Potential family conflicts arise for Joe Biden and aides as his administration drafts new ethics rules

The last time Joe Biden worked in the White House, his son-in-law Howard Krein mentioned that executives from his health-care start-up firm would be visiting Washington. The vice president promptly arranged a meeting between the group, which included Krein’s brother, Steven, and President Barack Obama in the Oval Office.

“He knew about StartUp Health and was a big fan of it,” Howard Krein, the husband of Biden’s daughter Ashley, told the Philadelphia Business Journal in 2015. “He asked for Steve’s number and said, ‘I have to get them up here to talk with Barack.’ "

Now Biden is preparing to step back into the Oval Office with radically different expectations about how he will handle the relationship between his official power and his family’s private interests. After President Donald Trump’s years of mixing family with governing and an election that highlighted the business dealings of Biden’s son Hunter, the president-elect has promised to keep his family from being hired into his administration, to prohibit family entanglements with “any foreign operation” and to go even further.

“My son, my family will not be involved in any business, any enterprise that is in conflict with or appears to be in conflict,” the president-elect told CNN this month.

That pledge has now been handed over to lawyers for the presidential transition who are drafting new rules for the Biden White House that are likely to be more restrictive than the rules that governed the Obama administration. Biden has made clear that he wants a clean break from Trump, who employed his family and spent public funds at family businesses.

“Especially as our nation confronts multiple crises, it’s all important to restore the American peoples’ faith in their government and turn the page on the unprecedented corruption and dysfunction of the outgoing administration,” Biden spokesman Andrew Bates said. “President-elect Biden is committed to leading an administration of the highest ethical standards.”

The potential family conflicts, both with Biden and his top White House advisers, are more extensive than the Obama White House confronted. Biden’s son Hunter is facing a federal investigation over taxes paid on a business venture in China, which also included Biden’s brother, James Biden, a situation that is certain to test the president-elect’s promise to let the Justice Department operate independently of his personal interests.

Both men have worked for years at the intersection of government and the private sector, using the Biden name to win work and sometimes partnering with Biden donors. Through his lawyer, Hunter Biden has promised not to work for any more foreign-owned companies, and to “keep his father personally uninvolved in his business affairs.”

John T. Owens, the husband of Biden’s sister, Valerie, and a former college classmate of the president-elect, owns a Delaware-based telemedicine company that markets itself as solution for covid-19, with medical second-opinion operations in Europe and Asia. The president-elect spoke to a conference for the company, MediGuide International, in 2017, which the company boasted about in its marketing materials.

It is unlikely that such foreign subsidiary business would be prohibited by Biden’s campaign promise that “no one in my family or associated with me will be involved in any foreign operation whatsoever, period, end of story.” The firm declined to speak to The Washington Post, apart from a company official saying “there is no comment at this time,” before any questions were asked.

Biden and his wife, Jill, have also given speeches during the Trump administration at events produced by StartUp Health, a firm that has investments overseas and that continues to boast about its Biden ties and the 2011 Oval Office meeting with Obama. Among the investors is Joe Kiani, a major Biden donor who has also had Biden speak at a patient safety conference he sponsored in 2017. A transition spokesman said the Bidens were not paid for speeches at Mediguide, StartUp Health or other venues related to their work on cancer research.

Much is riding on exactly how Biden decides to create the bright line he has promised. Existing ethics rules regulate the disclosure of nonpublic government information and financial conflicts for spouses and minor children, but the business dealings of extended family, for both elected officials and political appointees, traditionally fall into a legal and political gray zone.

The “appearance of a conflict,” in particular, a phrase often used in ethics briefings, is ill-defined and often a matter of dispute between observers of different political backgrounds.

During the administration of George W. Bush, White House lawyers used to refer to the “Washington Post test,” which asked, “Did the behavior in question risk a front-page story in the newspaper?”

But Richard Painter, a former ethics lawyer for Bush, said the question has shifted as media consumption habits have become more partisan. The question now, he said, has a lower bar: Does the Biden administration want to risk a 10-minute segment on a conservative outlet like Fox News, which may have a different standard for running a story?

Painter encouraged Biden’s attorneys to draft clear dividing lines so that controversies could be avoided.

“Federal government ethics rules are way under-inclusive and do not appropriately address improper influence whether it is from personal relationships or family, former employers or campaign donors,” Painter said. “What you need to do is have a policy in place that limits special access and special meetings for certain individuals or companies.”

In the second term of Bush’s presidency, Painter said, there was an informal rule in place that asked all agencies to contact the White House if a member of the Bush family, or someone claiming to be a friend of the family, made contact with an agency, so the matter could be vetted.

The options available to Biden and his incoming White House counsel Dana Remus, who is a specialist in government ethics, range from a similar informal edict to political appointees to report or prohibit contacts, a public announcement by Biden of that policy, or the inclusion of specific rules in an ethics executive order that Biden is expected to sign on his first day in office.

The ethics rules Obama signed in 2009 did not specifically regulate family contacts, though there were trainings and informal guidance given to officials, like former White House counselor John Podesta, who worked for Obama while his brother Tony Podesta ran a prominent Democratic lobbying firm that frequently met with the administration.

“Every ethics official would agree that a government official should not be meeting in their official capacity with a family member on a specific party or any other matter,” said Virginia Canter, a former White House ethics counsel to Presidents Obama and Clinton. “What I would want to do is establish a protocol where you figure out what are the potential conflicts of interests here and how will they be best resolved to promote public trust.”

Such concerns extend to other Biden appointees as well. Incoming White House counselor Steve Ricchetti, a top Biden campaign adviser, previously co-owned a lobbying firm, Ricchetti Inc., with his brother, Jeff, who continues to run the operation.

Business appears to be good. Since Biden secured the Democratic nomination, Jeff Ricchetti has registered to lobby Congress for seven new clients, compared with just six new clients in the previous eight years, according to public disclosures. They include the software firm Applied Materials, which has listed issues related to U.S.-China relations as its lobbying need. Other new clients include drug companies Eagle Pharmaceuticals, Horizon Therapeutics, Neurocrine Biosciences and GlaxoSmithKline, which is working on a coronavirus vaccine.

A person familiar with the relationship, who was not authorized to speak publicly, said that Steve Ricchetti has established a personal agreement with his brother Jeff to not talk about lobbying business since 2012, when Steve left the firm to begin working at the White House with then-Vice President Joe Biden. Jeff Richetti did not respond to requests for comment.

After Trump took office, Steve Ricchetti began consulting with the telecommunications giant AT&T in a non-lobbying capacity, a relationship that continued through much of his work on the Biden campaign and ended in September, the person familiar with the matter said.

Biden’s chief campaign strategist Mike Donilon, who will become a White House senior adviser, and Cathy Russell, the incoming White House director of personnel, have a different family conflict. Their brother and husband, respectively, former national security adviser Thomas Donilon, serves as the chairman of an internal think tank at BlackRock, the largest investment management firm in the world, which has significant federal regulatory interests.

Thomas Donilon’s job is to advise the firm’s clients on global and domestic trends. He also sits in on meetings with its Global Executive Committee, which runs the firm, according to the company. A BlackRock spokesman declined to comment on Donilon’s relationship with his family.

One of the most notable potential conflicts for Biden is his close relationship with Krein, an otolaryngologist and plastic surgeon who helped Biden navigate the brain cancer diagnosis of his late son Beau.

“Howard was our shepherd through it all, helping us understand the procedures and the medical terms, and Howard, you will always have our deep love and gratitude for that,” Jill Biden said in her 2019 keynote at a StartUp Health conference.

Krein has been a close adviser to Biden for years since, serving on the board of the Biden Cancer Initiative, a nonprofit founded after Beau’s 2015 death, accompanying him on international trips during the Trump years and consulting with the campaign on covid-19 response. People familiar with his role said he did not have a formal policy or advisory job with the campaign, but he occasionally joined calls with Biden to provide perspective as someone who was dealing with the coronavirus response as part of his work at Thomas Jefferson University Hospital in Philadelphia, where he works as an assistant professor.

The family firm where he also works provides both funding and mentorship for developing health-care ideas, and counts 24 projects on its website that have a direct interest in covid-19 response. Krein’s brother, Steven Krein, is the chief executive and his sister, Bari Krein, is the chief strategy officer. StartUp Health did not respond to requests for comment.

Norm Eisen, who served as the special assistant to Obama for ethics and government reform, said Biden should be given the time and space to work out how he structures the new family barriers.

“Having personally worked with him, I also know him to be individually of the utmost personal integrity,” Eisen said. “So I take him at his word when he says he will make sure there is an appropriate distance between family members and the government.”