FBI Secretly Taped Joe Biden's Brother During Unrelated Bribery Probe, Revealing More About Family Biz

Jim Watson/Pool via AP

When we talk about the accusations of Biden family influence peddling, we talk a lot about Hunter Biden. But James Biden, Joe Biden's brother, was also involved in the family business of making money off the family name. 

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Turns out that the FBI secretly recorded James Biden while they were in the process of investigating an unrelated bribery probe involving attorney Richard Scruggs. Neither James nor Joe Biden were implicated in that probe. But the tapes and other material regarding the case were then obtained by Curtis Wilkie who wrote about Scruggs and reported elements of the Biden connections. Then, he gave access to The Washington Post. So now more is being revealed about the nature of Scruggs's relationship with the Bidens.

The case shows more of the family business, with elements never revealed before about how James Biden's consulting firm was paid big money regarding a tobacco bill back in the 1990s. Scruggs identified Joe Biden as as a key person needed to win the vote and get the bill he wanted passed. 

James and his wife, Sara Biden, were trying to establish a consulting firm with the Scruggs partners, according to the WaPo report. The couple already had a consulting firm, Lion Hall. 

Scruggs paid the firm $100,000 in 1998 for advice on passing the bill, Scruggs said in an interview at his office here — the first time he has disclosed the amount.

“I probably wouldn’t have hired him if he wasn’t the senator’s brother,” Scruggs said.

Biden eventually backed the bill, which ultimately failed to pass Congress.

“Jim was never untoward about his influence,” Scruggs said. “He didn’t brag about it or talk about it. He didn’t have to. He was the man’s brother.”

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Biden ended up backing the bill, but it still failed to pass — Biden's kiss of death. 

Scruggs said he hoped Biden had spoken to his brother, but he didn't know if he had. 

James and Sara's attorney, Paul Fishman, denied that they had ever spoken to Joe Biden on the matter, stating, "Jim Biden’s consulting work has never involved speaking with or providing access to his brother for this or any other client.”

The White House isn't responding to questions on the matter from the WaPo or the question of whether he has been involved in helping his brother financially by using his public position. 

But the House Oversight Committee has subpoenaed James Biden, including regarding activities of Lion Hall, and in particular, regarding a $40,000 check to Joe Biden labeled as a loan repayment. They've also requested to speak to Sara Biden. So, they will likely be asked some interesting questions about the family business. 

The story of the bill is interesting. 

But members of Congress were divided about the settlement, which required federal legislation to waive antitrust provisions, according to their statements and hearing transcripts from the time. That concerned Biden, then the ranking Democrat on the Judiciary Committee, who said in a 1997 news release that he was “not yet convinced that this settlement is a good deal” for the American people. A few days later, Biden said at a hearing that if the deal wasn’t improved, it would go “down the tubes.”

Scruggs was at risk of losing hundreds of millions of dollars in legal fees without a deal. Scruggs said Patterson urged him to talk to Joe Biden, so he went to Washington in mid-1997 and met with the senator for the first time, as well as with other lawmakers he considered to be potential roadblocks. He said he realized he needed more help winning over the senator from Delaware and other members of Congress. That is when he turned to James and his wife, Sara, a former congressional aide.

Starting on April 9, 1998, Scruggs made a series of $10,000 payments to their firm, Lion Hall, during a year-long period. Those payments totaled $100,000, according to records that Scruggs provided to The Post.

When a larger version of the tobacco settlement finally reached the Senate floor in June 1998, Biden had gone from being one of its biggest critics to becoming one of its leading defenders — a significant victory for Scruggs.

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“Jim was a help, and Joe gave us some good advice,” he said. He ended up making millions in separate deals with the states.

Jim Biden ended up being recorded by the FBI because he was trying to set up a consulting firm with people he met because of the relationship with Scruggs, one of whom was a guy named Tim Balducci.

Five weeks after the Oxford fundraiser, James Biden was on the phone with Balducci discussing the final details about the firm’s creation, according to court records.

That same day, Balducci had handed an envelope containing the first of two $20,000 payments to a Mississippi judge who was slated to rule in a case involving Scruggs, according to court records. The filings say $26.5 million in legal fees was at stake, and Scruggs wanted the judge to give him a favorable settlement.

“Lord have mercy,” said the judge, Henry Lackey, as he took the envelope, according to court records.

Balducci did not know that Lackey was working with the FBI.

Then Balducci called Biden to talk about the setup of the firm that was to involve not just Sara but Jim and Hunter as well.

“I told him we had formalized our relationship with you guys,” Balducci told James Biden, according to the FBI recording reviewed by The Post. “I told him about the real Washington presence, that this was not going to be a bullshit, you know, a shingle hung somewhere in the window. That this was a real deal, that Sara was coming on, you know, as a named partner, an equity share in the venture, that we were changing the name of the firm to include her. … Hunter was going to be involved, and you were going to be involved.”

Balducci told James Biden that Scruggs was enthusiastic, quoting the trial lawyer as saying, “With the political connections you guys are putting together now, I know you’re going to do really, really well.”

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Scruggs and Jim Biden had another call in which he told Biden he thought he could make a lot of money. 

Biden discussed other possible deals that the proposed firm could take on, but everything went south when the FBI nailed Balducci over the money to the judge. He then flipped on Scruggs and taped him for the FBI. Then, the FBI raided Scruggs. Scruggs ended up serving five years. 

Jim Biden was never questioned in the case. Joe Biden ended up donating the campaign contributions he'd received from Scruggs, Balducci, and other associates -- about $11,500 -- to charity after the connections to the Scruggs case hit the news. 

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