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Politics & Policy

Uranium One Focus: Corruption, Not National Security

In response to The Week

Further on Jonah’s post, I’ve tried to flesh out the Uranium One scandal in two columns (here and here). Two basic things about the transaction are misunderstood.

First, as Jonah contends, because of uranium’s essential part in the production of nuclear power, people hear the word and understandably think nuclear weapons. That impression is reinforced in the Uranium One scenario because it is discussed in national security terms – i.e., the transfer of the assets to a Kremlin-connected business had to be approved by the Committee on Foreign Investment in the United States (CFIUS), which gets involved when the acquisition of American assets by foreign entities could have national security implications. But the security problem with the Uranium One transaction was not that the Russians might ship the uranium out of our country to make nuclear weapons. The problem has to do with domestic energy supply and consumption. In the United States, we get 20 percent of our electricity from nuclear power; yet, to generate that power, we only produce 20 percent of the uranium we need. In current global circumstances, this is not a problem – Jonah points out that uranium is plentiful and cheap. But if there were a crisis that made it more difficult to import, it could be very problematic that a foreign government – particularly an often hostile one – controlled the mining rights for a sizable chunk of domestic supply.

Second, the U.S. uranium stock at issue was not insignificant – after all, CFIUS only gets involved in a foreign acquisition of U.S. assets if it could pose a national-security threat. Nevertheless, the U.S. uranium was more an afterthought (and, because of CFIUS, a complication) in Russia’s calculations. What Putin really wanted were Uranium One’s Kazakh uranium holdings, which dwarfed its American holdings. The complication was that, because Uranium One held the U.S. assets, Rosatom (the Russian energy conglomerate) could not acquire it without CFIUS approval. But the U.S. assets were of secondary importance; Russia’s main objective was Kazakhstan’s uranium.

As I’ve related, the scandalous aspects of the Uranium One transaction involve Clinton family self-dealing. In 2005, Bill personally intervened with the despicable Kazakh dictator, Nursultan Nazarbayev, to grant uranium mining rights to Clinton’s major Canadian benefactor, Frank Giustra. This led to tens of millions of dollars pouring into the Clinton Foundation, and to Giustra’s merging his company (Ur-Asia Energy) into Uranium One – a deal valued at $3.5 billion. Later, when Putin leaned on Nazarbayev to put Uranium One’s holdings in jeopardy of seizure, putting downward pressure on its stock value, Hillary’s State Department immediately mobilized – mediating a deal that gave Rosatom a minority stake in Uranium One. Then, when the Kremlin wanted Rosatom to have a controlling interest in Uranium One, CFIUS signed off on the deal.

We now know that, around the time that sign-off was under consideration, millions more in related donations were made to the Clinton Foundation and Bill was given $500,000 for a single speech by a Kremlin-tied financial institution. In addition, the Justice Department had a prosecutable racketeering/extortion/money-laundering case against Rosatom’s U.S. subsidiary. Bringing the case at that point would have made the transfer of U.S. uranium assets to Rosatom politically impossible (Republicans in Congress, though they knew nothing about the investigation, were already grousing about the transfer to Russia). Instead, the Justice Department sat on the investigation for four years – even as Rosatom’s U.S. subsidiary continued actively corrupting the U.S. energy sector. Here, it is worth pointing out that the Attorney General (then, Eric Holder), like the Secretary of State (then, Hillary Clinton) sat on CFIUS; yet, neither appears to have taken any action to stop the transfer of U.S. uranium assets to Rosatom.

All of this, of course, must be considered in the context of the Clinton emails scandal. Secretary Clinton systematically conducted government business via a private email system. President Obama and FBI Director Comey were wrong in positing the strawman argument that that she did not intend to harm national security (because such an intent is not an element of the felony statute she violated). But what they said was true as far as it went: the harm to national security was an unintended consequence (albeit an easily foreseeable one).

So what was Hillary’s purpose? I believe she intended to shield the extent to which the State Department was being put in the service of the Clinton Foundation during her tenure. That is why she went to such lengths to devise this renegade communications system, why she resisted efforts to bring her office into the official State Department communications system, and why she unilaterally destroyed tens of thousands of emails despite the State Department’s request for them and their obvious relevance to then-pending congressional investigations. It is why she lied in insisting that she’d provided the State Department with all her work-related emails.

So, when Jonah says, “The Uranium One story is crap,” I take him to be talking about the story as it is being related by a number of commentators, as if it involved a major national-security crisis. (Note that Jonah is careful to acknowledge that an investigation of the Uranium One transaction might be warranted.) It is true that hyperbole about national security and treason is not helping people’s understanding of what this is about. Uranium One has never primarily been a national-security controversy. It is a corruption controversy with some national-security aspects, which are related to domestic energy supply, not nuclear weapons.


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