The headline on the website Pravda trumpeted President Vladimir 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 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 U.S. 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 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 U.S. government agencies. Among the agencies that eventually signed off was the State Department, then headed by 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 Hillary 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, Bill Clinton received $500,000 for a Moscow speech from a Russian investment bank with links to the Kremlin that was promoting Uranium One stock.
The New York Times’ 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.” 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 a role in the approval of the uranium deal is unknown. But the episode underscores the special 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 U.S. foreign policy as secretary of state.
In a statement, Brian Fallon, a spokesman for Hillary 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 U.S. 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.
A seat at the table
The path to a Russian acquisition of U.S. uranium deposits began in 2005 in Kazakhstan, where Canadian mining financier Frank Giustra orchestrated his first big uranium deal, with Bill Clinton at his side.
The two men had flown aboard Giustra’s private jet to Almaty, Kazakhstan, where they dined with the authoritarian president, Nursultan Nazarbayev. Clinton handed the Kazakh president a propaganda coup when he expressed support for Nazarbayev’s bid to head an international elections monitoring group, undercutting U.S. foreign policy and criticism of Kazakhstan’s poor human rights record by, among others, his wife, then a senator.
Within days of the visit, 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, 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 Corp. and its uranium holdings in Wyoming, Texas and Utah.
Still, the company’s story was hardly front-page news in the United States — until early 2008, in the midst of Hillary Clinton’s failed presidential campaign, when The Times published an article revealing the 2005 trip’s link to Giustra’s Kazakhstan mining deal. It also reported that several months later, Giustra had donated $31.3 million to Bill Clinton’s foundation.
In a statement released after this article appeared online, Giustra said he was “extremely proud” of his charitable work with Bill Clinton, and he urged the media to focus on poverty, health care and “the real challenges of the world.”
Although the article quoted the former head of Kazatomprom, Moukhtar Dzhakishev, as saying that the deal required government approval and was discussed at a dinner with Nazarbayev, Giustra insisted that it was a private transaction, with no need for Bill Clinton’s influence with Kazakh officials. He described his relationship with Bill Clinton as motivated solely by a shared interest in philanthropy.
As if to underscore the point, five months later Giustra held a fundraiser 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.
Arrest and progress
By June 2009, Uranium One’s stock was in free-fall, down 40 percent. 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 Giustra’s UrAsia and now owned by Uranium One.
Privately, Uranium One officials were worried they could lose their joint mining ventures. U.S. diplomatic cables made public by WikiLeaks also reflect concerns that Dzhakishev’s arrest was part of a Russian power play for control of Kazakh uranium assets.
At the time, Russia was already eyeing 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 U.S. Embassy in Kazakhstan, as well as Canadian diplomats, to take up its cause with Kazakh officials, according to the U.S. cables.
“We want more than a statement to the press,” Paul Clarke, a Uranium One executive vice president, told the embassy’s energy officer June 10, the officer reported in a cable. “That is simply chitchat.”
What the company needed, Clarke said, was official written confirmation that the licenses were still valid.
The U.S. Embassy ultimately reported to the secretary of state, Hillary Clinton. Although the Clarke cable was copied to her, it was given wide circulation, and it is unclear if she would have read it.
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 U.S. government to sign off on the deal.
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 a U.S. business or asset deemed important to national security.
When ARMZ, an arm of Rosatom, took its first 17 percent stake in Uranium One in 2009, the two parties signed an agreement to seek the committee’s review. But it was the 2010 deal, giving the Russians a controlling 51 percent stake, that set off alarm bells.
Sen. John Barrasso, a Republican from Wyoming, where Uranium One’s largest U.S. 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.”
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, Sergei Kiriyenko, sought to reassure Uranium One investors, promising that Rosatom would not break up the company. Another Rosatom official said that it did not intend to increase its investment beyond 51 percent and that it envisioned keeping Uranium One a public company.
The ultimate authority to approve or reject the Russian acquisition rested with the Cabinet officials on the foreign investment committee, including Hillary Clinton — whose husband was collecting millions in donations from people associated with Uranium One.
Before Clinton could assume her post as secretary of state, the White House demanded that she sign a memorandum placing limits on her husband’s foundation’s activities. To avoid the perception of conflicts of interest, beyond the ban on foreign government donations, the foundation was required to disclose all contributors.
To judge from those disclosures, the only Uranium One official to give to the Clinton Foundation was 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.
But a review of tax records in Canada, where 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.
His donations through the Fernwood Foundation included $1 million reported in 2009, the year his company appealed to the U.S. 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. Telfer said that his donations had nothing to do with his business dealings and that he had never discussed Uranium One with Bill or Hillary Clinton. He said he had given the money because he wanted to support Giustra’s charitable endeavors with Bill Clinton.
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.
Amid this influx of Uranium One-connected money, Bill 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 was paid by Renaissance Capital, a Russian investment bank with ties to the Kremlin.
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.
It started out well. The two countries made progress on nuclear proliferation issues, and expanded use of Russian territory to resupply U.S. 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 U.N. 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 approved in October, following what two people involved in securing the approval said had been a relatively smooth process.
The Clinton campaign spokesman, Fallon, said that in general, these matters did not rise to the secretary’s level. He would not comment on whether 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, Fernandez said, “Mrs. Clinton never intervened with me on any CFIUS matter.”
Despite pledges to the contrary, Uranium One was taken private. As of 2013, Rosatom’s subsidiary, ARMZ, owned 100 percent of it.