Checking in recently with some history of the Alfa-gate series of untoward Russia-hoax events, we unearthed some “degrees of separation” type dots through which the events linked, however innocently, to MBNA, the Delaware banking giant Joe Biden was at one time referred to as “the Senator from [i.e., “from MBNA”],” and other aspects of the Biden family enterprises.
The reason for this opening exercise is to set the stage for broader links that reveal a big-picture pattern, one that goes beyond the links highlighted earlier.
This big-picture pattern goes beyond the known outlines of Alfa-gate and its parent -gates, Russiagate and Spygate. In fact, it reaches all the way to Elon Musk’s bid to buy out Twitter, and for me illuminates the full meaning of “investor activism,” and how it appears to connect in at least some cases to the politics of interventionist government.
Starting with the MBNA thread, a brief summary:
Hunter Biden got a lucrative $100,000-a-year job at MBNA in 1996, coming out of Yale Law School. He wasn’t there that long before obtaining a job in the Clinton administration in 1998. But the lobbying firm he later joined remained on retainer to MBNA through 2003.
In the same period, as recounted by Byron York in a 1998 article for The American Spectator (re-posted at National Review Online in 2008, and cited by Miranda Devine in Laptop from Hell), Joe Biden sold a residential property in Delaware to an MBNA executive, a transaction widely thought to have overvalued the property (although that was disputed by then-Senator Biden and the buyer, who both offered appraisals showing a valuation at exactly the sale price). York described compensation later made by MBNA to the executive purchaser, appearing to include home improvements to the property. At the time, a bank whistleblower alleged that MBNA had done similar things in other instances as well.
Subsequently, in the early 2000s, Senator Biden shepherded and advocated financial regulations being vigorously lobbied for by MBNA. It was in this period that Biden was being called “the Senator from MBNA.”
These are the bare basics from the timeframe bookended by Hunter Biden’s employment with MBNA and Biden’s Senate pushes for legislation sought by the bank.
The later connections reviewed in the TOC posts linked above involve individuals who were also connected to MBNA in the mid-late 1990s, and then cropped up in interesting roles incident to Biden activities and Alfa-gate. I stress as usual that there is no evidence to suggest a nefarious character to these connections.
What there is, however, is a recurrence of Biden-connected (or directed) activities in the series of situations.
MBNA to HSBC
One individual – the one of least apparent interest, but still worth mentioning for context – was Michael Cherkasky. Cherkasky was president of the risk-management firm Kroll – the bit player in Spygate – in the late 1990s, when Kroll consulted with MBNA at the time of the whistleblower allegation about improper compensation of executives. The Biden property sale, with the buyer’s subsequent compensations from MBNA, was potentially in that category; i.e., something Kroll would have reviewed. Cherkasky, a former prosecutor in Manhattan who had earlier worked the notorious Bank of Credit & Commerce International (BCCI) case, was no neophyte on these matters; it’s safe to assume he was well aware of the Biden-MBNA connection and Hunter Biden’s role with MBNA.
The later role assumed by Cherkasky has interest, even if it isn’t the one that threads all the way to our objective in this article. A decade ago, after global banking colossus HSBC was indicted for massive U.S. sanctions violations, it was put under a deferred-prosecution agreement (DPA) with the U.S. government in December 2012. Michael Cherkasky was subsequently appointed in July 2013 as chief of compliance at HSBC to oversee the bank’s adherence to the criteria laid out for it in the DPA.
How did that intersect with a Biden family interest? As described in the 31 March TOC article linked at the top, it was during Cherkasky’s tenure as HSBC’s chief of compliance that Ukrainian prosecutors in 2014 accused oligarch Serhiy Kurchenko, an associate of nominal Burisma owner Mykola Zlochevsky, of embezzling from Burisma (along with Zlochevsky). At the same time, Kurchenko was laundering some $167 million through an alias account with HSBC.
The Kurchenko activity via HSBC started in 2014, as noted. But HSBC didn’t flag it for a suspicious activity report until 2017. For completeness, let us log that there was a change of U.S presidents in that interim – and, as outlined in my earlier articles, a change in how the DPA with HSBC was being administered.
Meanwhile, Hunter Biden’s associates Patrick Ho and Ye Jianming, senior officials with the CCP-linked China Energy Co., Ltd., were accused in U.S. federal court of laundering bribes to African clients through HSBC’s U.S. subsidiary in 2014.
The point here is not that these events per se are smoking guns demonstrating particular individuals’ knowing involvement in anything. Rather, they indicate patterns that inevitably do – and also should – color our evaluation of what’s being done by a set of usual suspects (institutions, industries, government, policy-makers and executors) when they crop up repeatedly in a network of connecting dots.
Especially a network with Bidens (and Clintons) in it. This is what the picture really looks like.
MBNA to Aon Plc
The other individual of interest is Jason Hogg*, whom we met in the TOC article of 11 May 2022.
Like our other figures, Mr. Hogg was connected to MBNA in the 1990s. In his case, he worked there at the same time as Hunter Biden, and, like Biden, as a young executive-path hire. Biographical information shows Hogg’s dates with MBNA as 1993-98. His bios also repeatedly indicate that he went on to co-found MBNA Canada in 1998.
The exact nature of his employment immediately after 1997 isn’t quite clear based on multiple biographical claims. Most biographies include the statement about founding MBNA Canada. (Note, if this seems odd for a youthful, relatively recent hire, that Hogg’s father was Russell Hogg, a key figure in creating MasterCard.)
Not all biographies emphasize that Jason Hogg was a “special operations” agent for the FBI from 1998 to 2000. Hogg has discussed that in a number of interviews, however. The curious thing is that one connection or the other – to MBNA or to the FBI – is missing in a number of Hogg’s biographies, as the bios appear for conferences, speeches, and business announcements.
Make of that what you will. Hogg went on in 2005 to found Revolution Money, a pioneering alternative payments company (later bought by American Express).
The culminating event of our meeting with Hogg in May was his appointment as president of risk-evaluation consulting firm Stroz-Friedberg in May 2017, in the middle of the firm’s work for Alfa Bank to analyze the purported DNS data from the Rodney Joffe team, which depicted server activity between Alfa Bank and a “Trump” server. (Alfa Bank’s counsel in the bank’s lawsuits against retailers of the data hired Stroz-Friedberg to conduct the study.)
The timing of Hogg’s appointment at Stroz-Friedberg was one of those jarring juxtapositions with which Spygate and all its subsidiaries are replete. The announcement came on 10 May 2017, the day after James Comey was fired as FBI director. (According to his LinkedIn timeline, Hogg had been in his other, dual-hat executive job with parent company Aon Plc for several weeks before he took over Stroz-Friedberg.)
This executive move remains something of a potential conundrum, along with the choice of Stroz-Friedberg by Alfa Bank’s lawyers in the first place.
Remember that Stroz-Friedberg, founded by two FBI agents in 2002, had been bought by global insurance broker Aon Plc at a time that can’t fail to grab attention because of who one of Aon’s highest-profile clients was: Donald Trump and his enterprises. Aon bought Stroz-Friedberg in October 2016.
Two weeks after the purchase announcement, the FBI’s Assistant Director for the Cyber Division, James Trainor, moved to Aon Plc to work with Stroz-Friedberg on cybersecurity risk analysis.
A few months later, when a fresh flurry of supposed Alfa Bank-“Trump” DNS lookups was reported in February and March 2017, Stroz-Friedberg was hired to perform forensic analysis of Internet records, and assess what was going on with this post-election development – which also took place after Cendyn, the company that originally contracted the “Trump” server, was no longer under contract to Trump Hotels. The Stroz-Friedberg study was delivered in July 2017.
Aon to Biden…
What exactly was going on with Stroz-Friedberg and its work for Alfa Bank may always be a loose end. We do know that in the period 2017-2020, authorities in New York had Trump and his businesses under a perpetual investigation for which Trump’s insurance broker, Aon – Stroz-Friedberg’s parent – received subpoenas and gave depositions. So far, none of that five-year, still ongoing investigative effort has produced anything unveiled to the public.
As discussed in the May article, Aon dropped Trump as a client in January 2021, shortly after the 6 January Capitol riot (and purportedly because of it).
Five months later, the Biden Justice Department sued in federal court to prevent Aon from completing a merger with rival insurance broker Willis Towers Watson (WTW). The merger, complained DOJ, would create the largest insurance broker in the world.
Aon and WTW are both headquartered in Ireland now, and a merger effective between U.S. subsidiaries required CFIUS (Committee on Foreign Investment in the United States) approval. The companies received that approval in November 2020, so a new DOJ leadership had to move to prevent an otherwise approved plan. For the record, the sequence is thus that Aon and WTW received their CFIUS approval while Trump was still president; Aon dropped Trump in January 2021, days before Biden took office; and then Biden’s DOJ sued to stop the merger.
What’s interesting about this is the relatively high profile the situation was accorded by the media. For a somewhat arcane industry development, it was give quite a bit of attention, accompanied by a vague but emphatic theme about the Biden administration’s determination to reenergize antitrust activism as a Democratic issue.
If you don’t remember seeing or hearing much of anything else about Biden’s antitrust push, you’re not alone. Indeed, media noted at the time of the DOJ lawsuit in June 2021 that Biden hadn’t yet appointed an antitrust chief at the Justice Department. There’s a whiff there of a special interest in preventing the Aon-WTW merger.
Biden has an antitrust chief now in Mr. Jonathan Kanter, whose nomination was approved by the Senate in November 2021.
But there’s a “rest of this story,” and it’s the nugget we’ve been teasing out in this article. At the same time the Biden DOJ was taking a special interest in stopping the Aon-WTW merger, Aon was under intense pressure from activist investors to forgo the merger. Two in particular, Elliott Management and Starboard Value – both activist firms with high industry profiles – had loaded up with the requisite shares to pressure Aon with.
Companies that come under such activist assaults frequently look for compromises and accommodations to avert shareholder insurgencies and raids on their boards. (One of the investors in Aon’s case, Starboard Value, notoriously got the entire board of Darden Restaurants, parent company of Olive Garden and LongHorn Steakhouse, replaced in an activist raid.)
Business media reporting seems to indicate Aon simply couldn’t agree with the activists’ demand that the merger not happen. Aon and WTW apparently sold off some holdings to try to satisfy the activists as to how big they’d be after a merger, but it wasn’t working. The investors were still pushing, and then the Biden administration filed suit seeking the same outcome the activists wanted: abandonment of the merger.
That’s what the activists and Biden ultimately got. In July 2021, Aon agreed not to complete the merger with WTW.
The activism energumen
Before moving on, let’s listen with our ears here to the fundamental thing that’s going on. Mergers may or may not be good things. They may or may not be bad things. In some cases they’re simply neutral things.
We tend to assume, when the government and media characterize policy as an “antitrust” move, that the public is being protected against companies that get too big. And sometimes that’s the case; it may have been the case here.
But it’s also possible, given how determined Aon and WTW were to complete their merger, that under current industry conditions – which have been unfavorable for most industries, and getting worse, since the COVID lockdown policies began in March 2020 – a merger was something the two firms sought to form a better basis for their own sustainability in turbulent times. Their enormous portfolios put them at enormous risk, in the increasingly likely event that obligations go north and investment returns on their capital go south.
I don’t know that that’s the case, and don’t have the resources to evaluate it. I haven’t found much popular investor speculation on the matter. But there’s no need to be an expert to see that it could be a consideration. Without making conclusions either way, it’s possible that Aon and WTW had a vision for something other than colluding to gain control of industry pricing.
This point helps us hear with discernment. Instead of applying the sophomore’s abstract “antitrust theory” template to the Aon-WTW drama, we should consider that it might have been a mixed bag of benefits and costs, in terms of outcomes for the market and the public.** “Antitrust” may not even be an applicable tiebreaker in this case, or at least not the highest priority.
The real, underlying thing going on is that activist investors and the federal government were using the leverage they had, to exert control over choices made by the company leadership: choices about strategy, direction, investment – everything pertaining to the companies’ futures.
They were united in that endeavor.
Increasingly, that’s the effective power sought by investor activism, whether the investors are mostly about political activism or mostly about the somewhat older, but still relatively recent phenomenon of “cleaning a company up” to suit the taste of profit-seeking investors.
Even the latter isn’t really what we’re talking about, because it started out as being primarily about company profitability, and bagging up gains from it. Surveying the activism landscape now, one sees more of a profile of Market Garden-type airborne landings to surprise and take down a target company’s corporate will behind its front lines – then bend and shape it to do what someone else wants to do with the company.
All without buying controlling interest in the company: instead buying just enough to start making demands and organizing internal opposition. (Listen, at the end of this CNN report, for the ringingly informative peremptoriness of a demand recorded by Elliott Management in its activist intervention with AT&T: “AT&T and Elliott reached a truce last October that included a pledge by the company not to make any major acquisitions.”)
The important thing about Elon Musk’s tender for Twitter is that it’s a nearly $44 billion buyout offer.
He’s basically proposing to immunize Twitter against investor activism.
In my view, that’s the key factor in the cottage industry now developing to build blowback against his offer. If Musk gets what he wants, the activist investors can’t combine with government agencies to demand concessions on company planning and strategy, while Musk and the great majority of the other shareholders still assume most of the risk.
Of course this is throwing the Biden administration for a loop. Activist investment is hot hot hot. It’s how clever, longheaded things are done now. If government agencies and activist investors agree, there are huge chunks of corporate power to be steered around out there, with minimum risk by entangling investment.
In the case of Twitter, with the whole issue-stew in the center ring – Section 230, free speech, cancel culture, deplatforming – it’s obvious why a thousand greedy hearts want activist leverage over the company, while a buyer like Musk would want to be free of their predatory maneuverings. Urgent policy desires, with enduring import, are going to live or die here.
It also turns out that – here comes another dot – Elliott Management is one of several activist investors that have been trying to leverage Twitter into what they deem a better frame of mind.
Yes, Elliott Management has been after Twitter. (I emphasize identities mainly when they matter to and recur in the situation, because who can remember all these random names?)
Industry observers, and people cited as having an informed perspective, have reported on multiple occasions that Jack Dorsey, who was forced out as CEO in an activist-led surge, gave his blessing to Musk’s move, if he didn’t actually collude in it.
Reports also indicate that other activist investors with Twitter shares have been approaching Musk about forming partnerships for the buyout. Silver Lake, the high-profile Silicon Valley/tech investment firm (which already had an activist stake in Twitter), is said to be one of them.
Curiously enough, Elliott Management (again, already invested) has been almost completely silent, at least in public, about Musk and Twitter.
So I think you’re going to love the final trot to home plate here, which connects the dot that Elliott Management is the investment firm of Paul Singer – the long-time Republican donor who figured as the Washington Free Beacon’s major backer when WFB first contracted for anti-Trump opposition research with Fusion GPS in 2015.
Singer’s bread and butter has been as a profits investor from the get-go. His legacy profile is that of the clean-em-up-and-bag-em activist. But that doesn’t necessarily mean he artificially separates his interest in corporate futures and profits from his interest in political preferences for policy outcomes. That would include things like policy conditions, which is what the category of “things you can do if you can gain activist leverage” falls into.
My perception is that most organized, deep-pocket investment is gravitating over time toward the minimally leveraged activism model. Whether it’s a Democratic or Republican donor at the activist helm, a government-industry policy agenda is in play, and activism is a tool for shaping conditions at the nexus – not just for making profits within the outlines of existing conditions.
(And again, in the case of Twitter, there’s no escaping the public policy aspects of owning and controlling the company. Other industries are at the center of policy concerns equally important, but few are as visible.)
In this regard, there might be two schools of thought. Singer, a right-wing donor and philanthropist, may be likely to approve the liberal-speech policy to be expected if Musk’s Twitter deal goes through. Perhaps Elliott Management’s low profile during the current perturbations is due to that. It would be fine with Singer to see Musk in charge.
Another possibility may occur to cynics. As noted in my 2017 article on Singer, he was strongly opposed to Trump in the primary period of the 2016 cycle. A media associate, Bill Kristol, then the Editor-in-Chief of The Weekly Standard (like WFB, backed by Singer), has been from the outset one of the most vocal Never-Trumpers (and has a family connection to WFB Editor Matthew Continetti. I trust readers to give Continetti the fair shake appropriate for a political opponents’ – New Republic – review of his latest book, The Right: The Hundred-Year War for American Conservatism – which I offer because in some ways it’s a more bracing and interesting review than the ones written from the right. It’s a timely insert here).
After the 2016 election, Kristol was connected to the extremely peculiar enterprise known as “Hamilton 68,” which achieved brief notoriety for perpetrating a “dashboard” on which to track nefarious(!) tweets(!) by unidentified Russians(!!), which were undermining our democracy with their suspicious pattern of amplifying material from Twitter’s “trending” topics.
Perhaps the most enduring impression left by Hamilton 68 was its mildly psychotic-looking theme art, in which Vladimir Putin appeared to loose a flock of Twitter birds with the flourish of a nicely-ripped arm.
But another Hamilton 68 connection, Jonathan Morgan (who helped create it), was the dot linking the Hamilton 68 episode to a whole big can of worms. Morgan founded the firm New Knowledge, which became infamous for a false-flag campaign on Twitter to smear Alabama’s one-time U.S. Senate candidate Roy Moore.
Pulling the string on Morgan, as Daily Caller’s Chuck Ross did, led by a direct path to Daniel Jones, the Senate Select Intelligence Committee, Jones’s Democracy Integrity Project (TDIP), Oleg Deripaska’s U.S. attorney Adam Waldman, Waldman’s Senate pal Senator Mark Warner, and, oh what do you know, another (unidentified) Senator, who … “contacted Jones in early 2017 to review data related to Alfa Bank, a Russian bank whose computer servers allegedly had back-channel contacts with Trump Organization computers.”
Many characters in our unending saga have been circling around the Big Blue Bird throughout the tale. It’s always nice to have the circle-back end up in the original spot. Happens a lot in Spygate.
MBNA was bought by Bank of America in 2006, incidentally. There probably aren’t enough sands accumulated yet to stretch, lone and level, far away. But you can bet your bippie there’s been a frown, and wrinkled lip, and sneer of cold command along the way.
* I reemphasize that Jason Hogg is not the father of Parkland student activist David Hogg. That claim was a social-media theme after the 14 February 2018 shooting at the Parkland, Florida high school, but it’s incorrect.
** Regarding the basis for antitrust activism, Biden’s Federal Trade Commission chair, Lina Khan, garnered interest for a 2017 article in the Yale Law Journal. In it, she explicitly opined that consumer pricing power could not be the measure of a monopoly situation in the Big Tech era, citing the notoriously low prices Amazon is able to afford its customers. (As those who follow the matter are aware, Amazon can do this because it doesn’t make its profits from selling goods to its customers. Its profits come from selling its access to customers’ activity patterns – and much of their information – to Amazon’s advertisers. The same is true of Google. The customer-user of the online service is the actual product.)
Deploying a fabulous, exotic verb, Khan stated: “We cannot cognize the potential harms to competition posed by Amazon’s dominance if we measure competition primarily through price and output.” We’d probably agree she’s right.
Her opening précis concludes with the proposition of (emphasis added) “two potential regimes for addressing Amazon’s power: restoring traditional antitrust and competition policy principles or applying common carrier obligations and duties.” The latter is an example, using antitrust as the pretext and speaking from the government viewpoint, of shaping the conditions of commerce – for a company’s operations, but also to give regulators leverage over the company.
Increasingly, shaping conditions for that purpose – to ensure investors and government retain significant leverage over companies – appears to be the purpose of activism from both entities. With a full, take-private buyout offer for Twitter, Elon Musk is proposing to remove Twitter from that emerging-standard calculus of investor and regulatory power. It’s no wonder there’s been a big reaction.
Feature image: View of the Washington Mall. Pixabay; author.