How a Young Anti-Nuclear Activist Grew Up
to Become a Pro-Nuclear President
“To put an end to Cold War thinking, we will reduce the role of nuclear weapons in our national security strategy, and urge others to do the same.… We must harness the power of nuclear energy on behalf of our efforts to combat climate change, and to advance peace opportunity for all people.”1
—Barack Obama, 2009
Deep under a college football stadium at the University of Chicago, the very first controlled nuclear chain reaction took place on December 2, 1942. Physicists first harnessed uranium fission and the United States became the world’s first nuclear power.2 Chicago would later become the headquarters of Exelon Corporation—one of the world’s most powerful nuclear conglomerates—and the home of the forty-fourth U.S. president: Barack Obama.
A few hundred miles south of Chicago, in Metropolis, Illinois, a conversion facility processed the Russian uranium after it had been stripped from Soviet missiles under the Clinton-era Megatons to Megawatts deal. The facility was run by Fortune 100 industrial behemoth Honeywell International Inc. Honeywell converted the Russian uranium into reactor fuel, then shipped it off to power the nuclear plants for utility companies like Exelon.3
The taxpayer-subsidized Megatons to Megawatts program was highly profitable for the utilities and even more so for the Kremlin. But Russia’s fortunes had waned under the Bush administration, and Putin’s aggression in Georgia jeopardized the nuclear dealings of the conglomerates like Honeywell and Exelon, who enjoyed the cheap fuel supply from Russia.
The Chicago and Metropolis nuclear money fueled the rise of the Obama political network.4 The conglomerates funneled massive sums to Obama and his inner circle even before he was elected U.S. senator in 2004. When Obama ran for president, Exelon’s and Honeywell’s contributions and lobbying expenditures ramped up significantly.5
Their years of investment in Obama and his closest advisors granted the conglomerates unprecedented access to the White House and returned substantial financial benefit in the form of green energy handouts and favorable nuclear energy policies. Obama’s Russia reset provided well-connected nuclear utilities an additional windfall.6
Like Putin and the Uranium One stakeholders, Obama’s nuclear benefactors—especially Exelon—had reason to rejoice when American uranium fell under Russian control. And like the Clinton Foundation, the post-presidential Obama Foundation reaped a big nuclear payday: Exelon was among the first to donate $1 million to the Obama Foundation (they pledged an additional $10 million, also making them one of the largest single donors).7
While Obama seemed particularly pro-nuclear, his propensity toward all things atomic had limits. Since his college days at Columbia University, Obama had dreamed of a world without nuclear weapons. Once president, he worked toward his near-lifelong goal of “going to zero”—dismantling the nuclear arsenal through arms reductions or “disarmament.”8 Putin could not have gotten luckier and, under the reset, he secured almost every item on his nuclear wish list by exploiting Obama’s weaknesses.
While Obama was stripping the U.S. of its nuclear deterrents and crippling domestic energy producers, Putin was bolstering Russia’s arsenal and cornering global energy markets. Obama must have known this, but he continued to disarm the U.S. anyway via toothless nuclear treaties. All the while, Putin cheated and breached such treaties repeatedly and, furthermore, sought to create an American dependency on Russian uranium. Evidently, Putin’s customers—the conglomerates like Exelon and other American utilities—were willing to trade short-term profits for that long-term dependency on Russia.9
An Activist Goes to Washington
In 2004, Obama was elected to the U.S. Senate. Having grown up during the Cold War, he was passionate about nuclear disarmament and had been for a long time. Even as a junior senator, Obama knew more about Russian nuclear deals than most people and, early on, made nonproliferation one of his primary goals. To boost his foreign policy bona fides, Senator Obama traveled to Russia in 2005 to inspect Soviet-era nuclear weapons facilities and materials.10
Obama and his delegation were detained at an airport in the Ural Mountains for hours by the Russian authorities. It is unclear if Senator Obama was already familiar with the Kremlin’s notorious brinkmanship antics, but it must have been an uncomfortable introduction to U.S.-Russia relations for the junior senator. More importantly, the trip allowed Obama to confirm Putin’s nuclear ambitions and his nuclear facilities in person (though Obama did not meet with Putin directly on this trip).11
After that trip to Moscow, Obama talked nobly (if naïvely) about collaborating with Russia “to dismantle these arms and create a more peaceful and safe future for…people all around the world.”12
As mentioned, Putin had been forced by constitutional constraints to step aside as president. Thus, his protégé Dmitry Medvedev, who was younger and more diplomatic than Putin, became his successor. Meanwhile, Putin continued pushing his agenda behind the scenes. Medvedev gave the outward appearance (particularly to the U.S.) that Russia was moving closer toward a pro-globalist democracy.13
In reality, newly elected President Medvedev oversaw the Georgia invasion and even issued a presidential decree recognizing Abkhazia and South Ossetia as independent states—an action condemned by the West. This lent credence to suspicions that Medvedev was just keeping Putin’s seat warm. These skeptics included Hillary Clinton, who in 2009 assumed the role of Secretary of State.14
By 2009, Russia desperately needed to reset the deteriorating relationship. Hostility at home and abroad during the Bush administration had created economic uncertainty amid threats of sanctions by Western nations. But Putin needed the West. The Russian economy depended on Western money, Western technology, and the West’s willingness to do long-term business with Russia.15
President Obama and Secretary Clinton were both essentially globalists, but Clinton was a liberal hawk with a more interventionist bent than Obama. Unlike Hillary, who is almost fourteen years older and grew up in a conservative town (and was a self-described “Goldwater girl”), Obama was a product of the postmodern left and his views were those of the liberal faculty lounge.16
Obama sincerely believed that the United States had shown arrogance in its relations with the world and publicly said so during his famous global “apology tour” in 2009.17 He apparently believed that the world was entering a new era of global cooperation, such that America should cede its role as global policeman and lead not from the front, but (as his advisor put it) “from behind.”18
But Obama’s idealism was not unmixed. As the product of the Chicago Democratic machine, he also had a certain hard-edged political realism, especially where his donors and supporters were concerned. People had to be rewarded for their loyalty. It is therefore not surprising that some of the wealthiest and most loyal benefactors from his days in Chicago, many of whom had significant nuclear operations, benefitted immensely from his plans for a diplomatic “reset” with Russia.19
The “reset” officially started forty-five days into President Obama’s administration as he dispatched Secretary Clinton to Geneva to meet on March 6, 2009, with Russian Foreign Minister Sergey Lavrov.20 With cameras rolling to record the event, Clinton presented Lavrov with a chintzy red emergency stop button that had actually been swiped from a hotel swimming pool or jacuzzi. They stuck the English word “reset” and the Russian word “peregruzka” onto the stolen button using a cheap label-maker.21
“We worked hard to get the right Russian word. Do you think we got it?” Clinton asked Lavrov. “You got it wrong,” said an amused Lavrov. “This says ‘peregruzka,’ which means ‘overcharged.’” Clinton laughed sheepishly and quickly recovered, “We won’t let you do that to us, I promise.”22
Obama’s deference to other world leaders and willingness to literally bow to them matched Hillary Clinton’s eagerness to take their money. In short, these were people with whom Putin could do business.23
Spy Ring Cover-up
A year later, President Obama sat at the head of the table in the situation room and he was furious. Deputy National Security Advisor John Brennan called the meeting on June 18, 2010, to inform the president that his intelligence chiefs planned to bust a Russian spy ring. The top brass were all in attendance, including Obama’s Defense Secretary, Robert Gates, who recalled the scene.24 But Gates and his colleagues were not prepared for the reaction they got from the president.
“Just as we’re getting on track with the Russians, this? This is a throwback to the Cold War,” Obama fumed. “This is right out of John le Carré. We put START, Iran, the whole relationship with Russia at risk for this kind of thing?”25
The tension in the room was palpable. In Gates’ account, Obama did not seem overtly angry at the Russians’ duplicity; he was not raging about Putin’s blatant disrespect and mockery of the recent diplomatic efforts. Instead, Obama was mad at American law enforcement officials for their audacity in creating a PR fiasco at the same time he was trying to bring Russia to the negotiating table to reduce weapons stockpiles, to increase civilian nuclear trade, and to cooperate on the upcoming Iran nuclear deal.26
The situation needed to be contained.
The Russian spies—operating in Washington, D.C., Manhattan, and Boston—had gotten too close to former top intelligence officials (including a Clinton administration Megatons to Megawatts negotiator and a scientist designing bunker-busting bombs). Secretary Clinton’s inner circle was targeted successfully, and one of her major financial backers had potentially been compromised.27
Obama’s advisors were divided. On one side were CIA Director Leon Panetta and FBI Director Robert Mueller. Panetta wanted to rescue their informant, a Russian asset who had exposed the domestic spy ring, and Mueller wanted to arrest the Russian sleeper agents. On the other side were the White House and the State Department, who wanted to keep the whole thing quiet.28
Vice President Joe Biden, National Security Advisor Tom Donilon, and the “diplomatic players” agreed with the president. Biden and Donilon strongly argued in favor of sweeping the illegal spy ring under the rug. Without a hint of irony, Biden said, “Our national security interest balance tips heavily to not creating a flap.” Obama’s top officials apparently believed that bowing to Russia was in the best interests of U.S. national security and that punishing Russian spies would “blow up the relationship.”29
Everyone agreed that busting the spy ring would blindside Medvedev, who was set to meet with Obama within days. But ignoring the spies or even letting them off the hook presented a dilemma in itself. Defense Secretary Robert Gates offered a solution: meet privately with Medvedev and reveal the real names and ranks of the nearly one dozen Russian spies and demand that they be recalled to Russia quietly and immediately. Obama did not want to embarrass Medvedev and agreed to Gates’ soft-touch proposal.30
After Obama left the situation room, the advisors deliberated a bit more and agreed that the plan would still put Medvedev in a tight spot.31 They decided that it was probably best to quietly “exfiltrate” their informant and deport the Russian agents without informing Medvedev.32 That way everyone was happy.
On June 27, 2010, ten of the Russian spies were quietly rounded up and deported. They returned to Russia in exchange for four Russian prisoners accused of spying for the West. It was a lopsided trade to say the least, particularly because the U.S. was unable to secure the release of a single American prisoner.33
Meanwhile, the Russian illegals, including the notorious femme fatale Anna Chapman, returned to Russia and Putin gave them a hero’s welcome.34 Then, in October, the spies were awarded the Order of Merit for the Fatherland—Russia’s highest award—by President Medvedev.35
Putin’s welcome home party for the agents was a direct slap in the face to the United States. Obama was desperately trying to downplay the threat they had posed, yet the Russian president gave them a very public national award ceremony. Putin even issued a thinly veiled threat to the FBI and CIA’s informant (and any potential co-informants). “It was the result of treason,” Putin said of whoever was responsible. “It always ends badly for traitors: as a rule, their end comes from drink or drugs, lying in a ditch. And for what?”36
Putin’s statement was essentially a promise of retaliation against the informant(s). In fact, as more Russian officials began to die under mysterious circumstances, the word “Putincide” became the unofficial term for such deaths among U.S. intelligence circles.37
In sum, the Russian reset was clearly a joke to Putin, and for obvious reasons. To him, Obama’s weakness was on full display, and Hillary (and Bill) Clinton’s own vulnerabilities would one day be exploited.
Putin’s Nuclear Wish List
As revealed by his anger in the situation room, President Obama’s primary goal with the Russian reset was to achieve nuclear deals. In fact, all the major concessions that Obama gave Putin were nuclear-related in one form or another.
· Scrapping the Bush missile defense plan was tied to mitigating Iran’s nuclear ambitions.
· The New START treaty was for nuclear disarmament.
· The 123 Agreement allowed Rosatom to sell nuclear materials directly to U.S. utility companies.
· The Iran nuclear deal and other denuclearization efforts in Iran, Libya, and North Korea sent hundreds of thousands of tons of uranium to Russia.
· The administration ignored multiple Russian espionage, bribery, kickbacks, and money-laundering conspiracies—all targeting the American nuclear industry.
· Even the Skolkovo project—“Russia’s Silicon Valley”—had nuclear implications.
· The Uranium One purchase approval allowed Putin to all but corner the global nuclear fuel market.
Perhaps the earliest and most controversial concession that President Obama made to the Russians was scrapping an American-European cohosted missile defense program that began under the Bush administration.38 All other concessions flowed from there.
Russia’s invasion of Georgia in 2008 had made its neighbors nervous.39 The Bush administration worked closely with Poland and the Czech Republic on a system of ground-based interceptors (GBIs) that would simultaneously keep the Russians and the Iranians in check. Poland especially welcomed the Bush plan for a European missile defense shield as essential to its national security.40
Yet, just a few weeks into his presidency, Obama sent a secret letter to Medvedev offering to effectively cancel the Bush plan in exchange for Russia’s help neutralizing the Iranian threat. The New York Times first reported on the hand-delivered letter and described it as a potential “quid pro quo,” but Obama disputed the characterization.41
Obama ordered Secretary Gates to draft a proposal that halted the expansion of Eastern European missile defense, which some viewed as a way to appease the Russians. Gates was a Republican holdover from the Bush administration, so Obama sometimes relied on Gates’ credibility as political cover. Thus, Gates was trotted out to defend Obama’s secret proposal when details were leaked to the New York Times. That leak “made us look like a bunch of bumbling fools, oblivious to the sensitivities of our allies,” Gates later lamented.42
In fact, Gates had recommended the missile defense system to President Bush in the first place. Gates was an expert on missile defense policy, and Obama relied on his justification and public support to reverse course.43 Gates was also a CIA man, through and through.
The CIA first recruited Gates in 1966.44 It was around that time that the U.S. began working on robust missile defense systems to counterbalance the Soviet missile threat.45 Gates became an officer in the Air Force and provided intelligence briefings on intercontinental ballistic missiles (ICBMs) during the late 1960s.46
Nixon signed the first Anti-Ballistic Missile (ABM) Treaty with the Soviet Union in 1972, imposing strict limits on missile defenses.47 But Ronald Reagan’s Strategic Defense Initiative (also known as “Star Wars”) gave U.S. missile defense a major boost in 1983. As Reagan’s deputy director at the CIA, Gates played a role in the development of a “‘shield’ for the United States against an all-out Soviet attack.”48
As part of the so-called “Peace Dividend” of defense spending cuts following the collapse of the Soviet Union, funding for SDI missile defense plummeted under President Clinton, who effectively cancelled the program in 1993.49
In 2002, President George W. Bush unilaterally withdrew from the 1972 ABM treaty amid growing threats from “rogue” nations, particularly Iran and North Korea. Robust missile defense systems were once more on the table. Putin’s duplicity, the weaponization of energy, aggression toward Russia’s neighbors, and assistance to hostile regimes all made missile defense a growing priority in the years before Obama’s presidency.50
Since Reagan’s announcement of the Star Wars program, most Democrats were opposed to increasing U.S. missile defenses against the Soviets and most Republicans were in favor. But by the time Obama took office, amid mounting Russian aggression and potential rogue actions by other nations, most members of Congress supported some form of limited missile defense.51
Putin viewed Bush’s nullification of the 1972 ABM treaty as yet another example of U.S. bullying. He resented the West “throwing their weight around.” Also, any American advance, in Putin’s mind, put Russia at a strategic disadvantage.52
Fortunately, in Barack Obama, Putin had a president who believed that the U.S. must atone for the “darker periods in our history,” as he called them. “We have not been perfect,” Obama told the Muslim world just days after his inauguration in January 2009.53
“At times we sought to dictate our terms,” he told an audience of the world’s most powerful countries in April 2009. “I would like to think that with my election and the early decisions that we’ve made,” Obama continued, “that you’re starting to see some restoration of America’s standing in the world.”54
For Putin, that meant his nuclear strategy had hit a major breakthrough.
Obama had long dreamt of a world without nuclear weapons. As a college student, he wrote his senior-year thesis on Soviet nuclear disarmament. He strongly supported disarmament initiatives to turn weapons-grade uranium into civilian reactor fuel. As a U.S. senator and presidential candidate, Obama made the elimination of nukes, or “going to zero,” a top priority.55
As president, Obama praised past efforts to take “concrete steps towards a world without nuclear weapons.” Obama believed that the U.S. had a responsibility—or even a moral obligation—to do so.56
But Putin was unlikely to give up all his nuclear weapons, and any suggestion to the contrary was almost comically naïve. Nonetheless, in 2009 President Obama began negotiating a disarmament treaty that would replace the 1991 Strategic Arms Reduction Treaty, or START I.57
Obama signed the New START with President Medvedev on April 8, 2010. Again, Putin made a mockery out of Obama’s effort. Defense Secretary Gates informed Obama, “at the exact moment of the signing ceremony, the Russian military had been conducting a nuclear attack exercise against the United States.” A nice Putin touch, Gates thought.58
As Congress began debating Obama’s proposed New START treaty, on May 10, the president resubmitted the U.S.-Russian civilian nuclear agreement (or the “123 Agreement”). The Atomic Energy Act of 1954 prohibits American companies from trading nuclear materials, technology, and services with foreign governments unless that government has signed a special cooperation agreement with the United States. Section 123 of the Atomic Energy Act defined the criteria for nuclear cooperation and trade, hence the nickname of the agreement.59
President Bush had first submitted a Russian 123 Agreement in May 2008 but scrapped the plan after Russia invaded Georgia in August 2008. President Obama reassured Congress in a letter that the situation in Georgia should no longer be considered an obstacle. Obama believed that “the level and scope of U.S.-Russian cooperation on Iran [were] sufficient to justify” the 123 Agreement.60
Opponents, including Representative Ileana Ros-Lehtinen (R-FL), objected to the agreement because of Russia’s shady nuclear dealings with Iran. But, Obama’s allies controlled Congress and the opponents were unable to block the deal, which became official on December 9, 2010.61
The 123 Agreement had been a major priority for the Kremlin long before 2008. The deal allowed Rosatom and its subsidiaries to sell “nuclear material, technologies and equipment, as well as services” directly to American companies. Furthermore, Obama and Medvedev agreed that the U.S. and Kremlin would facilitate these “commercial relations.”62
Obama’s State Department, led by Secretary Clinton, said that the agreement “will support commercial interests by allowing U.S. and Russian firms to team up more easily in joint ventures.” The Uranium One deal had 123 Agreement implications, and the approval of both (after heavy lobbying) meant that the Russian nuclear complex was poised to reap substantial benefits from Obama’s reset policy.63
But Rosatom and the Russians were not the only corporation to profit from increased nuclear cooperation. Obama’s oldest and closest corporate allies lobbied for the 123 Agreement and were among its largest beneficiaries.
Obama’s Nuclear Roots
With so many nuclear concessions to Putin, especially the questionable Uranium One sale, many in Washington wondered why Obama caved so spectacularly.
Obama’s critics consistently hammered him on his weak Russia policy throughout his first term. As news of Obama failures continued to trickle out through 2016, former counterintelligence officer John Schindler reported, “Hillary’s secret Kremlin connection is quickly unraveling.” Former federal prosecutor Andrew C. McCarthy wrote that the Uranium One deal compromised U.S. national security and was not just a Clinton scandal, but also “an Obama-administration scandal.” Even the left-leaning Brookings Institution implored their subscribers not to “rehabilitate Obama on Russia,” and laid bare how the Obama administration “consistently underestimated the challenge posed by Putin’s regime.”64
The administration’s explanation was repeatedly summed up in a single word: “reset.”65
But why was the reset so important for Obama? Was he just being naïvely idealistic? Was he blinded by communist sympathies? Were there perhaps any commercial motivations? All appear to be contributing factors.
Before Obama got into politics, he was a local community organizer and political activist in Chicago.66 He was also, like many on the left, a strong supporter of nuclear disarmament. Young Obama followed the antinuclear movement and interviewed the activists who attended rallies and marches calling for a reduction in U.S. nuclear stockpiles. At Columbia, he sympathized with and promoted groups like Arms Race Alternatives (ARA), Students Against Militarism (SAM), and Students Against Nuclear Energy (SANE) in the student newspaper.67 For his senior-year seminar thesis, Obama wrote about the nuclear standoff between the U.S. and the Soviet Union, and the prospects of disarmament.68
In 1983, Obama penned an article for Columbia’s Sundial student magazine promoting the Nuclear Freeze movement. “The Freeze is one part of a whole disarmament movement,” Obama wrote, quoting an ARA activist. “The lowest common denominator, so to speak.” The activist also suggested that diverting government spending toward social welfare programs “may dispel the idea that disarmament is a white issue.”69
In early 1985, Obama got a job at the New York Public Interest Research Group (NYPIRG), a nonprofit think tank.70 Antinuclear and environmental activist Ralph Nader founded the national organization, U.S. PIRG, in 1970 to research and advocate for consumer and environmental reform.71
Even though Obama’s supervisor was impressed with his ambitions, his efforts to bring about meaningful change in the Big Apple did not bear fruit and he needed a change of scenery. Although his supervisor wanted him to stay because “it was rare to get such a thoughtful organizer,” he had already made up his mind and began looking for work elsewhere.72 Soon he saw an ad for a community-organizing job in Chicago.73
Jerry Kellman, a white Jewish community organizer, had been looking for a black face to appeal to communities on the south side of Chicago.74 Kellman would become the first of several influential Obama mentors and showed him how to work the streets of Chicago, a city that has long been notorious for its corrupt political machine.75
Welcome to the Machine
Before Obama moved to Illinois, his nuclear stance was purely ideological. Once he entered Chicago politics, his nuclear interests soon became commercial.76 The experience that he gained within Chicago’s corrupt political culture would hone his skills of mutual back-scratching and palm-greasing to cut through the red tape of bureaucracy.77
Bettylu Saltzman was one of the first powerful Chicagoans to meet Obama and see his political potential. “I told everyone I knew about this guy,” Saltzman later said. “Everyone” turned out to be the most wealthy and elite families in Chicago and beyond. Saltzman opened the doors for Obama to the Pritzker real estate dynasty, the Crown business empire, the MacArthur Foundation, and other influential liberal organizations. Her vast network of connections formed the financial base of Obama’s political future.78
Saltzman also introduced Obama to some of Chicago’s winning political strategists. Soon, Obama added political heavyweights like David Axelrod, Rahm Emanuel, Valerie Jarrett, David Plouffe, and investor John Rogers Jr. to his expanding “golden Rolodex.”79 Obama’s new friends showed him how to make money as an activist. He learned that with enough political power, he could do good and do well.80
Young Obama had bounced from one tiny apartment to another, all in impoverished neighborhoods (“drug-ridden,” as one biographer described) and with spartan décor. When he moved to Chicago, he “outfitted the apartment for monkish living,” just as he had done in New York with “a bed, a bridge table, a couple of chairs, and some books.”81
Shortly after their marriage in 1992, Barack and his new wife, Michelle, purchased a modest apartment in the city’s Hyde Park neighborhood for $277,500. Twelve years (and a few electoral victories) later, the Obamas bought a three-story brick mansion and the adjacent lot.82
The “Kenwood house” was the couple’s dream home, but it came with a steep price tag. The list price of the home was $1.95 million, but with the stipulation that the buyer must also purchase an adjacent empty lot listed for $625,000—a package deal totaling more than $2.5 million. But in 2005, the Obamas only paid $1.65 million, and the wife of a political donor named Antoin “Tony” Rezko paid for the difference.83
Rezko was among Obama’s earliest and most active donors. Rezko first offered Obama a job while he was still at Harvard Law in the early 1990s. Obama declined, but when he returned to Chicago, he got a job at the Davis Miner law firm where he did legal work for Rezko’s development company.84
Rezko was eager for Obama to run for office and raised hundreds of thousands for Obama’s early campaigns. A Syrian émigré, he had an engineering background and designed nuclear reactors before betting on Chicago real estate (and politicians). The Rezko relationship gained scandalous notoriety when Obama confessed that Rezko and his affiliates had concealed more donations than originally disclosed.85
Rezko had also been a major donor and advisor to former Illinois Governor Rod Blagojevich. His political influence operations later led to a conviction on sixteen criminal charges ranging from fraud to money laundering and bribery.86
The scandal-plagued Rezko relationship and the tainted money that flowed therefrom could have destroyed Obama’s presidential ambitions and possibly his entire political career.87 He would not be so careless in the future.
Chicago’s Nuclear Oligarchs
Chicago is home to some of the largest corporations in the world, notably Boeing, United Airlines, Walgreens, Kraft, Heinz, Allstate, and McDonald’s. The largest nuclear utility company in the United States is also based there: Exelon Corporation.88
Most Americans have never heard of Exelon. Yet the company provides electricity to tens of millions of customers in forty-eight states, D.C., and Canada (about ten million residential, commercial, and industrial accounts). Eleven of the nearly one hundred nuclear reactors in the United States are in Illinois.89
If Illinois were a country, it would rank twelfth on the list of “most nuclear reactors”—ahead of Sweden, Belgium, and Germany. Exelon owns all of those reactors—plus half a dozen more across the United States—and fuels them with Russian uranium. With more than $30 billion in annual revenues (and over $110 billion in assets), Exelon is, by far, the largest power company in the United States.90 However, their corporate history is rife with cronyism.
By the end of the twentieth century, the Clinton administration had dramatically transformed the U.S. electric utility industry. The changes have been described as “deregulation” on a massive scale.91 But in reality, power utilities became more regulated than ever. This “restructuring” led to major consolidations in an already monopolistic industry. The net result was that, over time, investor-owned utility behemoths reaped billion-dollar windfalls, devoured their competitors, and produced “little discernable benefit to consumers.”92 Putin ran a similar play a few years later, but with less of the “free market” messaging.
Exelon Is Born, Swaddled in Cronyism
Exelon was formed in 2000 via merger, which was structured by Clinton’s former senior advisor, Rahm Emanuel (and conveniently implemented by Clinton’s former Energy deputy and FERC chairwoman, Elizabeth “Betsy” Moler, whom Exelon hired as a senior executive and top lobbyist). After Emanuel left the Clinton administration in 1998, he got a lucrative job as a managing director at the Chicago office of an elite investment banking firm called Wasserstein Perella & Co. (“Wasserstein”).93
Wasserstein hired Emanuel “despite [his] having no previous education in finance…and no experience in investment banking.” Years earlier, Emanuel had been instrumental in ramming the North American Free Trade Agreement (NAFTA) through Congress, and with his hire came the deep-pocketed clients that he met while working for Clinton.94
Emanuel’s Democratic connections proved to be worth every penny to the Chicago investment firm, and he quickly became the point man on deals “subject to heavy government regulation.”95
Chicago billionaire Lester Crown was an associate of Emanuel’s and introduced him to Chicago’s most powerful utility executive: John W. Rowe.96 At that time, Rowe was uncertain that it was legal (or even possible) to merge multibillion-dollar utility companies.97 “Every deal starts with a list of reasons why it can’t get done,” recalled an Exelon board member. “And I can’t think of a deal that had more unsolvable obstacles than that one.”98
The Clinton administration’s so-called energy “deregulation” and the FERC’s complex restructuring rules had not only created uncertainty in the industry, but also kicked off a feeding frenzy for utility companies. Ever the opportunist, Emanuel adroitly “deployed his skills as a born negotiator” and cashed in. According to Politico, Emanuel’s “signature transaction was the $16 billion merger” that created the Exelon conglomerate.99
Emanuel navigated the bureaucratic crosscurrents and got the multibillion deal done. Rowe had pulled off an unlikely merger in near-record time.100 The Exelon deal provided Wasserstein an equity stake in the nuclear utility, but only for a brief moment.
Suddenly, in September 2000, the German Dresdner Bank bought Wasserstein for $1.37 billion in stock. This deal happened a couple of months after the Exelon merger and netted Emanuel much of his Wall Street windfall. Over time, Dresdner began making nine-figure loans to Exelon and advising them on their acquisitions.101
Without Emanuel’s political connections, a foreign bank’s entrée into complex American nuclear financing might have been risky. Dresdner’s troubling connection to Putin included the widely condemned plunder of Russia’s largest oil company. In late 2004, Dresdner (which had become Dresdner Kleinwort Wasserstein) helped Putin strip Yukos of its assets. Dresdner’s man in Russia—Putin’s ex-Stasi comrade Matthias Warnig—worked the politically fraught Yukos takeover at the same time that Dresdner was saddling Exelon with debt.102
Very soon, Exelon was making deals directly with Putin’s Rosatom. But they would again need their Chicago political connections to open the doors.
Obama’s “Backroom Deal” and Axelrod’s “Astroturf”
Rowe became a generous new fundraiser for Emanuel and Obama and a windfall for Obama’s closest allies. Obama’s old friend John Rogers Jr. became a well-paid Exelon board member. Exelon and its interests also hired Obama’s top strategist, David Axelrod. Exelon’s proxies paid Axelrod’s firm to run a $15 million propaganda campaign.103
Exelon paid Axelrod to convince lawmakers that utility rate hikes were, counterintuitively, in their constituents’ best interests. This sounded like, at best, a challenging feat. But with a $15 million budget, Axelrod could sell just about anything.104
Axelrod was an acknowledged expert at creating the appearance of grassroots support through a practice known as “astroturfing.” In 2006, an Exelon subsidiary formed an organization called Consumers Organized for Reliable Electricity (CORE). CORE literature claimed that they were an innocuous “coalition of individuals, businesses and organizations,” but CORE was really funded entirely by Exelon interests and staffed accordingly.105
CORE carpet-bombed the airwaves with subtle advertisements warning of a vague but impending “California-style energy crisis” in Illinois if the utility’s rate hikes (a nearly 25 percent increase on each residential consumer’s monthly bill) were not approved by legislators. Illinois Senate President Emil Jones (D-Chicago)—an Obama mentor and fellow recipient of Exelon largesse—used a procedural maneuver to allow the rate hikes to proceed.106
Axelrod’s astroturfing strategy found its way into Obama’s playbook (the technique was used to push Obamacare through, for example) and helped cement the strategic benefit of their decades-long mutual relationship that began in 1991. Exelon’s top executives invested heavily in Obama as he rose from the Illinois State Senate to the White House. By 2012, Exelon executives and employees had personally donated at least $395,000 to Obama’s federal campaigns.107
This figure does not include the potential millions that Exelon executives and board members persuaded their friends to donate (a practice called "bundling").108 For example, Exelon board member John Rogers Jr. bundled a whopping $500,000 for Obama’s campaigns (at a minimum). Frank Clark, Exelon’s then-chairman and a forty-five-year veteran of the conglomerate, donated heavily to Obama’s campaigns—$24,300 over the years. He also gave $63,000 to the DNC and to Obama’s super PAC from 2008 to 2012. As of October 2011, Clark had also raised at least an additional $200,000 as an Obama bundler.109
By the time Obama set his sights on the White House, the leadership of Exelon had deeply ingratiated themselves with their fellow Chicagoan. On the 2008 campaign trail, Hillary Clinton even accused him of cutting backroom deals with Exelon. “Senator Obama has some questions to answer about his dealings with one of his largest contributors, Exelon, a big nuclear power company,” Clinton told ABC News. She went on, “Apparently he cut some deals behind closed doors to protect them from full disclosure in the nuclear industry.”110
Clinton was referring to backroom meetings Senator Obama and his staffers had with Exelon executives who sought to water down a nuclear transparency bill that Obama had introduced.
For years, Exelon failed to report that their operations had released more than six million gallons of radioactive tritium-contaminated wastewater outside Chicago. Exelon’s failure to alert the public demonstrated “callous disregard” for public health and safety, according to the prosecutor.111
Obama introduced a nuclear transparency bill (S. 2348) in response to public outrage over Exelon’s cover-up. The original draft of Obama’s bill would have required nuclear plant operators to “immediately notify” local communities of any radioactive spills. Exelon took issue with the language and wanted exemptions for spills that happened on company property.112
Clinton insinuated that because Exelon had funneled at least $46,000 to his U.S. Senate campaign, Obama was willing to make a backroom deal with them. She was referring to the fact that Obama met privately with Exelon’s CEO and top lobbyist while the bill moved through Senate committees. Exelon’s chief lobbyist on the bill admitted that Obama told him to “work with” a staffer to get the language right.113
Obama’s nuclear bill ultimately died in the Illinois Senate, but that did not stop him from touting it as a success—“the only nuclear legislation that I’ve passed”—in Iowa during the 2008 campaign. According to HuffPost, Obama’s willingness “to lie to Iowans to protect his nuclear baggage, is at the very least troublesome.”114 This was an apparent effort to distance himself from Exelon’s toxicity.
Hillary Clinton’s accusation of Obama’s crony ties to Exelon did not receive much coverage amid the media’s fawning “Obamamania,” and Clinton would later be criticized for the same thing after the Uranium One deal made headlines in 2015. The truth is that Obama and Clinton both pushed backroom Russian nuclear deals, and the Russian takeover of Uranium One benefitted both Clinton and Obama cronies.115
Exelon Becomes the President’s Utility
The day before Obama’s first inauguration, January 19, 2009, Exelon disclosed nearly $1 million ($877,000) in new lobbying expenditures. The disclosure revealed that Exelon wanted to make politically sensitive nuclear deals, specifically with the Russians (who, as mentioned above, had been supplying the nuclear utilities with fuel under Megatons to Megawatts).116 While Obama had long been a friend of Exelon, other decision makers may have needed persuasion.
The same Exelon lobbyist who successfully pressed Senator Obama to weaken nuclear transparency was now pressing President Obama, his agencies, and Congress to make nuclear concessions to the Kremlin. Exelon ultimately spent more than $4.5 million on lobbying in 2009 and an astronomical $51.5 million (including lobbying by subsidiaries) over the course of Obama’s entire presidency—more than double what was spent lobbying the previous administration.117
Exelon executives visited Obama’s White House frequently. They lobbied heavily for Obama’s energy programs and were strong supporters of his environmental policies, especially the ones that favored nuclear power.118 The New York Times reported that Exelon’s White House visits occurred “at key moments in the consideration of environmental regulations that have been drafted in a way that hurt Exelon’s competitors.”119
How did he do this? Obama pushed emissions standards that literally bankrupted Exelon’s non-nuclear rivals. Obama’s climate change agenda, especially his so-called “war on coal,” crippled Exelon’s fossil fuel competitors and simultaneously provided Exelon more than $1 billion in taxpayer-subsidized funding in the form of “clean energy” grants, special tax breaks, and loan guarantees.120
Exelon was not alone. Other nuclear utilities like Duke Energy, NRG Energy, and PG&E lobbied for Obama’s climate change agenda as well. They were all members of the U.S. Climate Action Partnership, a coalition of energy corporations and environmental groups that pushed for “significant reductions of greenhouse gas emissions.”121
Exelon, NRG Energy, and Duke Energy bagged over $5 billion from the same Obama energy stimulus program that notoriously included $535 million for a failed solar panel manufacturer called Solyndra.122
But Exelon and the other nuclear utilities wanted more. They wanted long-term guaranteed access to Russia’s cheap uranium supply. Obama delivered.
Obama’s State Department began to work quickly on the Russian civilian nuclear 123 Agreement and New START under the Russian reset. In mid-2009, Exelon and PG&E were among the first four U.S. utility companies to sign “landmark deals” with Rosatom’s Tenex valued at more than $1 billion.123 The most significant beneficiaries of the reset were apparently Obama’s nuclear cronies like Exelon and, of course, the Kremlin.
Even liberal critics noted the disconnect between Obama’s professed environmentalism and his corporate-backed environmental policies. The left-leaning outlet Vanity Fair blasted Obama’s cozy relationship with Exelon, which they partially blamed for his failed environmental record:
President Barack Obama’s environmental record has prompted eco-minded groups to call his policies “disastrous,” a “nightmare,” and a “sell-out.” Less well-known, however, is the fact that Obama himself has long been allied with Chicago-area pro-nuclear-energy leaders and that several people in his core council have professionally benefited from their association with Exelon, the power company that runs America’s largest nuclear fleet.
The magazine summarized the dizzying Exelon-Obama connections as follows:
As for political clout, it’s summed up by how Exelon’s former chief Washington lobbyist, Elizabeth Moler (who served as deputy national cochair for the Obama campaign), described her employer to Forbes: ”the President’s utility.”
How Exelon acquired that title—and in the process changed the fortunes of Rahm Emanuel, David Axelrod, and State Senator Barack Obama, is—like the workings of nuclear power plants—complicated.
The simplified version skips several twists. Such as: Thomas G. Ayers—father of retired Weatherman bomber Bill Ayers—having once been C.E.O. of Exelon forebear Commonwealth Edison; Bill’s wife, 60s *über-*radical Bernardine Dohrn, and future First Lady Michelle Obama overlapping as associates at ComEd’s principal outside legal counsel; and two other coincidences—recent Harvard Law grad Barack chairing a public-education group his friend Bill [Ayers] helped found, and both men serving as board members of a private anti-poverty foundation.124
“Americanizing” Putin’s Agenda
As we will see, Putin took advantage of Obama’s ties to the nuclear utilities like Exelon. Putin was well aware that Russian exploitation of U.S. energy policy would be a tough sell in Washington, so he sought to “Americanize” Rosatom’s efforts by working with U.S. utility companies. Even while Obama was a U.S. senator, plans were hatched to exploit those mutually lucrative relationships for Russian gain.
Tenex had collaborated with the nuclear utilities in the past, under the Megatons to Megawatts program, and the American utilities had even joined forces with Tenex to sue the U.S. Commerce Department. An independent agency called the U.S. International Trade Commission (USITC) had been monitoring uranium imports from Russia under the Megatons to Megawatts program and repeatedly warned that Russia was effectively dumping uranium into an already vulnerable domestic U.S. market.125
During the Bush administration, Exelon formed the Ad Hoc Utilities Group (AHUG) with other utilities to protect their cheap nuclear fuel imports from Russia, making common cause with Putin’s nuclear fuel exporter Tenex to protect their mutual interests. AHUG and Tenex sued the Bush administration when the Commerce Department sought to restrict imports after the USITC and domestic producers raised concerns over Russian dumping. But soon, their lawsuit against the U.S. government became unnecessary.126 The nuclear deals achieved under the reset granted Russia almost unfettered access to the U.S. market, effectively rendering the lawsuit moot. For the Russians, Obama was a dream come true.127
Beginning in 2009, under the guise of nuclear disarmament and nonproliferation, Obama was able to sell his Russian reset not just to Americans but also to the entire world. Obama claimed that he wanted to eliminate nuclear weapons, but Putin gave him no indication that Russia wanted the same thing. In fact, quite the opposite was true: Putin concealed his nuclear ambitions.128
Before and after the reset, American uranium producers sounded alarm bells over the fragility of their industry—to no avail. In 2012, the USITC confirmed previous predictions that Russia’s aggressively priced uranium imports would have a “significant adverse impact on the domestic industry within a reasonably foreseeable time.”129 Obama apparently ignored these and other warnings from Congress urging him not to trust Russia.
The USITC’s “foreseeable” prediction proved accurate. Putin’s nuclear agenda was declared a success in 2013 with the finalized takeover of Uranium One. He had conquered the world, according to the Russian propaganda outlet Pravda.130 The entire Obama administration approved this takeover due to the president’s desire for cooperation between American utility interests and Russian fuel suppliers.131
Today, the USITC’s warnings of adverse impacts have come to full fruition. The Commerce Department recently determined that uranium imports from Russia and other countries pose a threat to U.S. national security. More than fifty U.S. congressional representatives and domestic uranium stakeholders have urged President Trump to act.132
Obama and his nuclear industry cronies seemed not to care that Russia was untrustworthy, nor that American uranium producers could go bankrupt. In fact, the elimination of American producers would effectively guarantee unlimited cheap outsourced supply to Exelon and the AHUG utilities.133 Any long-term consequences could be addressed later.
Obama Cashes In
In Obama’s final years as president, he set up the Obama Foundation and appointed two Exelon men to prominent positions. Exelon became among the very first corporate donors to the Obama Foundation.134 Their initial donation in excess of $1 million placed them in the top tier. Exelon soon pledged an additional $10 million, making them the Obama Foundation’s largest single benefactor (Chicago-based Boeing—also a beneficiary of Russian reset deals—later matched the $10 million donation).135
The eight-year Obama administration feigned ignorance of Putin’s plans. They even sought to downplay the possibility that Putin was still in charge. They pretended that Medvedev was a great reformer and not Putin’s puppet—a preposterous suggestion. Everyone knew that Medvedev was just a placeholder “keeping Putin’s seat warm.” Putin never stopped pulling the strings, as was widely reported in Russia and indeed throughout Europe. Putin and Medvedev openly acknowledged that Putin was still in charge.136 So did Obama’s top diplomat, Hillary Clinton.137
As Obama took office, Russian spies were infiltrating America and harassing diplomats abroad. Russian nuclear officials were bribing American officials and seeking to corner the global uranium market. Russian military even conducted a simulated nuclear attack on the U.S. while Obama was signing a peaceful nuclear treaty—on and on and on.138
Obama not only ignored these dirty tricks, he actually provided political cover for the Russians both at home and abroad.139
So desperately did he want to “reset” relations with Russia that Obama seemed to look the other way on Putin and his associates’ pattern of criminality—the espionage by an illegal spy ring, bribery, kickbacks, money laundering, harassment of American diplomats, and, as we will see, cyber warfare.
“Well, first of all, I think it’s important for us to look back over the last two years and see the enormous progress we’ve made,” Obama told a Russian media outlet in August 2011. “I started talking about reset when I was still a candidate for President, and immediately reached out to President Medvedev as soon as I was elected. And we have been, I think, extraordinarily successful partners in moving towards reset.”140
That same week, Putin publicly called America a “parasite.” Furthermore, Putin’s threats to effectively annex Georgia’s South Ossetia region—the reason Bush had abandoned Russian rapprochement to begin with—remained while Obama turned a blind eye.141
Obama truly believed that America had “shown arrogance” and wanted to prove to the world that “fundamentally transforming the United States of America” was an achievable goal.142 Ironically, it was Obama who was arrogant. He was also inexperienced, and his administration at times resembled “bumbling fools.” He and his secretaries admitted to this.143
It was abundantly obvious to anyone paying close attention: Russia did not share Obama’s “citizen of the world” naïveté. Arrogance and naïveté are a very dangerous combination, and perhaps even more so in politics, diplomacy, and world affairs.144
Arrogance and naïveté aside, Obama’s Chicago friends had indeed shown him how to do good and do well. He and his wife had “barely finished” paying off their student loans by 2005. Not long after they left the White House, they closed on a nine-bedroom mansion in Washington, D.C., for $8.1 million. Shortly after that, they scored an $11.75 million estate with thirty acres of waterfront on the posh island getaway of Martha’s Vineyard.145
But the millions that Obama received from crony nuclear interests seeking to do business with Russia paled in comparison to the hundreds of millions received by Obama’s Secretary of State Hillary Clinton.