Sometimes the intersection of politics and policy is comfortable, sometimes uncomfortable, and sometimes you have to "connect the dots." One very uncomfortable "dot connecting" involves President Bill Clinton, philanthropic fundraising, the uranium industry and Clinton's private activity that ran contrary to US foreign policy and reinforced a country, Kazakhstan, with an antipathy to human rights and open media. Maybe it's just a former President cynically cashing in. Maybe it's more, as Clinton's income was pledged as part of the collateral for the loans to the Hillary Clinton presidential campaign. Who can know? It's not like they tell us anything.

 

My summary is a stripped down version of the New York Times story, with human rights websites added in. Apologies for the length, but it's really interesting (in a frustrating, tragic sort of way). To read the story for yourself, go here:

http://www.nytimes.com/2008/01/31/us/politics/31donor.html?_r=1&adxnnl=1&oref=slogin&adxnnlx=1204395501-nZTZ1lLN+NSs27uQK6AlIg

 

The Deal Details:

On September 6, 2005, Canadian mining financier Frank Giustra flew in his private jet to Almaty, in southeast Kazakhstan, with former President Bill Clinton. Kazakhstan, the former Soviet Republic, has about one-fifth of the world’s uranium reserves (yes, Uranium, as in nuclear energy and nuclear weaponry). Unlike more established competitors, Giustra was a newcomer to uranium mining in Kazakhstan(in late 2004, Mr. Giustra began talking to investors, and put together a company that would eventually be called UrAsia Energy Ltd.).

 

Upon landing in Almaty, Clinton and Giustra joined Kazakhstan’s president, Nursultan A. Nazarbayev at a reception. Nazarbayev has led the country for nineteen years, limiting political opposition and independent media (more on the human rights issues later).

At the reception, Clinton expressed enthusiastic support for the Kazakh leader’s bid to head an international organization that monitors elections and supports democracy, the Organization for Security and Cooperation in Europe (OSCE). OSCE is the world's largest regional security organization, with 56 member countries. The US opposed Kazakhstan, citing Nazarbayev's poor human rights record.

Within two days of the visit, corporate records show that Giustra's company signed preliminary agreements giving it the right to buy into three uranium projects controlled by Kazakhstan’s state-owned uranium agency, Kazatomprom, turning an unknown shell company into one of the world’s largest uranium producers in a transaction ultimately worth tens of millions of dollars to Giustra. The initial cost to UrAsia was more than $450 million, money the company did not have in hand and had only weeks to come up with. The transaction was finalized in November, after UrAsia raised the money through the largest initial public offering in the history of Canada’s Venture Exchange. By the time Giustra sold his company in 2007, uranium prices had tripled, generating a sale of $3.1 billion. In February 2007, Uranium One paid $3.1 billion to acquire UrAsia. Giustra, a director and major shareholder in UrAsia, would be paid $7.05 per share for a company that just two years earlier was trading at 10 cents per share.

Just months after the Kazakh pact was finalized, Clinton’s charitable foundation received $31.3 million donation from Giustra, though the gift was not acknowledged until December 2007. Giustra’s more recent and public pledge to give the William J. Clinton Foundation an additional $100 million.

The former president said he knew that Giustra had mining interests in Kazakhstan but was unaware of “any particular efforts” and did nothing to help. Giustra said he was there as an “observer only” and there was “no discussion” of the deal with Nazarbayev or Clinton, a point contradicted by Moukhtar Dzhakishev, president of Kazatomprom, and now acknowledged by Giusta to be inaccurate.

The publicly stated reason for the quickly arranged visit was to announce a Clinton Foundation agreement that enabled the government to buy discounted AIDS drugs. During a news conference, Clinton commended Nazarbayev for “opening up the social and political life of your country.”

In a statement promoted by Kazakhstan, Clinton declared that he hoped Kazakhstan would achieve a top objective - leading the OSCE, conferring legitimacy on the Nazarbayev’s government.

Clinton said, “I think it’s time for that to happen, it’s an important step, and I’m glad you’re willing to undertake it.”

Late last year, Kazakhstan won the chance to lead the security organization for one year, despite US opposition by the Bush administration. Moreover, NY Senator Hillary Clinton, who sits on a Congressional commission with oversight, also voiced concern. Eleven months before Bill Clinton’s travels, Senator Clinton co-signed a commission letter to the State Department that Kazakhstan’s bid “would not be acceptable,” citing “serious corruption,” canceled elections and government control of the news media.

Robert Herman, who worked for the State Department in the Clinton administration said the former president’s statement amounted to an endorsement of Kazakhstan’s readiness to lead the group, a position he called “patently absurd,” adding “there was nothing in the record to suggest that they really wanted to move forward on democratic reform.

In December 2005, Nazarbayev won an election, in which the OSCE itself said was marred by an “atmosphere of intimidation” and “ballot-box stuffing.” After Nazarbayev won with 91% of the vote, Clinton sent his congratulations. “Recognizing that your work has received an excellent grade is one of the most important rewards in life,” Clinton wrote in a letter released by the Kazakh embassy. Last September, just weeks after Kazakhstan held an election that once again failed to meet international standards, Clinton honored Nazarbayev by inviting him to his annual philanthropic conference.

Oh, and in September 2006, Giustra co-produced a gala 60th birthday for Clinton that featured rocker (former member of Atlantic City Expressway, before going on to super stardom) Jon Bon Jovi and raised about $21 million for the Clinton Foundation.

 

Oh, and It Goes On:

In the fall of 2006, Dzhakishev, the Kazatomprom chief, traveled to Chappaqua, N.Y., to meet with Clinton at his home, in a three hour meeting arranged and and attended by Giustra. Dzhakishev said he wanted to discuss Kazakhstan’s intention — not publicly known at the time — to buy a 10% stake in Westinghouse, a United States supplier of nuclear technology.

You may remember that nearly a year earlier, Clinton had advised Dubai on how to handle the political furor after one of Dubai’s companies attempted to take over several American ports. NY Senator Hillary Clinton was one Congressional leader raising the national security concerns that helped kill the Dubai ports deal. Dzhakishev said he was concerned that a Westinghouse deal could face the same objections (well, I certainly hope so!). Clinton said he would not support a Westinghouse deal.

Both Clinton and Giustra at first denied that any such meeting occurred. Giustra also denied ever arranging for Kazakh officials to meet with Clinton. After The New York Times confirmed the details of the meeting at the Clinton home, both Giustra and Clinton acknowledged the meeting.

The Current Implications:

The media have reported that Bill Clinton draws a salary from his foundation work. While the 2006 990 Form for the William J. Clinton Foundation (the only one posted) does not show a salary to Clinton, they would not necessarily be required to (or it could be part of the large consulting fees for collecting unpaid pledges).

Also, recall the Clinton's together used their own income to borrow $5 million for the Hillary Clinton presidential campaign and keep the campaign going.

So what are the Consequences? (other than public cynicism):

Human rights are quashed in Kazahkstan and democratic forces are undermined. Kazakhstan is not a great place to be an opposition political leader or a member of the media:

President Nursultan Nazarbaev retained power in presidential elections which international observers found did not meet international standards.

Since the elections, the government of Kazakhstan has also tightened control over independent media

• The Democratic Choice of Kazakhstan Party (DVK), which had been banned in January 2005, attempted to register under a new name"Forward Kazakhstan!" but was barred.

• In May 2006, Alibek Zhumabaev, of the For A Just Kazakhstan bloc, received a five-year sentence for insulting the dignity and honor of the president and creating civil disorder.

• In July, Bolat Abilov, the head of the Naghyz Ak Zhol party, received a three-year suspended sentence for insulting a police officer, which bars him from running in the 2009 parliamentary elections. Abilov was also charged in 2005 with embezzlement and tax evasion, for which he is awaiting trial. 
  

• Altynbek Sarsenbaev, co-chairman of Naghyz Ak Zhol, and two of his aides were murdered on February 13, 2006. The arrest and conviction has been characterized as a farce by his surviving Sarsenbaev's family. Another prominent opposition figure, Zamanbek Nurkadilov, a former ally of President Nazarbaev who had accused the government of corruption and joined the opposition two years previously, was found dead.

• July 2006 amendments to Kazakhstan's media law give the government unlimited power to close independent and opposition media outlets for technical and administrative violations, and creates unduly restrictive registration procedures for new media outlets and re-registration procedures for existing media companies.