ROSATOM - PRAVDA - VLADIMIR PUTIN - BILL HILLARY CLINTON - URANIUM - OBAMA - FBI - CIA - IRAN SYRIA NORTH KOREA RUSSIA NUCLEAR WEAPONS CANADA SCANDAL
The headline on the website Pravda trumpeted President
Vladimir V. Putin’s latest coup, its nationalistic fervor recalling an era when
its precursor served as the official mouthpiece of the Kremlin: “Russian
Nuclear Energy Conquers the World.”
The article, in January 2013, detailed how the Russian
atomic energy agency, Rosatom, had taken over a Canadian company with
uranium-mining stakes stretching from Central Asia to the American West. The
deal made Rosatom one of the world’s largest uranium producers and brought Mr.
Putin closer to his goal of controlling much of the global uranium supply
chain.
But the untold story behind that story is one that involves
not just the Russian president, but also a former American president and a
woman who would like to be the next one.
At the heart of the tale are several men, leaders of the
Canadian mining industry, who have been major donors to the charitable
endeavors of former President Bill Clinton and his family. Members of that
group built, financed and eventually sold off to the Russians a company that
would become known as Uranium One.
Beyond mines in Kazakhstan that are among the most lucrative
in the world, the sale gave the Russians control of one-fifth of all uranium
production capacity in the United States. Since uranium is considered a
strategic asset, with implications for national security, the deal had to be
approved by a committee composed of representatives from a number of United
States government agencies. Among the agencies that eventually signed off was
the State Department, then headed by Mr. Clinton’s wife, Hillary Rodham
Clinton.
As the Russians gradually assumed control of Uranium One in
three separate transactions from 2009 to 2013, Canadian records show, a flow of
cash made its way to the Clinton Foundation. Uranium One’s chairman used his
family foundation to make four donations totaling $2.35 million. Those
contributions were not publicly disclosed by the Clintons, despite an agreement
Mrs. Clinton had struck with the Obama White House to publicly identify all
donors. Other people with ties to the company made donations as well.
And shortly after the Russians announced their intention to
acquire a majority stake in Uranium One, Mr. Clinton received $500,000 for a
Moscow speech from a Russian investment bank with links to the Kremlin that was
promoting Uranium One stock.
Frank Giustra, right, a mining financier, has donated $31.3
million to the foundation run by former President Bill Clinton,
At the time, both Rosatom and the United States government
made promises intended to ease concerns about ceding control of the company’s
assets to the Russians. Those promises have been repeatedly broken, records
show.
The New York Times’s examination of the Uranium One deal is
based on dozens of interviews, as well as a review of public records and
securities filings in Canada, Russia and the United States. Some of the connections
between Uranium One and the Clinton Foundation were unearthed by Peter
Schweizer, a former fellow at the right-leaning Hoover Institution and author
of the forthcoming book “Clinton Cash.” Mr. Schweizer provided a preview of
material in the book to The Times, which scrutinized his information and built
upon it with its own reporting.
Whether the donations played any role in the approval of the
uranium deal is unknown. But the episode underscores the special ethical
challenges presented by the Clinton Foundation, headed by a former president
who relied heavily on foreign cash to accumulate $250 million in assets even as
his wife helped steer American foreign policy as secretary of state, presiding
over decisions with the potential to benefit the foundation’s donors.
In a statement, Brian Fallon, a spokesman for Mrs. Clinton’s
presidential campaign, said no one “has ever produced a shred of evidence
supporting the theory that Hillary Clinton ever took action as secretary of
state to support the interests of donors to the Clinton Foundation.” He
emphasized that multiple United States agencies, as well as the Canadian
government, had signed off on the deal and that, in general, such matters were
handled at a level below the secretary. “To suggest the State Department, under
then-Secretary Clinton, exerted undue influence in the U.S. government’s review
of the sale of Uranium One is utterly baseless,” he added.
American political campaigns are barred from accepting
foreign donations. But foreigners may give to foundations in the United States.
In the days since Mrs. Clinton announced her candidacy for president, the
Clinton Foundation has announced changes meant to quell longstanding concerns
about potential conflicts of interest in such donations; it has limited
donations from foreign governments, with many, like Russia’s, barred from
giving to all but its health care initiatives. That policy stops short of a
more stringent agreement between Mrs. Clinton and the Obama administration that
was in effect while she was secretary of state.
Either way, the Uranium One deal highlights the limits of
such prohibitions. The foundation will continue to accept contributions from
foreign sources whose interests, like Uranium One’s, may overlap with those of
foreign governments, some of which may be at odds with the United States.
When the Uranium One deal was approved, the geopolitical
backdrop was far different from today’s. The Obama administration was seeking
to “reset” strained relations with Russia. The deal was strategically important
to Mr. Putin, who shortly after the Americans gave their blessing sat down for
a staged interview with Rosatom’s chief executive, Sergei Kiriyenko. “Few could
have imagined in the past that we would own 20 percent of U.S. reserves,” Mr.
Kiriyenko told Mr. Putin.
GRAPHIC
Donations to the Clinton Foundation, and a Russian Uranium
Takeover
Uranium investors gave millions to the Clinton Foundation
while Secretary of State Hillary Rodham Clinton’s office was involved in
approving a Russian bid for mining assets in Kazakhstan and the United States.
OPEN GRAPHIC
Now, after Russia’s annexation of Crimea and aggression in
Ukraine, the Moscow-Washington relationship is devolving toward Cold War
levels, a point several experts made in evaluating a deal so beneficial to Mr.
Putin, a man known to use energy resources to project power around the world.
“Should we be concerned? Absolutely,” said Michael McFaul,
who served under Mrs. Clinton as the American ambassador to Russia but said he
had been unaware of the Uranium One deal until asked about it. “Do we want
Putin to have a monopoly on this? Of course we don’t. We don’t want to be
dependent on Putin for anything in this climate.”
A Seat at the Table
The path to a Russian acquisition of American uranium deposits
began in 2005 in Kazakhstan, where the Canadian mining financier Frank Giustra
orchestrated his first big uranium deal, with Mr. Clinton at his side.
The two men had flown aboard Mr. Giustra’s private jet to
Almaty, Kazakhstan, where they dined with the authoritarian president,
Nursultan A. Nazarbayev. Mr. Clinton handed the Kazakh president a propaganda
coup when he expressed support for Mr. Nazarbayev’s bid to head an
international elections monitoring group, undercutting American foreign policy
and criticism of Kazakhstan’s poor human rights record by, among others, his
wife, then a senator.
Within days of the visit, Mr. Giustra’s fledgling company,
UrAsia Energy Ltd., signed a preliminary deal giving it stakes in three uranium
mines controlled by the state-run uranium agency Kazatomprom.
If the Kazakh deal was a major victory, UrAsia did not wait
long before resuming the hunt. In 2007, it merged with Uranium One, a South
African company with assets in Africa and Australia, in what was described as a
$3.5 billion transaction. The new company, which kept the Uranium One name, was
controlled by UrAsia investors including Ian Telfer, a Canadian who became
chairman. Through a spokeswoman, Mr. Giustra, whose personal stake in the deal
was estimated at about $45 million, said he sold his stake in 2007.
Soon, Uranium One began to snap up companies with assets in
the United States. In April 2007, it announced the purchase of a uranium mill
in Utah and more than 38,000 acres of uranium exploration properties in four
Western states, followed quickly by the acquisition of the Energy Metals
Corporation and its uranium holdings in Wyoming, Texas and Utah. That deal made
clear that Uranium One was intent on becoming “a powerhouse in the United
States uranium sector with the potential to become the domestic supplier of
choice for U.S. utilities,” the company declared.
Photo
Ian Telfer was chairman of Uranium One and made large
donations to the Clinton Foundation. Credit Galit Rodan/Bloomberg, via Getty
Images
Still, the company’s story was hardly front-page news in the
United States — until early 2008, in the midst of Mrs. Clinton’s failed
presidential campaign, when The Times published an article revealing the 2005
trip’s link to Mr. Giustra’s Kazakhstan mining deal. It also reported that
several months later, Mr. Giustra had donated $31.3 million to Mr. Clinton’s
foundation.
(In a statement issued after this article appeared online,
Mr. Giustra said he was “extremely proud” of his charitable work with Mr.
Clinton, and he urged the media to focus on poverty, health care and “the real
challenges of the world.”)
Though the 2008 article quoted the former head of
Kazatomprom, Moukhtar Dzhakishev, as saying that the deal required government
approval and was discussed at a dinner with the president, Mr. Giustra insisted
that it was a private transaction, with no need for Mr. Clinton’s influence
with Kazakh officials. He described his relationship with Mr. Clinton as
motivated solely by a shared interest in philanthropy.
As if to underscore the point, five months later Mr. Giustra
held a fund-raiser for the Clinton Giustra Sustainable Growth Initiative, a
project aimed at fostering progressive environmental and labor practices in the
natural resources industry, to which he had pledged $100 million. The
star-studded gala, at a conference center in Toronto, featured performances by
Elton John and Shakira and celebrities like Tom Cruise, John Travolta and Robin
Williams encouraging contributions from the many so-called F.O.F.s — Friends of
Frank — in attendance, among them Mr. Telfer. In all, the evening generated $16
million in pledges, according to an article in The Globe and Mail.
“None of this would have been possible if Frank Giustra
didn’t have a remarkable combination of caring and modesty, of vision and
energy and iron determination,” Mr. Clinton told those gathered, adding: “I
love this guy, and you should, too.”
But what had been a string of successes was about to hit a
speed bump.
Arrest and Progress
By June 2009, a little over a year after the star-studded
evening in Toronto, Uranium One’s stock was in free-fall, down 40 percent. Mr.
Dzhakishev, the head of Kazatomprom, had just been arrested on charges that he
illegally sold uranium deposits to foreign companies, including at least some
of those won by Mr. Giustra’s UrAsia and now owned by Uranium One.
Publicly, the company tried to reassure shareholders. Its
chief executive, Jean Nortier, issued a confident statement calling the
situation a “complete misunderstanding.” He also contradicted Mr. Giustra’s
contention that the uranium deal had not required government blessing. “When
you do a transaction in Kazakhstan, you need the government’s approval,” he
said, adding that UrAsia had indeed received that approval.
Photo
Bill Clinton met with Vladimir V. Putin in Moscow in 2010.
Credit Mikhail Metzel/Associated Press
But privately, Uranium One officials were worried they could
lose their joint mining ventures. American diplomatic cables made public by
WikiLeaks also reflect concerns that Mr. Dzhakishev’s arrest was part of a
Russian power play for control of Kazakh uranium assets.
At the time, Russia was already eying a stake in Uranium
One, Rosatom company documents show. Rosatom officials say they were seeking to
acquire mines around the world because Russia lacks sufficient domestic
reserves to meet its own industry needs.
It was against this backdrop that the Vancouver-based
Uranium One pressed the American Embassy in Kazakhstan, as well as Canadian
diplomats, to take up its cause with Kazakh officials, according to the
American cables.
“We want more than a statement to the press,” Paul Clarke, a
Uranium One executive vice president, told the embassy’s energy officer on June
10, the officer reported in a cable. “That is simply chitchat.” What the
company needed, Mr. Clarke said, was official written confirmation that the licenses
were valid.
The American Embassy ultimately reported to the secretary of
state, Mrs. Clinton. Though the Clarke cable was copied to her, it was given
wide circulation, and it is unclear if she would have read it; the Clinton
campaign did not address questions about the cable.
What is clear is that the embassy acted, with the cables
showing that the energy officer met with Kazakh officials to discuss the issue
on June 10 and 11.
Three days later, a wholly owned subsidiary of Rosatom
completed a deal for 17 percent of Uranium One. And within a year, the Russian
government substantially upped the ante, with a generous offer to shareholders
that would give it a 51 percent controlling stake. But first, Uranium One had
to get the American government to sign off on the deal.
Among the Donors to the Clinton Foundation
Frank Giustra
$31.3 million and a pledge for $100 million more
He built a company that later merged with Uranium One.
Ian Telfer
$2.35 million
Mining investor who was chairman of Uranium One when an arm
of the Russian government, Rosatom, acquired it.
Paul Reynolds
$1 million to $5 million
Adviser on 2007 UrAsia-Uranium One merger. Later helped
raise $260 million for the company.
Frank Holmes
$250,000 to $500,000
Chief Executive of U.S. Global Investors Inc., which held
$4.7 million in Uranium One shares in the first quarter of 2011.
Neil Woodyer
$50,000 to $100,000
Adviser to Uranium One. Founded Endeavour Mining with Mr.
Giustra.
GMP Securities Ltd.
Donating portion of profits
Worked on debt issue that raised $260 million for Uranium
One.
The Power to Say No
When a company controlled by the Chinese government sought a
51 percent stake in a tiny Nevada gold mining operation in 2009, it set off a
secretive review process in Washington, where officials raised concerns
primarily about the mine’s proximity to a military installation, but also about
the potential for minerals at the site, including uranium, to come under
Chinese control. The officials killed the deal.
Such is the power of the Committee on Foreign Investment in
the United States. The committee comprises some of the most powerful members of
the cabinet, including the attorney general, the secretaries of the Treasury,
Defense, Homeland Security, Commerce and Energy, and the secretary of state.
They are charged with reviewing any deal that could result in foreign control
of an American business or asset deemed important to national security.
The national security issue at stake in the Uranium One deal
was not primarily about nuclear weapons proliferation; the United States and
Russia had for years cooperated on that front, with Russia sending enriched
fuel from decommissioned warheads to be used in American nuclear power plants
in return for raw uranium.
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Instead, it concerned American dependence on foreign uranium
sources. While the United States gets one-fifth of its electrical power from
nuclear plants, it produces only around 20 percent of the uranium it needs, and
most plants have only 18 to 36 months of reserves, according to Marin Katusa,
author of “The Colder War: How the Global Energy Trade Slipped From America’s
Grasp.”
“The Russians are easily winning the uranium war, and
nobody’s talking about it,” said Mr. Katusa, who explores the implications of
the Uranium One deal in his book. “It’s not just a domestic issue but a foreign
policy issue, too.”
When ARMZ, an arm of Rosatom, took its first 17 percent
stake in Uranium One in 2009, the two parties signed an agreement, found in
securities filings, to seek the foreign investment committee’s review. But it
was the 2010 deal, giving the Russians a controlling 51 percent stake, that set
off alarm bells. Four members of the House of Representatives signed a letter
expressing concern. Two more began pushing legislation to kill the deal.
Senator John Barrasso, a Republican from Wyoming, where
Uranium One’s largest American operation was, wrote to President Obama, saying
the deal “would give the Russian government control over a sizable portion of
America’s uranium production capacity.”
Photo
President Putin during a meeting with Rosatom’s chief
executive, Sergei Kiriyenko, in December 2007. Credit Dmitry Astakhov/Ria
Novosti, via Agence France-Presse — Getty Images
“Equally alarming,” Mr. Barrasso added, “this sale gives
ARMZ a significant stake in uranium mines in Kazakhstan.”
Uranium One’s shareholders were also alarmed, and were
“afraid of Rosatom as a Russian state giant,” Sergei Novikov, a company
spokesman, recalled in an interview. He said Rosatom’s chief, Mr. Kiriyenko,
sought to reassure Uranium One investors, promising that Rosatom would not
break up the company and would keep the same management, including Mr. Telfer,
the chairman. Another Rosatom official said publicly that it did not intend to
increase its investment beyond 51 percent, and that it envisioned keeping
Uranium One a public company
American nuclear officials, too, seemed eager to assuage
fears. The Nuclear Regulatory Commission wrote to Mr. Barrasso assuring him
that American uranium would be preserved for domestic use, regardless of who
owned it.
“In order to export uranium from the United States, Uranium
One Inc. or ARMZ would need to apply for and obtain a specific NRC license
authorizing the export of uranium for use as reactor fuel,” the letter said.
Still, the ultimate authority to approve or reject the
Russian acquisition rested with the cabinet officials on the foreign investment
committee, including Mrs. Clinton — whose husband was collecting millions in
donations from people associated with Uranium One.
Undisclosed Donations
Before Mrs. Clinton could assume her post as secretary of
state, the White House demanded that she sign a memorandum of understanding
placing limits on the activities of her husband’s foundation. To avoid the
perception of conflicts of interest, beyond the ban on foreign government
donations, the foundation was required to publicly disclose all contributors.
To judge from those disclosures — which list the
contributions in ranges rather than precise amounts — the only Uranium One
official to give to the Clinton Foundation was Mr. Telfer, the chairman, and
the amount was relatively small: no more than $250,000, and that was in 2007,
before talk of a Rosatom deal began percolating.
Photo
Uranium One’s Russian takeover was approved by the United
States while Hillary Rodham Clinton was secretary of state. Credit Doug
Mills/The New York Times
But a review of tax records in Canada, where Mr. Telfer has
a family charity called the Fernwood Foundation, shows that he donated millions
of dollars more, during and after the critical time when the foreign investment
committee was reviewing his deal with the Russians. With the Russians offering
a special dividend, shareholders like Mr. Telfer stood to profit.
His donations through the Fernwood Foundation included $1
million reported in 2009, the year his company appealed to the American Embassy
to help it keep its mines in Kazakhstan; $250,000 in 2010, the year the
Russians sought majority control; as well as $600,000 in 2011 and $500,000 in
2012. Mr. Telfer said that his donations had nothing to do with his business
dealings, and that he had never discussed Uranium One with Mr. or Mrs. Clinton.
He said he had given the money because he wanted to support Mr. Giustra’s
charitable endeavors with Mr. Clinton. “Frank and I have been friends and
business partners for almost 20 years,” he said.
The Clinton campaign left it to the foundation to reply to
questions about the Fernwood donations; the foundation did not provide a
response.
Mr. Telfer’s undisclosed donations came in addition to
between $1.3 million and $5.6 million in contributions, which were reported,
from a constellation of people with ties to Uranium One or UrAsia, the company
that originally acquired Uranium One’s most valuable asset: the Kazakh mines.
Without those assets, the Russians would have had no interest in the deal: “It
wasn’t the goal to buy the Wyoming mines. The goal was to acquire the Kazakh
assets, which are very good,” Mr. Novikov, the Rosatom spokesman, said in an
interview.
Amid this influx of Uranium One-connected money, Mr. Clinton
was invited to speak in Moscow in June 2010, the same month Rosatom struck its
deal for a majority stake in Uranium One.
The $500,000 fee — among Mr. Clinton’s highest — was paid by
Renaissance Capital, a Russian investment bank with ties to the Kremlin that
has invited world leaders, including Tony Blair, the former British prime
minister, to speak at its investor conferences.
Renaissance Capital analysts talked up Uranium One’s stock,
assigning it a “buy” rating and saying in a July 2010 research report that it
was “the best play” in the uranium markets. In addition, Renaissance Capital
turned up that same year as a major donor, along with Mr. Giustra and several
companies linked to Uranium One or UrAsia, to a small medical charity in
Colorado run by a friend of Mr. Giustra’s. In a newsletter to supporters, the
friend credited Mr. Giustra with helping get donations from “businesses around
the world.”
Photo
John Christensen sold the mining rights on his ranch in
Wyoming to Uranium One. Credit Matthew Staver for The New York Times
Renaissance Capital would not comment on the genesis of Mr.
Clinton’s speech to an audience that included leading Russian officials, or on
whether it was connected to the Rosatom deal. According to a Russian government
news service, Mr. Putin personally thanked Mr. Clinton for speaking.
A person with knowledge of the Clinton Foundation’s
fund-raising operation, who requested anonymity to speak candidly about it,
said that for many people, the hope is that money will in fact buy influence:
“Why do you think they are doing it — because they love them?” But whether it
actually does is another question. And in this case, there were broader
geopolitical pressures that likely came into play as the United States
considered whether to approve the Rosatom-Uranium One deal.
Diplomatic Considerations
If doing business with Rosatom was good for those in the
Uranium One deal, engaging with Russia was also a priority of the incoming Obama
administration, which was hoping for a new era of cooperation as Mr. Putin
relinquished the presidency — if only for a term — to Dmitri A. Medvedev.
“The assumption was we could engage Russia to further core
U.S. national security interests,” said Mr. McFaul, the former ambassador.
It started out well. The two countries made progress on
nuclear proliferation issues, and expanded use of Russian territory to resupply
American forces in Afghanistan. Keeping Iran from obtaining a nuclear weapon
was among the United States’ top priorities, and in June 2010 Russia signed off
on a United Nations resolution imposing tough new sanctions on that country.
Two months later, the deal giving ARMZ a controlling stake
in Uranium One was submitted to the Committee on Foreign Investment in the
United States for review. Because of the secrecy surrounding the process, it is
hard to know whether the participants weighed the desire to improve bilateral
relations against the potential risks of allowing the Russian government
control over the biggest uranium producer in the United States. The deal was
ultimately approved in October, following what two people involved in securing
the approval said had been a relatively smooth process.
Not all of the committee’s decisions are personally debated
by the agency heads themselves; in less controversial cases, deputy or
assistant secretaries may sign off. But experts and former committee members
say Russia’s interest in Uranium One and its American uranium reserves seemed
to warrant attention at the highest levels.
Photo
Moukhtar Dzhakishev was arrested in 2009 while the chief of
Kazatomprom. Credit Daniel Acker/Bloomberg, via Getty Images
“This deal had generated press, it had captured the
attention of Congress and it was strategically important,” said Richard
Russell, who served on the committee during the George W. Bush administration.
“When I was there invariably any one of those conditions would cause this to
get pushed way up the chain, and here you had all three.”
And Mrs. Clinton brought a reputation for hawkishness to the
process; as a senator, she was a vocal critic of the committee’s approval of a
deal that would have transferred the management of major American seaports to a
company based in the United Arab Emirates, and as a presidential candidate she
had advocated legislation to strengthen the process.
The Clinton campaign spokesman, Mr. Fallon, said that in
general, these matters did not rise to the secretary’s level. He would not
comment on whether Mrs. Clinton had been briefed on the matter, but he gave The
Times a statement from the former assistant secretary assigned to the foreign
investment committee at the time, Jose Fernandez. While not addressing the
specifics of the Uranium One deal, Mr. Fernandez said, “Mrs. Clinton never
intervened with me on any C.F.I.U.S. matter.”
Mr. Fallon also noted that if any agency had raised national
security concerns about the Uranium One deal, it could have taken them directly
to the president.
Anne-Marie Slaughter, the State Department’s director of
policy planning at the time, said she was unaware of the transaction — or the
extent to which it made Russia a dominant uranium supplier. But speaking
generally, she urged caution in evaluating its wisdom in hindsight.
“Russia was not a country we took lightly at the time or
thought was cuddly,” she said. “But it wasn’t the adversary it is today.”
That renewed adversarial relationship has raised concerns
about European dependency on Russian energy resources, including nuclear fuel.
The unease reaches beyond diplomatic circles. In Wyoming, where Uranium One
equipment is scattered across his 35,000-acre ranch, John Christensen is
frustrated that repeated changes in corporate ownership over the years led to
French, South African, Canadian and, finally, Russian control over mining
rights on his property.
“I hate to see a foreign government own mining rights here
in the United States,” he said. “I don’t think that should happen.”
Mr. Christensen, 65, noted that despite assurances by the
Nuclear Regulatory Commission that uranium could not leave the country without
Uranium One or ARMZ obtaining an export license — which they do not have —
yellowcake from his property was routinely packed into drums and trucked off to
a processing plant in Canada.
Asked about that, the commission confirmed that Uranium One
has, in fact, shipped yellowcake to Canada even though it does not have an
export license. Instead, the transport company doing the shipping, RSB Logistic
Services, has the license. A commission spokesman said that “to the best of our
knowledge” most of the uranium sent to Canada for processing was returned for
use in the United States. A Uranium One spokeswoman, Donna Wichers, said 25
percent had gone to Western Europe and Japan. At the moment, with the uranium
market in a downturn, nothing is being shipped from the Wyoming mines.
The “no export” assurance given at the time of the Rosatom
deal is not the only one that turned out to be less than it seemed. Despite
pledges to the contrary, Uranium One was delisted from the Toronto Stock
Exchange and taken private. As of 2013, Rosatom’s subsidiary, ARMZ, owned 100
percent of it.
