At the same time that Joe Biden’s son-in-law, Howard Krein, has been advising Biden’s campaign on its coronavirus response, Krein’s venture capital business has been running a special initiative to invest in health care startups that offer solutions to the pandemic.

In March, as Covid-19 began spreading in the United States, the investment firm, StartUp Health, unveiled a new coronavirus initiative soliciting pitches from entrepreneurs with products that addressed the outbreak.

The next month, reports in Bloomberg and the New York Times listed Krein among those participating in daily calls to brief Biden on health policy during the pandemic, while StartUp Health announced its intention to invest $1 million across 10 startups with coronavirus applications within 30 days.

“StartUp Health is putting the full support of its platform and network behind building a post-Covid world that uses technology and entrepreneurial ingenuity to improve health outcomes,” the firm said at the time.

Krein simultaneously advising the campaign and venturing into Covid investing could pose conflict-of-interest concerns for a Biden administration or simply create the awkward appearance of Krein profiting off his father-in-law’s policies. Since the start of the coronavirus outbreak, the federal government has directed tens of billions of dollars in coronavirus medical spending in areas like testing and vaccine research to private firms. It is poised to spend billions more next year and possibly beyond.

The potential conflicts are not limited to the coronavirus for Krein, 53, a Philadelphia-based head-and-neck surgeon who got into venture investing not long after he began dating Biden’s daughter, Ashley, in 2010.

Since StartUp Health’s 2011 launch, when Krein came on as its chief medical officer, it has invested in more than 300 health care businesses, according to its website, which prominently features the term “moonshot” to describe its investment goals — language that echoes that of Joe Biden’s own signature Cancer Moonshot initiative. In its early years, the firm enjoyed close ties to the Obama administration and described Krein as a White House adviser.

“I have little doubt that the relationship to Joe Biden, particularly if he becomes president, would attract the interest of some investors,” said Avik Roy, founder of Roy Healthcare Research, an investment research firm, and a former adviser to the presidential campaigns of Sens. Mitt Romney (R-Utah) and Marco Rubio (R-Fla.).

StartUpHealth did not respond to interview requests, and the Biden campaign declined to make Krein or others tied to the company available for interviews. In response to questions, a campaign official said that Krein does not have a formal role with the campaign but acknowledged that he had participated in calls briefing Biden on coronavirus based on his experience treating patients and coordinating his hospital’s response to the outbreak.

Even informal input or the perception of access can be valuable in health care, a heavily regulated sector that is influenced by federal policy and spending priorities.

“Sometimes, the perception is all you need,” said Laura Huang, a professor at Harvard Business School who studies the early-stage investment process. “Signaling is very important for startups and investors alike, and one signal is high-profile individuals who can help provide access.”

Roy said the firm’s Biden ties could also help it land stakes in hot startups that can be choosy about the investors they take money from. “Those companies will take your calls,” he said. “People who are plugged in have an advantage, and that is a common feature of a lot of heavily regulated industries.”

The influence concerns posed by the firm are compounded by its foreign ties. One StartUp Health fund raised $31 million from investors, including the Swiss drugmaker Novartis and the Chinese insurer Ping An, in 2018. The firm’s website also lists the Chinese technology conglomerate Tencent as a “co-investor” in its cancer moonshot initiative. A spokesperson for Tencent, Meredith Julian, declined to comment.

StartUp Health’s sprawling portfolio of investments, meanwhile, would make tracking potential conflicts of interest a daunting task should Biden win the presidency. If Krein were to obtain an inside track on policymakers’ intentions, or if Biden appointees were to make policies favorable to companies in StartUp Health’s portfolio, there could be grounds for further investigation, ethicists said.

Asked about ethical safeguards that would apply to the firm in a Biden administration, the campaign official pointed to the former vice president’s 2019 statement to POLITICO that "I have never discussed, with my son or my brother or with anyone else, anything having to do with their businesses. Period. And what I will do is the same thing we did in our administration. There will be an absolute wall between personal and private [business interests] and the government.”

Obama administration ties

From StartUp Health’s inception, Krein and the firm were closely linked to President Barack Obama’s administration and its health policy initiatives, while the firm touted its White House influence.

The firm grew out of OrganizedWisdom, a business founded by Krein’s brother, Steven, in 2006 that made medical information available online and listed Krein as its chief medical officer.

In June 2011, Krein’s brother announced the launch of StartUp Health at the Health Data Initiative Forum, a conference in Bethesda, Md., put on by the Department of Health and Human Services.

It was originally conceived not as an investment firm, but as a series of roundtables and a pledge that people and organizations could take to support health care innovation. Krein’s brother described it as an “initiative … to inspire entrepreneurship in health and wellness.” Coverage of the launch described it as a “a health-specific variation on Startup America,” the Obama administration’s entrepreneurship initiative, which worked with a nonprofit arm, Startup America Partnership.

The day before the launch, Krein’s brother scored a meeting with Obama and Joe Biden in the Oval Office. Krein told the Philadelphia Business Journal that Joe Biden was “a big fan” of StartUp Health and had arranged the Oval Office meeting when Krein mentioned to his father-in-law that his business partners were in Washington. Krein’s brother told the Business Journal that he used the meeting to let Obama know the administration’s health reforms offered a potential “treasure trove” to health startups. “The President loved it and it became a talking point for him,” Krein’s brother told the publication.

At the HHS conference the next day, StartUp Health received a stamp of approval from the Obama administration’s chief technology officer, Aneesh Chopra, who introduced Krein’s brother. “As you’ve heard all day today, this health and wellness movement is most certainly a new market opportunity,” Chopra said. “I am really excited to announce today, in the spirit of the president’s Startup America Partnership and collaboration, the next formal announcement that will come to you. And to make that announcement, please welcome to the stage Steve Krein from New York City, who is going to make a big deal on a big opportunity. Make us all successful in health care. Come on, man!”

Krein’s brother appeared at the conference as a guest of Todd Park, then serving as HHS’ chief technology officer. A spokesperson for Park, Ken Baer, said Park first met Steven Krein and his business partners at the South by Southwest festival in Austin, Texas, in March 2011, and that StartUp Health was among dozens of projects featured at the HHS conference. Baer and a campaign spokesperson both said Joe Biden did not facilitate StartUp Health’s participation in the conference.

Following the launch, StartUp Health evolved into a full-fledged investment firm and startup incubator, touting a “25-year master plan” to recruit a “global army of entrepreneurs.”

Krein — who has served as the StartUp Health’s chief medical since the month of its launch, according to his LinkedIn profile — married Ashley Biden in June 2012. The next month, Krein’s brother registered StartUp Health Innovation Fund with the Securities and Exchange Commission.

The total size of StartUp Health is unclear, but it appears to have grown considerably since its launch. In a 2012 SEC filing, it said it had raised $500,000 of a $7.5 million fund offering. In a 2015 filing, StartUp Health Holdings said it had raised $5 million of a $30 million offering. And in 2018, it announced it had raised a $31 million fund.

Private and public moonshots

During Obama’s second term, Krein and his firm became more visibly associated with Joe Biden’s health care policy. He traveled with the vice president to appearances related to the administration’s Cancer Moonshot initiative, while his firm touted his role as an adviser to the initiative and launched its own for-profit health care “moonshots.”

Following the death of his son Beau from brain cancer, Biden announced in an October 2015 Rose Garden speech that he would not run for president while calling for a “moonshot in this country to cure cancer.” Three months later, Obama officially kicked off the administration’s Cancer Moonshot initiative in his final State of the Union address, tapping Biden to lead it.

As Biden traveled the world promoting the initiative, Krein accompanied him at the official kickoff at the University of Pennsylvania, as well as at the World Economic Forum in Davos, Switzerland and to a health care conference at the Vatican, where they mingled with Pope Francis. (In 2018, Krein returned to the Vatican, this time as an invited speaker at another health care conference, where he plugged StartUp Health’s moonshot approach to some of the world’s leading researchers.)

Krein’s firm has described him as an adviser to the White House on its Cancer Moonshot initiative. The Biden campaign did not respond to questions about Krein’s role in the initiative.

“It does raise questions of nepotism,” said Roy Poses, president of the Foundation for Integrity and Responsibility in Medicine and a professor of medicine at Brown University. “If you have access to people within the administration, it can help you with regulatory issues and policy issues.”

While political access is no substitute for expertise, according to veteran health care investor Pete McNerney, a professor at Northwestern University’s Kellogg School of Management, such high-profile connections can provide an edge in fundraising and brand-building. “It could help them raise some money,” McNerney said, “add some sort of panache to the name.”

The firm’s marketing has played up its closeness to Joe Biden. In October 2016, Joe Biden promoted the administration’s moonshot in remarks at the Cleveland Clinic in Ohio. Krein’s brother appeared onstage before Joe Biden to discuss health care innovation. StartUp Health used the occasion to announce it was launching 10 “health moonshots” of its own — private investment initiatives — including a cancer moonshot.

The company issued a release to mark the event, writing, “Today, StartUp Health, its global army of Health Transformers, and Vice President of the United States Joe Biden kicked off the 14th annual Cleveland Clinic Medical Innovation Summit, sharing an urgent message with nearly 2,000 health leaders, CEOs, and entrepreneurs: the time is now to organize, break down silos, and adopt a ‘Health Transformer Mindset’ to speed up progress in solving big health challenges like ending cancer, ensuring access to care, and improving the wellbeing of people worldwide.”

Three months later, during the final days of the Obama administration, Joe Biden spoke at StartUp Health’s annual festival in San Francisco.

Greater scrutiny

Krein has remained affiliated with his father-in-law’s public health care work in the years since the former vice president left office, joining the board of the nonprofit Biden Cancer Initiative in 2017.

Since Biden announced his presidential run last spring, Krein’s ties to his father-in-law have drawn greater scrutiny. A June 2019 Associated Press investigation of influence concerns posed by Biden’s cancer nonprofit, which shuttered soon after, noted Krein’s dual roles as a board member and venture investor.

Conservative journalist Peter Schweizer includes a section on StartUp Health’s access to the government during the Obama years in his 2020 book, “Profiles in Corruption,” in which he argues that Joe Biden and his relatives used the trappings of his office to promote their private ventures.

“Biden family members see that Joe’s vested public power is convenient for the creation of business opportunities for personal wealth,” Schweizer writes.

Biden campaign spokesperson Mike Gwin described Schweizer’s coverage of StartUp Health as "baseless accusations and innuendo.”

Josh Kushner, brother of President Donald Trump’s son-in-law and one of his senior advisers, Jared Kushner, has faced similar scrutiny for the potential conflicts posed by his venture firm, Thrive Capital. Some of that scrutiny focused on Oscar Health, an insurance company co-founded by Josh Kushner and backed by Thrive, which benefited from Obamacare and faced risk from Trump’s efforts to repeal the law.

In March, as Jared Kushner led the Trump’s administration’s coronavirus task force, Oscar Health built a website that directed users to nearby coronavirus testing sites at the behest of the federal government, a project that was quickly scrapped, according to an investigation by The Atlantic.

StartUp Health’s high-profile connections, meanwhile, have continued to play a role in its business in recent years, with Joe Biden’s wife, Jill, speaking at its annual conference, and Chopra appearing as a guest on the company’s podcast.

Park, who succeeded Chopra as the U.S. CTO, went on to serve on the board of the Biden Cancer Initiative alongside Krein. A successful entrepreneur, Park had founded Athenahealth, a health care technology company, with George W. Bush’s first cousin, Jonathan Bush, before entering the Obama administration.

After leaving the administration, Park co-founded Devoted Health, a company that administers Medicare plans. StartUp Health is among the company’s investors.

Though Park has donated to Joe Biden’s campaign, Baer said he has no intention of returning to government in a Biden administration.

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