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Posted on 11/21/2019 11:39:26 AM PST by TigerClaws
An investment firm linked to Hunter Biden received over $130 million in federal bailout loans while his father Joe Biden was vice president and routed profits through a subsidiary in the Cayman Islands, according to federal banking and corporate records reviewed by the Washington Examiner.
Financial experts said the offshore corporate structure could have been used to shield earnings from U.S. taxes.
Rosemont Capital, an investment firm at the center of Hunter Biden’s much-scrutinized financial network, was one of the companies approved to participate in the 2009 federal loan program known as the Term Asset-Backed Securities Loan Facility, or TALF.
Under the program, the U.S. Treasury Department and the Federal Reserve Bank issued billions of dollars in highly favorable loans to select investors who agreed to buy bonds that banks were struggling to offload, including bundled college and auto loans.
According to federal records, 177 firms participated in TALF, many of them well connected in Washington or on Wall Street. For investors, there was little risk and a high chance of reward. The Federal Reserve funded as much as 90% of the investments. If the bonds were profitable, the borrowers benefited. If not, the department agreed to take over the depreciated assets with no repercussions for the borrowers.
“It's very complicated to become qualified as a TALF borrower or as a TALF fund, if you will,” Carol Pepper, a wealth management specialist, told Forbes in 2009. “But that's an example of where, if you can get into a TALF fund, you can benefit from this government program.”
Under the terms for the program, any U.S. company looking to invest in select categories of bonds was eligible to apply for the loans. However, the Treasury Department and Federal Reserve maintained the “right to reject a borrower for any reason,” and the internal selection process was criticized by some lawmakers as opaque and open to corruption.
“How can my constituents in Vermont get some of that money? Who makes the decisions? Do you guys sit around in a room — do you make it? Are there conflicts of interest?” Sen. Bernie Sanders asked Federal Reserve Bank Chairman Ben Bernanke at a March 3, 2009, Senate hearing. “Do you have to be a large, greedy, reckless financial institution to apply for these monies?”
Joe Biden was a key advocate for the financial bailout, which was approved under the Bush administration and expanded under President Barack Obama. He delayed his Senate resignation in January 2009 to cast his final vote to increase funding for the Troubled Asset Relief Program before taking office as vice president.
“These guys are not the most likable guys in the world,” Biden said about the banks and hedge funds aided by the government intervention. "But here are the facts ... Had we not bailed out the largest bank institutions in the world, there would have been a flat-out depression.”
One of the firms that benefited was Rosemont Capital, a company led by Hunter Biden’s business partners, Chris Heinz and Devon Archer. The firm received the loans at a crucial time for Hunter Biden. The younger Biden had stepped down from his lobbying business in late 2008, reportedly due to pressure on his father’s vice presidential campaign.
Biden, Heinz, and Archer incorporated Rosemont Seneca Partners in Delaware on June 25, 2009. The “alternative investment and market advisory firm” was an offshoot of Rosemont Capital, which held a 50% stake in the new venture. Rosemont Seneca and Rosemont Capital shared the same office address in lower Manhattan and the same New York phone number, according to Securities and Exchange Commission documents. Three weeks after Rosemont Seneca was incorporated, a subsidiary of Rosemont Capital, called Rosemont TALF SPV, received $23.5 million in federal loans through the TALF program. This included $13.4 million to invest in student loans and $11.1 million to invest in subprime auto loans. Over five months, the company received a total of $130 million from the program in multiple installments for investments in subprime credit cards and residential mortgages.
“This is a great example of the suspicion of many Americans that these bailouts were used to benefit connected insiders while ordinary Americans went broke,” said Tom Anderson, director of the Government Integrity Project at the National Legal and Policy Center, an organization that was critical of TALF at the time.
Although the government stopped issuing the loans at the end of 2009, the names of the well connected borrowers and investors were later released — prompting new criticism from lawmakers and the press. In April 2011, Rolling Stone reported that millions in TALF loans had been issued to the wife of Morgan Stanley Chairman John Mack, Miami Dolphins owner H. Wayne Huizenga, and Wall Street titan John Paulson, dubbing the program “welfare for the rich.”
“Our jaws are literally dropping as we're reading this,” Warren Gunnels, an aide to Sanders, told Rolling Stone. “Every one of these transactions is outrageous.”
Sanders also raised concerns that borrowers were using the program to evade taxes. His office staff compiled a list of over 100 TALF investors based in the Cayman Islands and other known tax havens.
“It has been estimated that each year corporations and wealthy individuals avoid approximately $100 billion in U.S. taxes through the use of abusive and illegal tax shelters,” wrote Sanders in a letter to Bernanke. “Why would the Fed lend to material investors located in the Cayman Islands?”
Federal Reserve records show Rosemont Capital was one of the companies that set up an offshore limited partnership, called “Rosemont TALF Investment Fund LP,” to participate in the TALF program. The fund was incorporated in the Cayman Islands on May 14, 2009, and dissolved on Nov. 14, 2014, according to corporate records in the British territory. The fund was managed by a Delaware-based subsidiary of Rosemont called “Rosemont TALF GP,” SEC records show.
Another investor in Rosemont’s TALF fund, called “Rosemont TALF Opportunities Fund II,” was also based in the Cayman Islands. Additional Rosemont TALF investors included two Greek shipping magnates, a California class action attorney and a financial trust based in Liberia.
Tax experts said the Cayman Islands were a popular location at the time for hedge funds and corporations to set up subsidiaries in order to avoid paying certain U.S. taxes. Didier Jacobs, a senior policy adviser at Oxfam America who focuses on international finance, said an estimated $2.7 trillion was parked in the Cayman Islands and other tax havens prior to the U.S. tax reform in 2017.
“As long as it was sitting there, it was not taxed. That’s why there was a lot of money sitting there in the Cayman Islands,” said Jacobs.
Steve Rosenthal, a senior fellow at the Urban-Brookings Tax Policy Center, said the use of an offshore company could also help investment firms reduce the tax liability for foreign or tax-exempt investors who could otherwise be subject to U.S. taxes.
Matt Gardner, a senior fellow at the Institute on Taxation and Economic Policy, said the most likely reason for setting up a company in the Cayman Islands would be to take advantage of its tax laws.
“It seems like a pretty basic ask that any recipient of these TALF loans would act in certain ways. And one of those ways would be to not organize
There is so much money parked in the Cayman Islands, I’m surprised they don’t capsize.
Too long. Did he pay the loans back within terms?
Rules for Radicals? Well yeah..Rules for changing a limited republican government into an unlimited hereditary one.
http://home.hiwaay.net/~becraft/FRENEAUbanking.html
Chelsea/Hunter 2024?
Special federal loan = free money
There was nothing illegal about that and Joe Biden didn’t know about it and if you want to inquire about it then you are trying to dig up dirt. So there!
Super-expensive government social-engineering the concomitant elitist thievery on such a scale is only allowed by having a completely fiat currency, issued by the Federal Reserve, and massive government debt it allows
My understanding is that US pressure has eliminated banking privacy there. But, the US doesn't, AFAIK, have access to accounting and tax information of entities there other than bank records.
This is a majore accusation--not only the favoritism part in the granting of the sure to profit loans--but also the implication of tax fraud through unreported earnings off of those loans.
But, that part is just a guess; the favoritism seems obvious.
bump
I think a lot of their actions have been predicated on the idea that “We will never be investigated; we are untouchable”.
That works if they have powerful friends, and if they take some basic precautions to obscure the essence of what they’re doing. But when the curtain is drawn back, all is revealed and it ain’t pretty.
Thank goodness bits have zero mass.
So far, they have been untouchable.
Jim Biden (Joe’s brother) has gotten loan guarantees he didn’t merit, and some sweetheart backing as well.
And that’s just the Bidens... I don’t need to tell you about Pelosi’s son in the Ukraine, or Kerry’s stepson, or ... well, it goes on and on.
It’s interesting... it looks like Joe Biden is worth around 9 million according to a recent FOX article. That’s reasonable, I suppose, for a 50-year high executive. But, he lives like someone worth much more, traveling all over, and appears to shephard many business opportunities to family members.
That’s why the net worth figures for Congressional members is a bit suspect. Those who were poor when they went into Congress, and became better off, are mostly all crooks, IMHO.
Really, Matt? How do I get one of these high-powered "Senior Fellow" jobs? Matt sounds like a real sharp and savvy guy with a deep insight into high finance and tax shelters. I'll bet I could do just as good at this.
Rosemont Capital was by Hunter Biden’s business partners, Chris Heinz and Devon Archer. The firm received the loans at a crucial time for Hunter Biden.
Hunter Biden stepped down from his lobbying business in late 2008, reportedly due to pressure on his father’s vice presidential campaign.
Fast forward 11 years to 2019:
Hunter Biden steps down from the board of directors of a Chinese-backed private equity firm as part of a pledge not to work on behalf of any foreign-owned companies should his father win the presidency. "Under a Biden Administration, Hunter will readily comply with any and all guidelines or standards a President Biden may issue to address purported conflicts of interest, or the appearance of such conflicts, including any restrictions related to overseas business interests. In any event, Hunter will agree not to serve on boards of, or work on behalf of, foreign owned companies."
This its a pattern of corrupt Biden family conduct consistent across the decades. Why does it take a Biden-the-Elder presidential campaign for these damn sleazy people to behave morally and stop being corrupt?
They all deserve the gallows.
But Trump is so corrupt.
The Caymen Islands... where Morris Dees’ SPLC liked to stash their cash.
RIGHT!!!!??? “There has been no evidence uncovered as to anything nefarious related to this....”
He is partner and principal so he has direct ownership interest in Rosemont and he is also a key decision maker
I guess that qualifies as “linked”
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