How Clinton Turned a National Security Review
into a Tollbooth (and How Obama Allowed It)
“One of the fears that I hear from Russians is that somehow the United States wants Russia to be weak. That could not be farther from the truth. Our goal is to help strengthen Russia.”1
—Secretary of State Hillary Clinton,
First Channel Television interview with Vladimir Pozner
in Moscow, March 2010
Before Hillary Clinton began her first failed presidential campaign in 2008, she burnished her image as a foreign policy expert and stateswoman in the Senate. Senator Clinton landed a position on the powerful Armed Services Committee. In February 2006, the committee convened to find out why the Bush administration had allowed the takeover of American shipping terminals by a United Arab Emirates (UAE) state-owned operator.2 A burgeoning fiasco, known as the Dubai Ports scandal, was brewing.
Senator Clinton, in her navy pantsuit, looked disheveled. Her short blond hair was mussed, and she had heavy bags beneath her eyes. She flashed a quick smile at her friend and mentor Senator Robert Byrd of West Virginia, as he hobbled over, placed his cane beside Clinton, and sat down at the Senate panel. Clinton returned to the talking points her aides had given her. The chairman and ranking member spoke first while Clinton patiently awaited her turn.3
Clinton began by expressing her “deep concerns” about the port deal. Those concerns seemed to focus less on the potential national security threats of that particular deal and more on the CFIUS process in general.
The CFIUS process has been subject to several critical reports in the last several years; most recently, a Government Accountability Office (GAO) report last fall which pointed out that one of its failures was its inability to focus effectively on national security issues as the statute establishing CFIUS intended it to do. This particular decision by CFIUS raises a number of red flags.4
Clinton used the opportunity to slam the Bush administration over 9/11 and Hurricane Katrina, citing “inadequate funding” and “bureaucratic dysfunction.” “If September 11 was a failure of imagination, and Katrina was a failure of initiative,” Clinton said, “this process is a failure of judgment.” Scoring political points was no doubt high on Clinton’s list of priorities, but she had another priority: she wanted to understand the CFIUS process.
Clinton complained of “numerous problems with this review process,” and wanted answers. She wanted to know exactly who was apprised of the review and who attended the CFIUS meetings. She wanted to know if state and local officials should have been consulted.
Clinton cloaked her curiosity in a vague concern for America’s national security. Meanwhile, her Democratic colleagues had more specific concerns. They linked the UAE to Osama bin Laden and al Qaeda’s financing of the September 11 attacks, global terrorism generally, and with nuclear material smuggling to Iran, Libya, and North Korea. But Clinton hardly mentioned the UAE and remained laser-focused on the inner workings of CFIUS.
“I want to just get additional information about how CFIUS actually operates. How many times did CFIUS meet to consider this transaction?”
Clinton continued to pepper the Bush officials with logistical questions.
“Are there quorum and proxy rules for conducting business for CFIUS?”
When a reporter for FOX News asked a Bush official for information on past deals that CFIUS reviewed, Clinton could not help but agree:
I think it would be useful for the committee to get those [CFIUS] examples, because if this definition of “national security” is kind of a moving target, we need some idea of what the field looks like.5
Clinton called the review “cursory, at best.” She was outraged that the CFIUS process “did not alert the President, the Secretary of the Treasury, the Secretary of Defense that several of our most critical ports were about to be transferred to a foreign government entity.”
“For many of us,” Clinton harped, “there is a significant difference between a private company and a foreign government entity.”6
For her, that difference would not matter as much when Russian state-owned Rosatom purchased Uranium One in 2010.
Previously, most people had never heard of the shadowy Committee on Foreign Investment in the United States, or CFIUS. The top-secret task force was formed in 1975 to assess foreign transactions that might pose threats to U.S. national security. Today, the committee is comprised of the top cabinet agencies, including the departments of State, Defense, Homeland Security, and the Treasury.7 CFIUS has the power to effectively make or break foreign investment deals.8
In 2006, CFIUS sprang into public awareness after a Middle Eastern ship port operator called Dubai Ports (DP) World sought to buy multiple ports in the U.S. The Bush administration’s CFIUS approved the transaction and strongly defended it amid intense public objections from Congress.9
Senator Hillary Clinton was one of the most vocal critics of the deal. Clinton argued that the deal could threaten national security and condemned the Bush administration for allowing the UAE-backed company to purchase the ports.10
Whatever her national security concerns, Clinton conveniently failed to disclose to the committee that, at that very moment, her husband was on the UAE’s payroll. Though it was not widely noted at the time, Bill Clinton had a commercial relationship with the UAE dating back to 2002. Interestingly, the former president specifically advised the UAE on the Dubai Ports CFIUS transaction at the same time that his wife publicly opposed it.11
The former president also delivered paid speeches in the UAE, established a Clinton scholarship program at the American University in Dubai, and set up a three-way partnership with Dubai ruler Sheikh Mohammed bin Rashid Al Maktoum and his friend, billionaire Ron Burkle. The partnership was a new sovereign wealth fund financed by the UAE, Burkle’s Yucaipa Companies LLC, and Clinton.12
Between 2002 and 2007, the Yucaipa partnership netted the Clintons more than $15 million. Clinton’s former advisor Dick Morris linked the partnership to the Dubai Ports deal and called the affair the “Clintons’ UAE quid pro quo.”13 The Clinton Foundation received millions from UAE-linked entities.14
A DP World competitor hired lobbyists to persuade Congress to kill the deal. Soon after, Senator Chuck Schumer (D-NY) attacked the purchase based on what the media called “anti-Arab suspicion.”15 He, Hillary Clinton, and others—including then-Senator Obama—even threatened legislation specifically targeting the Dubai Ports purchase. Meanwhile, Bush redoubled his support of the DP World purchase and threatened to veto any such legislation.16
The Dubai Ports fiasco was the first time that CFIUS deliberations made significant headlines and sparked public discussions. Despite receiving CFIUS approval, the sale sparked enough public outcry through Senator Clinton’s and others’ protests to cause the port operators to renegotiate the deal.17
At first glance, it appeared that Senator Clinton was working against the interests of her husband’s Arab benefactors. However, it is possible that the UAE never wanted the U.S. ports to begin with. First, the “U.S. operations represent[ed] only around ten percent of the $6.8 billion of the deal,” and the UAE operator’s primary interest in the takeover was “getting a greater presence in Europe and especially in Asia.”18 Second, U.S. port security costs skyrocketed after 9/11, and, while airports received an influx in federal funds, “only modest federal funding [had] been made available for port facility improvements.”19 Furthermore, inefficiencies caused by American union worker demands was an added deterrent.20
In the end, the Dubai Ports deal was neither killed nor undone. Rather, the transaction proceeded and the U.S. ports were carved out of the deal and sold to AIG Global Investment Group—a financial firm with zero port operation experience—for an undisclosed sum.21 As it turns out, AIG closed on the port deal with DP World less than three months after pledging $5.25 million to the Clinton Global Initiative.22
Whether Senator Clinton’s grandstanding was a demonstration of her genuine concern for U.S. national security, or an attempt to distance herself from the UAE-linked millions flowing to her husband and her foundation, or even a potential shakedown for future UAE largesse, the true reason for the Clintons’ conflicting actions was never exposed. What was certain? The UAE continued to shower the Clintons and their foundation with millions long after the Dubai Ports controversy died down.23
By working both sides of the deal, the Clintons received significant and undeniable benefits from the Dubai Ports debacle: it simultaneously highlighted their CFIUS expertise and demonstrated their ability to either close or kill a CFIUS deal.
After the Dubai Ports debacle, Senator Clinton pushed for legislation to fortify CFIUS dramatically. In 2008, when she ran for president the first time, she even touted herself as “an outspoken proponent of strengthening CFIUS.”24
If Senator Clinton tried to kill a port deal involving an allied country, surely Secretary Clinton would be concerned when an adversary like Russia tried to purchase a strategic nuclear asset like uranium through the Canadian mining company Uranium One. But, according to Clinton, the Uranium One takeover was handled by her deputy, Jose Fernandez, who (after receiving an extremely rewarding position from Clinton fixer John Podesta) claimed that she “never intervened.”25
Clinton’s defenders contend that Uranium One never rose to the level of importance deserving the secretary’s attention. Ironically, then-Senator Clinton criticized the Bush CFIUS officials for similar inattentiveness and grilled them on who was “apprised” and how many meetings they had.26
Hillary and Bill Clinton’s counterbalancing roles in the Dubai Ports deal demonstrated several important facts that relate to Uranium One. First, Hillary Clinton was a longtime CFIUS hawk. Second, Bill Clinton was willing to take foreign cash and lobby for controversial foreign governments. Most importantly, Bill had successfully advised on a contentious CFIUS review, but Hillary and her allies could blow up a deal even after CFIUS approved it. The Clintons thus proved their ability to affect CFIUS outcomes. They were the ultimate gatekeepers for foreign entities wanting to make major investments in strategic U.S. assets.27
Shortly before the Dubai Ports controversy began, the Clinton Global Initiative (CGI) was established. CGI convened annually in New York, providing a forum for foreign governments and industrialists to network with some of the most powerful people in the world. In return, the Clinton Foundation raked in tens of millions of dollars in donations, and hundreds of millions in “pledges” and “commitments” for charitable work. In 2004, Clinton Foundation revenue was over $57 million. Two years later, its revenues had more than doubled.28
New CGI benefactors were funneled into the Clinton fundraising pipeline. Their names and donation amounts were added to spreadsheets to be tallied and totaled for future donor outreach.29 Becoming a CGI donor was only the first step for individuals seeking Clinton’s favor. Next, they were encouraged to sponsor a speech by Bill Clinton, which would put money directly into Bill and Hillary Clinton’s pocket.30
While Hillary Clinton was running for president in 2008, the Clinton Foundation’s annual revenue approached $200 million. Obama defeated Clinton for the nomination but tapped her for the role of top U.S. diplomat. In her first year as Secretary of State, Clinton Foundation revenues hit an all-time high of nearly $250 million (after Clinton’s election loss to Trump in 2016, revenues plummeted to less than $40 million in 2017—and just over $30 million in 2018, a fifteen-year low).31
During her Secretary of State confirmation hearing, Hillary Clinton was grilled on the massive amounts of money flowing to her spouse and the foundation in the form of speeches and donations. Clinton was easily confirmed despite the reservations of congressional Republicans and some in the Obama administration. Clinton was able to ameliorate their concerns by signing a memorandum of understanding (MOU) with Obama’s presidential transition team—cochaired by none other than Clinton’s fixer, John Podesta—that promised enhanced disclosures for Clinton speeches and foundation donations.32
The Clinton MOU proved to be toothless as Clinton violated its requirements repeatedly with absolute impunity.33 This was particularly evident in the troubling case of Uranium One.
Many Uranium One shareholders, for example, secretly donated undisclosed millions to the Clinton Foundation.34 These investors stood to gain substantially from the CFIUS approval as the Russians were willing to pay top dollar. Rosatom paid billions for Uranium One—including a $610 million cash “premium”—of which at least $479 million went directly to Uranium One’s shareholders as a “special” cash dividend.35
But first, the Canadians and Russians would need the blessing of Obama’s CFIUS gatekeepers. Hillary Clinton was in the unique position to make or break the deal.
State Department’s Lead Role on CFIUS
The Dubai Ports case had thrust CFIUS under a microscope, and the national security establishment in Washington scrambled to avoid another public spectacle. The intelligence community (IC) tapped Major General John R. Landry to put together a task force to assess potential CFIUS deals being “blindsided” by “political landmines” like the Dubai Ports scandal. General Landry was a highly decorated graduate of both West Point and Harvard with combat experience. At the time, General Landry was the national intelligence officer (NIO) for military affairs—the highest-ranking military intelligence official.36
In May 2006, General Landry invited James Rickards, an investment guru with CIA experience, to meet at the CIA headquarters in Langley, Virginia. General Landry asked Rickards to put together a team of experts to assess future CFIUS deals from Wall Street’s perspective. Rickards agreed and set about forming a task force of private sector lawyers and financial advisors to assess CFIUS deals. Rickards’ team became known as “the Dirty Dozen.”37
Rickards’ Dirty Dozen team convened at Langley multiple times each year to discuss upcoming deals with national security implications and offer their perspectives. They provided valuable insight that protected American interests while supporting CFIUS’ mission. Rickards’ team reviewed dozens of CFIUS transactions, and their work was so successful that the Defense Department asked him to create a similar task force at the Pentagon.38
The Dirty Dozen had unprecedented civilian access to CFIUS proceedings, and Rickards is one of the few experts who has shed light on the secretive process. Rickards acknowledged that CFIUS decisions must be unanimous, but that fact alone does not exonerate Clinton’s key role in the Uranium One decision.39
The CFIUS unanimity issue became Clinton’s primary defense in the Uranium One case—amid a series of shifting and unverifiable excuses (such as Clinton “never intervened”)—when the heat came down in April 2015. “The State Department was just one of nine [CFIUS] agencies” remains the primary talking point of those who declare—without evidence—that Uranium One is a “debunked conspiracy.”40 Rickards reveals why the unanimity issue is not an airtight defense:
It is true that CFIUS has nine votes (eight Cabinet-level departments plus the president’s science adviser), and that the Uranium One deal was approved unanimously. So, this Clinton defense has superficial support.
But, this defense bears no relationship to how CFIUS works in practice. In fact, there are only four votes that count—the secretaries of state, defense, energy, and treasury.41
The Treasury Department is the designated leader of CFIUS and sets the agenda.42 On deals with significant national security implications, the opinions (or “equities”) of the secretaries of defense and state hold the most weight and “everyone else is a bystander.”43 Despite Clinton’s claim that she had no undue sway over the committee, Rickards’ description of how the CFIUS participants typically behave reveals that Clinton’s State Department played a central role. In fact, the State Department had the ability to single-handedly approve or block Uranium One:
The Commerce Department is considered a pro-investment cheerleader and is not taken seriously. The Office of the U.S. Trade Representative and the president’s science adviser can chime in but are little more than rubber stamps for what the big four want.
The Departments of Justice and Homeland Security contribute intelligence from the FBI and other collectors. This is added to collections produced by CIA, DIA, and NSA, yet those agencies seldom voice a strong view on the merits of a deal. CFIUS is a consensus-driven group.
If the secretary of state pushed hard for Uranium One, the secretaries of defense and treasury would go along because their equities, weapons systems and terrorist finance specifically, were not infringed. Other members would remain mute. If the White House did not oppose the secretary of state, then her strong support for a deal could single-handedly carry the day.44
Rickards was correct. Despite the Treasury Department’s designated lead role, Clinton’s State Department effectively ran point on the Uranium One CFIUS review and provided positive justification for the Russian nuclear takeover. Her staff linked the Uranium One CFIUS review to New START and the 123 Agreement—both major foreign policy priorities for Obama and Clinton.45 Obama had placed Clinton in charge of coordinating the U.S.-Russia Bilateral Presidential Commission (BPC), which had significant nuclear and foreign investment implications.46 The State Department was the logical choice for assessing the complex diplomatic and bureaucratic cross currents posed by Obama’s reset. It also dovetailed with Clinton’s announced interest in promoting “economic statecraft” during her tenure as secretary.47
Less than two months before the CFIUS review, Clinton’s economic guru, State Department Undersecretary Robert Hormats, visited Putin’s hometown of St. Petersburg to promote Russian investment in the U.S. He was a featured speaker at the St. Petersburg International Economic Forum (SPIEF) on June 18, 2010. Hormats highlighted the Obama administration’s commitment to fostering economic partnerships with Russia.48
We have a very open investment environment in the United States. We do have an investment review process known as CFIUS but that really only addresses a relatively small portion of the overall amount of investment that takes place in our country and we have a very welcoming environment for investment…. We are a country that looks forward to foreign investment.49
Several top Russian officials and oligarchs close to Putin (including at least one Clinton donor named Viktor Vekselberg) sat beside Hormats on the panel. They listened intently to the State Department deputy as he emphasized Obama’s policy of open investment. His words must have been music to Putin’s ears.50
A Controversial Decision
Obama’s reset with Russia had been widely criticized from the start—especially because it was a polar reversal of the Bush administration’s chill following Russia’s 2008 invasion of Georgia. By the time the October 2010 CFIUS review approached, Obama’s critics had grown frustrated with his perceived weakness and his pro-Putin policies under the guise of economic diplomacy.
Obama received the most backlash for his flip-flop on missile defense, for the perceived gutting of America’s nuclear arsenal, and for ensuring the safe return of Russian spies just weeks before the Uranium One approval.51
Several key GOP lawmakers were especially concerned with Russia’s nuclear assistance to rogue regimes (particularly Iran, Syria, and Burma) due to the threats posed by weapons-grade materials in the hands of American enemies. The ranking members of the House Armed Services, Financial Services, Foreign Affairs, and Homeland Security Committees urged CFIUS to recommend that Obama block the Russian takeover of Uranium One’s essential U.S. nuclear assets (which they believed posed national security risks).52
As president, Obama had the sole authority to suspend or block the Uranium One transaction based on the CFIUS recommendation. But in 2006, Clinton and her Senate colleagues had already proven that a coordinated media strategy could effectively derail a controversial deal like Dubai Ports. Thus, the Uranium One deal was by no means assured or guaranteed.
So why did CFIUS ignore the red flags surrounding Russia’s nuclear ambitions?
Clinton’s State Department anticipated criticism of Russia’s nuclear cooperation with Iran—the primary sticking point in past U.S.-Russia nuclear negotiations—and effectively preempted it amid CFIUS deliberations. Uranium One formally notified CFIUS of the deal with Rosatom/ARMZ on August 4, 2010.53 On September 13, State Department staffer Ari Sulby sent a memo to the Treasury Department titled “Russian Nuclear Cooperation with Iran.”54
The memo was sent to Treasury’s CFIUS chairman, Aimen Mir. Oddly, it had no header, it was unsigned, and it was undated, making attribution difficult.55 The memo appeared to have been hastily cribbed from a 2008 State Department assessment called a Nuclear Proliferation Assessment Statement (NPAS), prepared for the Bush administration and required for any prospective 123 Agreement.56
“The United States has received assurances from Russia at the highest levels that its government would not tolerate cooperation with Iran in violation of its UN Security Council obligations,” the State Department memo to CFIUS began. It then proceeded to list all the ways that Russia cooperated with the U.S. to keep Iran’s nuclear program in check.57
The State Department failed to mention the red flags surrounding Russia’s nuclear cooperation with Iran, which was of particular concern to the lawmakers. Instead, the department repeatedly lauded Russia for their Iranian containment efforts such as supporting the International Atomic Energy Agency’s “intense investigation into Iran’s nuclear program” and “condemning Iran’s construction of an illicit enrichment facility near Qom.”58
Clinton’s State Department justified nuclear dealings with the Kremlin, “In light of Russia’s demonstrated willingness, as outlined above, to work together with the United States and other nations to seek a resolution of the issues raised by Iran’s nuclear program.”59
The State Department memo was timely because it was sent to CFIUS only three weeks before the four ranking members implored Obama’s committee to block the deal—specifically due to Russia’s nuclear cooperation with Iran.
In Congress, the ranking members had apparently not seen the State Department’s mitigation memo praising Russia’s handling of Iran. Their letter directly contradicted the State Department’s optimistic view. The congressional representatives listed numerous Rosatom activities that they believed “should raise very serious concerns for United States national security interests.”60
The ranking members’ red-flag letter directly contradicted the State Department memo. While the State Department asserted that Russia was instrumental in the containment of Iran’s nuclear weapons ambitions, the lawmakers stated that Russia had undermined the “longstanding efforts to compel Iran to abandon its pursuit of nuclear weapons.”61
Other red flags that the ranking members believed should disqualify the Uranium One transaction included the fact that Russian entities have been placed under nuclear-related sanctions on more than twenty different occasions since 1998. In addition, Russia has continued to sell nuclear components with dual civilian and military use to regions that could use such technology for weapons of mass destruction (WMD) and missile programs.
The State Department memo never mentioned these alarming details. Quite the opposite, the memo highlighted that Russia is not selling dual-use technologies in violation of UN Security Council Resolutions. The memo also failed to report that Russian President Dmitry Medvedev met with Syrian despot Bashar al-Assad to discuss Russia-Syria nuclear cooperation, or that Syria continued to block any investigations into their North Korean–built nuclear weapons facilities, which were destroyed by an Israeli airstrike.
“The facilities, materials, technology, and expertise that could be provided to Syria, even for a ‘peaceful’ program,” the congressional letter warned, “would likely be used for a renewed weapons program, regardless of any assurances the Russians might provide.”
Russia’s nuclear alliances with Iran and Syria were particularly alarming given that both were state sponsors of terrorism.62 The ranking members’ letter concluded by criticizing the Uranium One transaction as the “take-over of essential U.S. nuclear resources by a government-owned Russian agency.” They reiterated the threat to national security and urged CFIUS to block or at least postpone the deal.63
CFIUS apparently found the State Department’s optimistic rationale more compelling; it ignored congressional pleas to block the deal.
CFIUS deliberations are held in secret and take place at the main Treasury building in what Rickards and the IC call “‘Downtown’ principals meetings.” Rickards does not know for certain how the State Department or any other Obama agency exercised their “equities” at the Downtown meetings. Mysteriously, he and his Dirty Dozen were kept out of the loop during the Rosatom takeover review in 2010. “Uranium One was the dog that didn’t bark.” When Rickards learned about the secret CFIUS approval, he was mystified:
[Uranium One] fits squarely in the realm of deals typically denied, where an adversary, Russia, is buying a sensitive asset, uranium. Strangest of all, this deal never came to our attention. Not once in any meeting, classified or unclassified, was Uranium One ever mentioned in our full advisory board sessions or one-on-ones. It’s as if the deal were being handled inside the intelligence community on a special track, precisely to avoid the analysis our group was formed to provide.64
Rickards’ observation that Obama’s IC may have shepherded Uranium One on a special track presents a curious dilemma: it either supports the Clinton defense that the State Department was just one of nine agencies who approved the deal, or it suggests that Clinton’s State Department was able to persuade Obama’s IC to get on board with the Russian takeover of American uranium assets.
Even if Clinton or her agency did exert pressure to approve, Obama’s CFIUS and IC had been warned of the risks and apparently failed to provide substantive pushback on those who advocated Uranium One approval.65
Putin began taking Uranium One private in 2013—a move that required a further 49 percent investment and could have triggered a second CFIUS review.66 At a time when Rickards and the Dirty Dozen would have alerted Obama’s IC to national security risks, their team was unexpectedly shut down. Rickards was puzzled by the abrupt dissolution. There was no credible explanation. In terms of costs and productivity, the Dirty Dozen had been highly effective.
We were told the advisory board’s termination was for budget reasons, but that never rang true. We were mostly volunteers who got paid travel reimbursements and little in the way of fees. We even passed the hat during meetings at Langley to pay for our buffet lunches. We were probably the best value for money the government ever saw.67
Rickards believed there was more to the story. It was rumored that the termination came from the top of Obama’s IC.
I was informed privately that another general, James Clapper, the director of national intelligence in 2013, wanted our operation shut down. I never knew why, yet always suspected there was a reason other than lunch money and a few plane tickets.68
As director of national intelligence (DNI), Clapper prepared the legally required “threat assessment” of the Uranium One deal. Clapper’s Uranium One threat assessment remains classified.69
The controversy around the Uranium One approval is amplified by the fact that CFIUS ignored many other red flags not mentioned in the ranking members’ letter. These red flags included multiple separate Russian nuclear conspiracies involving espionage, smuggling, bribery, extortion, kickbacks, and money laundering (all amounting to Russian racketeering, not only abroad but also in America).70
Obama had ended the Russian espionage operation known as the “illegals program” in July 2010, so perhaps CFIUS considered that matter unimportant. But the Tenex racketeering scheme was still in full swing.71
As recounted in the previous chapter, FBI operative William Campbell repeatedly warned his FBI handlers of the Rosatom subsidiary’s corruption. He was told that his intelligence had reached the highest levels, including FBI Director Mueller and President Obama.72
In August 2010—the same month CFIUS began the Uranium One review—the Nuclear Regulatory Commission was made aware of the FBI investigation into Tenex executive Vadim Mikerin when the NRC “received a sensitive intelligence report made available to various components of the Federal Government through normal intelligence reporting channels.”73
The NRC does not provide details on who briefed them on the FBI investigation into Tenex corruption or whether they were fully aware of what Campbell had uncovered. It remains unclear which other agencies were informed, particularly which other CFIUS agencies, in August 2010 amid the CFIUS review. The NRC only states that “various components of the Federal Government” received the report regarding the FBI Tenex investigation.
Obama’s intelligence officials, including FBI Director Robert Mueller and the Department of Energy’s inspector general, were all aware of the Tenex racketeering schemes well before the 2010 CFIUS review.74
FBI deputy Andrew McCabe and federal prosecutors Andrew Weissmann and Rod Rosenstein—all of whose names would later become familiar during the Mueller investigation—investigated Tenex bribery and money laundering. For unknown reasons, the FBI and DOJ did not bust the Russian racketeers until after the Uranium One takeover was complete.75
Between the August 2010 “sensitive intelligence report” regarding Tenex (acknowledged by the NRC) and the ongoing Tenex investigation by the FBI and the DOE, DNI Clapper had ample evidence of Rosatom-linked corruption to include in his mandated threat assessment.76
The conclusion is unavoidable: either Obama’s top intelligence officials misled CFIUS on the gravity of the Russians’ hostile nuclear efforts or someone gave a stand-down order—a directive that could only have come from Obama (or a very high-ranking lieutenant).
Empty Promises
Russia and Uranium One made numerous promises in order to receive CFIUS approval. To begin with, Rosatom promised to maintain the approved management and ownership structure, and that Uranium One would not be broken up.
In a July 2010 letter to the NRC, Uranium One tacitly recognized that a Russian state-owned nuclear company taking control of American uranium might be cause for alarm. After all, the Rosatom takeover would give Russia a license to possess unlimited quantities of radioactive material on U.S. soil in multiple forms, including fissile uranium (which is used in atomic bomb chain reactions).77
Uranium One sought to assuage NRC concerns by promising to remain a publicly listed company (which requires more transparency than a private company). According to the July 2010 letter:
However, Uranium One is and will remain a publicly listed company on the TSX (Toronto Stock Exchange) and JSE Limited (Johannesburg Stock Exchange) and will continue to be subject to extensive and ongoing securities regulatory, corporate governance and financial statement preparation and reporting requirements under applicable Canadian laws and regulations and the rules and regulations of the TSX and the JSE.78
Furthermore, the “proposed transaction does not provide for or anticipate any changes to Uranium One subsidiaries in the United States or the NRC Licenses and Applications held by such subsidiaries.”79 Uranium One’s mining leases in Wyoming (among other states) would remain controlled by Americans.80
Throughout Uranium One’s change of control notice, the company promised the NRC that the transaction would have “no effect” on Uranium One’s personnel; no effect on the use, possession, location, or storage of licensed materials; no effect on the organization, the facilities, equipment, and records; no effect on any of the operating or safety procedures; and no effect on the surety arrangements, bonds, and letters of credit.81
While some of these assurances may have been technically accurate, they were certainly misleading. Uranium One’s ownership structure changed multiple times. So did their operations, personnel, and activities.82 In December 2011, Uranium One issued corporate bonds valued at 14.3 billion rubles (approximately $463.5 million) on the Moscow stock exchange (MICEX). This effectively indebted Uranium One to Russian stock traders, despite the company’s promise to the NRC that the Rosatom takeover would have “no effect” on bond arrangements.83
Between August and October 2013, Uranium One refinanced the ruble bond debt through complicated financial maneuvers on Russia’s MICEX. These financial maneuvers allowed Rosatom to increase its ownership of Uranium One from 51 percent to 100 percent. The so-called “Going Private Transaction” resulted in Uranium One being delisted from the Toronto Stock Exchange. Another promise was broken. Substantial U.S. nuclear assets became wholly owned by the Russian government.84
During the CFIUS review, Uranium One highlighted that the Japanese would likely be taking a significant stake in the company through a complex stock arrangement (called the “2010 Debentures”). This detail perhaps led CFIUS and the NRC to believe that an allied country would be part owner of Uranium One. That proved untrue. Two months after CFIUS approved Rosatom’s takeover, Uranium One “repurchased and cancelled the debenture on December 29, 2010.”85
From the moment CFIUS approved the takeover, the Russians had full control.
Seemingly persuaded by the company’s misleading assurances, the NRC assured Congress and the American public that, at least, the new Russian owners could not export any nuclear materials.86 But beginning in 2012, Uranium One began exporting uranium from the U.S. to Canada.87 From there, it could be shipped anywhere in the world.
For most Americans, the Russian export of U.S. uranium—particularly to Iran, North Korea, or some other hostile regime—is a frightening prospect. Clinton apologists and defenders of the Uranium One deal argue that the export process is highly controlled and subject to significant oversight.88 CFIUS expert James Rickards argues this defense only has “superficial substance.” As Rickards explains:
What this defense misses is that uranium, usually in the form of the low-enriched concentrate, U3O8, called yellowcake, is a fungible commodity with a worldwide market….
Uranium One has mines in Kazakhstan, the United States, and Tanzania. It has customers, directly and indirectly via parent Rosatom, around the world, including Iran, Russia, and China. Prior to the acquisition of Uranium One by Rosatom, a U.S. nuclear power plant could have been supplied from mines in Kazakhstan. After the acquisition, Rosatom could assign that supply contract to Uranium One, a U.S.-to-U.S. deal, and the Kazakhstan output would be available for shipment to Iran. In effect, the Wyoming uranium is supplying Iran through a simple substitution of suppliers in a three-party structure.89
The possibility that American uranium was exported by Russians to bad actors is unlikely due to one simple fact: after taking control of Uranium One, Russia “throttled back” U.S. uranium production and even mothballed some of the American mines.90 But this outcome is perhaps even more sinister and has been eclipsed by the controversy over whether Russians exported American uranium to Iran or North Korea.
Russia’s true plans for the American assets have now become clear: the controlled demolition of the American uranium industry.91
Russians began restricting U.S. production after they took control of Uranium One.92 According to Rickards, this maneuver appears to have been a price manipulation strategy:
Taking the Wyoming production off the market would be costly in the short run, but the sudden shortage could increase the world price and benefit other mines owned by Rosatom. This is a price manipulation strategy that a global, government-owned player such as Rosatom could execute that would never be tried if the U.S. mines were owned by a smaller independent player.93
By manipulating the price of energy fuel, Russia made it difficult for smaller American miners to compete. The utility companies that Uranium One previously supplied did not care where their fuel came from. In fact, they would rather their fuel come from Russian-owned mines in Kazakhstan than Russian-owned mines in Wyoming if it saved them money. This means that the CFIUS approval of the Uranium One takeover was likely in the utilities’ immediate financial interest.94
Months before the CFIUS approval, the undercover informer Campbell specifically warned his FBI handlers about Rosatom’s strategy to undercut prices in the American market. In a black suburban that picked him up at his normal debriefing rendezvous location near the Pentagon in suburban Washington, Campbell related in July 2010 the recent discussions he had with Rosatom officials about impacting the U.S. market now that its Tenex sales arm had become number one in the uranium enrichment services marketplace worldwide.
“TENEX’s share in the world enrichment services market as of July 2010 is 37% total, which places them ahead of Urenco, AREVA, USEC,” Campbell wrote in the notes he prepared to share with the FBI during the ride. “This makes TENEX #1 in the world as of this month.”95
Campbell added, “TENEX indicates they can sell cheaper in the US market than any of their competitors however they are acutely aware of selling solo that they could possibly be accused of dumping into the market.”96
Neither the persistent warnings about dumping from the Department of Commerce nor the intelligence of the FBI informer inside Putin’s nuclear empire could put a pause on the fateful decision the Obama administration was about to make. Putin’s Rosatom was about to acquire another lever in its machine to monopolize the global uranium market and make American nuclear reactors more reliant on Moscow.
Influencing and Enriching the Gatekeepers
The Russia reset provided massive opportunities for perceptive investors. Preferential treatment from Obama’s State Department could be invaluable. This was especially true for Putin, the Canadians from whom he bought Uranium One, and the utility companies that stood to gain from cheap Russian uranium supplies.
If Hillary Clinton was the gatekeeper, the Clinton Foundation was the tollbooth, and Bill Clinton was the operator.
As Peter Schweizer documented extensively, Uranium One stakeholders (that is, entities who benefitted from the sale to Rosatom, including direct shareholders, investors, and financial advisors) donated more than $145 million to the Clinton Foundation.97
Beginning in June 2007, individuals linked to Uranium One secretly funneled millions of dollars through a Canadian pass-through entity called the Clinton Giustra Sustainable Growth Initiative (CGSGI). The timing of Uranium One’s expansion into the United States is closely tied to the establishment of the CGSGI enterprise. That is, cash flowed to Clinton coffers from Uranium One principals as their company sought CFIUS approval more than three years before the Russian takeover.98
Exactly seventeen days after Uranium One announced the acquisition of their first American mines, the company became a Clinton Foundation partner. On June 21, 2007, the Clinton Foundation proudly announced a $300 million commitment by CGSGI. Uranium One and several of its key stakeholders were touted among the new CGSGI partners. The next month, Uranium One’s acquisition of the American mines was approved.99
As a Canadian entity, Uranium One’s initial purchase of the American uranium assets (those the Russians would later own) was clearly not deemed to be a threat by CFIUS in 2007. This earlier CFIUS approval has gone widely unreported since it did not involve Russia and because Canadians are typically close American allies.
But the timing of Uranium One’s initial purchase of the American mines and the establishment of the $300 million pass-through vehicle are crucial to understanding how Uranium One stakeholders secretly enriched the Clinton Foundation. The timing and secrecy surrounding the payments are troubling.
CGSGI was incorporated under Canadian charity laws that prioritize donor privacy. Conveniently, the Clintons failed to disclose more than 1,100 of the donors to this entity. Uranium One’s chairman, Ian Telfer, secretly steered $2.35 million through his own private entity, the Fernwood Foundation, to CGSGI.100
Schweizer first revealed Telfer’s hidden donations, which sparked widespread condemnation of the Clintons’ shady disclosure practices. The Clintons quickly released a partial list of other donors they had previously failed to disclose, including Telfer and his foundation. More than one thousand CGSGI donors remain secret.101
While Giustra, Telfer, and other Uranium One stakeholders (including Uranium One Inc. itself) funneled potentially hundreds of millions through CGSGI, Rosatom made its first steps to begin taking control of the company. First, in mid-2009, Rosatom tested the waters and purchased 17 percent—a minority stake.102
This investment apparently flew under the CFIUS radar. Throughout 2010, more funds linked to Uranium One (and perhaps even Rosatom) flowed into the Clinton Foundation and into Bill Clinton’s pockets in the form of speech payments. Beginning in 2010, the Clinton Foundation received more than $2.6 million from a Canadian entity called Salida Capital Foundation. In 2011, Rosatom listed a “Salida Capital” as a subsidiary. Salida Capital refused to comment on whether or not they were owned by Rosatom—a shocking development, if confirmed.103
Russian money did flow directly to the Clintons. Clinton directly received $500,000 for a notorious speech in Moscow for Renaissance Capital—the Kremlin-controlled bank promoting Uranium One—mere months before the CFIUS review.104
On top of the hundreds of millions that Giustra and his Canadian associates sent or pledged to the Clinton Foundation, the tollbooth received between $1.74 and $6.28 million from Rosatom’s nuclear utility customers and partners. While Rosatom customer Exelon partnered with the Clinton Foundation, neither has disclosed any direct contributions.105
At the same time the Canadian mining investors and the American utility companies were pouring money into the Clinton Foundation, Rosatom’s Tenex subsidiary hired an international lobbyist named APCO Worldwide.106 One of Clinton’s deputies and top energy advisors, Amos Hochstein, had worked for Tenex in the past and taught the Russians how to “Americanize” their efforts by partnering with American utility companies.107 That strategy paid off.
Tenex hired APCO in April 2010 to promote the interests of Rosatom and used the pending 123 Agreement and New START as cover for their strategic interest in cornering supply. In September 2010, APCO sponsored a media panel at the CGI annual meeting and was listed as a CGI “meeting partner.”108 This was APCO’s first public affiliation with the Clinton Foundation and occurred just one month before CFIUS approved the Russian nuclear takeover.109
APCO first signed on to CGI as an in-kind donor in 2008, just before Obama won the presidency, but its support markedly soared after Hillary Clinton became secretary of state and the firm scored its contract with the Russians.110 In hindsight, these developments do not appear coincidental.
Public disclosures list APCO as a $25,000 to $50,000 donor to the Clinton Foundation, but internal Clinton Foundation records show APCO contributed closer to $1 million, including in-kind contributions. APCO sponsored multiple Clinton events while they lobbied for Russian interests, but their contributions were never fully disclosed publicly. This was another violation of Hillary Clinton’s 2009 special ethics agreement not to commingle public and private affairs on her watch as secretary.111
Throughout 2010 and into 2011, APCO contacted federal and congressional officials at least fifty times on behalf of Tenex—including at least ten interactions with the State Department. APCO built Rosatom a website, www.usarussia123.com, that touted Russia’s willingness to cooperate with the Americans. APCO’s efforts on behalf of Russian client Tenex were effectively propaganda.112
“APCO Worldwide’s activities involving client work on behalf of Tenex and The Clinton Global Initiative were totally separate and unconnected in any way,” claimed APCO’s chairwoman and founder, Margery Kraus, when asked about the suspicious connections.113 What else could she say?
At the same time the Kremlin was paying outside lobbyists such as APCO to lobby for their nuclear interests, the Russians also hired past, present, and future Obama administration officials. Washington insiders Theodore Kassinger and Amos Hochstein served in Clinton’s State Department at various times throughout her tenure. Both were on the payroll of Rosatom subsidiaries and specifically advised them on how to extract nuclear concessions from the Obama administration.114
Shockingly, Kassinger served as counsel to the Russians during the Uranium One CFIUS review while simultaneously advising Secretary Clinton. In addition to Hochstein and Kassinger, Rosatom employed energy consultant Cheryl Moss Herman. Two weeks before the CFIUS approval in October 2010, Herman drafted a memo for Tenex that specifically discussed the pending Uranium One takeover (as mentioned in Chapter Six). Before long, Herman was working within Obama’s Energy Department.115
Kassinger had been a top official in the Bush Commerce Department before he hit the lucrative revolving door in Washington. He took his commerce experience to the private sector and advised foreign clients at the white-shoe law and lobbying firm O’Melveny & Myers. As a Council on Foreign Relations member, he contributed to a 2008 report titled “Global FDI Policy: Correcting a Protectionist Drift.”116
The paper claimed the “danger of a protectionist drift…is considerable.” It specifically advocated tearing down barriers to foreign investment and assuaged concerns over investments by state-owned enterprises (SOEs)—entities like Rosatom.117 By 2009, when Kassinger served as the chairman of a State Department advisory panel, his anti-protectionist leanings were put into action.
In 2009, Secretary Clinton tasked her State Department Advisory Committee on International Economic Policy (ACIEP) to present policy recommendations dealing with foreign investment in the U.S. Kassinger was Clinton’s ACIEP chairman, and his report advocated an open investment climate and welcomed investments from SOEs like Rosatom.118
Kassinger was the perfect man to advise the Russian state-owned nuclear corporation on investments in the U.S. He had a significant role inside Clinton’s State Department and met regularly with Undersecretary Jose Fernandez—the man who claims that Clinton played no role in the Uranium One decision. Furthermore, Kassinger’s role as chairman of the ACIEP meant that he was not a full-time State Department employee. Thus, while serving in this advisory role, it is unlikely that he would have been required to disclose any potential conflicts of interest.119
Secretary Clinton met with Kassinger and Fernandez during an ACIEP meeting on April 15, 2010, just six months before Fernandez reviewed the Uranium One sale for CFIUS. Kassinger met again with Fernandez on August 12, just nineteen days before Uranium One’s shareholders approved the sale to ARMZ and shortly before CFIUS approved the transaction.120 State Department emails reveal that on October 22, the Uranium One CFIUS approval was sent to the Russians’ attorney: Ted Kassinger.121
The Russian agents working both inside and outside Clinton’s State Department, combined with the massive sums of money flowing to the Clinton Foundation from Uranium One stakeholders, have still not been seriously investigated. An internal audit (or “governance review”) of the Clinton Foundation, performed at the behest of Chelsea Clinton, revealed that several Clinton Foundation benefactors “reported conflicts” associated with the donations and “may have an expectation of quid pro quo benefits in return for gifts.”122
The sums Clinton received from interested parties linked to Uranium One were staggering. Schweizer’s original calculation exceeding $145 million has ballooned to a figure that could exceed $450 million.123
The FBI opened multiple investigations after Clinton Cash was released and FBI agents consulted with Schweizer on his findings. But those investigations were ultimately stymied by FBI leadership, including then-Director James Comey and his deputy Andrew McCabe. New details have now emerged, and the public continues to demand answers.124
* * *
Despite the protests from high-ranking U.S. legislators and numerous complaints from constituents, Vladimir Putin took majority control of significant American uranium assets. The deal was finalized in December 2010. Six months later, Obama signaled that such investments had his blessing:
My Administration is committed to ensuring that the United States continues to be the most attractive place for businesses to locate, invest, grow, and create jobs. We encourage and support business investment from sources both at home and abroad.125
Putin’s takeover of Uranium One was a major coup, especially when combined with guaranteed billion-dollar nuclear fuel contracts he simultaneously secured with U.S. utility companies.126
While Hillary Clinton’s defenders used the unanimity of Obama’s CFIUS to ameliorate Clinton’s role, the fact remains that Putin further cornered the uranium market and gained significant energy assets around the globe by way of a single purchase. Putin also extracted other significant nuclear concessions from Obama, including the New START treaty, weakened NATO missile defense, and the 123 Agreement concerning civilian nuclear sales.
CFIUS expert Rickards and his Dirty Dozen team were never consulted on the transaction. Had they been, they would have recommended rejection of the Russian nuclear takeover scheme. Rickards believed that this type of deal would have typically been denied. “In the end,” he concluded, “the Uranium One deal went through because the secretary of state and the White House wanted it to go through.”127
Just as Clinton’s State Department could not approve the deal single-handedly, Putin could not have pulled off the Uranium One takeover by himself. Putin needed lobbyists and embedded allies in high places in Washington to pull off the deal. His nuclear operatives also partnered with politically connected American utilities by appealing to their mutual interests—primarily cheap nuclear fuel supplies. These collaborative efforts began under the Bush administration but ramped up when Obama took power.
Clinton’s defenders were correct that Obama’s CFIUS decision granting Putin control of Uranium One was unanimous. That argument is irrelevant because it does not exonerate Clinton. Rather, it condemns the broader Obama administration. Her earlier criticisms of the Dubai Ports deal would be more fitting had they been applied to the way CFIUS approved the Uranium One deal.