Biden family ties pose questions

Times Staff Writers

When Joe Biden's brother and son wanted to buy a hedge fund company two years ago, they turned for financing to a law firm that had lobbied the Delaware senator's office on an important piece of business in Congress -- and in fact had recently benefited from his vote. The firm promised James and Hunter Biden that it would invest $2 million, and quickly delivered half of it.

That arrangement eventually fell through, and the firm's money was returned. But the investment highlighted the close ties between the Biden family and SimmonsCooper, an Illinois law firm that specializes in representing asbestos victims -- a multimillion-dollar line of business that was under threat in Congress.

In addition to providing financing for the hedge fund deal, SimmonsCooper picked the law firm of another of Biden's sons, Beau, to work with it on dozens of asbestos cases in Delaware. "It was only natural that we worked with my friend Beau Biden and his firm," said Jeffrey Cooper, former managing partner of SimmonsCooper.

And SimmonsCooper employees have donated about $200,000 to Biden's campaign efforts since 2001, making the firm his No. 1 donor. All told, SimmonsCooper employees provided much more money to Biden than to any other senator during that period, according to an analysis by the Center for Responsive Politics.

His family's financial dealings could be troublesome for Biden, who Wednesday night became part of a Democratic presidential ticket that has vowed to reform Washington's traditional money culture.

A spokesman for the senator said that all the SimmonsCooper business deals with his sons and brother were above board, involved no special favors and were arranged without the senator's knowledge. Biden, one of the Senate's leading advocates for trial lawyers and the right of victims to sue in court, has long taken a skeptical view of efforts by the asbestos and insurance industries to get asbestos-related lawsuits out of the courts by creating a trust fund to handle billions of dollars in claims. SimmonsCooper has spent $6.4 million since 2002 lobbying Washington, according to records on CQ MoneyLine, much of it directed at opposing the trust fund bill.

David Wade, Biden's spokesman, noted that the $1-million investment in the hedge fund venture was made after Senate action on asbestos reform had been completed in 2006 and that the Bidens fully repaid the law firm the money. Biden's opposition to the asbestos bill "was well established" long before his sons became involved with the asbestos litigation firm, Wade said.

SimmonsCooper officials said any suggestion of a connection between business deals with Biden's family and official Senate actions was "ludicrous."

What's clear is that SimmonsCooper's interests in Washington were clearly aligned with Biden's philosophical views, and his position on the Judiciary Committee was enormously important to such a firm.

SimmonsCooper is one of the nation's best-known and most successful asbestos litigation firms. Its says it has obtained more than $1 billion for clients, many of whom suffered from mesothelioma, a deadly lung disease that results from contact with asbestos, a once commonly used fire retardant and insulation material.

Biden and others -- including many congressional Democrats, trial attorneys, victims groups and organized labor -- have argued that any trust fund must be large enough to compensate cancer victims. And in 2003, when then-Senate Judiciary Committee Chairman Orrin G. Hatch (R-Utah) sponsored legislation to create a trust fund, Biden attached an amendment that would have allowed plaintiffs to return to court if the fund ran out of money.

The amendment was fiercely opposed by industry groups and Republican lawmakers. When Hatch's bill collapsed, those supporters pledged to continue to work to create the trust fund. The following year, SimmonsCooper began contributing heavily to Biden, providing $45,500 to the senator.

In 2005, when asbestos legislation was revived by Sens. Arlen Specter (R-Pa.) and Patrick J. Leahy (D-Vt.), Biden again pushed for a guarantee that plaintiffs could return to court if there was insufficient money in the fund. The bill stalled.

It was during this period that the first financial connections to the Biden family emerged.

SimmonsCooper began filing asbestos cases in Delaware in 2005 using, as its local counsel, the law firm where Biden's son Beau worked.

Beau, 39, a former federal prosecutor, had just joined the firm -- which became Bifferato, Gentilotti & Biden -- and was looking to do more complex litigation work. Beau Biden, who is now the attorney general of Delaware and a captain in a National Guard unit heading to Iraq, did not respond to requests for comment. But a partner in his former firm credited the senator's son with securing the SimmonsCooper business.

"While Beau was here, he was the person considered responsible for bringing the SimmonsCooper work to our firm," said Connor Bifferato. He said the relationship started because "Beau knew Jeff" Cooper. Beau's interest in expanding his firm's portfolio coincided with SimmonsCooper's concern about declining prospects in their home base of Madison County, Ill., which had become such a center for filing tort claims that one business group dubbed it a few years ago "America's No. 1 judicial hellhole."

Bifferato added that he did not think Beau Biden's ability to secure the SimmonsCooper account had anything to do with his being a senator's son. He also said the SimmonsCooper work did not generate any "measurable income" until after Beau left the firm at the end of 2006.

Cooper said his friendship with Beau Biden was one reason he chose Bifferato, Gentilotti & Biden to help file asbestos cases in Delaware. But another was that it was "one of the best firms in the state."

He added that Beau Biden has had no interest in the firm's cases since he moved to the attorney general's office, but "his old firm continues to do a great job on SimmonsCooper cases."

In 2006, the Leahy-Specter legislation reached the Senate floor, and Joe Biden again rose to speak against it.

"The real problem is that there are a lot of people out there suffering from the effects of asbestos. There are not a lot of companies out there with the money to pay all of these claims. There is the concern that some of the very companies we have to go to, to recover from, may very well declare bankruptcy. So I understand the motivation. It is a decent, honorable motivation," he told his colleagues on Feb. 14, 2006.

"But the bottom line is, what we are asking an awful lot of people to do is to give up a right in tort that has existed in common law for hundreds and hundreds of years. . . . The victims are not in on this bill."

When the measure came up for a vote that evening, Biden was among 41 senators who voted against it -- meaning it fell short of the 60 votes needed for passage. It never came up for another vote.

A few months after that bit of Senate drama, the complex deal involving the senator's brother and son moved forward. His brother James -- a now 59-year-old Pennsylvania businessman -- and son Hunter -- 38 and a Yale Law School graduate working as a lawyer and lobbyist in Washington -- sought to acquire a group of hedge funds known as Paradigm. To get the initial capital for the deal, they went to Cooper, who described himself in a brief e-mail exchange with The Times as an admirer of the senator and a longtime "friend of the Biden family." He noted that his wife and Hunter Biden's wife had gone to high school together.

Wade, the campaign spokesman, said Hunter Biden and Cooper met "several years ago and they became good friends."

The Illinois firm, based in the downstate city of East Alton, agreed to provide the initial $2 million of the purchase of the company in exchange for a 10% interest. In an affidavit from a suit involving the Bidens and another partner in the Paradigm deal, Hunter Biden said that he and his uncle "sought and obtained an additional investor, SimmonsCooper," after agreeing to buy a controlling interest in the Paradigm hedge funds. Hunter Biden said that SimmonsCooper agreed to make the initial $330,000 payment for the purchase and to cover other costs.

Hunter Biden said in his affidavit that SimmonsCooper made that payment on May 2, 2006, and that he and his partners used it as a down payment so they could begin managing Paradigm hedge funds while they finalized the purchase. SimmonsCooper sent a second payment of $670,000 a week later, bringing its total investment to $1 million.

According to the affidavit, SimmonsCooper pulled out of the deal after the Bidens said their then-partner, Anthony V. Lotito Jr., had misled them about the value of the hedge funds and about expenses.

Lotito's lawyer denied the allegations, which the Bidens made in an ongoing lawsuit filed by Lotito against them.

The Bidens eventually acquired the hedge fund, and said in court filings that they incurred a $1-million debt to SimmonsCooper for the money they had been advanced.

"Jim and Hunter repaid SimmonsCooper the $1 million they had invested because they believed it was the right thing to do," said Nicholas A. Gravante Jr., the lawyer for the two Bidens.

Like many plaintiffs' firms, SimmonsCooper distributes campaign contributions liberally to influential Democratic lawmakers, most of whom opposed the proposed legislative solution to limit asbestos lawsuits.

"We support a lot of Democrats," said SimmonsCooper partner Michael Angelides. "We generally support candidates who are for consumer and victim rights. . . ."

He described Biden as "a real champion for consumer rights issues."

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chuck.neubauer@latimes.com

tom.hamburger@latimes.com

Times staff writer Noam N. Levey and researchers Janet Lundblad and Ole Jann contributed to this report.

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(BEGIN TEXT OF INFOBOX)

In the money

Donations to candidate campaign committees between 2001 and 2008 from SimmonsCooper, a firm that deals with asbestos litigation.

Top five

Joe Biden: $196,050

Tom Daschle: 111,600

Richard J. Durbin: 95,535

Barack Obama: 74,900

Harry Reid: 73,400

Others of note

John Edwards: $58,100

John F. Kerry: 22,000

Hillary Rodham Clinton: 15,400

Edward M. Kennedy: 7,000

Source: Center for Responsive Politics

Graphics reporting by Ole Jann

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