From Kazakhstan to Russia,
with Love and Money
“All of my chips, almost, are on Bill Clinton. He’s a brand, a worldwide brand, and he can do things and ask for things that no one else can.”1
—Frank Giustra, 2006
On March 5, 2015, HarperCollins announced the imminent publication of an “explosive Clinton exposé” titled Clinton Cash: The Untold Story of How and Why Foreign Governments and Businesses Helped Make Bill and Hillary Rich by Peter Schweizer.2
Schweizer, an investigative writer, had already published several bestselling exposés of cronyism and self-dealing in Washington. When Schweizer takes aim at Washington, the political class ducks for cover.
Schweizer has a reputation as a serious researcher with a bipartisan interest in corruption. (Disclosure: coauthor Seamus Bruner works for Schweizer’s Government Accountability Institute.)
Schweizer’s newest book exposed a pattern of moneymaking by the Clintons through a combination of exorbitant speaking fees and huge donations to the Clinton Foundation. These donations, in the range of tens if not hundreds of millions, were from people whom Bill had helped or who stood to gain from decisions made or approved by the Clinton-controlled State Department.
While corruption is notoriously difficult to prove, the pattern of Clinton Foundation donations linked to Clinton State Department favors was repeated over and over again, strongly suggesting an institutionalized influence-peddling scheme of global dimensions.
Although Clinton Cash was embargoed—a normal practice in cases where a book’s contents have explosive news-making potential—word of its contents had already begun to leak out. The Clintons’ friends had apparently scored major deals in the wake of the Haitian earthquake. Their family members did too, the forthcoming book alleged. “And this is just the tip of the iceberg,” HarperCollins’ press release teased.
Panic at Clinton Inc.
By late March, Clinton’s inner circle was scrambling to get an advance copy of the book. “Adding Kristina [Schake, deputy communications director] who is poking around as well,” Clinton campaign manager Robby Mook emailed the team.3
“May have a line on it,” wrote media advisor Jim Margolis on March 21.4
“That would be big,” replied campaign spokesperson Jennifer Palmieri. “We are having a hard time finding it.”5
“Feels like what Brock is good at,” campaign chairman (and fixer) John Podesta finally weighed in.6
“Oh that’s a great idea,” Mook replied, “I’ll get a chain going on that.”7
Mook quickly fired off an email to their political and legal guru, Marc Elias, at the law firm Perkins Coie (Clinton’s one-stop shop for all things legally or politically sensitive): “Marc, can we communicate with Brock about getting a copy of this Clinton Cash book? We need it very urgently if possible.”8
They were referring to Clinton’s longtime political consultant David Brock. Brock has been called Clinton’s “psycho dirty tricks hitman,” and worse. The progressive outlet The Nation would later describe Brock’s politics as “poisonous.”9
Even Clinton’s aide, Neera Tanden (Podesta’s right-hand), thought Brock was “batshit crazy,” but he did have a vast network of contacts who might be able to help acquire a prerelease copy of Schweizer’s book.10
Brock also had a media empire that consisted of a blog called Media Matters, a media machine called ShareBlue, a super PAC called American Bridge, and a think tank called Citizens for Responsibility and Ethics in Washington (CREW).11
Brock’s entities—especially the flagship Media Matters—served as a “hit squad” for Clinton’s campaign and would prove essential in the effort to assassinate Schweizer’s character.12
Ironically, Brock had been given similar treatment as Schweizer when he published his own book on the Anita Hill controversy in 1993 (back when he was still a conservative and before he switched to Clinton’s team). In The New Yorker’s review, writers Jane Mayer and Jill Abramson had independently fact-checked Brock’s entire book hoping to find his Achilles’ heel or some fatal flaw.13
The Clinton team was starting to get desperate. There were rumors that CBS News’ 60 Minutes might run the material, and the Clinton Foundation was also scrambling to “finesse” the story.14
The Clinton team hoped to paint Schweizer’s premise—that the Clintons had created an elaborate, highly lucrative shakedown scheme with their do-gooding global foundation at its center—as ridiculous and to remind 60 Minutes of the previous Benghazi debacle in which a CBS producer was fired. “And of course,” campaign spokesman Nick Merrill advised, “having the book would help that.”15
Podesta weighed in again: “Shouldn’t we attack the book or get Brock to attack the book as a Murdoch special. From the folks who brought you Fox News…”16
Podesta, an experienced political operative, should have known that attacking the book would only increase media interest in it. He also knew that the timing of large private donations to the Clinton Foundation vis-à-vis certain State Department policy decisions would not be easily explained. His close friend Brent Budowsky told him so in no uncertain terms.
On March 21, Budowsky, a longtime Democratic strategist and columnist at The Hill, wrote to Podesta privately:
If there is one thing that could well bring down a Hillary Clinton candidacy it is this cycle of money issues about which I am now feeling red alerts, loud bells, warning signals, and red flags and I am now seriously pissed off that there is a real chance that her candidacy and the Democratic Party could be destroyed by these self-created dangers that continue to proliferate the closer she gets to presumably announcing her candidacy.
Budowsky referred to the Clinton Cash press release and offered one final warning: “foreign donations and paid speeches and hustling gold mining deals by her brother are entirely legitimate issues that are self-created, and must [be] self-corrected before it is too late.” Budowsky signed off, “I do not believe the Clintons fully understand the magnitude and immediacy of the danger.…”17
Budowsky obviously knew enough about the Clintons and their friends’ and associates’ pattern of corrupt self-dealing to believe the Clinton Cash press release had at least some merit. Budowsky never mentioned the radioactive core of the now-burgeoning Clinton cash scandal that had the potential to derail Clinton’s presidential ambitions: Uranium One and its approval by a committee to which Clinton’s department was a party.18
The situation clearly needed to be contained. Secretary Clinton could avoid uncomfortable questions if someone who worked for her would be willing to take credit (or blame) for any decisions that might pose a conflict of interest or, worse, look like a bribe. Jose Fernandez, a former Clinton undersecretary, was all too willing to support Clinton and help her campaign.19
Fernandez’s official State Department title was the assistant secretary of state for economic, energy, and business affairs. Essentially, he handled Clinton economic and foreign energy policy. Fernandez worked closely with Clinton—meeting regularly with the secretary and her inner circle.20
One week after the internal scrambling to get a copy of Clinton Cash, Podesta received an email from Fernandez indicating they had previously spoken and thanking him for landing Fernandez a plum appointment on the Board of Trustees of Podesta’s organization: the Center for American Progress (CAP).21
“Thanks no doubt to your recommendation I have joined the CAP board of trustees,” wrote Fernandez, “which I’m finding extremely rewarding.”22 Neither CAP nor Fernandez disclosed what he meant by “rewarding.”
It was apparently the first time they had ever had email contact, according to leaked email archives dating back to the mid-2000s.23
On April 17, Podesta started work at Clinton’s brand-new campaign headquarters in Brooklyn, where he would spend much of the next eighteen months.24 After getting his keycard, the two most important items on his calendar that Friday were back-to-back telephone calls.
The first was with Hillary Clinton. Immediately after that, he called Fernandez.25
What the two discussed is not known. However, Fernandez afterwards appeared to be very excited and highly motivated. He quickly followed up in an email, thanking Podesta for taking the time to call. “As I mentioned, I would like to do all I can to support Secretary Clinton,” Fernandez said, “and would welcome your advice and help in steering me to the right persons in the campaign.”26
Fernandez reiterated his willingness to help Clinton’s campaign multiple times in the same email and concluded: “Please count on me for full support within the confines of my day job. I look forward to your suggestions on what I can do to help.”27
With Schweizer’s book set for release in a couple of weeks, a perfect storm was brewing on the media horizon.28 Clinton’s team had to move fast. They needed to prepare an airtight defense for the issues that columnist Budowsky had raised with Podesta the previous month, specifically foreign donations to the foundation and paid speeches. The problem was that there was no airtight defense and 60 Minutes was the least of their worries. The New York Times was now working on a story based on Schweizer’s reporting.29
The next day, on April 18, the Clinton team finally caught a break.
In an email chain under the subject line, “The Book,” Hillary’s close aide and confidante Huma Abedin delivered the news that Clinton’s inner circle had been waiting for:
We have a copy. It’s in DC. We can get it to Tony [Carrk] asap.
Its 186 pages with 60 pages of footnotes.
Also heard that the NYT is moving their pub date to April 26th.
Book comes out May 5th and author is slated to appear [on] Hannity and Morning Joe.
Can jump on phone if you want specifics sooner.30
“Perfect,” said Clinton opposition researcher Tony Carrk.
“BOOM,” replied spokesperson Palmieri.
The fact that the Schweizer book was so heavily sourced was bad news for the Clinton team—it couldn’t be dismissed as a hatchet job. Abedin followed up with plans for an in-person handoff of Clinton Cash and coordinated roles for an immediate prerelease teardown of the book.31
Meanwhile, Pulitzer Prize–winning journalist Jo Becker and her investigative team at the New York Times had been vetting Schweizer’s findings and in mid-April, they reached out to the Clintons for comment. This was a major roadblock for Podesta’s plan to smear Schweizer as a right-wing conspiracy theorist taking orders from Roger Ailes.32
The Clinton team certainly could not claim that the New York Times was in on a right-wing conspiracy.33 No one would buy that. The Times’ confirmation of Schweizer’s findings was unfathomable to Clinton’s team, and Podesta—evincing what can only be described as cognitive dissonance—called the Times’ joint effort with Schweizer “bizarre.”34
Nonetheless, Clinton’s press secretary, Brian Fallon, immediately got to work drafting a memo to the New York Times to rebut the lethal exposé.35
The Clinton “teardown” had not produced any evidence that Schweizer’s book misstated or misrepresented facts about Clinton’s role in approving the sale of Uranium One to Rosatom. The best that they could do was to diffuse the issue by blaming the other Obama agencies involved in the Uranium One review and rolling out Jose Fernandez.
Fallon’s April 22 memo to the New York Times included the following excerpt:
Apart from the fact that the State Department was one of just nine agencies involved in CFIUS, it is also true that within the State Department, the CFIUS approval process historically does not trigger the personal involvement of the Secretary of State. The State Department’s principal representative to CFIUS was the Assistant Secretary of State for Economic, Energy and Business Affairs. During the time period in question, that position was held by Jose Fernandez. As you are aware, Mr. Fernandez has personally attested that “Secretary Clinton never intervened with me on any CFIUS matter.”36
Fallon’s memo to the Times and his April 23 memo to Clinton’s “Friends and Allies” spelled out every talking point that was subsequently used in the coordinated effort by Hillary’s surrogates to deflect and discredit Schweizer’s findings. The main message was that Schweizer had not produced “a shred of evidence,” and there was “no smoking gun.”37
ABC’s George Stephanopoulos interviewed Schweizer and hit every point on the script drafted by Clinton’s team.38 After the interview, Clinton’s team celebrated:
A Clinton staffer forwarded the transcript and said, “great work everyone. this interview is perfect. [Schweizer] lands nothing and everything is refuted (mostly based on our work).”
“This is amazing,” replied Palmieri, “A pleasure to read.”
One of Clinton’s top advisors called the interview “therapeutic,” and offered his opinion that the ABC host “destroyed him slowly but surely” throughout the interview, “culminating when [Stephanopoulos] asks [Schweizer] about A/S Fernandez confirming that HRC had absolutely nothing to do with the Uranium 1 deal.”39
The Stephanopoulos interview confirmed that Fernandez was critical to Clinton’s defense and ultimately created more questions than answers. Rather than “debunk” the Uranium One connections to Clinton, such as the undisclosed donations from Uranium One stakeholders, it revealed that Stephanopoulos had concealed his own Clinton conflicts.
Stephanopoulos never disclosed that his questions were effectively drafted by Clinton’s team. He also never disclosed that he was, personally, a major Clinton Foundation donor. He was excoriated for his animus and bias. Schweizer called the duplicity a “massive breach of ethical standards.”40
Stephanopoulos apologized repeatedly for not disclosing his potential bias and regretted not having “gone the extra mile to avoid even the appearance of a conflict.” But the apology was too little, too late, and Stephanopoulos disqualified himself from moderating campaign debates.41
Asking for forgiveness rather than permission and failing to disclose conflicts of interest are a recurring problem in Clinton world. Just as Stephanopoulos preferred to keep his financial ties to the Clintons quiet, the Clinton Foundation had conveniently failed to disclose its Uranium One-linked donations.42
It was only after the media confirmed Schweizer’s reporting that the Clinton Foundation finally disclosed Uranium One chairman Ian Telfer’s $2.35 million and the other millions from his Canadian cohorts.43
Furthermore, the Clinton campaign failed to disclose that campaign chairman Podesta rewarded Fernandez and that the former Clinton undersecretary had offered his “full support” to help her campaign. Therefore, he was neither neutral nor credible.44
The Clinton campaign touted Fernandez’s statement as proof that the story had been debunked. But they failed to disclose that Fernandez had quietly offered his full support to help the former secretary and the campaign.45
Therefore, just as with Mr. Stephanopoulos, Mr. Fernandez’s conflicts raise serious questions about his motives and impartiality. Also, as mentioned earlier, Podesta’s recommendation was presumably crucial to the former undersecretary’s CAP appointment, which the latter described as “extremely rewarding.”46
By July 2015, the Uranium One debacle had all but consumed Clinton’s campaign. By 2016, FBI field offices around the country had opened investigations based on the findings in Schweizer’s book.47 Internal campaign polling research in New Hampshire found that public perception surrounding Uranium One was the single greatest threat to Clinton’s campaign.48
Since then, none of Schweizer’s findings have been debunked. In fact, everything significant that Schweizer reported was true. Furthermore, millions more in undisclosed Uranium One–linked donations have since been identified.49
The Clinton team was right about one thing: Secretary Clinton did not approve Uranium One all by herself.
The Uranium One deal required the approval of Obama’s top Cabinet officials, including the Secretaries of Treasury, State, and Defense. That is true. And while Obama and other Cabinet officials had their own reasons for allowing the Russian takeover of Uranium One, the Clintons had more reasons than most.50
Under the cover of Obama’s Russian reset, Bill and Hillary Clinton and their vast network of friends and donors (known colloquially as “Clinton Inc.”) were able to make lucrative deals in Russia and generate millions of dollars lobbying for Putin’s interests.
The Moscow Speech (Kremlin-backed Renaissance Capital)
On April 5, 2010, Bill Clinton’s office asked Hillary Clinton’s State Department for permission to travel to Moscow for a paid speaking event. The request came in just as dozens before had—innocuous, terse, and devoid of any substantive detail that might lead to a denial.51
“Renaissance Capital is an investment bank focused on the emerging markets of Russia, Ukraine, Kazakhstan, and sub-Saharan Africa,” read the description offered by Clinton’s legal team. Attendees would be from the private sector (“financial experts, economists, investors and representatives of various emerging markets companies”), and no government officials were mentioned.52
Bill Clinton’s office expected a response from the State Department within five days.53
Just like dozens of Clinton’s previous requests, the Renaissance Capital speech was approved almost instantly—approximately forty-eight hours later. But unlike most Clinton speeches, the Renaissance Capital speech was for $500,000.54 This massive payday in Moscow was more than double Clinton’s average speaking fee.55
After the request was approved, Bill Clinton’s foreign policy advisor Amitabh Desai bypassed the ethics review channel and followed up directly with Hillary Clinton’s right-hand woman Cheryl Mills and top aide Jake Sullivan.56 Desai had previously served as a legislative aide to Hillary Clinton when she was a U.S. senator and was now working at the Clinton Foundation.57
“In the context of a possible trip to Russia at the end of June, WJC is being asked to see the business/government folks below,” Desai said on May 14. “Would State have concerns about WJC seeing any of these folks [?]”58
As it turned out, a significant number of Kremlin officials and influential oligarchs would be at the event, including Russian Deputy Prime Minister and Minister of Finance Alexei Kudrin, President Medvedev’s aide Arkady Dvorkovich, and notorious oligarch Oleg Deripaska, among other top Russians.59
Secretary Clinton’s advisors initially ignored Desai’s request.60 While Bill Clinton’s office was preparing to meet with Russian officials in Moscow, Hillary Clinton’s office was busy preparing to advance the “reset” in Washington.
They worked particularly hard, publicly and privately, to accomplish the New START treaty, which President Obama submitted to the U.S. Senate on May 13.61
Putin had a way of mocking the Obama administration’s weakness. As mentioned, Secretary Gates noted the “nice Putin touch” of the Russian military simulating a nuclear attack on the United States at the exact moment that Obama and Medvedev were signing the New START Treaty in Prague.62
The treaty aimed to reduce America’s nuclear forces in exchange for mutual cuts from Russia. More than two dozen missile silos in California and other U.S. states would be shut down, as well as nearly three dozen bombers, and nearly sixty submarine launch tubes would be retired. Obama had canceled Bush-era plans for missile defense in Poland eight months prior. Now he was hoping to reduce America’s nuclear defense at home.63
Secretary Clinton sought to persuade lawmakers in at least two formal briefings in May 2010. Her prepared statements were an obvious effort to persuade conservatives in the Senate to get on board with the reset:
A ratified New START Treaty would also continue our progress toward broader U.S.-Russian cooperation, which is critical to other foreign policy priorities, including dealing with Iran’s nuclear program, cooperating on Afghanistan, and pursuing increased trade and investment. Already, the negotiations over this treaty have advanced our efforts to reset the U.S.-Russian relationship. There is renewed vigor in our discussions on every level, including those between our presidents, our military leaders, and with my counterpart, Foreign Minister Lavrov. Our approach to this relationship is pragmatic and clear-eyed. And our efforts—including this treaty—are producing tangible benefits for U.S. national security.64
Beside Clinton sat her key ally Secretary Gates, a longtime Republican.65 They worked as a tag team to persuade Obama’s opponents to back pro-Russian reset priorities. Testifying beside Clinton was neither the first nor last time Gates “was rolled out to provide political cover for the Democratic president [Obama].”66
In her testimony, Clinton repeatedly referred to vague verification measures, which Russia would presumably abide by. She acknowledged that New START may not convince Iran and North Korea to change their behavior. Nonetheless, Clinton emphasized that “by bringing the New START Treaty into force, we will strengthen our national security more broadly,” among other counterintuitive assertions.67
Clinton and Obama’s other top officials failed to clarify how they planned to ensure Russia’s compliance and how weakened defenses made America safer in the event that Russia decided to breach the agreement. After all, Putin had violated other nuclear treaties, so why would New START be any different?
At the same time Clinton was pushing Obama’s New START, Putin repeatedly violated the Reagan-era Intermediate-range Nuclear Forces (INF) Treaty (according to former top Defense officials)—a detail that Clinton neglected to mention in her testimony. The Wall Street Journal noted the irony, “It is questionable whether the Senate would have approved the 2010 New START treaty had Russian noncompliance with the INF Treaty been aired at the time.”68
Undeterred by Republican criticism, Clinton lobbied her former Senate colleagues behind the scenes, and the treaty was eventually ratified by a lame-duck Congress.69
Meanwhile, back at the Clinton Foundation, Amitabh Desai was growing impatient. “We urgently need feedback on this,” he nudged Secretary Clinton’s advisors. Despite a lack of a responding email from Secretary Clinton’s staff, Bill Clinton met directly with Putin after the June 29 speech in Moscow, which indicates that permission was granted through some other communication.70
While at Putin’s home, the prime minister thanked Clinton for the speech. Putin seemingly mocked U.S. law enforcement for busting the illegal Russian spy ring. “You’ve chosen the right time to come to Moscow. I hear your police have got carried away and put people in jail,” Putin said. “But that’s their job after all; really, they are all just doing their job.”71
Days earlier, the president blasted his FBI and CIA directors for daring to expose the spy ring and jeopardize the reset. Obama’s loyal top officials were now scrambling to sweep the illegal spy ring under the rug.72
As the FBI made plans to bust the spy ring, Hillary was at home and called the Russian foreign minister.73 Within a week of that June 20, 2010, phone call, a quick and quiet swap was negotiated that sent the spies back to receive their hero’s welcome from Putin himself. Secretary Clinton—Obama’s chief diplomat—was unusually silent on the spy ring. Some of Obama’s closest officials wrote about the incident in their memoirs; Clinton did not.74
The timing of the Moscow speech is significant. Just one week before Clinton was in Moscow, Uranium One notified regulators that Putin’s nuclear conglomerate Rosatom would take a controlling stake through its mining subsidiary AtomRedMetZoloto (ARMZ).75 This would give Rosatom a projected 20 percent of American uranium production (at the time of the deal).76
Uranium is a strictly controlled commodity with national security implications. As such, the deal would require the approval of Obama’s top agencies. In this process, the Secretary of State had a lead role.77
When Becker’s investigative team at the New York Times inquired about the secretary’s role, Fallon said that “in general, these matters did not rise to the secretary’s level.” Instead, the spokesman offered the statement from Fernandez claiming that Clinton “never intervened with me.”78
Such claims were mind-boggling. Why would an assistant have the authority to approve the deal on Clinton’s behalf? What does “never intervened” really mean? Such language sounds like a Clintonian half-truth: Hillary’s role in approving the sale depends on the definition of “intervene.”
One thing is certain: the deal had been in the works since 2005 and would have been impossible without support from both Clintons.79
The Giustra Connection
The Uranium One deal was the brainchild of the Clintons’ close friend, Canadian mining mogul Frank Giustra. Giustra is a diminutive man, with olive skin and receding, whitish Caesar-style hair. Giustra’s net worth allegedly exceeds $1 billion, mostly derived from his many successful mining deals (he disputed the “billionaire” characterization and claimed that “excess money is an illusion”).80 Giustra made his fortune chasing what he calls “ten baggers”—deals that multiply his investments tenfold.81
Bill Clinton and Giustra claim that they met in 2005 at a charity event for tsunami relief.82 That may be true, but Giustra experienced Clinton’s ability to open political doors more than a decade before that, in Arkansas.
The Crater of Diamonds State Park is home to the oldest diamond mine in the United States and is located about forty miles from Hope, Arkansas—the birthplace of Bill Clinton.83 The mine’s commercial operations ended when it was sold in the late 1960s, and the State of Arkansas bought the land several years later for a state park. However, plans to revive the mine brought together American and Canadian mining investors in the 1990s through a company called Diamond Fields Resources.84
Diamond Fields Resources was founded by a controversial mining investor named Jean-Raymond Boulle. Boulle was born in Mauritius, held British citizenship, and later moved to Texas, where he kept a low profile, scouting deals in South Africa, Namibia, and other far-flung regions.85
Jim Blair, a friend of Hillary Clinton from Arkansas, introduced Boulle to then-Governor Bill Clinton in the mid-1980s. Blair made millions of dollars trading commodities and had a knack for striking good deals, including helping Hillary Clinton turn a $1,000 cattle futures investment into $100,000—an almost impossible bet absent some form of insider corruption.86 Boulle pitched Clinton on what he believed “had the potential to rival any [mine] in South Africa.”87 Governor Clinton gave the project his blessing.88
Bill Clinton’s attorney and friend Bruce Lindsey did the legal work for Diamond Fields. When Clinton was elected president, Boulle was invited to attend the inauguration in January 1993. At the first inaugural ball, Hillary wore a gift from Diamond Fields that came from the Crater of Diamonds: a 3.5 carat diamond ring. Lindsey had been Bill Clinton’s 1992 national campaign director and was tapped to serve as an aide and deputy counsel in Clinton’s White House. Following the end of the Clinton administration, Lindsey joined the Clinton Foundation and later became the chairman of its board.89
Diamond Fields’ first major investor, Robert Friedland, is notorious among mining insiders. Friedland is a wiry, copper-haired man who was classmates with Steve Jobs at Reed College. They lived together on Friedland’s family orchard (giving Apple Inc. its name); Friedland traveled on a pilgrimage to India and inspired Jobs to do likewise. Incidentally, Friedland had been arrested in 1970 for trafficking more than 24,000 doses of LSD. He served more than six months in jail before his release in 1972, after which he enrolled at Reed.90
Friedland got into the penny stock mining business and soon earned himself the nickname “Toxic Bob” for his environmental legacy. His company Galactic Resources used cyanide and heavy metals to extract and leach gold from their open-pit mine on an Indian reservation in southern Colorado starting in the 1980s. American taxpayers footed the bulk of the estimated cleanup bill, which exceeded $200 million.91
Friedland introduced Giustra and Giustra’s close friend Ian Telfer to the Diamond Fields play, among other deals.92 In fact, several Canadian investors in Diamond Fields went on to become major investors in Uranium One. They also donated heavily to the Clinton Foundation.93
Friedland, Giustra, and Telfer are living legends in the small world of Canadian mining. Some deals make them partners; others make them competitors. There is no evidence that Friedland partnered with Giustra and Telfer on Uranium One, but there is little doubt that he was aware. (Coincidentally, Friedland was in Moscow on the same day as Bill Clinton in June 2010. He was featured in two panels at the Renaissance Capital investor conference).94
It is possible that Giustra and Clinton were acquainted before 2005. Both men have a habit of misrepresenting details about their past mutually beneficial interactions. They blame a faulty memory or inaccurate record keeping. Nevertheless, Clinton and Giustra became fast friends and traveled the world together on Giustra’s MD-87 jet nicknamed “Giustra Air.” (Clinton flew on Giustra Air at least twenty-six times, for “foundation business.”)95
Bill and Frank’s Kazakh Adventure (UrAsia Is Born)
The Clintons left the White House in 2001. Hillary alleges that they were “dead broke.” This did not last for long. Hillary became a powerful senator in New York, and Bill focused on making money—both personally and for their legacy project: the Clinton Foundation.96
On September 6, 2005, the former president was on foundation business in Almaty, Kazakhstan.97 Kazakhstan is a country with both rugged terrain and large grassy plains. In the West, this Eurasian country is generally known for becoming part of Genghis Khan’s Mongolian empire in the thirteenth century and for the 2006 fictional comedy film Borat. To savvy mining explorers, however, Kazakhstan held vast untapped natural treasures—an estimated $5 trillion worth—of assorted resources including oil, natural gas, chromium, copper, gold, and the other yellow metal: uranium.98
The reason given for Bill Clinton’s visit was, allegedly, to work on what the foundation claims to do best: helping to alleviate suffering from HIV/AIDS.99 At the time, Kazakhstan’s estimated HIV/AIDS infection rate was between 0.1 and 0.3 percent. In contrast, several sub-Saharan African nations reported an HIV infection rate in excess of 20 percent—up to two hundred times worse than Kazakhstan.100
But instead of meeting exclusively with health officials, Clinton met with the brutal “dictator for life,” Nursultan Nazarbayev. Nazarbayev had climbed the right ladders in the days of the Soviet Union and became ruler in 1990. Since then, Kazakhstan gained independence and Nazarbayev regularly won reelections with more than 90 percent of the vote.101
Nazarbayev is one of the richest men in the world. He and his family, which includes two of Kazakhstan’s five billionaires, have stashed their wealth in a maze of businesses.102
Nazarbayev has long presided over atrocious human rights violations including torture, human trafficking, arbitrary detention, restrictions on freedom of speech, press, and assembly, and overall pervasive corruption, according to the State Department and the research arm of Congress.103
Despite the poor track record, Clinton showered the dictator with praise for “opening up the social and political life of your country.” A former State Department official under President Clinton called Clinton’s position “patently absurd.”104 The official State Department position on Kazakhstan was that it “failed to significantly improve its human rights record.…”105 Clinton had swerved far outside his lane as a former president, but he was not done.
Clinton publicly lobbied for Nazarbayev’s appointment to head an intergovernmental human rights organization called the Organization for Security and Co-operation in Europe (OSCE). “I think it’s time for that to happen,” Clinton said in his unofficial nomination, “it’s an important step, and I’m glad you’re willing to undertake it.”106
Nazarbayev was ecstatic and his press release proudly boasted about Clinton’s support.107 Clinton never revised or corrected his ringing endorsement, and Nazarbayev’s country became head of the OSCE in 2010.108 As Schweizer noted, “Putting Nazarbayev’s Kazakhstan at the helm of the OSCE was like putting Iran in charge of the International Atomic Energy Agency. It made no sense.”109
If Clinton was not there to meet with health officials and to help the suffering people of Kazakhstan, why was he really there? The short answer is because Frank Giustra wanted him there.110
Clinton arrived in Kazakhstan on “Giustra Air.” Giustra’s luxurious private jet had a “bedroom and shower, gold-plated bathroom fixtures, leather upholstered reclining seats, flat-panel TVs and original paintings on the cabin walls. The blankets are emblazoned ‘Giustra Air.’”111 It could comfortably sleep a dozen and a half people.112
Giustra calls his jet “a business tool. No more, no less.”113 Canadians cannot donate money to U.S. political campaigns, but they can lend their private jets to the spouse of a future presidential candidate. Giustra did that often. He also funneled tens of millions of dollars into the Clinton Foundation.114
Giustra made much of his fortune in the penny stock market in Toronto and Vancouver. The Vancouver Stock Exchange (VSE) was a veritable casino compared to the highly regulated New York Stock Exchange (NYSE).115 The VSE was a huckster’s paradise, and Giustra got rich “through a Byzantine system of shell companies, furtive share purchases and elaborate compensation schemes.” Giustra’s “ten baggers” were basically hyped-up “pump and dump” operations.116
His 2005 trip to Kazakhstan would be his grandest mission yet. He would need a former president and a shell company called UrAsia Energy Ltd. to pull it off.
Kazakhstan’s mineral rights are prized possessions. Russians, Canadians, and Australians, the world’s fiercest mining rivals, covet the lucrative Kazakh leases, and access is very competitive. At the time Giustra secured the leases, the global uranium market was about to boom. The Kazakh nuclear agency, Kazatomprom, was well-positioned to take advantage of the bull market.117
One of Giustra’s associates, a Russian man named Sergei Kurzin, had done business in Kazakhstan before. Kurzin had previously worked for Marc Rich, the fugitive billionaire mysteriously pardoned by Clinton on the last day of his presidency.118 Kurzin located several Kazakh uranium mines, and Giustra was interested. But Giustra was hardly the only one with his eye on yellowcake, and as Kurzin recalled, “timing was everything.”119
“Everyone was asking Kazatomprom to the dance,” said one senior uranium industry stock analyst. “A second-tier junior player like UrAsia—you’d need all the help you could get.”120
The Kazakh and Russian state-owned mining companies were more than capable of extracting uranium ore. They had actual mining experience, as did Canadian miner Cameco Corporation. UrAsia Energy was an empty holding company with no mining experience and few, if any, assets. Giustra’s visit with Clinton to Nazarbayev’s palace changed everything.121
After a lavish private feast in Nazarbayev’s palace, Clinton and Giustra departed on September 7. Over the next two days, UrAsia Energy signed agreements with the Kazakh mineral agency (MEMR) that gave Giustra’s shell company the rights to three of Kazakhstan’s largest uranium mines. Almost overnight, UrAsia became one of the largest uranium companies in the world.122
The $450 million deal stunned experts in the industry. “UrAsia was able to jump-start the whole process somehow,” an industry observer said of the mysterious deal. Giustra’s shell company became a “major uranium producer when it didn’t even exist before.”123
Giustra and Clinton had endorsed Nazarbayev’s December 2005 reelection effort with their visit. Within five weeks of their departure, Nazarbayev’s opposition suffered an arson attack on their headquarters and the opposition leader was arrested by the autocrat’s paramilitary forces.124
Nazarbayev won reelection in a landslide amid allegations of ballot-box stuffing and voter intimidation.125 “Recognizing that your work has received an excellent grade is one of the most important rewards in life,” Clinton wrote, congratulating the dictator. “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.” Nazarbayev again boasted of the endorsement by the former U.S. president and published Clinton’s note.126
Meanwhile, Giustra began funneling almost unprecedented sums to the Clinton Foundation. The first major tranche was more than $30 million, rapidly making Giustra one of the foundation’s largest benefactors.127
Just like the Diamond Fields deal, Giustra assembled a heavyweight team of Canadian mining insiders to boost UrAsia’s clout and draw more retail investors. Then he began shopping for more uranium assets to add to the Kazakh portfolio.128
Giustra swiftly distributed UrAsia’s shares to himself and his Canadian friends. He got three million shares. Bob Cross, an old colleague, got 500,000 shares and a board slot. Telfer got 2.2 million shares, gratis, thanks to his long-time friendship with Giustra. Telfer and Giustra had a long history of promoting penny stocks before they moved to the big leagues. “I’m more of an opportunist than a visionary,” Telfer self-deprecated.129
With the bulk of UrAsia’s shares firmly in the hands of Giustra’s friends, he then offered the company to the public via the Canadian venture exchange in one of “the largest [offerings] on record.”130 The Canadian firms that handled the stock placement all became major donors to the Clinton Foundation just like Giustra, Telfer, and other UrAsia investors.131
Uranium One Is Born
In February 2007, UrAsia Energy announced its merger with a Canadian-South African hybrid company called sxr Uranium One Inc.132 The $3.1 billion merger required the approval of Nazarbayev’s government due to the substantial Kazakh holdings that Giustra had acquired seventeen months previously on his trip with Clinton.133
The same month that the merger was announced, Giustra conveniently arranged for the head of Kazatomprom, a man named Mukhtar Dzhakishev, to fly to North America and meet to discuss the future of nuclear power. Giustra’s hometown of Vancouver or even UrAsia’s headquarters would have been an appropriate venue. Instead they met at Bill and Hillary Clinton’s personal residence in Chappaqua, New York.134
When asked about the Dzhakishev meeting at the Clintons’ home, both Giustra and the former president denied the meeting ever took place. When confronted with evidence, they again blamed faulty memory and inaccurate record keeping.135 Later that year, Bill Clinton invited the Kazakh dictator to be a “featured attendee” at the “exclusive” annual Clinton Global Initiative meeting in New York City, and Nazarbayev was subsequently awarded the OSCE chairmanship. 136
The UrAsia merger with Uranium One was approved, and Giustra’s baby became one of the largest uranium mining companies in the world. Giustra stepped down from the board of UrAsia one day before the merger was announced “to permit the UrAsia Board to pursue this transaction without any perception of conflict, as he is also Chairman of Endeavour Financial (UrAsia’s financial advisor).”137
UrAsia officially became Uranium One, and Ian Telfer was named the chairman. Giustra said he sold his stake in UrAsia and characterized the transaction as a takeover of his company, but, in effect, Giustra and his friends acquired Uranium One in a tricky move called a reverse merger—Giustra’s buddies wound up owning 60 percent of the whole operation, and he remained involved through his company Endeavour Financial.138 With Telfer at the helm, Uranium One began snapping up U.S. uranium assets to add to its portfolio.139
In June 2007, Uranium One signed an agreement to purchase Energy Metals Corporation (EMC), which owned extensive uranium mines in Wyoming, Texas, and New Mexico. EMC also owned properties in Utah, Nevada, Oregon, Arizona, and Colorado. “The combination of Uranium One and EMC will create a powerhouse in the United States uranium sector with the potential to become the domestic supplier of choice for US utilities,” said Uranium One’s CEO.140
The deal was subject to the approval of the Committee on Foreign Investment in the United States (CFIUS) because it involved foreign companies and substantial nuclear assets in the U.S. But both companies were Canadian, and the CEO highlighted Uranium One’s potential to become a major domestic energy source (which would presumably mitigate U.S. dependence on foreign uranium).141
The company boasted that the merger would create “the only company in the uranium sector with production and asset exposure to each of the world’s five largest resource jurisdictions, namely Kazakhstan, South Africa, Australia, the United States and Canada.”142
The deal cleared CFIUS without any issues on July 31, 2007.143
Giustra and Telfer’s new uranium juggernaut was one of a kind. With the merger, Uranium One had quickly become a world-class nuclear supplier with highly prized assets.144
At the same time that Uranium One was snapping up properties in the United States, Putin was consolidating Russia’s nuclear industry under the umbrella of the Rosatom behemoth. By the late 2000s, Rosatom had its eyes on Uranium One’s Kazakh and American assets.145
Giustra’s timing was impeccable. When he started building up UrAsia in 2005, uranium prices were approximately $20 per pound. Prices peaked in 2007 at nearly $140 per pound. Uranium One began negotiations with Rosatom in 2008, just as the global financial crisis was beginning to take its toll.146
Rosatom was among only a few entities capable of buying a company as large as Uranium One. Selling Uranium One to Rosatom would be extremely profitable for Uranium One’s Canadian shareholders, but it would not be as easy as the EMC takeover. In addition to CFIUS, other regulatory bodies would need to sign off on the deal, including the Nuclear Regulatory Commission (NRC) and a Utah mineral rights agency.147
The Uranium One deal was worth a premium to Putin for several reasons. First, Uranium One had top-tier assets and had quickly become one of the world’s largest uranium mining companies. Second, it had multiple mines in the United States, and purchasing those mines piecemeal would be almost impossible due to scrutiny—buying in bulk would be much easier. Perhaps most importantly, Uranium One had been accepted into the exclusive world of the American nuclear industry.
A Russian entity would have likely been treated with considerable skepticism, but, as a Canadian entity, Uranium One would pose minimal threats and be welcomed into the Uranium Producers of America (UPA) and Nuclear Energy Institute (NEI) with open arms. These members-only trade associations had access to America’s nuclear security information.148
Using Uranium One’s credentials, Putin’s operatives could gain access to conventions, seminars, and lobbyists without drawing intense scrutiny. Indeed, after the takeover, Uranium One hired American lobbyists (including the Clinton-connected Podesta Group) without ever filing under the Foreign Agents Registration Act (FARA).149
Members of Congress and the American public were outraged—not only at Putin’s audacity but also at Obama’s failure to block Putin’s nuclear advances.150 Why did CFIUS allow the deal to go through?
Perhaps the simplest answer is the most obvious: because the deal aligned with the Obama administration’s Russian reset.
But a more sinister possibility remains. Could Putin have bribed the gatekeepers?
According to Schweizer’s calculation, “the collective commitments and donations from investors who profited directly from the deal would ultimately exceed $145 million.”151 The donations linked directly to Giustra and Uranium One include:
· Frank Holmes, another major shareholder in the deal, wrote a check to the Clinton Foundation for between $250,001 and $500,000.152 Holmes also listed himself as an advisor to the Clinton Foundation.153
· Neil Woodyer, Giustra’s colleague who founded Endeavour Financial, committed to $500,000 and providing “ongoing financial support.”154
· 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.155
· Paul Reynolds, an executive at Canaccord Capital, Inc., donated in the same range, between $1 million and $5 million.156 For Canaccord, the UrAsia deal was “the largest transaction in our history.”157
· GMP Securities Ltd., another large shareholder in UrAsia Energy, committed to donating a portion of its profits to the Clinton-Giustra Sustainable Growth Initiative. GMP made great money on the private placement of shares and as an underwriter on UrAsia Energy deals.158
· Bob Cross, who was a major shareholder and served as director of UrAsia Energy, committed a portion of his future income to the Clinton Foundation.159
· 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.160 BMO paid $600,000 for two tables at the Clinton-Giustra Sustainable Growth Initiative’s March 2008 benefit.161
· Sergei Kurzin, a Russian dealmaker involved in the Kazakhstan uranium deal and a shareholder in UrAsia Energy, also made the Clinton-Giustra Sustainable Growth Initiative a $1 million pledge.162
· Ian Telfer, the chairman of UrAsia Energy, who would become the new chairman of Uranium One, committed $3 million.163