Clinton Cash (4 page)

Less a mining executive than a penny-stock speculator, Giustra made his money pumping and dumping mining stocks in the Canadian stock exchanges.
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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.”
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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.”
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According to Clinton and Giustra, they first met in 2005.
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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.
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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.
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(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.
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Boulle claimed the mine could become “one of the world’s largest diamond producers.”
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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.
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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.
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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.

A
ccess 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.”
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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.”
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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.
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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.
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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.”
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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.
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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.
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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.
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Kurzin, in a 2008 interview with
New York Times
reporters Jo Becker and Don Van Natta, said about the visit, “timing was everything.”
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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.”
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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.”
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Bill has gone even further, claiming that “formal endorsement from the Kazakh government was not required to acquire the assets.”
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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.”
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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.”
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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.
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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.”
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Any asset transfer of uranium rights needed to be approved by Kazakh officials.
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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.
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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.
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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.
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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.
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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.
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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.
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Dzhakishev also claimed that Phillips “began to scream” at him that it was important to get the deal done for “Democrats” involved in it.
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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.
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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.
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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.”
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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.”
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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.