We continue to see how the US government was used to help a small secretive group with unlimited funds get control of the world’s uranium supply. Uranium is used to make nuclear weapons and to fuel nuclear power.
Hillary was at the time a legislative branch commissioner for the Commission on Security and Cooperation in Europe, one of only nine US senators on the panel. In 2004 Hillary had cosigned a letter to the State Department stating that Kazakhstan's bid to head the OSCE "would not be acceptable" because of wide-spread corruption and human rights problems. In July 2008 when the commission held hearings titled "Promises to Keep: Kazakhstan's 2010 OSCE Chairmanship." Senator Ben Cardin, Democrat of Maryland and the cochair of the commission, said Kazakhstan's "record on human rights and democratization does indeed raise concerns. The State Department's yearly reports, as well as those by numerous human rights groups inside and outside of Kazakhstan, lay out in detail the problem areas.”
According to the official transcript, Hillary didn't show up for the hearings.
Clinton and Giustra left Kazakhstan the day after the banquet. Within forty-eight hours, Giustra's company UrAsia signed two memoranda of understanding outlining the transfer of uranium mining assets, which Kazakh authorities later approved: buying a 30 percent stake in the Kharassan uranium project and 70 percent in another project-the Betpak-Dala joint venture.
The deal stunned longtime mining observers. Choosing UrAsia to buy into those mines was a "mystery" said Gene Clark, the chief executive of Trade Tech, an industry newsletter. "UrAsia was able to jump-start the whole process somehow," he said. The company was now a "major uranium producer when it didn't even exist before. In the months that followed, Giustra gave the Clinton Foundation $31.3 million." It was the first of several large donations he would make as he went on to secure other lucrative natural resources deals in developing countries around the world.
We will see him again in other chapters. As mentioned earlier, at the time of Clinton's visit, Kazakhstan was on the verge of a national election. Days after Clinton departed, the opposition party's campaign headquarters were ravaged by fire in an arson attack. On October 12 heavily armed police temporarily arrested the opposition party's leader. The OSCE said the election "was marred by an atmosphere of intimidation” and “ballot-box stuffing.”
In December 2005 Nazarbayev won reelection with more than 90 percent of the vote. Bill sent him a note of congratulations. "Recognizing that your work has received an excellent grade is one of the most important rewards in life," he wrote. "At the start of your new term as president, I would like to express confidence that you will continue to live up to the expectations of your people."
The Kazakh dictator promptly released Clinton's congratulatory note to the public. With the Kazakh concession in hand, UrAsia Energy Ltd. significantly expanded its assets. UrAsia quickly went about directing shares of the company's stock to friends in Canada. Giustra took 3 million shares. He gave half a million more to Robert Cross, a former brokerage colleague, whom he also placed on the board. According to the Globe and Mail, his friend and fellow investment dealmaker, lan Telfer, received 2.2 million shares of his own. Telfer, like Giustra, had been kicking around in the mining business for decades, involved in several high-profile penny-stock mining deals. "I'm more of an opportunist than a visionary," he admitted. But this deal was special. And he would provide the Clinton Foundation with funds of his own.
With the shares doled out, UrAsia went public and was "among the largest [offerings] on record" to be brokered on Canada's Venture Exchange." Canadian firms BMO Nesbitt Burns Inc., Canaccord Adams, and GMP Securities Ltd. handled the placement of the shares, and became supporters of the Clinton Foundation as well, as we will see.
Then phase two began. In February 2007 UrAsia Energy announced that it would merge with Uranium One, a uranium company based out of South Africa and Canada. Like all transactions involving uranium in Kazakhstan, the merger required approval by the Kazakh government. That same month, Dzhakishev, the head of Kazatomprom, went to Chappaqua for a private meeting with Bill Clinton.
Frank Giustra allegedly arranged the meeting. According to Dzhakishev, they discussed uranium markets and the future of nuclear power, Just as Giustra needed Kazakh government approval, the Kazakhs might need US government approval for their aspirations to purchase a stake in Westinghouse, a major US manufacturer of nuclear power plant components.
Yet pressure was mounting in Washington about Nazarbayev's human rights record and Kazakhstan's fitness to head an international human rights body like the OSCE.
Senator Joe Biden, chairman of the Senate Foreign Relations Committee, fired off a letter on March 13, 2007, to President Nazarbayev, making it clear he wanted Kazakhstan to clean up its act or he would not support their bid. "Unless visible progress is attained quickly, I will not be able to support Kazakhstan in its quest to assume chairmanship of the OSCE.”
The Clintons, however, took a different tack. Hillary, who had expressed concerns about Kazakhstan heading up the OSCE prior to the deal, now was strangely silent. Bill was emboldened: he invited Nazarbayev to attend the Clinton Global Initiative (CGI) as his guest.
The Kazakh dictator was happy to make the trip, and on September 25, 2007, he was a featured attendee at an exclusive CGI meeting in New York. Two months later Nazarbayev was awarded the OSCE chair, a post he took in 2010.
Meanwhile, in February 2007, shareholders approved the merger between UrAsia and Uranium One. Although Giustra tried to characterize the transaction as a Uranium One takeover of his company, UrAsia Energy Ltd., it was actually a reverse merger. Giustra, his friends, and other shareholders wound up controlling 60 percent of the new company. And in the months that followed, they began acquiring uranium assets in the United States itself.
Within the next year, they began negotiations with the Russian State Nuclear Agency, which, in 2009, bought a stake in the company, as described in the next chapter.
Following the lucrative merger, many of the deal's largest shareholders wrote multimillion-dollar checks to the Clinton Foundation and its project, the Clinton Giustra Sustainable Growth Initiative. In addition to his $31.3 million donation, Giustra announced a multiyear commitment to donate $100 million, and half of his future profits, to the Clinton Foundation.
Giustra's commitmemts made the Canadian mining investor one of the largest individual contributors to the Clinton Foundation, rivaling those far wealthier than himself, like Bill Gates, who has given more than $25 million to the Clinton Foundation. As we will see, Bill Clinton would show up at critical times in other developing countries where Giustra had business. As Canada's Globe and Mail put it, "it just so happens that Bill Clinton keeps popping up in places where Giustra is buying resource assets."
The collective commitments and donations from investors who profited from the deal would ultimately exceed $145 million." (The Clinton Foundation only reports ranges, not exact amounts.) These investors include the following business associates of Giustra:
• Frank Holmes, another major shareholder in the deal, wrote a check to the Clinton Foundation for between $250,000 and $500,000, Holmes also lists himself as an adviser to the Clinton Foundation.
• Neil Woodyer, Giustra's colleague who founded Endeavour Financial, pledged $500,000 and committed to providing "ongoing financial support.”
• Robert Disbrow, a broker at Haywood Securities, which provided $58 million in capital to float shares of UrAsia's private placement, sent between $1 million and $5 million to the Clinton Foundation a few months later.
• Paul Reynolds, an executive at Canaccord Capital, Inc., donated in the same range, between $1 million and $5 million. The UrAsia deal was the largest in Canaccord's history.
• GMP Securities Ltd., another large shareholder in UrAsia Energy, committed to donating a portion of its profits to the CGSGI, GMP made great money on the private placement of shares and as an underwriter on UrAsia Energy deals.
• Robert Cross, who was a major shareholder and serves as director of UrAsia Energy, committed a portion of his future income to the Clinton Foundation. Egizio Bianchini, the Capital Markets vice chair and Global cohead of BMO's Global Metals and Mining group, had also been an underwriter on the mining deals. BMO paid $600,000 for two tables at the CGSGI's March 2008 benefit.
• Sergei Kurzin, a Russian dealmaker involved in the Kazakhstan uranium deal and a shareholder in UrAsia Energy, also made the CGSGI a $1 million pledge.
• Tan Telfer, the chairman of UrAsia Energy, who would become the new chairman of Uranium One, committed $3 million. Bill Clinton hailed the windfall as a selfless philanthropic gesture that would support economic growth and health care in the developing world. "I'm proud of the coalition in the natural resources industry that has come together," he said.
A group of Canadian mining investors just happened to become conspicuously large contributors in the Clinton Foundation over a very short period of time. Giustra went even further in bringing in funds for the foundation. In 2006, he hosted a birthday party/fundraiser for Bill Clinton at the Fairmont Royal York Hotel in Toronto that featured an impressive guest list. The event was headlined by Kevin Spacey and included Billy Crystal and Bon Jovi. In March 2008 there was another superstar fundraising gala including Tom Cruise and Robin Williams in Toronto.
In Vancouver on October 17, 2008, Giustra and Clinton addressed the British Columbia Business Council on corporate social responsibility. Any actions the Clintons may have taken to support Canadian Giustra in the uranium deals could not be justified on the grounds that they were creating jobs for Americans or helping American companies be more competitive overseas, the explanation politicians often give to justify doing favors for companies or donors. But the international scope of the deals would expand beyond Kazakhstan, Canada, Washington, and Chappaqua to include some of the most powerful government officials in Russia. The flow of money would only increase.
