A top aide to former Vice President Joe Biden’s transition team once helped steer $3 million in taxpayer dollars to a Hunter Biden-linked venture capital firm.
Last week, Bloomberg reported that Don Graves, a high-ranking executive at Key Bank, has been tasked to advise Biden on financial regulation issues during the transition process. Graves, who worked for the former vice president during the Obama administration, has been a long time fixture in the Biden family orbit.
As Peter Schweizer, a senior contributor at Breitbart News and the president of the Government Accountability Institute, revealed in Profiles in Corruption, that relationship benefited Hunter Biden’s business interests on at least one occasion.
In December 2013, Hunter Biden, along with his long-time business associate Devon Archer, invested in a Hawaii-focused venture capital fund called mbloom. The investment, which was meant to provide seed capital for technology startups, was the result of a public-private partnership between Biden’s firm, Rosemont Seneca Technology (RST) Partners, and the state of Hawaii.
As part of the agreement, RST would provide five million for the fund, with the Hawaii Strategic Development Corporation (HSDC) matching the same amount.
Little-known at the time, however, was that more than half of HSDC’s contribution, nearly $3 million, came from the Treasury Department’s State Small Business Credit Initiative. The program, which expenses more than $1.5 billion to state economic development agencies, fell under the purview of then-Deputy Assistant Secretary of the Treasury Don Graves.
Complicating matters is that while Graves was overseeing the Small Business Credit Initiative, he was also informally advising Biden on economic and domestic policy as the executive director of the president’s Council on Jobs and Competitiveness. That role took on a more official form shortly after mbloom received its contribution from HSDC, with Graves leaving the treasury department and joining the vice president’s office.
Since then, the two men’s personal and professional lives have continued to intertwine. Graves, now the head of corporate responsibility and community relations at KeyBank, has not only donated to Biden’s 2020 campaign, but has also taken an active role in the former vice president’s philanthropic pursuits.
Graves’ success in leveraging his relationship with the Biden family sharply contrasts with that of taxpayers in the state of Hawaii.
Within months of HSDC inking the mbloom deal with Hunter Biden’s firm, the fund was embroiled in scandal. Most notably, two of the companies that first received capital from mbloom were owned by individuals, Arben Kryeziu and Nick Bicanic, tasked with managing the fund.
The scandal only grew when the company owned by Bicanic went under, without ever reporting a profit, and Kryeziu fell afoul of the Securities and Exchange Commission. HSDC, which initially saw mbloom as an opportunity to diversify Hawaii’s service-centered economy, stepped in to stabilize the fund.
Those efforts proved futile, especially when Archer was indicted for defrauding a Native American tribe in May 2016. The charges against Archer stemmed in part from allegations that he and a business associate conspired to use tribal bonds under their control to drive up the stock price of Code Rebel, a technology company also owned by Kryeziu.
In the aftermath of the indictment, RST Partners agreed to give up its stake in mbloom to an investor lined up by HSDC. It remains unclear if Hunter Biden’s firm recouped its initial five-million-dollar investment.
Despite hopes of salvaging mbloom, further investment never materialized. In June 2016, HSDC opted to shutter the fund in an effort to prevent any more tax dollars from going to waste.
The Biden campaign did not respond to requests for comment on this story.