How Joe Biden helped build a financial system
great for Delaware banks and terrible for the rest of us.
TIM MURPHY, MOTHER JONES, NOVEMBER/DECEMBER 2019 ISSUE
SNIP
Though he’s now a MULTI-millionaire thanks to (he says) book sales and speaking fees, Biden has long positioned himself as the champion of the middle class, a scrappy kid from Scranton who’s fought the good fight for decades. His adopted home state is part of that identity too—an unglamorous enclave of scrapple and toll roads, the Acela Corridor’s own Flyover Country. But as he pursues his third and likely final quest for the Democratic presidential nomination, his record haunts him, because the interests of Delaware are often at extreme odds with everyone else’s.
Biden did not create this system, but he used his influence to strengthen and protect it. He cast key votes that deregulated the banking industry, made it harder for individuals to escape their credit card debts and student loans, and protected his state’s status as a corporate bankruptcy hub.
Biden’s career in the Senate placed him on the wrong side of some of the biggest financial fights of his generation and brought him into conflict with some of the same rivals he faces today. If you want to understand how Biden became Biden, you have to understand how Delaware became Delaware.
Delaware is a tiny state, and because it is tiny, it has had to get creative to survive. Small countries sell shipping rights, citizenship, and secrecy. Delaware offers an American variation of the same—a legal and administrative sanctuary that allows businesses to do things there that they could not do elsewhere.
The foundation for the state’s economy began with its 1776 constitution, which created a special venue for the handling of business disputes, called the chancery court. But Delaware’s role as America’s corporate epicenter traces back to 1899, when—with the backing of the du Ponts—legislators passed the General Corporation Law, allowing anyone in the United States who wanted to form a company in Delaware to do so. The number of corporations based in the state grew quickly, and when New Jersey—the OG of lax incorporation laws—decided to crack down on trusts, Delaware welcomed the exiles.
The incorporation law made it easy to set up shop in Delaware, and the chancery court made it convenient to stay. Companies knew they’d get a reliable pro-business forum for their disputes. Today, there are nearly twice as many Delaware-incorporated companies as there are Delaware voters, and incorporation fees constitute the second-largest share of the state’s annual revenue.
But Delaware’s windfall comes at the expense of other states. Corporations can place their profits in Delaware-based holding companies to avoid paying taxes in the places where they actually operate. Delaware LLCs can also be incorporated anonymously via third-party agents, stifling transparency. “Setting up a company in Delaware,” the Institute on Taxation and Economic Policy says, “requires less information than signing up for a library card.”
FTB-——On November 3, Americans did not just elect Joe Biden: They got a package deal. The tight-knit Biden family—siblings, children, in-laws, and beyond—is coming right along with him. They are sure to play a defining role in his presidency, just as they have in every other one of his endeavors.
Inside, you’ll find these and other stories and revelations about the Biden family, including:
Joe’s childhood, the stunning 1972 Senate upset engineered by his sister Valerie
Joe’s early years in the Senate and his role in the creation of the cozy “Delaware Way” of conducting politics
The Biden brothers’ business escapades, including the ’70s rock club rivalry that pitted Jim Biden against Jill’s first husband and ended in a banking scandal
The Delaware lawman who oversaw an FBI investigation into Joe’s 2007 campaign fundraising and now has Hunter in his sights
Hunter’s surprisingly close friendship with his Fox News antagonist, Tucker Carlson
What Steve Bannon really hoped to accomplish by giving the contents of “the Laptop from Hell” to the New York Post
New evidence that sheds light on the authenticity of Hunter’s alleged computer files
Like the Kennedys before them, the Bidens are a tight-knit, idealistic Irish Catholic clan with good looks, dynastic ambitions, and serious personal problems.
As THE BIDENS reveals, the best way to understand Joe Biden—his values, fears, and motives—is to understand his family: Their Irish (and not-so-Irish) roots, their place in the Delaware pecking order, their dodgy business deals, and their personal struggles and triumphs alike.