Landry got to the point. “Jim, we’ve just come through a firestorm on this Dubai Ports deal. I’d like you to recruit and organize an expert team who can help us avoid being blindsided. The intelligence on that case was fine, but we need outsiders, real-world perspective. If we add that dimension, we’ll see political landmines in advance. We want Wall Street’s take on these deals. Can you put a team together for us?”
Of course, I accepted the mission. I had done a lot of recruiting on Wall Street beginning in 2004, to help the CIA on Project Prophesy. That was a post-9/11 strategic study related to insider trading ahead of the attacks. Project Prophesy used Wall Street expertise to build and test predictive analytic systems that could foresee new terror attacks using market data. One of the most gratifying parts of that project was that when I called Wall Streeters to volunteer I was never turned down. Everyone I recruited, from major bank investment chiefs to hedge fund billionaires, dropped what they were doing to help us any way they could. I welcomed the chance to enlist volunteers again for the CFIUS mission.
Over the next few months I recruited one of the best possible teams. I tapped deal lawyers, risk arbitrageurs, subject-matter experts, and private-equity players who knew their way around those emerging markets most likely to be the source of threats, especially China and Russia.
As I identified each recruit, we made arrangements for that person to visit General Landry at CIA headquarters before making a formal offer to participate in the project. My favorite interview story involves a blond, blue-eyed investment banker from Connecticut with strong Middle-East connections. Like most of my recruits, he was a first-time visitor to Langley. Landry knew how to turn on the charm. We escorted our visitor through a special headquarters tour, including the director’s seventh floor office suite. Landry had his run of the premises due to longevity and the respect of his peers.
When we got back to Landry’s office we completed the interview. The candidate was clearly a strong choice. Landry was pleased to welcome him aboard. As we were wrapping up, Landry reached in his desk and pulled out a gold-plated CIA challenge coin stamped with the agency logo. He handed it to our recruit and said, “Here’s a souvenir of your visit; something to show your kids when you get home.” Our recruit placed it in his pocket and said, “Thank you, general.” At that point, Landry turned serious and said, “Good. Because once you put that coin in your pocket we have you in our pocket.” The recruit blanched.
I had to keep myself from laughing out loud. I wondered how often the general had used that line on newcomers. Landry gave me a sideways glance and a slight smile at the inside joke he had just pulled. The recruit smiled nervously. At CIA, nothing is ever quite what it seems. In any case, our Connecticut banker had just joined the team.
When I was done and my recruits had all received their engagement letters, we were officially organized as an advisory panel to the intelligence community’s CFIUS Support Group. Unofficially we were the “dirty dozen” helping to keep America safe from foreign financial threats.
We operated for seven years with good success. In early 2007, when the IC was worried about telecommunications takeovers, we warned that financial institutions would be the next battlespace. That proved prescient. In late 2007, during the financial panic, Wall Street ran to sovereign wealth funds in China, South Korea, Singapore, and Abu Dhabi for fresh cash to prop up insolvent banks like Bear Stearns, Lehman, Citi, and Morgan Stanley. Those deals raised exactly the types of national security threats we warned about. The dirty dozen’s work was so successful that a Pentagon official took me aside at Langley one day and asked if I could set up a similar body for the Defense Department. This new panel would assist them in conducting their own CFIUS intelligence, and other matters including export controls on U.S. weapons systems.
Beginning in mid-2013, our group was quietly phased out in stages. We got word that our regular October 2013 meeting was postponed due to the threat of a government shutdown at the time. That meeting was never rescheduled. We received a formal termination notice in January 2014. We didn’t know it at the time, but our last meeting had been in April 2013, because of the subsequent cancellation and termination. The dirty dozen were disbanded, our services no longer needed. I carried on with other missions for the intelligence community; my CFIUS days were done.
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. Still, orders were orders. General Landry had retired, and sadly passed away in June 2015. 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.
Clintons, Russians, and Uranium One
While our advisory board was helping the IC with foreign threat assessments, CFIUS principals, based in the U.S. Treasury Department, were wrestling with the strange case of Uranium One. Over the course of 2016, Uranium One became the most publicized and politicized CFIUS case since Dubai Ports in 2006. The Uranium One deal is a twisted saga with roots dating back to 2005. That backstory is crucial to understanding how the Uranium One deal later became politically toxic for CFIUS.
In 2005, a wealthy Canadian entrepreneur, Frank Giustra, with a background in gold mining penny stocks and film production, made a foray into uranium mining. Uranium is a scarce, silvery-colored element, atomic number 92, that is used both for peaceful generation of electricity in nuclear power plants, and for military purposes, to power vessels and for nuclear weapons. It is one of the most strategically sensitive natural resources on the planet.
Giustra and his associates formed a company called UrAsia Energy with a view to acquiring uranium mining rights in Kazakhstan in Central Asia. Giustra enlisted Bill Clinton to assist his efforts. As Giustra put it, “All of my chips, almost, are on Bill Clinton.3 He’s a … worldwide brand, and he can do things and ask for things that no one else can.” On September 6, 2015, Giustra and Bill Clinton visited Almaty, the capital of Kazakhstan. On that visit, Clinton met privately with the ruthless Kazakh dictator, Nursultan Nazarbayev. UrAsia and Giustra got the Kazakh uranium mining rights over stiff competition from larger, more seasoned mining companies in Australia, Russia, and other producing countries. In the following years, Giustra orchestrated hundreds of millions of dollars in contributions to the Clinton foundation.
Once the Kazakh uranium mines were secured, UrAsia embarked on a dizzying round of dealmaking. In November 2005, UrAsia shares were listed on the Toronto Stock Exchange. With listed shares now available as currency to fuel further deals, UrAsia announced on February 12, 2007, its plans to merge with Uranium One, another major uranium producer based in Canada and South Africa. After that merger was completed, the combined company, now called Uranium One, with Giustra and the other UrAsia shareholders in control, began to acquire uranium mining assets in the United States. In just over two years, UrAsia Energy moved from the ranks of junior miners to the ranks of major global uranium producers under the banner Uranium One.
During this period, Hillary Clinton was actively seeking the presidency of the United States and was deemed by the media to be the inevitable winner. Bill Clinton continued to meet with Nazarbayev. The Kazak dictator was named head of a human rights organization, the Organization for Security and Cooperation in Europe, OSCE, despite his atrocious record on civil rights and opposition from senior senators such as Joe Biden. Nazarbayev was invited to attend the Clinton Global Initiative in New York City in September 2007 and was a featured participant. Giustra announced a new pledge to give over $100 million to the Clinton Foundation. The web of mutually beneficial payments, appointments, and accommodations among Bill and Hillary Clinton, Frank Giustra, and the dictator Nazar
bayev grew densely interconnected.
Then Giustra commenced his endgame—a sale of Uranium One, including U.S. uranium mines, to the Russian State Atomic Energy Corporation, Rosatom. On June 15, 2009, Rosatom, operating through its mining arm Atomredmetzoloto, or ARMZ, announced it had acquired a 17 percent stake in Uranium One. Just a few months earlier, on January 21, 2009, Hillary Clinton had become the U.S. secretary of state in the administration of newly elected president Barack Obama. As secretary of state, Hillary Clinton immediately became one of the most powerful voices on CFIUS.
In a succession of follow-on acquisitions, Rosatom announced plans to acquire 51 percent control of Uranium One in June 2010. That transaction was approved by CFIUS, with Hillary Clinton’s support, on October 22, 2010, and was closed by year end. In January 2013, Rosatom acquired complete control of Uranium One and took the company private. Today Rosatom owns the substantial U.S. uranium assets of the former Uranium One.
Facets of this deal are curious. The timeline of the Uranium One story runs from 2005 to 2013, which overlaps almost perfectly with the work of the dirty dozen from 2006 to 2013. The deal 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. Uranium One was the dog that didn’t bark.
Although the deal attracted contemporaneous news coverage as Giustra’s plan progressed, it did not become a political scandal until the 2016 presidential election cycle and the publication of the book Clinton Cash, an exposé by Peter Schweitzer that covered the Uranium One story in detail.4 At that point, Hillary Clinton surrogates rushed forward with red-herring defenses of her conduct that do not withstand scrutiny.
The first defense is that Hillary Clinton was just one of nine votes on CFIUS and could not have single-handedly influenced the outcome on the Uranium One case. 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. The Treasury has the most important role because they chair the committee and set the agenda. “Downtown” principals meetings, as the IC calls them, are held in the main Treasury building. The secretaries of state and defense have the main equities on national security. Everyone else is a bystander. The Commerce Department is considered a proinvestment 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.
The second defense of Hillary Clinton’s role was summed up as “the uranium isn’t going anywhere.” The U.S. uranium mines controlled by Uranium One (and ultimately Russia) are located in Wyoming. It is true that the mine cannot be moved and none of the uranium produced there will be shipped abroad to adversaries such as Iran. Yet this is another defense with only superficial substance.
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.
Rosatom could also shut down the Wyoming mines temporarily. 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.
Spotting market strategies such as supply substitution and price manipulation are exactly the kind of guidance our advisory board was expected to bring to the table. These techniques and others are not second nature to most bureaucrats, who focus solely on first-order export license issues.
In the end, the Uranium One deal went through because the secretary of state and the White House wanted it to go through. The position of this deal in the category of deals typically denied was ignored. The perspective of our advisory board, which was set up precisely to contribute expertise on sensitive deals, was never sought. The dirty dozen, formed to do damage control after Dubai Ports, were sidelined by General Clapper on the most politically explosive deal of all. All that remains is Russian control of U.S. uranium by a classic Clinton obfuscation.
Today, the Uranium One story lives on. On November 16, 2017, Reuters reported the case of William D. Campbell, a lobbyist and FBI informant.5 Campbell claimed to have information pertaining to corrupt efforts by Rosatom to influence the CFIUS approval of the Uranium One acquisition. Campbell was also linked to a separate case in which Vadim Mikerin, the head of U.S. operations for a Roastom subsidiary, Tenex, pleaded guilty to bribery and was sentenced to four years in prison. The bribery charge involved contracts to ship Russian uranium to the United States. Expectations are that as more facts emerge, the Clinton role in CFIUS will be viewed in a harsh light.
Nationalism and Globalism
The threads I weaved while working on CFIUS and other matters for CIA in the early 2000s exploded into headlines by 2015. Donald Trump’s presidential campaign, launched on June 16, 2015, was the most explicitly nationalistic campaign by a major party candidate since Pat Buchanan’s run for the Republican Party nomination in 1996. As the result of his successful campaign, Trump was sworn in on January 20, 2017, as the strongest nationalist since Theodore Roosevelt. For the first time in over one hundred years, a committed nationalist was sitting in the Oval Office.
Obama, both Bushes, and Bill Clinton were globalists, defined as those willing to trade off or compromise U.S. interests for the sake of a stronger global community from which the U.S. benefits. Even conservative hawks like Ronald Reagan and John F. Kennedy were firmly in the globalist camp, as they relied on NATO, the UN, and the IMF, among other multilateral institutions, to pursue their Cold War goals. Richard Nixon’s famous opening to China, Lyndon Johnson’s willingness to wage war half a world away in Vietnam, and Gerald Ford’s 1975 triumph with the Helsinki Accords were all milestones in the history of a robust American engagement with an international system of allies and adversaries, in which American interests were sometimes subordinated to a greater good.
What sets Teddy Roosevelt and Trump apart is not isolationism but unilateralism. American presidents can never be truly isolationist; America is too big and too rich to stand apart from the world, nor should it want to. The distinction among presidents is wheth
er the United States works with allies and in a multilateral framework, or whether she works on her own initiative, unilaterally at first, but with cooperative allies only as the American direction becomes clear.
Teddy Roosevelt was an unabashed unilateralist and imperialist. Trump is an equally unabashed unilateralist and nativist who is happy to defund U.S. contributions to the UN at the slightest offense from the General Assembly. Roosevelt supported tariffs in his race against Woodrow Wilson in 1912; Wilson called the tariffs “stiff and stupid.”6 Trump is actively imposing new tariffs today.
Trump’s slogans—“Make America great again,” and “America first”—are echoes of Roosevelt’s “Speak softly and carry a big stick,” and the ebullient “Bully!” Roosevelt even invented the term “muckraker” as a name for unethical journalists. Roosevelt wrote that this kind of journalist “speedily becomes, not a help to society, not an incitement to good, but one of the most potent forces of evil.”7 This was more than a century before Trump leveled the charges of “fake news” and “enemy of the people” to make the same point.
Roosevelt was and Trump is nominally Republican, but both fought hard against their own party. Roosevelt stormed out of the Republican Convention in 1912 and labeled Republicans as a party of thieves.8 Trump routinely excoriates Republicans on Twitter. Both Roosevelt and Trump can be said to have hijacked the Republican Party from the hands of established figures and a wealthy donor class.
A Trump-Roosevelt comparison cannot be taken too far. Roosevelt was a distinguished scholar, voracious reader, author of eighteen books, and Nobel Peace Prize recipient. Trump shows little inclination to read books and is not well versed in history or international affairs.
Aftermath Page 5