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Cash Flowed to Clinton Foundation Amid Russian Uranium Deal

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.

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.

https://static01.nyt.com/images/2015/04/23/us/clinton-foundation- donations-uranium-investors-1429749669022/clinton-foundation- donations-uranium-investors-1429749669022-master495-v3.png

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.

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.

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

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