Clinton Cash: The Untold Story of How and Why Foreign Governments and Businesses Helped Make Bill and Hillary Rich

by Peter Schweizer

  Nazarbayev craves acceptance from the West. But he has a nasty habit of throwing political opponents and journalists into jail. Torture is common. The list of Kazakh human rights violations, according to the US government, besides torture includes arbitrary detention; restrictions on freedom of speech, press, and assembly; pervasive corruption; and human trafficking.

  So why would former president Bill Clinton bestow an air of international respectability on a backwater billionaire dictator with a treacherous human rights record? And why would he do so on the eve of a national election in that country, when Clinton’s mere presence could be read as an endorsement of the dictator’s “candidacy”?

  It helps to look to Clinton’s traveling companion, Canadian mining tycoon Frank Giustra. Short, compact, and sporting a gray-haired Caesar haircut, Giustra is estimated to be worth several hundreds of millions of dollars. Bill flew on board the mining magnate’s private jet: a “luxurious MD-87, complete with 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 with ‘Giustra Air.’” It features a boardroom and sleeps eighteen comfortably.7

  “The plane is a business tool. No more, no less,” says Giustra bluntly. And one of its useful functions has been doing the Clintons favors. For some years, Giustra has made his jet available to Bill to travel the globe delivering big-money speeches, as well as to travel to campaign events for Hillary’s 2008 presidential campaign. As a Canadian citizen, Giustra couldn’t donate to Hillary’s campaign, but he could certainly offer use of his plane to Bill. He could also steer tens of millions to the Clintons and entities that they control.8

  Giustra built his empire by cutting deals in some of the most dangerous parts of the world. At the time of his 2005 travels with Clinton, he lived in a palatial 12,000-square-foot home in western Vancouver. “Obsessively private,” according to Canadian media, he operated out of a thirty-first-floor corner office on Burrard Street, a sloping boulevard with scenic views of Vancouver’s port.

  Less a mining executive than a penny-stock speculator, Giustra made his money pumping and dumping mining stocks in the Canadian stock exchanges.9 As the Globe and Mail, Canada’s most prestigious newspaper, put it in a generally sympathetic portrait, Giustra got rich “through a Byzantine system of shell companies, furtive share purchases and elaborate compensation schemes.”10 In Kazakhstan he was looking to close a large deal.

  Giustra had done mining deals in sub-Saharan Africa and South America. He knew how to do business with autocrats. For an autocrat, the allure of doing a favor for an ex-American president, especially a former president with a powerful wife, likely held special value. As Giustra admitted in 2006 to the New Yorker in a rare moment of candor, “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.”11

  According to Clinton and Giustra, they first met in 2005.12 Technically, that might be correct. But their business ties actually go back decades earlier.

  Both men were involved with mining entrepreneur Jean-Raymond Boulle, whose company Diamond Fields invested in an Arkansas diamond mine that Clinton approved when he was governor.13 At the time, Diamond Fields had its eye on an Arkansas state park known to have diamond deposits. So Boulle went to Little Rock and hooked up with Clinton pal Jim Blair.14 (Blair made headlines in 1994 as the man who helped Hillary Clinton turn $1,000 into $100,000 in futures.) Blair took Boulle to see Governor Clinton and pitched a diamond mine in the Crater of Diamonds State Park.15 Boulle claimed the mine could become “one of the world’s largest diamond producers.”16 Governor Clinton signed off on the project and helped get the property green-lighted for mining in 1987. Clinton pal Bruce Lindsey (who went on to become a senior White House adviser and now serves as chairman of the board of the Clinton Foundation) provided legal services to the fledgling company. For good measure, Diamond Fields set up its corporate headquarters in Hope, Bill Clinton’s hometown.17

  When Bill was elected president, Boulle was an invited guest at the inauguration in Washington, DC. That night, as the Clintons celebrated their victory at several inaugural balls around town, Hillary wore a 3.5-carat diamond ring that came from one of Boulle’s mines.

  Giustra, through a variety of domestic and offshore holding companies, had more than sixty thousand shares of stock in Diamond Fields in the early 1990s.18 But by 2005 the public face of the Clinton-Giustra relationship was all about philanthropy. The two would establish something called the Clinton Giustra Sustainable Growth Initiative (CGSGI) as a project of the Clinton Foundation. CGSGI is supposed to foster economic growth in the developing world. Its activities are often sited near “natural resource industry” projects such as mines or oilfields in which Giustra is invested.

  Access to Kazakh mining concessions is highly competitive. Large mining companies from Australia to Russia vie for them. Giustra’s company, UrAsia Energy, was a new player with no background in the uranium business and was therefore far from the logical choice for Kazatomprom, the Kazakh atomic energy agency. Other companies with decades of experience in the field should have been first in line for this lucrative deal. “Everyone was asking Kazatomprom to the dance,” said Fadi Shadid, a senior uranium industry stock analyst. “A second-tier junior player like UrAsia—you’d need all the help you could get.”19 UrAsia Energy was a mere shell company. But with Nazarbayev’s approval, that was about to change.

  Giustra had his eye on three mines several hundred miles from Almaty. The deal was obscure from the start: the mining concessions were transferred to mysterious offshore entities including Jeffcott Group Ltd., which was registered in the British Virgin Islands. Giustra and others involved in the venture later claimed they didn’t even know who actually owned the mysterious entity. “We dealt with corporations and entities that had title to the assets,” said Chris Sattler, executive vice president of corporate development and investor relations of Uranium One (of which UrAsia Energy would soon become part). “In fact, we dealt with their representatives. . . . Therefore, we have no knowledge of the beneficiaries or shareholders behind Jeffcott.”20 On other occasions, Frank Giustra claims to have known precisely whom he was dealing with in the transaction.

  Clinton’s itinerary included a lavish private feast with the Kazakh dictator, as well as a public press conference.21 For the former president it was a reunion of sorts. Clinton and Nazarbayev had first met back in 1994, when the Kazakh autocrat came to Washington to meet the new president.22 The two discussed several topics and signed a Charter on Democratic Partnership, “which recognized Kazakhstan’s commitments to the rule of law, respect for human rights, and economic reform.”23 Nazarbayev had a habit of signing documents he had no intention of honoring. Clinton and Nazarbayev met again in December 1999, when they discussed a number of issues, one of which likely included concerns involving two mining and metal companies that were having troubles in Kazakhstan. A Canadian firm, World Wide Minerals, and a London-based firm, Trans-World Metals, had seen property confiscated by the Kazakh government.24

  The September 2005 visit had been organized in part by Sergei Kurzin, a round-faced Russian nuclear physicist from Siberia who had done business in Kazakhstan before. In addition to arranging the meeting in Almaty, he assisted Giustra in creating UrAsia Energy.25

  It’s unclear if Kurzin and Clinton had met before, but they would have several more meetings in the years that followed. And they had something else in common: fugitive financier Marc Rich. Recall that in January 2001, on his last day in office, Clinton had issued a presidential pardon for Rich. Kurzin had previously worked for Rich traveling around Russia in search of suitable investment opportunities.26

  Kurzin, in a 2008 interview with New York Times reporters Jo Becker and Don Van Natta, said about the visit, “timing was everything.”27 After the Times piece ran, Kurzin reported getting an angry phone call from Giustra. The
secretive Canadian “yelled like hell at me over the phone after he saw the piece,” Kurzin said later. “He was furious that I talked to a journalist.”28

  What transpired at dinner with Clinton, Nazarbayev, and Giustra depends on whom you ask. It was by all accounts a lavish affair, with upward of seventy-five guests.

  Bill maintained that the entire visit was about dealing with HIV/AIDS in Kazakhstan. Giustra insisted that the mining deal he wanted to secure did not involve Nazarbayev or the Kazakh government. As he put it, “The mining agreements I reached in Kazakhstan were concluded after lengthy negotiations with private companies—not the Kazakhstan government.”29 Bill has gone even further, claiming that “formal endorsement from the Kazakh government was not required to acquire the assets.”30 He went on to make a technical legal argument: “Kazatomprom was not a signatory to either of the memorandums of understanding signed by Mr. Giustra’s company.”31

  But these were, at best, elaborate evasions. Corporate executives for the uranium company later admitted to journalists and US diplomats that Kazakh officials absolutely needed to sign off on the deal. Jean Nortier, CEO of the company that would eventually control the assets, said, “When you do a transaction in Kazakhstan, you need the government’s approval. UrAsia got the approval, and when UrAsia merged with Uranium One, that approval was given again.”32

  Leaked State Department cables from the US ambassador in Kazakhstan further refute Bill Clinton’s claim. Giustra acquired the assets in Kazakhstan through his shell company UrAsia Energy and then transferred those assets through a merger with a company called Uranium One.33 According to a 2009 US diplomatic cable revealed by WikiLeaks, Paul Lewis Clarke, senior vice president of Uranium One, claimed that Uranium One’s UrAsia acquisitions “were approved by many of the same people still in power,” including the then prime minister Danial Akhmetov (who later became minister of defense), and “Kazatomprom president [Vladimir] Shkolnik, then the Minister of Energy and Mineral Resources.”34 Any asset transfer of uranium rights needed to be approved by Kazakh officials.35

  A key Kazakh official involved in the deal was Mukhtar Dzhakishev, the president of Kazatomprom, the government agency that runs Kazakhstan’s uranium and nuclear energy industry. A technocrat with pro-Western sympathies, Dzhakishev was eager to do business with the United States and would later visit Clinton in 2007 at his home in New York. According to Dzhakishev, the uranium deal came up in discussions that night at the banquet.36 Clinton and Giustra dispute this.

  But more than that, suggestions have been made that Dzhakishev and other Kazakh officials had already been under pressure for months to close the deal and grant the lucrative uranium concessions to Giustra.37 For reasons that remain unclear, approval was being held up on the Kazakh end. Giustra was understandably anxious and may have asked Bill to intervene.

  In a 2009 video of a statement to authorities on an unrelated matter, Dzhakishev claimed that then senator Hillary Clinton pressured Kazakh officials to secure the deal for the Canadians. According to Dzhakishev, Kazakh prime minister Karim Massimov “was in America and needed to meet with Hillary Clinton but this meeting was cancelled. And they said that those investors connected with the Clintons who were working in Kazakhstan have problems. Until Kazakhstan solved those problems, there would be no meeting, and all manner of measures would be taken.” Massimov returned to his country and called Dzhakishev and told him to work it out.38 Dzhakishev then claims he was contacted by Tim Phillips, an adviser to Bill. According to Dzhakishev, Phillips told him that there would be no further meetings with Hillary until Kazakh officials approved Giustra’s uranium deal.39

  Dzhakishev was certainly in a position to know. He played a central role in the Giustra uranium deal. He was among the first Giustra met in Kazakhstan to discuss it. Some time later he met with Bill Clinton at his home in Chappaqua, New York, to discuss the broader uranium market in Kazakhstan.40

  The alleged threat to withhold American aid would not have been perceived as an idle one. The Kazakhs received large sums of money from the US government as part of a post–Cold War nonproliferation program. (In 2011, for example, they received $110 million for “combatting weapons of mass destruction.”) At that time, Hillary sat on the powerful Senate Armed Services Committee. More specifically, she sat on the Subcommittee on Emerging Threats and Capabilities. Hillary’s subcommittee had responsibility for oversight of nonproliferation programs.41

  Dzhakishev also claimed that Phillips “began to scream” at him that it was important to get the deal done for “Democrats” involved in it.42 Dzhakishev says he took Phillips to see Kazakh officials, including assistant to the president Karim Massimov, who later became prime minister. When Phillips was asked by the Washington Post about Dzhakishev’s account, he didn’t respond. He has, however, changed his online résumé and has removed any references to having been a Clinton Foundation fundraiser.43

  Meanwhile, Bill gave Nazarbayev the international credibility he craved. Standing before the gathered media in front of a large gold-inlaid national seal of Kazakhstan, Bill Clinton took the podium with a grinning Nazarbayev at his side.44 Bill talked about his global AIDS work before praising Nazarbayev for “opening up the social and political life of your country.” Clinton’s glowing assessment was not shared by anyone in the human rights community. Indeed, Robert Herman, who worked for the Clinton State Department in the 1990s and later joined the nonprofit Freedom House, called the statement “patently absurd.”45 Certainly the US State Department would not agree with Clinton’s fawning praise. For years, it had categorically stated that Kazakhstan had “failed to significantly improve its human rights record.”46

  As the international media recorded his words, Bill also came out publicly in support of Nazarbayev’s bid to have his country head the prestigious Organization for Security and Cooperation in Europe (OSCE). “I think it’s time for that to happen, it’s an important step, and I’m glad you’re willing to undertake it,” he said. Nazarbayev quickly issued a press release proudly claiming support from Clinton. The ex-president neither refuted nor challenged Nazarbayev’s public relations victory lap.

  Clinton’s endorsement was remarkably audacious. The OSCE was primarily a human rights organization, formed as a result of the 1975 Helsinki Accords. The international body held little power, but it was an honor Nazarbayev sought. 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. Still, it would be a prestigious appointment for the dictator.

  Hillary was at the time a legislative branch commissioner for the Commission on Security and Cooperation in Europe, one of only nine US senators on the panel. In 2004 Hillary had cosigned a letter to the State Department stating that Kazakhstan’s bid to head up the OSCE “would not be acceptable” because of widespread corruption and human rights problems. In July 2008 when the commission held hearings titled “Promises to Keep: Kazakhstan’s 2010 OSCE Chairmanship,” Senator Ben Cardin, Democrat of Maryland and the cochair of the commission, said Kazakhstan’s “record on human rights and democratization does indeed raise concerns. The State Department’s yearly reports, as well as those by numerous human rights groups inside and outside of Kazakhstan, lay out in detail the problem areas.”47

  According to the official transcript, Hillary didn’t show up for the hearings.

  Clinton and Giustra left Kazakhstan the day after the banquet. Within forty-eight hours, Giustra’s company UrAsia signed two memoranda of understanding outlining the transfer of uranium mining assets, which Kazakh authorities later approved: buying a 30 percent stake in the Kharassan uranium project and 70 percent in another project—the Betpak-Dala joint venture.48 The deal stunned longtime mining observers. Choosing UrAsia to buy into those mines was a “mystery” said Gene Clark, the chief executive of Trade Tech, an industry newsletter. “UrAsia was able to jump-start the whole process somehow,” he said. The company was now a “major uranium pro
ducer when it didn’t even exist before.”49

  In the months that followed, Giustra gave the Clinton Foundation $31.3 million.50 It was the first of several large donations he would make as he went on to secure other lucrative natural resources deals in developing countries around the world. We will see him again in other chapters.

  As mentioned earlier, at the time of Clinton’s visit, Kazakhstan was on the verge of a national election. Days after Clinton departed, the opposition party’s campaign headquarters were ravaged by fire in an arson attack. On October 12 heavily armed police temporarily arrested the opposition party’s leader. The OSCE said the election “was marred by an ‘atmosphere of intimidation’ and ‘ballot-box stuffing.’”51

  In December 2005 Nazarbayev won reelection with more than 90 percent of the vote. Bill sent him a note of congratulations. “Recognizing that your work has received an excellent grade is one of the most important rewards in life,” he wrote. “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.”52 The Kazakh dictator promptly released Clinton’s congratulatory note to the public.

  With the Kazakh concession in hand, UrAsia Energy Ltd. significantly expanded its assets. UrAsia quickly went about directing shares of the company’s stock to friends in Canada. Giustra took 3 million shares. He gave half a million more to Robert Cross, a former brokerage colleague, whom he also placed on the board. According to the Globe and Mail, his friend and fellow investment dealmaker, Ian Telfer, received 2.2 million shares of his own.53

  Telfer, like Giustra, had been kicking around in the mining business for decades, involved in several high-profile penny-stock mining deals.54 “I’m more of an opportunist than a visionary,” he admitted.55 But this deal was special. And he would provide the Clinton Foundation with funds of his own.