James Biden isn’t a big name in the business of residential housing development, so what exactly qualifies him to work at a construction company and share in the winnings of a $1.5 billion project to build affordable homes in Iraq?
If you said it has something to do with his last name, the one shared by his older brother Vice President Joe Biden, you wouldn’t be far off.
At least that’s the guess of some Wall Street analysts who cover the Marlton, NJ-based company Hill International and think they’ve seen yet another sordid tale of crony capitalism.
Hill has been around for decades; its main business is managing construction projects in the Middle East and here in America. It’s built a good reputation over the years, as has the father-son team who run it, Irv and David Richter.
But the bursting of the real-estate bubble took its toll; Hill shares dropped 80 percent after 2008. In 2011, the company still reported losses. Its Middle East business was also stymied by the Arab Spring uprisings; in Libya alone, Hill was out $60 million in payments that it was trying to recover.
But it got some good news not long after its housing subsidiary hired James Biden as an executive vice president in late 2010. Just six months later, Hill won one of its biggest contracts ever, a $1.5 billion deal to build at least 100,000 affordable homes in Iraq.
A good deal for Hill, a relative newcomer to building homes — and for James Biden, who as one partner would get a good share of that $1.5 billion.
The deal in 2012 was contingent on the Iraqi government providing financing, but Hill execs told analysts the money could start flowing by the end of that year. That’s when everyone involved, James Biden included, would start collecting on tens of millions of dollars in profits.
One friend of James Biden’s estimates his net worth at around $7 million, yet he seems to have a remarkable lack of concrete business experience. An attorney who’s done work for him called him a “serial entrepreneur,” but didn’t name the startups he was responsible for.
Hill chief Irv Richter called Biden a “good salesman” and the firm’s Web site described “40 years of experience dealing with principals in business, political, legal and financial circles across the nation and internationally.”
(James Biden also had a relatively short and somewhat controversial run as a co-owner of a hedge-fund company with Joe’s son Hunter. The company, as it turns out, was marketed by companies controlled by now convicted Ponzi schemer Allen Stanford. Neither Biden was charged, but the fund company is now winding down its operations.)
No, James Biden’s obvious value came from his connection to the Obama administration. Richter assures media at the time that James’ ties to Joe played no part in landing the plum assignment in Iraq or any of the other government-related jobs Hill had received recently.
Really? Connect these dots: Both the Iraqi government and the Obama State Department played roles in helping Hill win the assignment, Richter concedes. And Joe Biden was President Obama’s point man on Iraq — a country where people expect politicians’ families to be “taken care of.”
Also key is TRAC Development, a South Korean firm that won the master contract for the Iraq work. And — huh! — James Biden and his wife were guests of President Obama and Michelle for last a state dinner honoring the then-president of South Korea, Lee Myung-bak.
All one big coincidence?
Well, Richter insisted that, while Biden’s name and connections might open doors when government business is on the line, that doesn’t guarantee success. “If he had the name Obama, he would get in the door easier,” Richter joked.
During a 2012 vice-presidential debate, Joe Biden told Americans to just ignore all that stimulus money that went to administration-connected failures like Solyndra. Crony capitalism, he insisted, hardly exists with Joe Biden and Barack Obama watching the store.
Maybe that’s why the veep, after making that statement, was laughing so much that night.
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