What’s behind Republicans’ claim that Joe Biden received $40,000 of ‘laundered Chinese money’?

Republicans investigating President Joe Biden’s family business dealings have focused on a $40,000 check written to Joe Biden before he was president.

"BREAKING → @GOPoversight has uncovered a $40,000 payment of laundered Chinese money directly to Joe Biden himself," Rep. Steve Scalise, R-La., wrote Nov. 1 on X, formerly Twitter. "Joe Biden isn't just implicated in his family's corruption scheme — he's a key financial beneficiary."

This claim comes from a check House Republicans made public on Nov. 1, along with a memorandum of bank records — the fourth memo released during the investigation — that they said "traced payments from Chinese companies to Joe Biden."

These bank records show that the money in question appears to have originated with a Chinese business that Biden’s son Hunter had engaged. But the best information we have suggests Scalise overreached by not providing proof of a crime.

"Money laundering" is a legal term that assumes the money was obtained through illegal means; there’s been no illegal activity shown. The $40,000 came to Joe Biden in a check written by his sister-in-law for what it says was a "loan repayment." 

Neither Scalise nor the Republicans’ House Oversight Committee spokesperson responded to PolitiFact’s request for comment. But we dug into Scalise’s claim to learn what is and is not known about the $40,000 payment — the latest piece of evidence Republicans have pointed to in a range of accusations over Biden family finances.

In September, after years of investigating the Bidens’ foreign business dealings, Republicans opened an impeachment inquiry into Joe Biden. The evidence Republicans have provided so far, including during the impeachment inquiry, has not proved Joe Biden engaged in wrongdoing. House Republicans on Nov. 8 issued subpoenas for Hunter Biden and Joe Biden’s brother, James, as part of the inquiry.

Here’s what we know.

House Republicans on Nov. 8 issued subpoenas for Hunter Biden (right) and Joe Biden’s brother, James (left) as part of their impeachment inquiry. (AP) 

The Republicans’ Nov. 1 bank memo outlines a web of transactions that involve a Chinese company, Hunter Biden’s businesses, and Joe Biden’s brother and sister-in-law. The Republicans’ framing is that Biden’s sister-in-law sent Joe Biden money that originated from sources linked to China.

• On Aug. 8, 2017, Northern International Capital wired $5 million to an account for Hudson West III LLC, a company Hunter Biden formed with a Chinese business associate that aimed to help CEFC, a Chinese energy company, establish liquefied natural gas contracts in the U.S. That $5 million was the only money in the Hudson West III account then. The memo describes Northern International Capital as "a Chinese company affiliated with CEFC." 

• Also on Aug. 8, 2017, Hunter Biden wired $400,000 from Hudson West III to Owasco P.C., Hunter Biden’s professional corporation. Owasco P.C. already had $100,000 in it from a wire transfer from CEFC Infrastructure, another company linked to China, bringing the account’s balance to $500,832.

• On Aug. 14, 2017, Owasco P.C. transferred $150,000 to an account for Lion Hall Group, a consulting company linked to Joe Biden’s brother James. That account’s balance was $151,965.

• Sara Biden, James Biden’s wife, withdrew $50,000 from the Lion Hall Group bank account on Aug. 28, 2017. That same day, either Sara or James Biden deposited $50,000 into their personal account. Sara Biden also withdrew $1,000 from the personal account, bringing the balance to $49,047 as of Aug. 28, 2017. 

• On Sept. 3, 2017, Sara Biden signed a $40,000 personal check to Joe Biden. The check’s memo section said it was for "loan repayment."

In summary: In 2017, Biden’s sister-in-law sent Joe Biden money that originated from sources linked to China, according to the Republicans’ memo. 

Available bank records contain no evidence of wrongdoing by the president, nor do they provide evidence that Joe Biden knew where the $40,000 originated.

"The President, when he was a private citizen, loaned his brother money, and his brother promptly paid him back," said Ian Sams, a White House spokesperson. Sams said bank records in Republicans’ possession show that the check was repayment for a loan and cited a press release that Oversight Committee Democrats released Oct. 20.

In it, ranking committee member Rep. Jamie Raskin, D-Md., described the transactions as "personal transactions of the President’s family members that have no relevance to any legitimate congressional inquiry." 

PolitiFact reviewed the records for two bank wires, one for $40,000 and one for $200,000, from an account linked to Joe Biden to James Biden. The records were not explicit documentation of outgoing loans. 

Checks the Oversight Committee released show that James Biden then appeared to repay his brother in full, without interest, within two months of each alleged loan. 

Republicans also released a $200,000 check Sara and James Biden had written to Joe Biden on March 1, 2018; it also said "loan repayment" on the memo line. But because it was sent the same day Americore Health LLC, a company that manages rural hospitals across the U.S., wired a $200,000 loan to James Biden, Republicans have claimed it proves Joe Biden benefited from his family’s "shady influence peddling of his name." FactCheck.org covered it here.

"It’s certainly plausible" that the $40,000 check was a loan repayment, said Rep. James Comer, R-Ky., the House Oversight Committee’s chair. But even if it were, he said, "it still shows how Joe benefited from his family cashing in on his name — with money from China, no less."

On Nov. 1, House Oversight Committee Republicans released this personal check dated Sept. 3, 2017, from Sara Biden to Joe Biden. (House Oversight Committee)

By definition, money laundering involves efforts to obscure the source of money that is obtained illegally, according to government agencies, legal sources and experts. 

"In order to have money laundering, you have to have a predicate crime — an initial crime that creates illegal profits," said Ross Delston, an attorney who specializes in anti-money laundering. "People throw the term 'money laundering' around a lot."

A link to China does not mean that money was obtained illegally, Delston said. And unless it’s illegally obtained, it would not be considered money laundering.

The bank memo Republicans released Nov. 1 included no new information that would prove the money Hunter Biden received from Northern International Capital or CEFC Infrastructure was obtained illegally. 

Thus far, none of the memos have provided evidence that the money paid to Biden family members and associates was illicitly obtained.