IRS whistleblowers delivered to Congress a devastating indictment of the Justice Department’s handling of the Hunter Biden tax investigation, saying prosecutors blocked search warrants and shut down pursuits of leads, including some that could implicate President Biden.
In closed-door testimony last month, Gary A. Shapley said he had never seen an investigation handled in such a way during his 14 years as a criminal investigator with the IRS.
Every time a conflict arose or a decision had to be made in the investigation into Hunter Biden, federal prosecutors ruled in ways that benefited Mr. Biden, he said.
“I am alleging, with evidence, that DOJ provided preferential treatment, slow-walked the investigation, did nothing to avoid obvious conflicts of interest in this investigation,” Mr. Shapley told the House Ways and Means Committee in testimony that the panel unsealed Thursday.
Among the allegations:
• One investigator, whose name is redacted and is identified in documents as “Mr. X,” said Hunter Biden’s attorney threatened to end the careers of investigators and prosecutors if they charged the president’s son.
• Hunter Biden flew prostitutes to his location, often first class, and expensed their flights as off-the-books employees. One $10,000 payment for a sex club was labeled as a golf club membership. He also deducted expenses for hotel rooms for one of his drug dealers.
• Hunter Biden earned at least $8.3 million and was at least $2.2 million in arrears in taxes from 2014 to 2019. Included in investigators’ assessment of his income were an $80,000 diamond and a $142,000 Porsche.
• A 2017 WhatsApp message from Hunter Biden to Henry Zhao, a business associate and Chinese Communist Party official, implicated the president.
The strongly worded message apparently chastised Mr. Zhao for missing a deadline.
“I am sitting here with my father and we would like to understand why the commitment made has not been fulfilled,” Hunter Biden wrote. “And, Z, if I get a call or text from anyone involved in this other than you, Zhang, or the chairman, I will make certain that between the man sitting next to me and every person he knows and my ability to forever hold a grudge that you will regret not following my direction. I am sitting here waiting for the call with my father.”
Mr. X said Hunter Biden also wrote off hotel rooms rented in his father’s name as a business expense. The investigator said this indicated that the then-vice president was involved in his son’s dealings.
The investigator said he wanted location data to place Mr. Biden at the hotel but prosecutors shot down the idea.
The Ways and Means Committee voted Thursday to release the testimony of Mr. Shapley and Mr. X by waiving a section of federal law that generally shields private taxpayer information.
“The American people deserve to know that when it comes to criminal enforcement, they are not on the same playing field as the wealthy and politically connected class,” said committee Chairman Jason Smith, Missouri Republican. “The preferential treatment Hunter Biden received would never have been granted to ordinary Americans.”
Mr. X, a subordinate of Mr. Shapley, said in his testimony that he is generally a Democrat but couldn’t believe how the Biden case was mishandled.
“Looking back on everything, they had the best investigators in the nation and the prosecutors were the JV squad and weren’t up to the task of handling such a big case,” he said. “They would often slow-walk investigative steps, often not follow the appropriate investigative procedure and would say that we couldn’t do or had to wait on certain steps because there were too many approvals in front of us.”
Mr. X said he had been investigating Hunter Biden since 2018, when bank reports suggested he paid prostitutes and was living lavishly. Investigators saw red flags for tax problems.
Mr. Shapley said he joined the investigation in January 2020 after the FBI obtained Hunter Biden’s laptop and spotted what it thought could be evidence of tax problems.
Mr. Shapley said the IRS developed an investigative plan with interviews and search warrants, but the Justice Department derailed the plan.
Mr. Shapley said investigators were pulled off the IRS probe last month after whistleblower communications with Congress. Mr. X said it felt they were cut out before that, even though they were still formally on the investigation.
David Weiss, the U.S. attorney in Delaware, ran the Justice Department’s investigation. President Trump appointed Mr. Weiss, and President Biden said he kept him on because he didn’t want the appearance of putting his thumb on an ongoing case.
Hunter Biden has decided to plead guilty to two misdemeanor tax charges and enter a diversionary program for a felony gun charge in a deal that is expected to shield him from any prison time. The gun charge will be wiped away if he keeps a clean record during two years of probation.
He is scheduled to appear in federal court in Wilmington on July 26 to enter the plea.
Republicans said others facing the same charges would receive prison time.
The Justice Department said Mr. Weiss had free rein over charging decisions.
“He needs no further approval to do so,” the department said.
Mr. Weiss’ office declined to comment.
The whistleblowers, who were testifying under oath, said Mr. Weiss sought to be named as a special counsel, which would have given him more prosecution leeway. The Justice Department turned down that request.
Mr. Shapley said he fought to move the charges from Delaware to the District of Columbia. Mr. X said Delaware was a small office and in President Biden’s home state. His ties there created conflicts of interest, Mr. Shapley said.
Mr. Shapley said Matthew Graves, the U.S. attorney in the District of Columbia and a Biden appointee, refused to take the case.
Mr. Shapley said Mr. Weiss tried unsuccessfully to persuade Mr. Graves to take the case.
In response to an inquiry from The Washington Times, Mr. Graves’ office said any prosecutions were Mr. Weiss’ call.
“U.S. Attorney Weiss was given full authority to bring charges in any jurisdiction he deemed appropriate. He did not need approval from this office or the U.S. Attorney to bring charges in the District of Columbia,” Mr. Graves’ office said.
Mr. X said Justice Department lawyers worried that a jury would be too sympathetic to Hunter Biden, given his history of drug use and the 2015 death of his brother, Beau Biden, coinciding with some years when taxes were unpaid.
Mr. Shapley fueled ongoing questions about a confidential source who told the FBI about a bribery scheme involving the president.
Former Attorney General William Barr said the information was turned over to the Delaware investigation into Hunter Biden, but Mr. Shapley said that was not shared with him nor with FBI agents working with him.
“This appears to be another example of prosecutors obstructing the investigative process,” Mr. Shapley said in an affidavit given to the committee earlier this month. “It is more likely than not that there are more examples of information that prosecutors concealed from investigators.”
Mr. X, the other whistleblower, said through his attorney that he never saw the human source information, even though it could have been relevant to his investigation.
Mr. X said prosecutors regularly dismissed investigative leads and said were not worth following.
At one point, he suggested sending the fact pattern to higher-ups but redacting the name. He was told that was impossible, given the specific facts of Hunter Biden.
Democrats blasted the release of the whistleblowers’ testimony.
Rep. Earl Blumenauer, Oregon Democrat, called the testimony “politically charged” and said it weaponized the use of private taxpayer information.
When Democrats controlled the committee, they made a similar attempt to obtain and release President Trump’s tax returns. Mr. Blumenauer said this was “nothing like” that.
“The American people deserve better,” he said.
• Stephen Dinan can be reached at sdinan@washingtontimes.com.
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