to block legislation that would have created a trust fund for victims of exposure to the cancer-causing material.
Beau Biden went on to become a federal attorney and, currently, Delaware's attorney general. Contact left Montgomery at 678-4277 or This email address is being protected from spambots. You need JavaScript enabled to view it.
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