Things that make you go hmmmmm.

seems to me what he says could be true.   as far as the examples of he maybe far fetched stories, the author doesn't say why they are far fetched.

10/23/2012

Charlie Gasparino has pieces in the NYPost and on FoxBusiness.com on a shady Iraqi home construction contract that appears to benefit Vice President Joe Biden’s brother, James.

In a nutshell:

James Biden isn’t a big name in the business of residential housing development, so what exactly qualifies him to work at a construction company and share in the winnings of a $1.5 billion project to build affordable homes in Iraq?

If you said it has something to do with his last name, the one shared by his older brother Vice President Joe Biden, you wouldn’t be far off. At least that’s the guess of some Wall Street analysts who cover the Marlton, NJ-based company Hill International and think they’ve seen yet another sordid tale of crony capitalism.

Hill has been around for decades; its main business is managing construction projects in the Middle East and here in America. It’s built a good reputation over the years, as has the father-son team who run it, Irv and David Richter.

But the bursting of the real-estate bubble took its toll; Hill shares are down 80 percent since 2008. Since 2011, the company has reported losses. Its Middle East business has also been stymied by the Arab Spring uprisings; in Libya alone, Hill is out $60 million in payments that it’s still trying to recover.

But it got some good news not long after its housing subsidiary hired James Biden as an executive vice president in late 2010. Just six months later, Hill won one of its biggest contracts ever, a $1.5 billion deal to build at least 100,000 affordable homes in Iraq.

A good deal for Hill, a relative newcomer to building homes — and for James Biden, who as one partner will get a good share of that $1.5 billion.

The deal is contingent on the Iraqi government providing financing, which it has yet to do, but Hill execs tell analysts the money could start flowing by the end of the year. That’s when everyone involved, James Biden included, will start collecting on tens of millions of dollars in profits.

Does James Biden’s name ring a bell? If you read Culture of Corruption, it will. As I reported in the book, brother James and the VP’s lobbyist son Hunter were caught up in a shady financial scheme that exposed the family’s nepotism-dependent business.

Refresher:

“Average Joe” Biden wants you to believe he hangs with the regular guys at Home Depot. But the BFFs (Best Friends Forever!) of the Bidens wear pin-striped suits, not coveralls. They carry briefcases, not toolboxes. And you can bet they’re not driving pick-up trucks.

One lucrative cloud seeded by “rainmaker” William Oldaker showered generous benefits on both Hunter Biden and his dad. In 2005–06, the Chicago-based personal injury law firm of Cooney and Conway paid Oldaker, Biden & Belair $220,000 to push its tort reform proposals. At the same time, Cooney and Conway gave Senator Biden’s political campaigns more than $70,000. The firm’s founding co-partner John Cooney told the Chicago Daily Law Bulletin that he struck up a friendship with Biden in 2004 over a legislative battle before Biden’s Senate Judiciary Committee. Cooney was part of a small group that strategized with Biden on campaign matters at his Delaware home.

Cooney and Conway represent clients claiming asbestos-related injuries. Biden sided with the trial lawyers, actively opposing measures to reduce frivolous lawsuits and reduce the returns on future lawsuits.

Other heavy-hitting law firms that pitched in to Biden’s campaigns: Baltimore-based Peter Angelos, whose law firm gave Biden $156,250; Wilmington-based Young Conaway Stargatt & Taylor, which kicked in $127, 979; and Pachulski Stang Zielhl & Jones, which donated $145,625, according to The American Lawyer. Philip Howard, author and founder of Common Good, a bipartisan coalition that advocates for legal reform, summed up his record: “Senator Biden has a pretty clear record of being close to the trial lawyers. To people who are interested in restoring reliability to the legal system, he’s probably unlikely to be the champion.”

Disgraced trial lawyer Richard Scruggs donated $11,500 to Biden in 2008. After Scruggs was convicted of attempting to bribe a federal judge, Biden tried to show his ethical bona fides by donating the money to a worthy charity. But Biden couldn’t steer clear of nepotism. The money ended up with the National Prostate Cancer Coalition—a charity where, The American Lawyer pointed out, Biden’s son Hunter sits on the board of directors.

Another Biden family pal in the trial lawyers’ community: Jeff Cooper. With his partner John Simmons, the 39-year-old Cooper built one of the biggest asbestos litigation firms in the country. SimmonsCooper, based in Madison County, Illinois, has donated a whopping $196,050 to Biden’s campaigns since 2003, according to the nonpartisan Center for Responsive Politics in Washington, D.C. In that same time frame, the firm poured $6.5 million into lobbying against the same tort reform bill that fellow asbestos litigators Cooney and Conway opposed—and which Senator Biden worked hard to defeat. Without a hint of irony, Cooper extolled Biden’s anti-tort reform stance: “He understands the plight of the little guy and is against huge corporate interest.” But what Biden did was help fuel lucrative business for the tort bar. When courts in SimmonsCooper’s home base in Illinois finally started cracking down on what had become “America’s No. 1 judicial hellhole” for filing out-of-control tort claims, the firm turned East. And in Joe Biden’s Delaware, they created a new sanctuary. The Wall Street Journal explained:

Simmons Cooper is a big asbestos player, and Madison County was until recently one of America’s meccas for jackpot justice. But the story gets better: Mr. Biden has been helping the tort bar turn his home state of Delaware into a statewide Madison County.

Simmons Cooper made hundreds of millions of dollars on asbestos cases in Madison County, but that started to change in 2004. The business community helped to elect conservative Lloyd Karmeier to the Illinois Supreme Court. Madison County Circuit Judge Daniel Stack also took over the asbestos docket, was determined to clean house, and began dismissing suits filed by residents outside his jurisdiction.

Simmons Cooper and other firms started shopping for a new legal goldmine. And where better than Delaware? Many companies incorporate there, which means a list of defendants usually includes a Delaware target. Beginning in mid-2005, Simmons Cooper began transferring its suits to Bidenland.

The trial bar’s strategy has been to overwhelm Delaware’s once-sensible legal system, taking advantage of rules that pressure companies to settle. In the 22 months following SimmonsCooper’s first asbestos filing in Delaware, the state was hit with 412 suits, primarily from SimmonsCooper and fellow asbestos giant Baron & Budd.

According to the Madison County Record—a legal journal that has doggedly followed this story—clerks in Wilmington were “working nights and weekends to keep up” with the filings. The trial lawyers drew sympathetic judges that have already overseen big verdicts against defendants, primarily Detroit auto makers. Plaintiffs have obtained certain procedures that raise the costs of defense, and restrict defendants’ ability to take discovery.

Cooper first befriended Biden’s sons, Hunter and Beau, before deepening his financial and political relationship with their dad. There’s a personal connection: Cooper’s wife went to high school with Hunter Biden’s wife, Kathleen. And as Biden the Elder was carrying water for the trial lawyers in the U.S. Senate, SimmonsCooper was working another Biden channel through the Wilmington, Delaware, law firm of Bifferato, Gentilotti & Biden, where Joe’s son and Hunter’s brother, Beau, was a partner.

SimmonsCooper found Delaware an attractive new magnet for its asbestos litigation racket because many of the firm’s defendants included clients who had incorporated in the state.

SimmonsCooper recruited Beau’s firm to work as co-counsel on Delaware asbestos litigation cases. The Illinois firm steered dozens of cases Beau Biden’s way. He dropped an asbestos defense client to accommodate his deep-pocketed family friend. SimmonsCooper then forked over $35,000 to Beau Biden’s successful run for state attorney general in 2006. Steve Hantler, president of the American Justice Partnership Foundation, observed, “Delaware is fast becoming asbestos lawsuit central.…A tsunami of lawsuits being filed by the SimmonsCooper firm, along with the flow of campaign dollars to Delaware politicians is quite the troubling coincidence.”

Even more troubling was the financial partnership Hunter Biden and his Uncle James (Senator Biden’s brother) attempted to forge with SimmonsCooper. The Bidens approached SimmonsCooper with a proposition: Team up with the family to buy a hedge fund investment firm for $21 million. Cooper agreed to chip in $2 million in exchange for 10 percent interest. The Bidens negotiated the hedge fund buyout of Paradigm Global Advisors with business partner Anthony Lotito Jr. in 2006. As Paradigm chairman, Hunter Biden oversaw half a billion dollars of client money invested in hedge funds while remaining a lobbyist at Oldaker, Biden & Belair.

But things fell apart. In their haste to clean up the Biden image, they ended up with dirtier hands. According to Lotito, the Bidens pursued the venture to help get Hunter Biden out of the lobbying business before Dad launched another presidential campaign. The Madison County Record, which tracked the dealings of the Bidens and SimmonsCooper closely, laid out the timeline:

According to court records filed by Lotito, Joe Biden wanted Hunter Biden to find a different line of work because he couldn’t afford to run for president as father of a lobbyist.

Lotito claims he and James Biden discussed Hunter Biden’s job prospects.

Lotito met James Biden in 2002 and they invested together in 2005, according to Lotito.

Lotito introduced James Biden and Hunter Biden to lawyer John Fascian[a], and the four began planning to buy Paradigm Capital Management.

Majority owner James Parks had started Paradigm in 1991 and successfully promoted it as less volatile than most hedge funds.

Everyone agreed that the Bidens and Lotito would form a corporation to buy 54 percent of Paradigm for $21.3 million in cash.

They would install Hunter Biden as chief executive officer at a salary of $1.2 million.

In April 2006, they formed LBB Limited Liability Corporation.

In May 2006, SimmonsCooper invested $1 million.

In June 2006, according to Lotito, the Bidens told him to stay away.

In August 2006, according to Lotito, the Bidens formed a corporation, executed a promissory note for $8.1 million, and purchased Paradigm’s assets.

In September 2006, Lotito signed an agreement relinquishing his third of LBB.

He sued the Bidens in January 2007, alleging fraud and breach of fiduciary duty.

Lie down with shady partners, get up with a public relations nightmare. Lotito maintained that the Bidens cut a secret deal and tried to fraudulently trick him into signing away his interest in the LLC that they had formed together. In court filings, Lotito’s lawyer asserted that the Bidens used their political clout to intimidate his client: “Ultimately, the Bidens threatened to use their alleged connections with a former U.S. Senator to retaliate against counsel for insisting that his bill be paid, claiming that the former Senator was prepared to use his influence with a federal judge to disadvantage counsel in a proceeding then pending before that court.”

The Bidens shot back that Lotito had neglected to mention that the lawyer he connected them with, John Fasciana, was a crook. Fasciana had been convicted in July 2005 on federal charges of conspiracy and wire and mail fraud over a scheme to cheat Electronic Data Systems (Ross Perot’s computer services company) of millions of dollars.

Fasciana was sentenced in 2008 to four years in prison, but has appealed the case. He sued the Bidens for nearly $200,000 in legal fees; they countersued Fasciana for overbilling him and committing fraud by concealing his criminal conviction. Hunter and James Biden also countersued Lotito in February 2007 seeking $10 million. The Bidens asserted that Lotito “hid debts and falsely claimed he held securities licenses to lure them as partners in the planned $21.3 million acquisition,” the Washington Post reported. “Had James and Hunter Biden known the truth about Anthony Lotito, they never would have gone into business with him,” their complaint alleged.

Where did this leave SimmonsCooper, which had kicked in half of a $2 million investment at the request of the Bidens? The Illinois firm had withdrawn from the deal after watching $1 million of its investment allegedly squandered by Lotito. The investment “converted to debt,” which Hunter and James Biden then attempted to shift to Lotito. A New York judge didn’t go along with the Bidens’ attempt to play the victim card. In May 2008, he rejected their bid after concluding they should have vetted the fund more carefully and performed their own due diligence. Cutting through the ploy, the judge ruled that the Bidens’ counterclaims “seek only to foment uncertainty and chaos between the parties in the event that plaintiff is successful in presenting the main claims.…Such pleading will not be countenanced.” Moreover, he ruled,

“Certainly defendants do not claim that the law permits sophisticated investors to rely on whatever representations a potential advisor makes without the need for a diligent inquiry by defendants, and that such representations are actionable if they wind up to have been faulty.”

In January 2009, court papers announced that the legal fracas had been settled confidentially —preventing any disclosure or discussion whatsoever regarding the nature of the settlement or the subject matter of the action. The record did note that the lawsuit was resolved “without cost to any party.” For anyone paying close attention, however, the cost to the Biden family’s “just folks” reputation was clear. Alas, the settlement didn’t end the sordid story for the Bidens…

From one smelly crony scheme to the next, Stimulus Sheriff Joe and his fam keep laughing all the way to the bank.