\u201cThey [Burisma] were wanting to enter into the U.S. energy market through an IPO, and they felt like they couldn\u2019t conduct an initial public offering if they were under investigation for corruption in Ukraine. So that\u2019s what it all pertained to. That\u2019s where the supposed bribe happened \u2026 They also wanted to buy an existing energy company, and I believe it was in Texas.\u201d \u2014 Rep. James Comer (R-Ky.), chair of the House Oversight committee, in an interview on Fox Business Network, June 12<\/p>\n
This article was originally pubished on Aug. 30, 2023 and has been updated.<\/p>\n
Congressional Republicans recently released an FBI document from 2020 that makes a shocking allegation about President Biden \u2014 that he and his son Hunter were involved in a foreign bribery scheme with a Ukrainian business executive. Republicans have long been investigating Hunter Biden\u2019s business affairs, as recounted on a recovered laptop, and some have suggested the claim could be the basis for a possible impeachment inquiry of the president.<\/p>\n
The four-page document that the Republicans released, an FD-1023 form, is the kind used to record information from a person the FBI considers a \u201cconfidential human source\u201d (CHS). That means the information would not be a tip from an unknown walk-in, but from someone who had been vetted and assessed by the FBI as potentially helpful for investigations. Still, such individuals can be unreliable and any statements by a CHS are basically unverified tips.<\/p>\n
The identity of this FBI source and any connection to Ukraine remain unknown, and the FBI has not publicly confirmed any tips the person supplied in the document. Moreover, the person was interviewed by telephone in 2020 about conversations that took place as many as four years earlier. Nonetheless, some Republicans have treated the document\u2019s allegations as true. \u201cAs Vice President Joe Biden sold his influence to the highest bidder,\u201d Rep. Elise Stefanik (R-N.Y.), a member of the House Republican leadership, said on social media in May. \u201cHe is unfit to be President of the United States.\u201d<\/p>\n
[Update, Feb. 15: Alexander Smirnov, 43, was charged with making a false statement to the FBI and creating a false and fictitious record. The indictment reveals he is the confidential human source who provided the information used for the FBI document.]<\/p>\n
While the document recounts conversations that cannot be independently verified, The Fact Checker can shed light on a business transaction described in those conversations, comparing the document\u2019s account with publicly available information. The transaction concerned the alleged desire of Mykola Zlochevsky, the chief executive of the Ukrainian gas firm Burisma, to purchase a U.S.-based company. During the period described in the document as starting in late 2015 and extending two or three months into 2016, Burisma did make a deal with a company based in Texas. This agreement sparked the interest of conservative media, as there are similarities to the FBI source\u2019s account of what Burisma sought.<\/p>\n
But upon examination, the facts don\u2019t add up.<\/p>\n
To test whether any other business transaction might match with the FBI source\u2019s account, The Fact Checker examined all available news reports in Ukrainian, English and Russian concerning Burisma from September 2015 to April 2016. We also scoured emails from that period in Hunter Biden\u2019s apparently abandoned laptop. No other deal matches this one. Because conservative outlets have speculated that the Texas deal is the one discussed by the person in the FBI document, that is the one we will fact-check. A representative for Hunter Biden declined to comment.<\/p>\n
In a way, as Comer\u2019s comment to Fox Business indicates, the Burisma deal in question is the linchpin of the GOP accusation that the Bidens were bribed.<\/p>\n
Hunter Biden was a board member of Burisma, and the FBI\u2019s CHS suggests that, according to Zlochevsky, Hunter was hired so that problems faced by the company could be handled by his father, who was then vice president. Chief among those problems, according to the FBI source, was Ukraine\u2019s then-prosecutor general, Viktor Shokin.<\/p>\n
The FBI source alleges that Zlochevsky said he paid Joe and Hunter Biden each $5 million to \u201cdeal with Shokin.\u201d The Shokin reference \u2014 suggesting Burisma wanted him fired \u2014 raises an immediate red flag about the accuracy of the allegation, as we have documented previously that Shokin was actually in Burisma\u2019s camp, having not taken action against corruption to the frustration of the international community.<\/p>\n
Devon Archer, a fellow Burisma board member, said in a closed-door interview with lawmakers on July 31 that he was told at the time of Shokin\u2019s firing that it was a setback for the company, according to a transcript. \u201cThat\u2019s what was I told, that it was bad for Burisma,\u201d he said. \u201cBut I don\u2019t know. I don\u2019t know if it was good or bad.\u201d<\/p>\n
Archer noted that Ukrainian business executives have a tendency to \u201cexaggerate, tell fibs\u201d \u2014 a point he noted is also acknowledged in the FBI document, which he indicated he had read. \u201cCHS explained it is very common for businessmen in post-Soviet countries to brag or showoff,\u201d the FBI document says in describing the individual\u2019s account.<\/p>\n
In the first of two meetings recounted by the FBI\u2019s source, which is described as having taken place in Kyiv in late 2015 or 2016, the source details learning from a Burisma official of the company\u2019s \u201cinterest in purchasing a US-based oil and gas business, for purposes of merging it with Burisma for purposes of conducting an IPO in the US.\u201d The individual says Burisma was willing to spend $20 million to $30 million.<\/p>\n
The meetings took place as U.S. and European officials made clear their displeasure at Shokin\u2019s performance. On Dec. 8, 2015, Biden addressed the Ukrainian parliament and decried the \u201ccancer of corruption\u201d in the country. \u201cThe Office of the General Prosecutor desperately needs reform,\u201d he said. Shokin was dismissed by the Ukrainian parliament March 29, 2016.<\/p>\n
One or two months after the Kyiv meeting, the confidential source says he met with Zlochevsky in a coffee shop in Vienna. The person says he asked Zlochevsky \u201cwhy Burisma would pay $20-30 million to buy a US company for IPO purposes when it would be cheaper to just form a new US-entity or purchase a corporate shell that was already listed on an exchange.\u201d<\/p>\n
The timing of these alleged conversations does not track with the information provided by Archer to congressional investigators. Archer said that when he and Hunter Biden were brought on the Burisma board in 2014, \u201cthe initial idea was expansion into the U.S. by a small U.S. company.\u201d But \u201cthings got a little dicey\u201d because of scrutiny of alleged corruption at Burisma, and instead they turned to finding Asian investors for global expansion, which Archer described as \u201cvery successful.\u201d<\/p>\n
As an example, he cited Burisma Geothermal, which was created in 2015. In other words, if Archer is to be believed, the idea of expanding into the United States had been put on the back burner by 2016 \u2014 when the FBI\u2019s source claimed Zlochevsky was still talking about it. However, we cannot rule out the possibility that Zlochevsky still had this aspiration or that he was simply showing off, as the person had indicated was common practice among business executives in that part of the world.<\/p>\n
In the second meeting, according to the individual, Zlochevsky supposedly said Hunter Biden had \u201cadvised Burisma it could raise much more capital if Burisma purchased a larger US-based business that already had a history in the US oil and gas sector.\u201d The person said Zlochevsky mentioned some U.S.-based gas businesses in Texas, the names of which the person did not recall.<\/p>\n
As it happens, Burisma announced on Jan. 2, 2016, that it was acquiring 70 percent of a Canadian company for $30 million. There is even a Texas connection.<\/p>\n
That would seem like a tantalizing confirmation that a deal took place as discussed. But here\u2019s the catch: The assets acquired by Burisma were gas fields in Ukraine \u2014 nothing was obtained in the United States \u2014 which would accord with Archer\u2019s suggestion that Burisma had ceased looking to expand in the United States.<\/p>\n
What\u2019s the Texas connection? The part of the Canadian company not acquired by Burisma was owned by a Houston-based company called Cub Energy, which then acquired an additional 5 percent from Burisma.<\/p>\n
But again, this deal would not have provided any access to the U.S. market. Cub Energy, despite its Texas address, was consistently described as a Ukrainian gas company. Its archived webpages from 2012 show a map of Ukraine and declare: \u201cCub Energy Inc, with offices in Houston and Kyiv, is one of the five largest oil and gas operators in energy-rich Ukraine.\u201d<\/p>\n
When Cub Energy founder Mikhail Afendikov died in 2021, the news release described the company as \u201can upstream oil and gas company, with a proven track record of exploration and production cost efficiency in Ukraine.\u201d The release added: \u201cThe Company\u2019s strategy is to implement western technology and capital, combined with local expertise and ownership, to increase value in its undeveloped land base, creating and further building a portfolio of producing oil and gas assets within a high pricing environment.\u201d<\/p>\n
Burisma\u2019s connection to Cub Energy pops up occasionally in emails found on Hunter Biden\u2019s laptop, but none discussed it as part of a planned entry into the United States or the basis for a public offering. He communicates every so often with a Cub Energy director named Frank Mermoud and appears to have introduced Mermoud to Zlochevsky. But these exchanges do not describe the transaction as a backdoor way into the U.S. market either. (These emails have not been verified by experts hired by The Washington Post, so we are not linking to them or describing them in detail.)<\/p>\n
Mermoud, who did not respond to phone or email messages, is now reported to be a fundraising bundler for Florida Gov. Ron DeSantis, Trump\u2019s main rival for the GOP presidential nomination.<\/p>\n
On a superficial level, Burisma\u2019s arrangement with Cub Energy matches up with the account in the FBI document: Burisma made a deal in 2016, the purchase price was $30 million, and a Texas-based company was involved.<\/p>\n
The individual in the document repeatedly describes the transaction as a way for Burisma to enter the U.S. market, even a backdoor way to offer shares in the United States. Instead, this deal expanded Burisma\u2019s reach in Ukraine. And Hunter Biden\u2019s email stash, assiduously mined by Republicans, also does not confirm that Burisma was seeking entry in the U.S. market when these alleged conversations took place. Moreover, the deal was completed before Shokin was fired under pressure from the international community for not acting against corruption.<\/p>\n
Taylor Foy, a spokesman for Sen. Charles E. Grassley (R-Iowa), who released the FD-1023, pointed to reporting in conservative media that the Pittsburgh FBI office obtained travel records for the source and confirmed that the person had been in the locales referenced in the document. \u201cThere are details here that track with open source records as well as what the DOJ\/FBI knows regarding the CHS\u2019s travel,\u201d Foy said. \u201cThis is exactly why we need to know whether DOJ\/FBI followed normal procedure to further investigate.\u201d<\/p>\n
Spokespeople for Comer, who has led the House investigation into Hunter Biden, did not respond to requests for comment.<\/p>\n
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\u201cThey [Burisma] were wanting to enter into the U.S. energy market through an IPO, and they felt like they couldn\u2019t conduct an initial public offering if they were under investigation for corruption in Ukraine. So that\u2019s what it all pertained to. That\u2019s where the supposed bribe happened \u2026 They also wanted to buy an existing […]<\/p>\n","protected":false},"author":0,"featured_media":1137,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[5],"tags":[],"class_list":["post-1152","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-politics"],"_links":{"self":[{"href":"https:\/\/businesstriumphs.com\/index.php\/wp-json\/wp\/v2\/posts\/1152","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/businesstriumphs.com\/index.php\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/businesstriumphs.com\/index.php\/wp-json\/wp\/v2\/types\/post"}],"replies":[{"embeddable":true,"href":"https:\/\/businesstriumphs.com\/index.php\/wp-json\/wp\/v2\/comments?post=1152"}],"version-history":[{"count":0,"href":"https:\/\/businesstriumphs.com\/index.php\/wp-json\/wp\/v2\/posts\/1152\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/businesstriumphs.com\/index.php\/wp-json\/wp\/v2\/media\/1137"}],"wp:attachment":[{"href":"https:\/\/businesstriumphs.com\/index.php\/wp-json\/wp\/v2\/media?parent=1152"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/businesstriumphs.com\/index.php\/wp-json\/wp\/v2\/categories?post=1152"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/businesstriumphs.com\/index.php\/wp-json\/wp\/v2\/tags?post=1152"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}