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

by Peter Schweizer

  With the shares doled out, UrAsia went public and was “among the largest [offerings] on record” to be brokered on Canada’s Venture Exchange.56 Canadian firms BMO Nesbitt Burns Inc., Canaccord Adams, and GMP Securities Ltd. handled the placement of the shares, and became supporters of the Clinton Foundation as well, as we will see.57

  Then phase two began. In February 2007 UrAsia Energy announced that it would merge with Uranium One, a uranium company based out of South Africa and Canada.58

  Like all transactions involving uranium in Kazakhstan, the merger required approval by the Kazakh government. That same month, Dzhakishev, the head of Kazatomprom, went to Chappaqua for a private meeting with Bill Clinton.59 Frank Giustra allegedly arranged the meeting.60 According to Dzhakishev, they discussed uranium markets and the future of nuclear power. Just as Giustra needed Kazakh government approval, the Kazakhs might need US government approval for their aspirations to purchase a stake in Westinghouse, a major US manufacturer of nuclear power plant components.61

  Yet pressure was mounting in Washington about Nazarbayev’s human rights record and Kazakhstan’s fitness to head an international human rights body like the OSCE. Senator Joe Biden, chairman of the Senate Foreign Relations Committee, fired off a letter on March 13, 2007, to President Nazarbayev, making it clear he wanted Kazakhstan to clean up its act or he would not support their bid. “Unless visible progress is attained quickly, I will not be able to support Kazakhstan in its quest to assume chairmanship of the OSCE.”62

  The Clintons, however, took a different tack. Hillary, who had expressed concerns about Kazakhstan heading up the OSCE prior to the deal, now was strangely silent.63 Bill was emboldened: he invited Nazarbayev to attend the Clinton Global Initiative (CGI) as his guest. The Kazakh dictator was happy to make the trip, and on September 25, 2007, he was a featured attendee at an exclusive CGI meeting in New York.64

  Two months later Nazarbayev was awarded the OSCE chair, a post he took in 2010.65

  Meanwhile, in February 2007 shareholders approved the merger between UrAsia and Uranium One.66 Although Giustra tried to characterize the transaction as a Uranium One takeover of his company, UrAsia Energy Ltd., it was actually a reverse merger. Giustra, his friends, and other shareholders wound up controlling 60 percent of the new company.67 And in the months that followed, they began acquiring uranium assets in the United States itself.68 Within the next year, they began negotiations with the Russian State Nuclear Agency, which, in 2009, bought a stake in the company, as described in the next chapter.69

  Following the lucrative merger, many of the deal’s largest shareholders wrote multimillion-dollar checks to the Clinton Foundation and its project, the Clinton Giustra Sustainable Growth Initiative. In addition to his $31.3 million donation, Giustra announced a multiyear commitment to donate $100 million, and half of his future profits, to the Clinton Foundation.70 Giustra’s commitments made the Canadian mining investor one of the largest individual contributors to the Clinton Foundation, rivaling those far wealthier than himself, like Bill Gates, who has given more than $25 million to the Clinton Foundation.71

  As we will see, Bill Clinton would show up at critical times in other developing countries where Giustra had business. As Canada’s Globe and Mail put it, “it just so happens that Bill Clinton keeps popping up in places where Giustra is buying resource assets.”72

  The collective commitments and donations from investors who profited from the deal would ultimately exceed $145 million.73 (The Clinton Foundation only reports ranges, not exact amounts.) These investors include the following business associates of Giustra:

  • Frank Holmes, another major shareholder in the deal, wrote a check to the Clinton Foundation for between $250,000 and $500,000.74 Holmes also lists himself as an adviser to the Clinton Foundation.

  • Neil Woodyer, Giustra’s colleague who founded Endeavour Financial, pledged $500,000 and committed to providing “ongoing financial support.”75

  • 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.76

  • Paul Reynolds, an executive at Canaccord Capital, Inc., donated in the same range, between $1 million and $5 million.77 The UrAsia deal was the largest in Canaccord’s history.

  • GMP Securities Ltd., another large shareholder in UrAsia Energy, committed to donating a portion of its profits to the CGSGI. GMP made great money on the private placement of shares and as an underwriter on UrAsia Energy deals.78

  • Robert Cross, who was a major shareholder and serves as director of UrAsia Energy, committed a portion of his future income to the Clinton Foundation.79

  • 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.80 BMO paid $600,000 for two tables at the CGSGI’s March 2008 benefit.81

  • Sergei Kurzin, a Russian dealmaker involved in the Kazakhstan uranium deal and a shareholder in UrAsia Energy, also made the CGSGI a $1 million pledge.82

  • Ian Telfer, the chairman of UrAsia Energy, who would become the new chairman of Uranium One, committed $3 million.83

  Bill Clinton hailed the windfall as a selfless philanthropic gesture that would support economic growth and health care in the developing world. “I’m proud of the coalition in the natural resources industry that has come together,” he said.84 A group of Canadian mining investors just happened to become conspicuously large contributors in the Clinton Foundation over a very short period of time.

  Giustra went even further in bringing in funds for the foundation. In 2006, he hosted a birthday party/fundraiser for Bill Clinton at the Fairmont Royal York Hotel in Toronto that featured an impressive guest list. The event was headlined by Kevin Spacey and included Billy Crystal and Bon Jovi.85 In March 2008 there was another superstar fundraising gala including Tom Cruise and Robin Williams in Toronto.86 In Vancouver on October 17, 2008, Giustra and Clinton addressed the British Columbia Business Council on corporate social responsibility.87

  Any actions the Clintons may have taken to support Canadian Giustra in the uranium deals could not be justified on the grounds that they were creating jobs for Americans or helping American companies be more competitive overseas, the explanation politicians often give to justify doing favors for companies or donors.

  But the international scope of the deals would expand beyond Kazakhstan, Canada, Washington, and Chappaqua to include some of the most powerful government officials in Russia. The flow of money would only increase.

  CHAPTER 3

  Hillary’s Reset

  THE RUSSIAN URANIUM DEAL

  Perhaps Hillary Clinton and Vladimir Putin had gotten off to a rough start. When she was running for the Democratic presidential nomination in 2008, Hillary had talked tough about the Russian president. Contradicting President George W. Bush’s oft-quoted statement that he “was able to get a sense of [Putin’s] soul,” Hillary had pointedly countered that Putin “doesn’t have a soul.” When asked about the comment, Putin shot back, “At a minimum, a head of state should have a head.”

  But when Hillary was confirmed as secretary of state in January 2009, dealing with Vladimir Putin would become a major part of her job. And the uranium deal in Kazakhstan, whose shareholders were sending in tens of millions of dollars to the Clinton Foundation and were also providing speechmaking opportunities for Bill, would set the stage to bring Putin into the cast of characters.

  The uranium deal that was sealed in 2005 during Bill Clinton’s visit to Kazakhstan and then fortified by the 2007 Kazakh-approved merger would soon morph into a third transaction intersecting with some of Hillary’s most consequential and difficult national security decisions as secretary of state. And as we will see, there is no evidence that she disclosed to US government ethics officials, the White House, or her cabinet colleagues the apparent conflicts of interest at
play as she steered US nuclear policy.

  In the final years of the Bush administration, relations with Moscow had cooled. The Russian incursion into neighboring Georgia, Bush’s plans to erect a missile-defense shield, and Russian pressures on Ukraine had heightened tensions between the two nuclear powers.1 What President Barack Obama and Hillary Clinton had in mind was a “reset.” At Foggy Bottom, Hillary offered the Kremlin a chance to clean the slate and begin anew.2

  Moscow was all in favor of a reset and viewed it as an opportunity to develop more trade and investment opportunities with the West.3 And in spite of her pointed comments about Putin’s soul, Hillary’s appointment as secretary of state was generally praised in Moscow. Authorities saw her as offering a “balanced view of US relations with the Russian Federation.”4 She was “by far not the worst” outcome for Moscow, said one official, noting that there were advisers around Obama who were “very critical of our country.”5 Not a ringing endorsement perhaps, but Hillary was someone the Russians believed they could work with.

  At the heart of the reset was what Newsweek called “a bevy of potential business deals.”6 These included deals involving oil and natural gas, which are the backbone of the Russian economy.7 But not far behind were Kremlin ambitions to expand its share of the world nuclear market. Uranium, civilian nuclear power plants, and the technical services that supported them were considered a huge growth industry for Moscow.8 In 2006 the Kremlin had approved plans “to spend $10 billion to increase Russia’s annual uranium production by 600 percent.”9 Putin considered the nuclear energy sector “a priority branch for the country, which makes Russia a great power.”10 Russia not only wanted to build nuclear plants around the world, it also wanted to control a large chunk of the global uranium market.11

  But an important side note to the Russian reset was how it involved a collection of foreign investors who had poured vast sums of money into the Clinton Foundation and who continued to sponsor lucrative speeches for Bill. Those investors stood to gain enormously from the decisions Hillary made as secretary of state.

  The Russian State Atomic Nuclear Agency (Rosatom) handles all things nuclear in Russia. Unlike the US Department of Energy or the Nuclear Regulatory Commission, Rosatom is not just deeply imbedded with civilian nuclear power but actually controls the Russian nuclear arsenal.12

  Longtime Rosatom head Sergei Kiriyenko is a tall, lanky technocrat who served in the Komsomol, the Soviet Youth League, during the Soviet era. He went on to become energy minister and then prime minister of Russia while Bill Clinton was president of the United States. (Indeed, when Russian president Boris Yeltsin made Kiriyenko prime minister in 1998, it brought “instant endorsements” from the Clinton administration.)13 He and his agency operate in a special way in Russia, without any independent supervision from the Russian parliament. Rosatom “is subject only to the decision-making of the Kremlin,” as one nuclear scholar at UC Berkeley puts it. “Unlike the oil and gas industries, the nuclear sector is under the direct supervision of the state.”14

  Rosatom not only built the controversial Bushehr nuclear reactors in Iran, it also supplies them with uranium.15 Rosatom also operates in North Korea, Venezuela, and Myanmar.16 As the agency makes clear in its annual report, it places a primacy on protecting information “constituting state secrets.”

  During her tenure as secretary of state, Hillary Clinton and senior aides received numerous diplomatic cables discussing Moscow’s nuclear ambitions. In October 2009, for example, she received a cable exposing Rosatom’s plan to leverage Ukraine into a long-range supply contract with the Russian state nuclear fuel company, and its efforts to create “zones of pressure” on Eastern European governments.17

  In December 2009 the US ambassador to Kazakhstan sent a classified cable to Washington laying out Russian efforts to exert control over Kazakh uranium markets.18 The cable noted that Rosatom sought to control this market as part of a broader initiative to reestablish itself as a world power. The memo also stated that Russian military intelligence, the GRU, was involved in these nuclear ambitions.19

  Even before that cable was sent, there were signs of Russian moves on the uranium market. In June 2009 Rosatom bought a stake in Uranium One. It was not a controlling stake, only 17 percent, but the Russians were just getting started.20

  Uranium One was an inviting target. Production was booming, jumping from 2 million pounds of uranium in 2007 to 7.4 million in 2010. But Uranium One was also aggressively buying uranium assets in the United States. By 2010 the Canadian company had “61 ongoing or planned projects on some 293,000 acres in Wyoming.”21 The firm also owned ten thousand acres of uranium claims in Utah, as well as holdings in Texas and South Dakota.22 In sum, Uranium One was projected to control up to half of US uranium output by 2015.

  In December 2009 Rosatom chief Kiriyenko appeared before the Presidium, a selection of Russian government officials. He laid out an aggressive plan to acquire uranium assets outside of Russia. “An opportunity has opened up to buy foreign assets that are profitable and, for now, not very expensive,” he said. “With this program of buying uranium deposits, we can guarantee this to any customers of ours.” Then prime minister Putin announced at the meeting that the Russian government would allocate the money for the transactions to Rosatom’s equity capital.23

  The Kremlin’s move came at a sensitive time. Hillary Clinton was directing negotiations for the 123 Agreement with the Russian government concerning civilian nuclear energy. The 123 Agreement is a nuclear nonproliferation treaty whose name derives from the fact that it falls under Section 123 of the US Atomic Energy Act. It requires that the United States have a 123 Agreement negotiated and in place to make nuclear cooperation possible with foreign countries. In short, as the US State Department put it, the 123 Agreement with Russia would “support commercial interests by allowing U.S. and Russian firms to team up more easily in joint ventures.”

  The pact had previously been negotiated by the Bush administration, but when Russian forces went into Georgia in 2008, the administration withdrew a request that Congress approve it. The Obama-Clinton reset meant that the agreement was back on and (along with input from the US Department of Energy) that Hillary was in charge. Congress would eventually approve the 123 Agreement in January 2011.

  In March 2010 Hillary was in Moscow for a meeting with Putin. Putin had set in motion the purchase of a controlling stake in Uranium One by Rosatom only a few months earlier. During a meeting on March 19, Hillary and Putin discussed a wide variety of issues related to trade. He expressed displeasure with US trade policy, presumably because Russian companies were affected by US sanctions. Whether the Uranium One deal was discussed is not known.

  The primary purpose of Hillary’s trip was to increase pressure on Iran. Instead, Putin promised Moscow’s assistance with the completion of a civil nuclear power station by the summer. Hillary blasted the move, saying it “would be premature to go forward with any project at this time, because we want to send an unequivocal message to the Iranians.”24

  As part of its reset with Moscow, the Obama administration wanted to make progress on the New START nuclear talks and sought commercial opportunities in areas like civilian nuclear power. On that front, Hillary was optimistic. “If we continue to work together, we can move beyond the problems to greater opportunities.”

  In May 2010 the Obama administration submitted the proposed text of the US-Russian Civilian Nuclear Cooperation Agreement to Congress. Weeks later, Rosatom announced it was seeking to buy majority control (52 percent) of Uranium One. To some observers in the uranium market, it all made sense. “It was no accident that Rosatom’s choice fell to Uranium One,” wrote one paper, given the uranium assets it held.25

  Several multimillion-dollar Clinton Foundation donors were at the center of the deal. As we saw in the previous chapter, one of these, Ian Telfer, was chairman of Uranium One. A longtime mining investor and associate of Frank Giustra, Telfer made his fortune as a gold investor and has se
rved as the chairman of the World Gold Council.

  The Clinton Foundation also failed to disclose major contributions from entities controlled by those involved in the Uranium One deal. Thus, beginning in 2009, the company’s chairman, Telfer, quietly started funneling what would become $2.35 million to the Clinton Foundation through a Canadian entity he controlled called the Fernwood Foundation.26 According to records released by the Clinton Foundation, Telfer had personally contributed $100,001 to $250,000 to the Clinton Foundation in 2007. But according to Canadian tax records, Telfer’s Fernwood Foundation donated more than $2 million to the Clinton Foundation while Hillary was secretary of state. The Clinton Foundation’s public disclosures don’t list Fernwood as a donor.27

  In 2009 Fernwood contributed $1 million to the Clinton Giustra Sustainable Growth Initiative (CGSCI).28 In 2010 its donation was $250,000. In 2011 it gave another $600,000 and in 2012 the amount was $500,000.29 According to Canadian tax records, nearly all of the funds CGSCI collects are transferred directly to the Clinton Foundation in New York.30 In other words, it operates as a pass-through.

  The fact that these donations are not listed in Clinton Foundation public disclosures violates the Clinton Foundation’s memorandum of understanding with the Obama White House described in chapter 1, and contradicts Hillary’s correspondence with the Senate Foreign Relations Committee. It also raises questions about what other undisclosed multimillion-dollar donations from foreign entities could have been channeled to the Clinton Foundation.

  The Russian uranium deal involved other major Clinton Foundation donors. Two men listed as “financial advisors” for Uranium One and the Russia deal, Robert Disbrow and Paul Reynolds, were also multimillion-dollar contributors.31 Another important shareholder in Uranium One was US Global Investor Funds, whose CEO was Frank Holmes.32 Holmes was not only a major contributor to the foundation, he was also the chairman of Giustra’s Endeavour Mining Capital Corp. Holmes describes himself as “an advisor to the William J. Clinton Foundation on sustainable development in countries with resource-based economies.”33 The managing director for global affairs at Endeavour Financial during this deal was Eric Nonacs, who simultaneously served as “senior advisor” to the Clinton Foundation. Nonacs, before taking the job, had been a foreign policy adviser to Bill during his post-presidential years.34