The FBI discovered in as early as 2016 that Hunter Biden and his associates planned to establish a new venture in tax-friendly Liechtenstein, backed by a substantial $120 million investment from the contentious owner of Ukrainian energy firm Burisma Holdings. This revelation comes from documents obtained by Just the News, which were withheld from public knowledge for eight years.
The significant deal was not mentioned in Hunter Biden’s notorious laptop nor during the 2019 impeachment proceedings involving Ukraine. Instead, it was detailed in a collection of 3.39 million documents seized by the FBI from Hunter Biden and his business partners during a securities fraud investigation nearly a decade ago.
Former Hunter Biden business partner Devon Archer recently handed over this cache of documents to the House Oversight Committee as part of its impeachment inquiry into President Joe Biden’s conduct.
The new evidence indicates that this major investment plan was being developed while Hunter Biden was on Burisma’s board of directors and Joe Biden was vice president, overseeing U.S.-Ukraine policy under Barack Obama.
Memos reveal that Hunter Biden was expected to join the board of a new company named Burnham Energy Security LLC, which Burisma owner Mykola Zlochevsky intended to capitalize in 2015. At the time, Zlochevsky was trying to escape corruption allegations in Ukraine.
According to recent congressional testimony from one of the partners, the Hunter Biden-affiliated Burnham entity was set to receive a quarter of the new venture’s net revenues without any cash investment.
The Ukrainian oligarch Zlochevsky committed “$120 million over thirty-six (36) months to be invested in exploration and leasehold improvements” in the new venture, aimed at making Burisma a global energy leader, as per the project’s prospectus.
An August 2015 email from Zlochevsky’s top lieutenant, Vadym Pozharskyi, emphasized the importance of Hunter Biden’s involvement with Burnham Energy for his boss.
“You mentioned to me that it’s also you and HB [Hunter Biden] who will be the founders of the Llc in Delaware. Cliff mentioned only yourself,” Pozharskyi wrote Archer in August 2015 in one email obtained by Just the News. “For credibility ‘Ukrainian’ purposes you both would be better.”
It remains unclear what exactly Vadym Pozharskyi meant by “credibility,” but previous reports have indicated that Burisma viewed Hunter Biden’s presence on its board as a protective measure against government pressure. This perspective was supported by Devon Archer’s testimony during the House impeachment inquiry.
Another partner, Jason Galanis, testified to Congress that he believed Archer and Biden were placed on the board to shield the company from Ukrainian investigations and prosecutions.
Pozharskyi also directly communicated with Hunter Biden about the new venture. In an email dated August 12, 2015, he wrote to Biden and Archer: “Burnham Energy Security Fund: we started a legal discussion between our lawyers and legal counsels from your side (through Devon’s kind introduction). At the moment, we’re working on structure and all related issues.”
This email was sent just a few months after Joe Biden met with Pozharskyi and other foreign business partners of Hunter Biden at a dinner at Cafe Milano in Washington, D.C., in April 2015, according to evidence released by Congress during the Joe Biden impeachment inquiry.
Among the evidence gathered by the FBI in 2016, nearly 200 documents mentioned Burnham Energy Security LLC (BESL), with most referencing Hunter Biden or his role at the parent firm, Burnham Asset Management (BAM).
“What’s a current role of HB [Hunter Biden] in BAM and what role he’ll have in BESL?” a top official working for Zlochevsky’s firm asked in an Aug. 25, 2015, email
“HB is a W-2 employee of BAM and the Vice-Chairman of the parent company which owns 100% of BAM. HB is also contemplated as a director of BESL,” a lawyer drafting the deal wrote back.
Evidence revealed that lawyers in the United States and Ukraine were finalizing a term sheet for the venture in September 2015 when Hunter Biden’s team encountered two major setbacks within 24 hours.
First, on September 24, 2015, Hunter Biden’s business associate, Jason Galanis, was arrested in a securities fraud case. Later that same day, U.S. Ambassador to Ukraine Geoffrey Pyatt delivered a speech urging Ukrainian prosecutors to pursue corruption charges against Burisma’s owner, Mykola Zlochevsky, after months of inaction.
Pyatt’s speech posed a significant problem for Biden, Archer, and Burisma. In response, they quickly hired Blue Star Strategies, a U.S. lobbying and public relations firm with Democratic ties, to manage the fallout and lobby U.S. officials in the Obama-Biden State Department to dismiss any Ukrainian corruption allegations against Burisma.
A month after Pyatt’s speech, Burisma officials drafted a wish list of statements they hoped Pyatt would be compelled to make as damage control regarding Zlochevsky, referred to in the emails by his initials “NZ.”
“Target: Us ambassador communicates to Ukraine officials I.e. President administration formally/informally that he/U.S. government is ok with NZ, supports him and Burisma,” one email summarizing Burisma’s wish list read. “Other U.S. High ranking officials communicate this message to President Administration. President Administration and other agencies ( general prosecutors office ) do not pursue NZ. NZ freely travels home. Ambassador Pyatt loves NZ.”
Archer, Hunter Biden’s close associate at the time, thought that request might be too much given how harshly Pyatt had criticized Zlochevsky in his speech a few weeks earlier.
“I think this might be a little too overt but this was the feedback below,” Archer wrote a Blue Star executive in October 2015. “Anyway to tone down but in operate [sic] would be useful.”
Pyatt’s speech unexpectedly kicked Ukrainian prosecutors into a more aggressive effort to investigate Zlochevsky in fall 2015, an effort that came to an abrupt halt when Vice President Joe Biden pressured Ukraine to fire the chief prosecutor, Viktor Shokin, by threatening to withhold $1 billion in U.S. loan guarantees. Archer told Congress last year that Burisma wanted Hunter Biden to get help from “D.C.” to deal with the pressure from the Shokin probe.
The Yuzivska Block
There is no evidence the Burnham Energy Security deal got resurrected after the tumultuous events of fall 2015. But a series of drafts of the term sheet for the proposed venture details the primary goals of the partnership between the Burnham group and the Ukrainian oligarch: expanding Burisma’s energy production both inside and outside of Ukraine.
Burnham Energy Security would be a “vehicle to acquire the rights to explore and recover hydrocarbons within the Yuzivska Block of the State of Ukraine, with the intention of scaling and expanding exploration and recovery to Mexico, Kazakhstan and other locations,” reads the term sheet obtained and reviewed by Just the News
. Importantly, the new firm would be used for “all expansion bidding” on Burisma’s behalf globally.
The Yuzivska Block, the natural gas field in Eastern Ukraine referenced in the sheet, is near the region in Ukraine that was under threat from Russian-backed separatists at the time. Those separatist groups in the far east of the country had declared independence from the central government in Kyiv as a result of the Revolution of Dignity, or Maidan Revolution, in 2014 which brought the central government closer to the West. That same year saw the Royal Dutch Shell Corp. withdraw from a gas exploration project in gas field citing geopolitical concerns, opening the market for Burisma.
Hunter Biden—who was serving as a board member of Burisma at the time—is not mentioned in the term sheet, which lists Devon Archer as the director of the proposed entity.
However, email communications between lawyers responsible for hammering out the deal show the group was considering Hunter Biden to be a director of the enterprise along with fellow Burisma board member and former Polish President Alexander Kwasnieski.
The Liechtenstein Factor
The joint venture envisioned establishing an entity in the small European country of Liechtenstein. It is unclear exactly why, however, the country does boast significant tax benefits, including no capital gains taxes.
The partners may have also wished to obscure the direct relationship with Burisma owner Zlochevsky. At the time, the oligarch’s public reputation had taken hits after his assets were frozen in the United Kingdom beginning in 2014. After Ukrainian authorities refused to cooperate with the British probe and Zlochevsky’s accounts were unfrozen, a Ukrainian deputy prosecutor came forward to allege the Burisma owner had bribed the Ukrainian authorities.
“We consider three of jurisdictions [sic] in order to incorporate a fund: USA, Lichtenstein [sic] and Luxembourg. We inclined [sic] to Lichtenstein [sic], that uses [sic] commonly for such purposes as we need to achieve,” the Ukrainian side wrote in an August 2015 email.
“Lichtenstein [sic] is the preferred jurisdiction for the entity” and “The best structure for the intended purpose is a Lichtenstein [sic] limited liability company (LLC, Ltd.),” the American side replied.
The documents and emails do not make clear whether or not Hunter Biden or his partners stood to directly benefit from the arrangement. But the term sheet outlines that net revenue from the venture would be distributed between Zlochevsky’s company (75%) and the Burnham Asset Management branch headquartered in the United Kingdom (25%).
Trading on the Biden name and connections
What Hunter Biden and Devon Archer were up to is clearer, however, based on the testimony of an ex-partner and emails obtained from the laptop. Galanis testified that he worked with Archer and Biden to build the Burnham group into a global, multibillion-dollar hedge fund marrying foreign investors with the “globally known political name” Biden.
The plan focused on building global cooperation between prominent investors from all continents, including deals with high-powered oligarchs from Russia and Kazakhstan, Chinese government-linked businessmen, and politically connected Mexican tycoons, among others, Just the News previously reported.
The first event which spelled trouble for the proposed venture was the arrest of Galanis.
In his testimony to Congress earlier this year, Galanis explicitly mentioned this proposed Burisma investment in Burnham and how his arrest and subsequent conviction related to it.
“Burnham also reached an agreement with a Ukrainian oligarch, Mykola Zlochevsky, for a $120 million investment into a new Burnham entity. The financial arrangement documented by the U.S. and Ukrainian lawyers laid out a 25 percent profit participation for the Burnham partners,” Galanis told the impeachment inquiry.
“The Burnham partners were not required to put up 25% of the capital. Instead, Burnham was putting up the relationship capital of the Biden name in foreign markets like Kazakhstan and Mexico and elsewhere where oil concessions were sought from government,” he added. Galanis testified the venture was set to begin with pursuing a production sharing agreement to take over the gas field from the Shell oil company in Eastern Ukraine.
But, the fund was unusual. The Burnham side, made up of Hunter Biden and his business partners, would not have to put up any of the initial investment. Instead, Galanis testified, their contribution was relationship capital–including the political connections that are associated with the Biden family name.
“Mykola would put up all the money. We, Burnham, would put up the investment banking expertise and the political connects and influence in foreign countries where we were seeking oil and gas leases,” Galanis told Congress.
In one email, Galanis makes explicitly clear that Archer and Biden were also offering “nonlegal” protection to Zlochevsky, its main investor.
“At the end of the day, the other non legal protection is the relationship cover of DA and HB,” Galanis wrote in late August 2015.
The plan eventually collapsed when a fraudulent tribal bonds scheme led to the downfall of Jason Galanis in September of that year. Devon Archer was also implicated in the case and both were ultimately convicted for their roles in the scheme. Archer appealed his conviction, which was initially overturned, then reinstated. Archer eventually appealed to the Supreme Court, which affirmed the conviction.
Recently, a federal judge ordered Archer to be resentenced after his original one-year prison sentence. Archer argued that a sentencing guidelines calculation error warranted reconsideration due to “ineffective assistance of counsel.”
Hunter Biden was not charged in the scheme. However, Galanis told Congress that the tribal bonds scheme was executed to raise funds for the Burnham enterprises, in which Hunter Biden was involved.
“In an effort to build this financial platform, I engaged in unlawful conduct. Our companies were entrusted with $11 billion of union members’ pension fund money, whose trust I betrayed. I pleaded guilty, and I had 8 years in federal custody to reflect on my actions, and I’m profoundly sorry for my role in these actions,” Galanis told congressional investigators in his opening statement.
SOURCE: JUSTTHENEWS
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