A son of Democratic vice presidential candidate Joe Biden was paid an undisclosed amount of money as a consultant by MBNA, the largest employer in Delaware, during the years the senator supported legislation that was promoted by the credit card industry and opposed by consumer groups.
Barack Obama's presidential campaign said Biden helped forge a bipartisan compromise on the measure, which is now law and makes it harder for consumers to obtain bankruptcy protection in the courts.
MBNA's consulting payments to Hunter Biden, first reported by The New York Times, followed his departure in 2001 from the company, where he had been an executive.
Obama opposed the bankruptcy law, enacted in 2005, while Biden supported it.
David Wade, a spokesman for the Obama campaign, said that "after working in the Clinton administration in the Department of Commerce on Internet privacy and online commerce issues, Hunter consulted for five years as an expert on these very same issues at a time of enormous expansion in online banking."
At the time Hunter Biden was receiving consulting payments from MBNA, he also was a Washington lobbyist at a firm he had co-founded.
"He was not a lobbyist for MBNA, and his work had absolutely nothing to do with the bankruptcy bill. Zero. Nothing," said Wade.
Resurrecting Biden's role in the bankruptcy legislation could undercut one of the Obama campaign's lines of attack: That his Republican opponent, John McCain, is insensitive to the financial woes of middle-class Americans.
Consumer and civil rights groups and unions, as well as Democratic opponents, had argued that the bankruptcy legislation was unfair to low-income working people, single mothers, minorities and the elderly, and would remove a safety net for those who have lost their jobs or face mounting medical bills.
The financial services industry made the case that bankruptcy frequently is a refuge of gamblers, impulsive shoppers, divorced or separated fathers avoiding child support, and multimillionaires who buy mansions in states with liberal exemptions to shelter assets from creditors.
When the Senate Judiciary Committee approved the bill early in 2005, Biden, Dianne Feinstein of California and Herb Kohl of Wisconsin were the only Democrats to vote with the Republican majority. Biden also voted for the bill on final passage in the Senate, while Obama voted against it.
MBNA employees have poured more than $200,000 into Biden's Senate campaigns over the past two decades, making donors working for the credit card company the senator's largest source of campaign money.
On the bankruptcy bill, the senator "took plenty of knocks from the largest employer in his state because he demanded changes," said Wade, the Obama campaign spokesman. "Sen. Biden improved the bill for low-income workers, women, and children. There were times when he believed amendments on both sides would have blown up a bipartisan compromise backed by three quarters of the Senate. At those moments, Sen. Biden had to make the tough calls and he voted to pass a bill."
In a separate matter in which Hunter Biden's lobbying activities were referenced, he and Biden's brother Jim have been sued for allegedly defrauding an ex-business partner.
In the lawsuit filed last year in state court in New York, Anthony Lotito says that he got a call from Jim Biden in early 2006 saying that Sen. Biden was concerned with the impact that Hunter's lobbying activities might have on the senator's expected campaign for the 2008 Democratic presidential nomination.
According to the lawsuit, Jim Biden said his brother had asked him to seek Lotito's assistance in finding employment for Hunter in a non-lobbying capacity.
The lawsuit says that Lotito later was cut out of a business arrangement with Jim and Hunter Biden to purchase Paradigm Hedge Funds, a business in which the Bidens now own a controlling interest.
Nicholas Gravante Jr., a lawyer for the Bidens, said that Lotito's claim that Sen. Biden told his brother that he was concerned about his son's lobbying activities is completely baseless.
"There is absolutely no connection between Joe Biden and this lawsuit. The case is without merit and it will be dismissed," said Gravante, a partner at the firm of Boies, Schiller & Flexner.