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The Kerrys, the Bidens and the Chinese government

Washington – Senate Finance Committee Chairman Chuck Grassley (R-Iowa) is raising concerns over the process by which the Obama administration’s Committee on Foreign Investment in the United States (CFIUS) approved the acquisition of a U.S. automotive technology company, Henniges, with reported military applications. Henniges was reportedly jointly acquired by Chinese government entities and an investment firm linked to family members of then-Vice President Joe Biden and other Obama administration officials. In his letter to Department of Treasury Secretary Steven Mnuchin, Grassley is requesting documents associated with the approval of the transaction, as well as other details that may speak to the legitimacy of the decision-making process, including any potential coordination with the Obama-Biden White House.

“As with the Uranium One transaction, there is cause for concern that potential conflicts of interest could have influenced CFIUS approval of the Henniges transaction,” Grassley wrote. “Accordingly, Congress and the public must fully understand the decision-making process that led to the Henniges approval and the extent to which CFIUS fully considered the transaction’s national security risks.”

“For example, one of the companies involved in the Henniges transaction was a billion dollar private investment fund called Bohai Harvest RST (BHR). BHR was formed in November of 2013 by a merger between the Chinese-government linked firm, Bohai Capital, and a company named Rosemont Seneca Partners. Rosemont Seneca was reportedly formed in 2009 by Hunter Biden, the son of then-Vice President Joe Biden, Chris Heinz, the stepson of former Secretary of State John Kerry, and others.”

Both individuals are related to high-ranking Obama administration officials. Accordingly, Grassley is raising concerns about potential conflicts of interest because in September 2015, BHR joined with a subsidiary of the Aviation Industry Corporation of China (AVIC) to acquire Henniges. The Department of State, then under Kerry’s leadership, is a CFIUS member and would have played a direct role in the decision to approve the Henniges transaction.

In the past, I have raised concerns regarding the Committee on Foreign Investment in the United States’ (CFIUS) decision-making process, most notably with respect to its approval of the Uranium One transaction where the Obama administration ceded some U.S. uranium production capacity to the Russian government. Today, I write to express concern about another Obama-era CFIUS-approved transaction which gave control over Henniges, an American maker of anti-vibration technologies with military applications, to a Chinese government-owned aviation company and China-based investment firm with established ties to the Chinese government. As with the Uranium One transaction, there is cause for concern that potential conflicts of interest could have influenced CFIUS approval of the Henniges transaction. Accordingly, Congress and the public must fully understand the decision-making process that led to the Henniges approval and the extent to which CFIUS fully considered the transaction’s national security risks.

For example, one of the companies involved in the Henniges transaction was a billion dollar private investment fund called Bohai Harvest RST (BHR). BHR was formed in November of 2013 by a merger between the Chinese-government linked firm, Bohai Capital, and a company named Rosemont Seneca Partners. Rosemont Seneca was reportedly formed in 2009 by Hunter Biden, the son of then-Vice President Joe Biden, Chris Heinz, the stepson of former Secretary of State John Kerry, and others.

The direct involvement of Mr. Hunter Biden and Mr. Heinz in the acquisition of Henniges by the Chinese government creates a potential conflict of interest. Both are directly related to high-ranking Obama administration officials. The Department of State, then under Mr. Kerry’s leadership, is also a CFIUS member and played a direct role in the decision to approve the Henniges transaction. The appearance of potential conflicts in this case is particularly troubling given Mr. Biden’s and Mr. Heinz’s history of investing in and collaborating with Chinese companies, including at least one posing significant national security concerns. This history with China pre and post-dates the 2015 Henniges transaction.

For example, in December of 2013, one month after Rosemont Seneca’s merger with Bohai Capital to form BHR, Hunter Biden reportedly flew aboard Air Force Two with his father, then-Vice President Biden to China.

While in China, he helped arrange for Jonathan Li, CEO of Bohai Capital, to “shake hands” with Vice-President Biden. Afterward, Hunter Biden met with Li for reportedly a “social meeting.” After the China trip, BHR’s business license was approved.

In December of 2014, BHR also reportedly became an investor in China General Nuclear Power Corp (CGN), a state-owned energy company involved in building nuclear reactors. In April of 2016, the U.S. Department of Justice (DOJ) charged CGN with conspiracy to unlawfully engage and participate in the production and development of special nuclear material outside the United States which could cause “significant damage to our national security.”

Then, in August of 2015, Gemini Investments Limited, another Chinese-government linked entity, purchased 75 percent of Rosemont Reality, a sister company of Rosemont Seneca. Rosemont Realty became Gemini Rosemont and it reportedly focused on purchasing American real estate.

In September 2015, BHR joined with a subsidiary of the Aviation Industry Corporation of China (AVIC) to acquire Henniges for $600 million. AVIC acquired 51 percent of the company, and BHR acquired 49 percent.

According to reports, the acquisition of Henniges by BHR and AVIC was the “biggest Chinese investment into US automotive manufacturing assets to date.”

Because the acquisition gave Chinese companies direct control of Henniges’ anti-vibration technologies, the transaction was reviewed by CFIUS.

CFIUS approved the transaction despite reports that in 2007, years before BHR teamed up with AVIC’s subsidiary, AVIC was reportedly involved in stealing sensitive data regarding the Joint Strike Fighter program.

AVIC later reportedly incorporated the stolen data into China’s J-20 and J?31 aircraft.

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Bohai Harvest RST (BHR) Rosemont Seneca and the Thorton Group

In short, the Chinese government was literally funding a business that it co-owned along with the sons of two of America’s most powerful decision makers.

The partnership between American princelings and the Chinese government was just a beginning. The actual investment deals that this partnership made were even more problematic. Many of them would have serious national security implications for the United States.

In 2015, BHR joined forces with the automotive subsidiary of the Chinese state-owned military aviation contractor Aviation Industry Corporation of China (AVIC) to buy American “dual-use” parts manufacturer Henniges.

AVIC is a major military contractor in China. It operates “under the direct control of the State Council” and produces a wide array of fighter and bomber aircraft, transports, and drones — primarily designed to compete with the United States.

The company also has a long history of stealing Western technology and applying it to military systems. The year before BHR joined with AVIC, the Wall Street Journal reported that the aviation company had stolen technologies related to the US F-35 stealth fighter and incorporated them in their own stealth fighter, the J-31. AVIC has also been accused of stealing US drone systems and using them to produce their own.

In September 2015, when AVIC bought 51 percent of American precision-parts manufacturer Henniges, the other 49 percent was purchased by the Biden-and-Kerry-linked BHR.

Henniges is recognized as a world leader in anti-vibration technologies in the automotive industry and for its precise, state-of-the-art manufacturing capabilities. Anti-vibration technologies are considered “dual-use” because they can have a military application, according to both the State Department and Department of Commerce.

The technology is also on the restricted Commerce Control List used by the federal government to limit the exports of certain technologies. For that reason, the Henniges deal would require the approval of the Committee on Foreign Investment in the United States (CFIUS), which reviews sensitive business transactions that may have a national security implication.

According to BHR internal documents, the Henniges deal included “arduous and often-times challenging negotiations.” The CFIUS review in 2015 included representatives from numerous government agencies including John Kerry’s State Department.

The deal was approved in 2015.

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Last week, Biden raised eyebrows when he shrugged off concerns over the China threat. “Come on, man,” Biden said. “I mean, you know, they’re not bad folks, folks. But guess what, they’re not competition for us.” Perhaps Biden’s insouciant attitude toward the Chinese government has to do with the fact that his family does not consider them competitors but business partners.

In 2013, then-Vice President Joe Biden and his son Hunter Biden flew aboard Air Force Two to China. Less than two weeks later, Hunter Biden’s firm inked a $1 billion private equity deal with a subsidiary of the Chinese government’s Bank of China. The deal was later expanded to $1.5 billion. In short, the Chinese government funded a business that it co-owned along with the son of a sitting vice president.

If it sounds shocking that a vice president would shape US-China policy as his son — who has scant experience in private equity — clinched a coveted billion-dollar deal with an arm of the Chinese government, that’s because it is.

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Until the publication of my book, “Secret Empires,” no one knew the deal took place. Indeed, it took me and a team of seasoned investigators nearly two years to unearth and report the facts.

Without the aid of subpoena power, here’s what we know. The businesses of Hunter Biden and his partners created a series of LLCs involved in multibillion-dollar private equity deals with companies owned by the Chinese government.

https://nypost.com/2019/10/10/6-facts-about-hunter-bidens-business-dealings-in-china/

The centerpiece of these deals is Rosemont Seneca Partners, an investment firm controlled by Hunter Biden and his associates: Chris Heinz, who is John Kerry’s stepson, and Heinz’s longtime associate Devon Archer. The trio founded Rosemont Seneca in 2009 and quickly began making deals through a series of overlapping entities under the Rosemont name.

Less than a year after opening Rosemont Seneca’s doors, Hunter Biden and Archer were in China meeting with top Chinese officials. To assist in their new venture, they partnered with a Massachusetts-based consultancy called the Thornton Group, headed by James Bulger, son of former Massachusetts state Sen. Billy Bulger. James Bulger has the dubious honor of being named after his uncle, the notorious mob hitman James “Whitey” Bulger.

The Thornton Group’s account of the meeting on their Chinese-language Web site is telling: Chinese executives “extended their warm welcome” to the “Thornton Group, with its US partner Rosemont Seneca chairman Hunter Biden (second son of the now Vice President Joe Biden).”
The purpose of the meetings was to “explore the possibility of commercial cooperation and opportunity.” Curiously, details about the meeting did not appear on their English-language Web site.

Joe Biden meeting with then Ukrainian prime minister Arseniy Yatsenyuk during a meeting in Kiev in 2014.

The timing of this meeting was also notable. It occurred just hours before Hunter Biden’s father, the vice president, met with Chinese President Hu Jintao in Washington as part of the Nuclear Security Summit.

Twelve days after Hunter stepped off Air Force Two in Beijing, his company signed a historic deal with the Bank of China, the state-owned financial behemoth often used as a tool of the Chinese government. The Bank of China had created a first-of-its-kind investment fund called Bohai Harvest RST (BHR). According to BHR, one of its founding partners was none other than Rosemont Seneca Partners LLC.
It was an unprecedented arrangement: the government of one of America’s fiercest competitors going into business with the son of one of America’s most powerful decision makers.

Chris Heinz claims neither he nor Rosemont Seneca Partners, the firm he had part ownership of, had any role in the deal with Bohai Harvest. Nonetheless, Biden, Archer and the Rosemont name became increasingly involved with China. Archer became the vice chairman of Bohai Harvest, helping oversee some of the fund’s investments.

Troublingly, some of those investments had major implications for national security.

In December 2014, BHR became an “anchor investor” in the IPO of China General Nuclear Power Corp. (CGN), a state-owned energy company involved in the construction of nuclear reactors. In April 2016, the US Justice Department would charge CGN with stealing nuclear secrets from the United States — actions prosecutors said could cause “significant damage to our national security.”
Of particular interest to CGN were sensitive, American-made components that, according to experts, resembled components used by the US on its nuclear submarines.

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Joe Biden and John Kerry have been pillars of the Washington establishment for more than 30 years. Biden is one of the most popular politicians in our nation’s capital.

His demeanor, sense of humor, and even his friendly gaffes have allowed him to form close relationships with both Democrats and Republicans. His public image is built around his “Lunch Bucket Joe” persona. As he reminds the American people on regular occasions, he has little wealth to show for his career, despite having reached the vice presidency.

One of his closest political allies in Washington is former senator and former Secretary of State John Kerry. “Lunch Bucket Joe” he ain’t; Kerry is more patrician than earthy. But the two men became close while serving for several decades together in the US Senate. The two “often talked on matters of foreign policy,” says Jules Witcover in his Biden biography.

So their sons going into business together in June 2009 was not exactly a bolt out of the blue.

But with whom their sons cut lucrative deals while the elder two were steering the ship of state is more of a surprise.

What Hunter Biden, the son of America’s vice president, and Christopher Heinz, the stepson of the chairman of the Senate Committee on Foreign Relations (later to be secretary of state), were creating was an international private equity firm. It was anchored by the Heinz family alternative investment fund, Rosemont Capital. The new firm would be populated by political loyalists and positioned to strike profitable deals overseas with foreign governments and officials with whom the US government was negotiating.

Hunter Biden, Vice President Joe Biden’s youngest son, had gone through a series of jobs since graduating from Yale Law School in 1996, including the hedge-fund business.

By the summer of 2009, the 39-year-old Hunter joined forces with the son of another powerful figure in American politics, Chris Heinz. Senator John Heinz of Pennsylvania had tragically died in a 1991 airplane crash when Chris was 18. Chris, his brothers, and his mother inherited a large chunk of the family’s vast ketchup fortune, including a network of investment funds and a Pennsylvania estate, among other properties. In May 1995, his mother, Teresa, married Senator John Kerry of Massachusetts. That same year, Chris graduated from Yale, and then went on to get his MBA from Harvard Business School.


Joining them in the Rosemont venture was Devon Archer, a longtime Heinz and Kerry friend.

The three friends established a series of related LLCs. The trunk of the tree was Rosemont Capital, the alternative investment fund of the Heinz Family Office. Rosemont Farm is the name of the Heinz family’s 90-acre estate outside Fox Chapel, Pennsylvania.

The small fund grew quickly. According to an email revealed as part of a Securities and Exchange Commission investigation, Rosemont described themselves as “a $2.4 billion private equity firm co-owned by Hunter Biden and Chris Heinz,” with Devon Archer as “Managing Partner.”

The partners attached several branches to the Rosemont Capital trunk, including Rosemont Seneca Partners, LLC, Rosemont Seneca Technology Partners, and Rosemont Realty.

Of the various deals in which these Rosemont entities were involved, one of the largest and most troubling concerns was Rosemont Seneca Partners.

Rather than set up shop in New York City, the financial capital of the world, Rosemont Seneca leased space in Washington, DC. They occupied an all-brick building on Wisconsin Avenue, the main thoroughfare of exclusive Georgetown. Their offices would be less than a mile from John and Teresa Kerry’s 23-room Georgetown mansion, and just two miles from both Joe Biden’s office in the White House and his residence at the Naval Observatory.

In short, the Chinese government was literally funding a business that it co-owned along with the sons of two of America’s most powerful decision makers.
Over the next seven years, as both Joe Biden and John Kerry negotiated sensitive and high-stakes deals with foreign governments, Rosemont entities secured a series of exclusive deals often with those same foreign governments.

Some of the deals they secured may remain hidden. These Rosemont entities are, after all, within a private equity firm and as such are not required to report or disclose their financial dealings publicly.

Some of their transactions are nevertheless traceable by investigating world capital markets. A troubling pattern emerges from this research, showing how profitable deals were struck with foreign governments on the heels of crucial diplomatic missions carried out by their powerful fathers. Often those foreign entities gained favorable policy actions from the United States government just as the sons were securing favorable financial deals from those same entities.

Nowhere is that more true than in their commercial dealings with Chinese government-backed enterprises.

Rosemont Seneca joined forces in doing business in China with another politically connected consultancy called the Thornton Group. The Massachusetts-based firm is headed by James Bulger, the nephew of the notorious mob hitman James “Whitey” Bulger. Whitey was the leader of the Winter Hill Gang, part of the South Boston mafia. Under indictment for 19 murders, he disappeared. He was later arrested, tried, and convicted.

James Bulger’s father, Whitey’s younger brother, Billy Bulger, serves on the board of directors of the Thornton Group. He was the longtime leader of the Massachusetts state Senate and, with their long overlap by state and by party, a political ally of Massachusetts Senator John Kerry.

Less than a year after opening Rosemont Seneca’s doors, Hunter Biden and Devon Archer were in China, having secured access at the highest levels. Thornton Group’s account of the meeting on their Chinese-language website was telling: Chinese executives “extended their warm welcome” to the “Thornton Group, with its US partner Rosemont Seneca chairman Hunter Biden (second son of the now Vice President Joe Biden).”

The purpose of the meetings was to “explore the possibility of commercial cooperation and opportunity.” Curiously, details about the meeting do not appear on their English-language website.

Also, according to the Thornton Group, the three Americans met with the largest and most powerful government fund leaders in China — even though Rosemont was both new and small.

The timing of this meeting was also curious. It occurred just hours before Hunter Biden’s father, the vice president, met with Chinese President Hu in Washington as part of the Nuclear Security Summit.


Chris Heinz (left) with John Kerry at a campaign fundraiser, April 16, 2004.
There was a second known meeting with many of the same Chinese financial titans in Taiwan in May 2011. For a small firm like Rosemont Seneca with no track record, it was an impressive level of access to China’s largest financial players. And it was just two weeks after Joe Biden had opened up the US-China strategic dialogue with Chinese officials in Washington.

On one of the first days of December 2013, Hunter Biden was jetting across the Pacific Ocean aboard Air Force Two with his father and daughter Finnegan. The vice president was heading to Asia on an extended official trip. Tensions in the region were on the rise.

The American delegation was visiting Japan, China, and South Korea. But it was the visit to China that had the most potential to generate conflict and controversy. The Obama administration had instituted the “Asia Pivot” in its international strategy, shifting attention away from Europe and toward Asia, where China was flexing its muscles.

For Hunter Biden, the trip coincided with a major deal that Rosemont Seneca was striking with the state-owned Bank of China. From his perspective, the timing couldn’t have been better.

Vice President Biden, Hunter Biden and Finnegan arrived to a red carpet and a delegation of Chinese officials. Greeted by Chinese children carrying flowers, the delegation was then whisked to a meeting with Vice President Li Yuanchao and talks with President Xi Jinping.

Hunter and Finnegan Biden joined the vice president for tea with US Ambassador Gary Locke at the Liu Xian Guan Teahouse in the Dongcheng District in Beijing. Where Hunter Biden spent the rest of his time on the trip remains largely a mystery. There are actually more reports of his daughter Finnegan’s activities than his.

What was not reported was the deal that Hunter was securing. Rosemont Seneca Partners had been negotiating an exclusive deal with Chinese officials, which they signed approximately 10 days after Hunter visited China with his father. The most powerful financial institution in China, the government’s Bank of China, was setting up a joint venture with Rosemont Seneca.

Often those foreign entities gained favorable policy actions from the United States government just as the sons were securing favorable financial deals from those same entities.
The Bank of China is an enormously powerful financial institution. But the Bank of China is very different from the Bank of America. The Bank of China is government-owned, which means that its role as a bank blurs into its role as a tool of the government. The Bank of China provides capital for “China’s economic statecraft,” as scholar James Reilly puts it. Bank loans and deals often occur within the context of a government goal.

Rosemont Seneca and the Bank of China created a $1 billion investment fund called Bohai Harvest RST (BHR), a name that reflected who was involved. Bohai (or Bo Hai), the innermost gulf of the Yellow Sea, was a reference to the Chinese stake in the company. The “RS” referred to Rosemont Seneca. The “T” was Thornton.

The fund enjoyed an unusual and special status in China. BHR touted its “unique Sino-US shareholding structure” and “the global resources and network” that allowed it to secure investment “opportunities.” Funds were backed by the Chinese government.

In short, the Chinese government was literally funding a business that it co-owned along with the sons of two of America’s most powerful decision makers.

The partnership between American princelings and the Chinese government was just a beginning. The actual investment deals that this partnership made were even more problematic. Many of them would have serious national security implications for the United States.

In 2015, BHR joined forces with the automotive subsidiary of the Chinese state-owned military aviation contractor Aviation Industry Corporation of China (AVIC) to buy American “dual-use” parts manufacturer Henniges.

AVIC is a major military contractor in China. It operates “under the direct control of the State Council” and produces a wide array of fighter and bomber aircraft, transports, and drones — primarily designed to compete with the United States.

The company also has a long history of stealing Western technology and applying it to military systems. The year before BHR joined with AVIC, the Wall Street Journal reported that the aviation company had stolen technologies related to the US F-35 stealth fighter and incorporated them in their own stealth fighter, the J-31. AVIC has also been accused of stealing US drone systems and using them to produce their own.

In September 2015, when AVIC bought 51 percent of American precision-parts manufacturer Henniges, the other 49 percent was purchased by the Biden-and-Kerry-linked BHR.

Henniges is recognized as a world leader in anti-vibration technologies in the automotive industry and for its precise, state-of-the-art manufacturing capabilities. Anti-vibration technologies are considered “dual-use” because they can have a military application, according to both the State Department and Department of Commerce.

The technology is also on the restricted Commerce Control List used by the federal government to limit the exports of certain technologies. For that reason, the Henniges deal would require the approval of the Committee on Foreign Investment in the United States (CFIUS), which reviews sensitive business transactions that may have a national security implication.

According to BHR internal documents, the Henniges deal included “arduous and often-times challenging negotiations.” The CFIUS review in 2015 included representatives from numerous government agencies including John Kerry’s State Department.

The deal was approved in 2015.

Excerpted with permission from “Secret Empires: How the American Political Class Hides Corruption and Enriches Family and Friends,” by Peter Schweizer, published by Harper Collins.