White House: No conflict with Biden's son working for Ukraine gas company

The White House brushed aside questions this week about whether the involvement of Vice President Joe Biden's son in a Ukrainian natural gas company raised ethical issues at a time when the Obama administration is promoting energy diversity in the country, which is also currently mired in a gas-price spat with Moscow.

R. Hunter Biden, an attorney and chairman of the board of the World Food Program USA, was named this week to the board of directors of Burisma Holdings, a private company that has drilled for natural gas in Ukraine since 2002.

"I believe that my assistance in consulting the company on matters of transparency, corporate governance and responsibility, international expansion and other priorities will contribute to the economy and benefit the people of Ukraine," Biden said, according to a statement released by the company.

The announcement comes as Ukraine and the U.S. are looking to decrease Ukraine's reliance on Russian energy amid threats from Moscow to cut Ukraine off if it doesn't pay massive debts. Western countries believe Russia would have less leverage over Ukraine if Europe were less dependent on Russian gas.

Amid the push to make Ukraine less dependent on Moscow, Kyiv is also mired in a conflict with pro-Russian rebels in its eastern region who voted Sunday for wider autonomy. The U.S. has placed sanctions on Russia for its alleged support of the rebels, but the pressure has done little to stop activists in the region from seeking more independence. 

In April, Vice President Biden traveled to Kyiv to discuss how the U.S. could help provide technical expertise for expanding domestic production of natural gas.

Asked by a reporter Tuesday whether Hunter Biden's appointment to the company presented a conflict of interest, White House spokesman Jay Carney said it did not.

"Hunter Biden and other members of the Biden family are obviously private citizens, and where they work does not reflect an endorsement by the administration or by the vice president or president," Carney said. 

Kendra Barkoff, a spokeswoman for Vice President Biden, said he "does not endorse any particular company and has no involvement with this company."

Ukraine, which depends on Russia for most of its natural gas, has accused Moscow of hiking natural gas prices as punishment for Kyiv's moving closer to the European Union.

On Tuesday, Russia's state-run natural gas company Gazprom demanded a $1.7 billion prepayment from Ukraine for June gas deliveries, heightening a dispute over price that is pushing the two countries closer to another gas war that could cut supplies.

Ukraine also wants to change the conditions of a 2009 contract that locked Kyiv into buying a set volume, whether it needs it or not, at $485 per 1,000 cubic meters — the highest price paid by any client in Europe.

Moscow dropped the price to $268.50 after then-president Viktor Yanukovych turned his back on a trade and association agreement with the European Union last year, but reinstated the original price after Yanukovych was ousted in February.

Kyiv has so far refused to pay the higher price, saying gas is being used as a political tool by Moscow to punish Ukraine's new leaders for moving closer to the European Union.

As for the involvement in Burisma Holdings, Melanie Sloan, the head of Citizens for Responsibility and Ethics in Washington, a watchdog group on government ethics, told Reuters there was no inherent conflict in the younger Biden's job.

"It can't be that because your dad is the vice president, you can't do anything," Sloan said. "The most important thing is for Biden not to be speaking about these issues with his dad, and for them to try and draw the lines."

Wire services