Donor links Bill Clinton, Kazakh uranium venture

Former president traveled with Giustra, who gave $31 million to Clinton Foundation

January 31, 2008|By New York Times News Service.

Late on Sept. 6, 2005, a private plane carrying the Canadian mining financier Frank Giustra touched down in Almaty, a ruggedly picturesque city in southeast Kazakhstan. Several hundred miles to the west a fortune awaited: deposits of uranium that could fuel nuclear reactors. And Giustra was in hot pursuit of an exclusive deal to tap them.

Giustra was a newcomer to uranium mining in Kazakhstan, a former Soviet republic. But what his fledgling company lacked in experience, it made up for in connections. Accompanying Giustra on his luxury MD-87 jet that day was a former president of the United States, Bill Clinton.

Upon landing on the first stop of a three-country philanthropic tour, the two men were whisked off to share a sumptuous midnight banquet with Kazakhstan's president, Nursultan A. Nazarbayev, whose 19-year stranglehold on the country has all but quashed political dissent.

Nazarbayev walked away from the table with a propaganda coup, after Clinton expressed support for the Kazakh leader's bid to head an international organization that monitors elections and supports democracy.

Within two days, 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.

The monster deal stunned the mining industry, 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, analysts said.

Just months after the Kazakh pact was finalized, Clinton's charitable foundation received its own windfall: a $31.3 million donation from Giustra that had remained a secret until he acknowledged it last month.

The gift, combined with Giustra's more recent and public pledge to give the William J. Clinton Foundation $100 million, secured Giustra a place in Clinton's inner circle, an exclusive club of wealthy entrepreneurs.

Giustra was invited to accompany the former president to Almaty just as the financier was trying to seal a deal he had been negotiating for months.

In separate written responses, both men said Giustra traveled with Clinton to Kazakhstan, India and China to see first-hand the philanthropic work done by his foundation.

A spokesman for Clinton said the former president knew that Giustra had mining interests in Kazakhstan but was unaware of "any particular efforts" and did nothing to help him. Giustra said he was there as an "observer only" and there was "no discussion" of the deal with Nazarbayev or Clinton.

But Moukhtar Dzhakishev, president of Kazatomprom, said in an interview that Giustra did discuss the deal, directly with the Kazakh president, and that his friendship with Clinton "of course made an impression." Dzhakishev added that Kazatomprom chose to form a partnership with Giustra's company based solely on the merits of its offer.

After The New York Times told Giustra that others said he had discussed the deal with Nazarbayev, Giustra said he "may well have mentioned my general interest in the Kazakhstan mining business to him, but I did not discuss the ongoing" efforts.

Records show that Giustra donated the $31.3 million to the Clinton Foundation in the months that followed in 2006, but neither he nor a spokesman for Clinton would say exactly when.

In February 2007, a company called Uranium One agreed to pay $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.

That same month, Dzhakishev, the Kazatomprom chief, said he traveled to Chappaqua, N.Y., to meet with Clinton at his home. Dzhakishev said Giustra arranged the three-hour meeting with the ex-president. Dzhakishev said he wanted to discuss Kazakhstan's intention - not publicly known at the time - to buy a 10 percent stake in Westinghouse, a U.S. supplier of nuclear technology.

Nearly a year earlier, Clinton had advised Dubai on how to handle the political furor after one of that nation's companies attempted to take over several U.S. ports, including operations in Baltimore.

Sen. Hillary Rodham Clinton was among those on Capitol Hill who raised national security concerns that helped kill the deal.

Dzhakishev said he was worried that the proposed Westinghouse investment could face similar objections. Bill Clinton told him that he would not lobby for him, but Dzhakishev came away pleased by the opportunity to present the proposal to a former president.

Clinton "said this was very important for America," said Dzhakishev, who added that Giustra was present at Clinton's home.

Both Clinton and Giustra at first denied that any such meeting occurred. Giustra also denied ever arranging for Kazakh officials to meet with Clinton. Yesterday, after The Times told them that others said a meeting, in Clinton's home, had in fact taken place, both men acknowledged it.

"You are correct that I asked the president to meet with the head of Kazatomprom," Giustra said. "Mr. Dzhakishev asked me in February 2007 to set up a meeting with former President Clinton to discuss the future of the nuclear energy industry." Giustra said the meeting "escaped my memory until you raised it."

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