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September 15, 2008

Biden's Son, WTO, Internet Gambling, Sleaze thread

(Disclosure: Global Trade Watch has no preference among the candidates.)

The New York Times reported over the weekend that Robert Hunter Biden, vice-presidential candidate Joe Biden's son, did some lobbying work of trade relevance:

Federal lobbying records show that Hunter Biden’s firm was hired in June by lawyers for J. Russell DeLeon and his wife, Ruth Parasol, billionaire expatriates who founded a Web site called PartyPoker. Their company, PartyGaming P.L.C., which later went public in London, stopped doing business in the United States after President Bush signed a bill into law in 2006 aimed at curbing online gambling.

Wyeth Wiedeman, a lobbyist hired by Mr. DeLeon and Ms. Parasol, said Mr. Biden helped46_large put together a lobbying campaign to persuade Congress to pass a law that would clarify the question about whether online gambling was legal prior to 2006. Mr. Wiedeman said the Justice Department has been examining the couple and others involved with the PartyPoker site.

Mr. Wiedeman said Mr. Biden visited a House member from North Carolina to discuss the issue...

Published accounts have said that Ms. Parasol, a lawyer who now lives in Gibraltar, started out as an adviser to her father’s telephone sex-chat business and then operated pornographic Web sites before turning to online gambling.

Hunter Biden could not be reached for comment. David Wade, a spokesman for the Obama campaign, said Mr. Biden’s involvement in the lobbying effort “gives much ado about nothing a whole new meaning.” He said Mr. Biden was hired by PartyGaming’s law firm, Sharp & Barnes, to provide expert advice because he specialized in electronic commerce and served on a working group on Internet gambling issues when he worked at the Commerce Department in the Clinton administration.

There is no report that any of this was connected in any way to the presidential campaigns. To see the official document detailing the $50,000 in lobbying expenditures by Biden for the gambling company investors in the gambling company, click here. (Taken from the Senate Office of Public Records.)

PartyGaming was shut out of the U.S. market when Congress passed an Internet gambling ban in 2006. Interestingly, although their lawyers PartyGaming's investors' lawyers paid Biden Biden's company thousands of bucks to lobby Congress for clarification that online gambling provision was legal prior to 2006, the company actually stated in their public offering documents that they knew it probably was illegal... and that they didn't care. As Kurt Eichenwald reported:

The Justice Department and numerous state attorneys general maintain that providing the opportunity for online gambling is against the law in the United States - and PartyGaming does it anyway. Indeed, of its $600 million in revenue and $350 million in profit in 2004, almost 90 percent came from the wallets and bank accounts of American gamblers.

To justify this, PartyGaming walks a very thin line. Providing online gambling is not illegal per se in the United States, the company argues - federal prosecutors just say it is. The company has already received an e-mail message from the Louisiana attorney general demanding that it cease providing online gambling in that state; PartyGaming simply ignored the communication and waited for additional action that never came.

The company's prospectus - a British document that is not available in the United States - at times reads something like a legal brief, citing American case law to support the company's position that no prosecution would ever take place.

Still, in its offering documents, PartyGaming makes no secret of the fact that even if the company's view of the law proves wrong, it is banking on its executives' belief that there is little that law enforcement can do - or will do - to prosecute. "In many countries, including the United States, the group's activities are considered to be illegal by the relevant authorities," PartyGaming says in its offering document. "PartyGaming and its directors rely on the apparent unwillingness or inability of regulators generally to bring actions against businesses with no physical presence in the country concerned."...

Now, as the largest company pushing into the United States market, PartyGaming is best positioned to benefit if the question of online gambling is decided in its favor. Already, the World Trade Organization and foreign governments are siding with companies like PartyGaming and against the United States.

LATE last year, for example, the W.T.O. agreed with the Caribbean island nation of Antigua that United States legislation criminalizing online betting based in other countries violated global laws. An appellate body at the trade organization upheld the principal conclusions in that ruling in April.

And it has still been upheld, as we reported on recently in our lawsuit against the Bush administration.

UPDATE: 9/17: The NYT has issued a correction, stating that:

An article on Saturday about a decision by R. Hunter Biden, a son of Senator

Joseph R. Biden Jr.

, to quit working as a

Washington

lobbyist included an incorrect identification from Senator

Barack Obama

’s campaign for the clients of a law firm, Sharp & Barnes, that had hired the senator’s son to lobby on an online-gaming issue. The firm’s clients are two investors, J. Russell DeLeon and Ruth Parasol — not the company PartyGaming P.L.C.

I corrected the info above.

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Comments

free bet

i think its great that at least the democrats will think about legalizing an industry where Europe has been making it legal for years. US is in trade violation by banning it

NOBODY

EVERYTHING ELSE IS DONE ONLINE, WHY CANT WE GAMBLE?

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