Groups with Biden ties pose ethics quandary for his administration

The University of Delaware’s Biden Institute promises in its mission statement to embody the spirit of “honesty, integrity, compassion and courage” it says have defined President-elect Joe Biden’s career in politics.

But as Biden prepares to take the oath of office on Wednesday, the research center he helped launch in 2017 to promote scholarship on public policy has the potential to become an ethical headache for his administration. The institute doesn’t disclose all of its donors and hasn’t committed to doing so once Biden is sworn in president.

While it’s much smaller than the Clinton Foundation, which sparked ethics concerns during Hillary Clinton’s tenure as secretary of State and her presidential campaigns, the Biden Institute continues to engage in a multimillion-dollar fundraising campaign, which could attract donations from those interested in currying favor with the Biden administration.

The Biden Institute is one of a small network of charitable organizations and academic centers bearing Biden’s name, which he helped start after leaving office four years ago to promote causes he worked on during more than four decades in Washington. Several of them have also employed his former aides.

Two of the groups — the Biden Foundation and the Biden Cancer Initiative — shut down in 2019 after Biden announced he would run for president. But the Biden Institute and the University of Pennsylvania’s Penn Biden Center remain active, as does the Beau Biden Foundation for the Protection of Children, which was started after his son Beau Biden’s death in 2015, while Biden was still vice president.

The Beau Biden Foundation will start making its major donors public for the first time on Wednesday, when Biden is sworn into office.

The Penn Biden Center does not fundraise. The University of Pennsylvania uses general funds to operate the center and has no plans to solicit money for it in the future, according to a university spokesperson.

A Biden transition official said the incoming administration was taking steps to prevent any real or perceived conflicts of interest “or ethically compromising positions.”

“The administration will adhere to high ethical standards and ensure any affiliations with outside groups will not result in special access or treatment,” the official wrote in an email to POLITICO.

But some ethics experts argue the president and his immediate family members should cut ties with the Biden Institute and the Beau Biden Foundation if they plan to continue to fundraise.

“They should at the very least disclose their donors, and I think the Biden family should at the very least take their name off if they’re going to continue to raise money,” said Richard Painter, the chief ethics lawyer in President George W. Bush’s White House.

Meredith McGehee, the executive director of Issue One, a Washington group that promotes political reform, said she’d like to see the groups disclose all donors going back five years.

“Clearly when you’re president you need to sever all ties,” she said.

Painter also urged Hunter Biden to step down from his role as a co-chair of the Beau Biden Foundation, pointing out that he’d encouraged Chelsea Clinton in 2016 to sever ties to the Clinton Foundation if her mother was elected president. (Biden’s daughter, Ashley Biden, recently stepped down from the board.)

“I just don’t think it’s worth it,” he said. “Why compromise the presidency? Why create an issue for the right-wing media to grab onto?”

Other members of Biden’s immediate family are also still involved in the groups, as well. Biden’s sister, Valerie Biden Owens, remains a paid consultant to the Biden Institute, and Beau Biden’s widow, Hallie Biden, is co-chair of the Beau Biden Foundation’s board.

The University of Delaware launched a campaign in 2017 featuring Biden Owens with a goal of raising $20 million for the Biden Institute. The university hasn’t met the goal yet and expects fundraising to continue “for years to come,” according to Peter Bothum, a university spokesperson.

Asked if the university planned to make its donors public, Bothum said the university disclosed all donors who gave more than $100,000.

“Anything earmarked for the institute would be part of that, because it's part of the university,” Bothum said in a statement. “We are in the process of reviewing our policies regarding gifts pertaining to the Biden Institute and Biden School of Public Policy in order to comply with federal guidelines while Joe Biden is president."

The Beau Biden Foundation said in a statement that it “will continue its mission” once Biden takes office “but with strict guardrails around fundraising including focusing on low dollar fundraisers and utilizing existing donors to continue their support.” The foundations will start disclosing the names of donors who’ve given at least $2,500 on Wednesday.

In an interview, Patricia Dailey Lewis, a former Delaware deputy attorney general who’s now the foundation’s executive director, said it doesn’t take money from lobbyists or foreign interests and only accepts contributions from donors whom the foundation has vetted. “My default would be if you have business before the federal government we wouldn’t take the money,” she said.

Boeing wrote the foundation a check in its early days, Dailey Lewis said, but it stopped accepting the company’s money after two of the company’s 737 MAX planes were grounded in 2019 following two deadly crashes, triggering federal investigations.

“I’m sure there will be lots of organizations that will be wanting to send us checks now,” she said. “We’ll just turn them down.”

Unlike other recent presidents, Biden is entering office after having already set up much of the infrastructure associated with a post-presidency. The Biden Foundation, for instance, had initially planned to construct a vice presidential library but scrapped those designs once Donald Trump was elected, given the possibility that Biden might challenge him.

None of the groups Biden helped set up after leaving office ever approached the scale of the Clinton Foundation, which President Bill Clinton established in 1997 to raise money for his presidential library and later became the center of a $2 billion philanthropic colossus.

The Clinton Foundation’s fundraising, which included millions of dollars in contributions from foreign donors such as the Saudi government and Abu Dhabi’s royal family, attracted scrutiny when Hillary Clinton ran for president in 2008 and again in 2016. (The Clinton Foundation agreed to make its donors public in 2008 after President-elect Barack Obama chose Clinton as his secretary of State.)

The Biden Foundation, meanwhile, raised about $3.3 million in 2018, its last full year of operation. The Beau Biden Foundation raised less than $1 million in the same year. The Biden Cancer Initiative raised about $4.8 million over a two-year period.

The Biden nonprofits also set ground rules the Clinton Foundation didn’t. The groups didn’t accept foreign contributions, and the Biden Cancer Initiative didn’t take money from drug companies, a Biden spokesperson told The New York Times in the months before he kicked off his campaign.

Several university centers that have been affiliated with sitting senators also make their donors public, including the University of Louisville’s McConnell Center, which Senate Majority Leader Mitch McConnell helped start three decades ago, and Arizona State University’s McCain Institute for International Leadership, which the late Sen. John McCain (R-Ariz.) helped set up in 2012 while he was still in office. The donors to the McCain Institute included Saudi Arabia’s government, which gave $1 million in 2014.

Norm Eisen, who served as Obama’s top ethics lawyer, said he didn’t think the Biden groups were comparable to the Clinton Foundation. “These are worthy but relatively modest entities in the academic and nonprofit world” compared to the Clintons’ behemoth, he said.

But Craig Holman, a lobbyist for Public Citizen who’s a government ethics expert, said Biden should encourage groups bearing his name to make their donors public “or else he’s going to come under the same kind of scrutiny that Clinton came under.”

One of the legacies of the groups Biden helped set up has been serving as a landing place for many of his allies and former aides.

At least 28 people working on the transition or going into the Biden administration — including much of the incoming White House senior staff — have ties to one of the groups Biden set up after leaving office or to the Beau Biden Foundation.

Tony Blinken, Biden’s pick for secretary of State, worked as a managing director at the Penn Biden Center and was paid nearly $80,000 in the first six months of 2019, according to his personal financial disclosure.

Other Penn Biden Center alumni joining the administration include Steve Ricchetti, who will be a White House counselor to Biden; Brian McKeon, Biden’s choice for a top State Department post; Colin Kahl, Biden’s pick for under secretary of Defense for policy; Jeff Prescott, whom Biden will nominate as deputy ambassador to the United Nations; and Carlyn Reichel, Juan Gonzalez and Ariana Berengaut, all of whom will serve on the National Security Council staff.

Ted Kaufman, who’s running the transition, served as the Biden Foundation’s chair, and Louisa Terrell, who will be Biden’s White House legislative affairs director, drew a salary of more than $220,000 as its executive director, according to a tax filing.

Ben Harris, whom Bloomberg News reported this week would join the administration as a top Treasury Department aide, earned more than $150,000 in 2018 as a Biden Foundation consultant. Another consultant to the foundation, Anthony Bernal, who was paid more than $100,000 in 2018, will be a senior adviser to Jill Biden in the White House.

Jeff Zients, who’s heading up Biden’s Covid response efforts, was on the board of the Biden Cancer Initiative.

Mike Donilon, who will be a top White House adviser to Biden, worked as the Biden Institute’s managing director before going on leave last spring.

And at least four members of the Biden Institute’s policy advisory board are set to go into the administration: Bruce Reed, who will be deputy White House chief of staff; Heather Boushey, who will be a member of the Council of Economic Advisers; Vivek Murthy, Biden’s pick for surgeon general; and Don Graves, his choice for deputy Commerce secretary. Sally Yates and Sarah Bianchi, both of whom advised the transition, were also on the board.

Reed, Boushey, Murthy and Graves are stepping down from the board now that they’re joining the administration, the University of Delaware said.

Aside from Bianchi, none of the people on the board were paid by the institute, and serving on it apparently didn’t require a big time commitment.

Two members of the board said they could recall attending only one in-person meeting. One of them said another two or three meetings had been held by phone, the last one in 2019.