The primary purpose of Hillary's trip was to increase pressure on Iran. Instead, Putin promised Moscow's assistance with the completion of a civil nuclear power station by the summer. Hillary blasted the move, saying it "would be premature to go forward with any project at this time, because we want to send an unequivocal message to the Iranians."
As part of its reset with Moscow, the Obama administration wanted to make progress on the New START nuclear talks and sought commercial opportunities in areas like civilian nuclear power. On that front, Hillary was optimistic. "If we continue to work together, we can move beyond the problems to greater opportunities."
In May 2010 the Obama administration submitted the proposed text of the US-Russian Civilian Nuclear Cooperation Agreement to Congress. Weeks later, Rosatom announced it was seeking to buy majority control (52 percent) of Uranium One. To some observers in the uranium market, it all made sense. "It was no accident that Rosatom's choice fell to Uranium One," wrote one paper, given the uranium assets it held. Several multimillion-dollar Clinton Foundation donors were at the center of the deal.
As we saw in the previous chapter, one of these, lan Telfer, was chairman of Uranium One. A longtime mining investor and associate of Frank Giustra, Telfer made his fortune as a gold investor and has served as the chairman of the World Gold Council. The Clinton Foundation also failed to disclose major contributions from entities controlled by those involved in the Uranium One deal. Thus, beginning in 2009, the company's chairman, Telfer, quietly started funneling what would become $2.35 million to the Clinton Foundation through a Canadian entity he controlled called the Fernwood Foundation. According to records released by the Clinton Foundation, Telfer had personally contributed $100,001 to $250,000 to the Clinton Foundation in 2007. But according to Canadian tax records, Telfer's Fernwood Foundation donated more than $2 million to the Clinton Foundation while Hillary was secretary of state.
The Clinton Foundation's public disclosures don't list Fernwood as a donor. In 2009 Fernwood contributed $1 million to the Clinton Giustra Sustainable Growth Initiative (CGSCI) In 2010 its donation was $250,000.
In 2011 it gave another $600,000 and in 2012 the amount was $500,000. According to Canadian tax records, nearly all of the funds CGSCI collects are transferred directly to the Clinton Foundation in New York.
In other words, it operates as a pass-through. The fact that these donations are not listed in Clinton Foundation public disclosures violates the Clinton Foundation's memorandum of understanding with the Obama White House described in chapter 1, and contradicts Hillary's correspondence with the Senate Foreign Relations Committee.
It also raises questions about what other undisclosed multimillion-dollar donations from foreign entities could have been channeled to the Clinton Foundation. The Russian uranium deal involved other major Clinton Foundation donors.
Two men listed as "financial advisors" for Uranium One and the Russia deal, Robert Disbrow and Paul Reynolds, were also multimillion-dollar contributors. Another important shareholder in Uranium One was US Global Investor Funds, whose CEO was Frank Holmes.
Holmes was not only a major contributor to the foundation, he was also the chairman of Giustra's Endeavour Mining Capital Corp. Holmes describes himself as "an advisor to the William J. Clinton Foundation on sustainable development in countries with resource-based economies. The managing director for global affairs at Endeavour Financial during this deal was Eric Nonacs, who simultaneously served as "senior advisor" to the Clinton Foundation. Nonacs, before taking the job, had been a foreign policy adviser to Bill during his post-presidential years.
As part of the merger with Uranium One, key shareholders, including Telfer and Giustra, were required to hold their shares for at least six months. (Dzhakishev believes that Giustra made $300 million in the deal.)
Giustra's firm, Endeavour Financial, continued to act as a financial adviser to Uranium One. In July 2008, for example, they arranged credit for the firm as part of a deal involving several Canadian investment banks.
In early 2008, according to Rosatom executive Vadim Zhivov, negotiations had already begun between Rosatom and Uranium One to buy a stake in the company.
Was Giustra an investor in Uranium One via US Global Investor Funds? He did not return repeated calls asking for comment. It is unclear whether by 2010 Giustra was still directly involved in the deal, as he often conducts deals through shell companies.
For shareholders of Uranium One, the Russian government acquisition would mean huge payouts. In addition to giving every sharebolder a special one-dollar-per-share dividend, Moscow had big plans for Uranium One.
According to corporate records, Telfer alone had shares and options amounting to more than 1.6 million shares. "We would like just to use Uranium One as the global platform for future growth and all the future acquisitions and all M&A activity," said Zhivov, who directed the transaction for Rosatom. Moscow wanted Uranium One Inc. "to be transformed into a global growth platform."
This had to sound lucrative to Canadian investors, though Zhivov admitted there was a "hard road ahead" to prove that "a Russian state-owned company can... play by the rules of the modern developed world."
Speaking out is perfectly legal. Abusing the court system to harass the truthful is called abuse of process and it’s not legal. The lawyers who have been trying this on me surely must know that.
Russia wanted the deal for commercial and strategic reasons. The Canadian investors wanted the deal because it stood to make them richer. But politics in the United States would prove critical. Because uranium is a strategic industry, the Russian purchase of a Canadian company holding massive US assets required US government approval.
Playing a central role in whether approval was granted was none other than Hillary Clinton. When the Uranium One deal was announced in June 2010, news of the bid "panicked some shareholders and alarmed industry observers worried that the Vancouver-based company might end up serving the Kremlin's strategic interests," as one Canadian newspaper put it.
The Kremlin went into full public relations mode. It dispatched Russian ambassador to the United States Sergey Kislyak to meet with mining executives in Colorado to soothe concerns about the deal. "Do you mind some investment? It is a normal commercial operation-not something that is operating on any political guidance," he said in an interview. "It doesn't matter whether it is uranium or steel or oil or gas," Kislyak said. "What is important is that the positive ties between our two countries seem to be getting more and more expanded. Politically, that is very important.”
Kislyak's distinction between business and politics is highly misleading: the funds for the Uranium One acquisition came from Putin directly and were approved by the Russian President. And of course Russia has a history of using natural gas and energy exports to neighboring countries as a political tool.
Four senior congressmen-Peter King of the Homeland Security Committee, Ileana Ros-Lehtinen of Foreign Affairs, Spencer Bachus of Financial Services, and Howard McKeon of Armed Services-voiced grave concerns about the deal. They were troubled by Rosatom's "activities-and the context within which it operates in Russia-[which] should raise for United States national security interests.”
The fact that Rosatom had helped Iran in building the Bushehr nuclear "should raise red flags... Although Uranium One USA officials are reportedly skeptical that the transaction would result in the transfer of any mined uranium to Iran, we remain concerned that Iran could receive uranium supplies through direct or secondary proliferation," they wrote. "We believe the take-over of essential US nuclear resources by a government-owned Russian agency... would not advance the national security interests of the United States.”
Wyoming senator John Barrasso also, wrote a letter to the Obama administration raising concerns about Russian control of uranium assets in his state, citing Russia's "disturbing record of supporting nuclear programs in countries that are openly hostile to the United States, specifically Iran and Venezuela.”
In short, a bipartisan group of congressmen felt that Russia could not be trusted to allocate US uranium in keeping with US nuclear interests. Then congressman Ed Markey pushed a bill in the House with Congressman Jeff Fortenberry, "expressing disfavor of the Congress regarding the proposed agreement for cooperation between the United States and the Russian Federation."
Markey said, "Russia continues to train Iranian nuclear physicists, supply sensitive nuclear technology to Iran.... Does Russia want cooperation with the United States, or with Iran and Syria? Because it can't have both.”
In light of the obvious national security concerns, Uranium One and Rosatom officials offered concessions. Uranium One, for example, did not have an export license from the Nuclear Regulatory Commission (NRC) allowing it to ship uranium outside of the United States. Supporters of the deal argued, therefore, that no one should fear that American uranium might end up in, say, Iranian reactors. But in correspondence with the NRC, Uranium One executives did not rule out trying to obtain an export license in the future.
They could only say that "Uranium One does not intend today (and does not envision in the foreseeable future) any export of uranium from the United States derived from the Uranium One U.S. Facilities."
Despite the glaring concerns, the Russian majority control purchase of Uranium One was approved by the Committee on Foreign Investment in the United States (CFIUS). CFIUS is a small and somewhat secretive executive branch task force created in 1975 to evaluate any investment transactions that might have a direct effect on American national security.
Besides the secretary of state, CFIUS includes cabinet officials such as the secretary of defense, the secretary of homeland security, and the treasury secretary. CFIUS wields enormous power to stop or limit investment deals.
Ironically, Uranium One officials, after CFIUS approved the deal, did mention global markets as an important reason why the deal made sense. Donna Wichers, Uranium One Senior Vice President, said her company is pushing for uranium mines in Wyoming with an eye toward growing markets both in the United States and abroad as countries plan for new nuclear power reactors. “We've got China-they're looking at opening 500 nuclear power plants in the next 40 years: India-several hundred... So you can see worldwide there is a huge demand for nuclear power.”