Ball of Collusion

by Andrew C. McCarthy

  Recognizing Russia’s “current pursuit of external aggression and internal repression,” which marked what it generously regarded as the Kremlin’s “previous course toward democracy and cooperation with the West,” EUCOM stressed caution against “the risks that Russia could leverage transferred scientific knowledge to modernize and strengthen its military.”23

  Ya think? The U.S. Army’s Foreign Military Studies Program at Fort Leavenworth concluded that Skolkovo was a “vehicle for world-wide technology transfer to Russia in the areas of information technology, biomedicine, energy, satellite and space technology, and nuclear technology.” Moscow has made it unabashedly clear, moreover, that “not all of the center’s efforts are civilian in nature”: the project was deeply involved in military activities, including the development of a hypersonic cruise missile engine.24 As investigative journalist John Solomon notes, the FBI ended up warning several American tech companies that entanglement with Skolkovo risked wide-ranging intellectual property theft. The agent in charge of the Bureau’s Boston field office even took the extraordinary step of publishing a business journal op-ed, depicting Skolkovo as “a means for the Russian government to access our nation’s sensitive or classified research development facilities and dual use technologies with military and commercial application.”25

  Why would our government do such a thing? At the time this was all going on, Clinton’s State Department issued its annual country-by-country findings on the state of civil liberties. Russia was found to be using technology “to monitor and control the internet.” The State Department elaborated that official corruption was rampant, security services engaged in sweeping surveillance of communications, journalists were under siege, dissidents were arbitrarily detained—and some even tortured and killed.26

  What was Secretary Clinton thinking?

  As we’ve seen, most of the time, she was thinking about the Clinton Foundation, and money (I’d say not in that order, but it’s pretty much the same order). Putin’s regime dangled billions of dollars to invest in Skolkovo companies. Secretary Clinton immediately went to work attracting both corporate contributors and businesses deemed worthy of Russian investment.

  The investigative journalist Peter Schweizer has done yeoman’s work exposing the grimy interplay between the Clinton Foundation and the State Department. By 2012, the last year of Secretary Clinton’s tenure, 60 percent of the “key partners” identified for the Skolkovo venture (seventeen out of twenty-eight) had “made financial commitments to the Clinton Foundation, totaling tens of millions of dollars, or sponsored speeches by Bill Clinton.” Russians tied to Skolkovo also gave to the Clinton Foundation, including Viktor Vekselberg, a billionaire confidant of Putin’s who was chosen to run the Skolkovo Foundation.27

  There is symmetry here. Again, no one would sensibly say that Secretary Clinton wanted to make Russia a more capable adversary—and as things turned out, I’d wager that strengthening the regime’s cyber proficiency would be something she’d regret (if she were given to that kind of introspection). But it is like the irresponsible mishandling of top-secret information, and the storing and transmission of any sensitive government information, classified or otherwise, on a non-secure server system: it’s not that Clinton didn’t know what she was doing or that she didn’t apprehend the risks; it is that she had other priorities and threw caution to the wind—pretty much the textbook definition of gross negligence. She wasn’t alone: this was not Secretary Clinton’s administration, but President Obama’s. He calculated that abetting and appeasing Russia was a price worth paying for “help” on the Iran deal and in Syria. And while there is some reason to believe Clinton was marginally harder on Russian aggression than Obama, it is a simple thing to rationalize doing the wrong thing when making waves is hard. So, you convince yourself that building Russia into a modern economy will somehow change the nature of the regime (instead of enriching and fortifying it). Plus, there was money to be made.

  Collusion with Russia: Uranium One

  That, naturally, is where the Clinton Foundation came in. And while Skolkovo is not a pretty story, Uranium One is even worse, involving the surrender to Putin’s regime of fully one-fifth of the United States’ uranium-mining stock, an outrage concealed by the tanking of a criminal investigation into the American subsidiary of Russia’s state-controlled nuclear energy and uranium-mining conglomerate, Rosatom.

  Once again, Peter Schweizer’s Clinton Cash has exposed much of this scandal, this time supplemented by excellent reporting from The New York Times.28 Significant background of the story predates the Obama years, involving more of Washington’s history of “collusion with Russia.”

  The United States government has been conducting uranium commerce with Russia since the Soviet Union imploded. In 1992, the Bush administration agreed with the nascent Russian federation that U.S. nuclear providers would be permitted to purchase uranium from Russia’s disassembled nuclear warheads (after it had been down-blended from its highly enriched weapons-grade level). Uranium is a key component of nuclear power, from which the United States derives about 20 percent of our total electrical power, generated by approximately ninety-nine commercial reactors operating at sixty-one nuclear power plants in thirty states. Relatively speaking, our country does not have vast uranium resources. We currently produce only about 7 percent of the uranium we need and must import the rest; in 2017, for example, Russia accounted for 18 percent.29

  In 2005, under the guise of the Clinton Foundation’s mobilization to address the incidence of HIV/AIDS in Kazakhstan (where the virus was nearly nonexistent), Bill Clinton helped his Canadian billionaire pal Frank Giustra convince the ruling despot, Nursultan Nazarbayev, to grant coveted uranium-mining rights to Giustra’s company, Ur-Asia Energy. Ur-Asia had no background in this highly competitive but potentially lucrative business. Nazarbayev, a former Communist party apparatchik, has ruled Kazakhstan for almost thirty years, and is notorious for human rights abuses and looting the treasury.30

  In the months that followed, Giustra gave an astonishing $31.3 million to the Clinton Foundation and pledged $100 million more. With the Kazakh rights secured, Ur-Asia was able to expand its holdings and attract new investors. One was Ian Telfer, who also donated $2.35 million to the Clinton Foundation. Ur-Asia merged with Uranium One, a South African company, in a $3.5 billion deal. Telfer became Uranium One’s chairman. The new company proceeded to buy up major uranium assets in the United States.

  Meanwhile, as tends to happen in dictatorships, Nazarbayev turned on the head of Kazakhstan’s uranium agency (Kazatomprom), who was arrested for selling valuable mining rights to such foreign entities as Ur-Asia/Uranium One. This was likely done at the urging of Russia, the neighborhood bully. Rosatom, the Kremlin-controlled nuclear energy and uranium extraction conglomerate, was hoping to grab the Kazakh mines—whether by taking them outright or by taking over Uranium One.

  The arrest, which happened a few months after Obama took office, had Uranium One’s Clinton Foundation investors deeply concerned that the Kazakh mining rights would be lost. Uranium One turned to Secretary Clinton’s State Department for help. As State Department cables disclosed by WikiLeaks show, Uranium One officials wanted more than a U.S. government statement to the media; they pressed for written confirmation that their mining licenses were valid. The State Department leapt into action: An energy officer from the U.S. embassy immediately held meetings with the Kazakh regime. A few days later, it was announced that Russia’s Rosatom had purchased 17 percent of Uranium One. Problem solved.

  Well, not quite. Rosatom was only fleetingly satisfied. Russia wanted a controlling interest in Uranium One. That would mean a controlling interest not just in the Afghan mines but in the U.S. assets that Uranium One had acquired—amounting to 20 percent of total U.S. uranium stock.

  On this point, much of the anti-Clinton (and pro-Trump) coverage in conservative media has misaimed its focus.31 The tendency is to hype the U.S. uranium assets and the fact that ur
anium can be used to make nuclear bombs. But Russia did not need our uranium for weapons purposes—no more than Newcastle needs our coal. Rather, to generate wealth, Putin’s regime has long sought to develop and exploit its capacity as a commercial energy producer. The Kremlin was no doubt delighted at the opportunity to grab American uranium stocks: as I’ve already noted, we do not produce enough uranium for our domestic electricity needs, so anytime Putin takes from us something we need, it potentially becomes a leverage point for him and thus a problem for us. But in the greater scheme of things, the U.S. assets were a comparatively small objective next to the Kremlin’s real target: the copious Kazakh stocks Uranium One owned.

  Still, because Russia’s move on Uranium One implicated significant U.S. uranium assets, federal law required approval by the Committee on Foreign Investment in the United States. CFIUS is a powerful tribunal, composed of the leaders of 14 U.S. government agencies involved in national security and commerce. In 2010, these included not only Secretary of State Hillary Clinton, who had cultivated a reputation as a hawk opposed to such foreign purchases, but Attorney General Eric Holder. This is important because, at the very time the Uranium One transaction was under consideration, the Justice Department and the FBI were conducting an investigation of Rosatom’s ongoing U.S. racketeering, extortion, and money-laundering scheme.

  The Russian commercial agent responsible for the sale and transportation of uranium to the United States is a subsidiary of Rosatom known as “Tenex” (formally, JSC Techsnabexport). Tenex (and by extension, Rosatom) has an American arm called “Tenam USA,” based in Bethesda, Maryland. Around the time President Obama came to power, the Russian official in charge of Tenam was Vadim Mikerin. The Obama administration reportedly issued a visa for Mikerin in 2010, but a racketeering investigation led by the FBI determined that he was already operating here in 2009.

  As Tenam’s general director, Mikerin was responsible for arranging and managing Rosatom/Tenex’s contracts with American uranium purchasers. This gave him tremendous leverage over the U.S. companies. With the assistance of several confederates, Mikerin used this leverage to extort and defraud the U.S. contractors into paying inflated prices for uranium. The proceeds were then laundered through shell companies and secret bank accounts in Latvia, Cyprus, Switzerland, and the Seychelles Islands—though sometimes transactions were handled in cash, with the skim divided into envelopes stuffed with thousands of dollars. The inflated payments served two purposes: they enriched Kremlin-connected energy officials in the United States and in Russia to the tune of millions of dollars; and they compromised the American companies that paid the bribes, rendering players in U.S. nuclear energy—a sector critical to national security—vulnerable to blackmail by Moscow.

  To further the Kremlin’s push for nuclear-energy expansion, Mikerin sought to retain a lobbyist. Naturally, he planned not only to use the lobbyist’s services but to extort kickbacks, just as he did with U.S. energy companies with which he dealt. Aided by an associate connected to Russian organized-crime groups, Mikerin found his lobbyist—a man named William Douglas Campbell. Mikerin’s solicitation in 2009 made Campbell uncomfortable, worried that he’d end up on the wrong side of the law. He contacted the FBI and revealed what he knew. From then on, he became the Bureau’s informant, and the Justice Department ultimately relied on his information to arrest and prosecute Mikerin and his conspirators.

  Interestingly, at the time Campbell started cooperating, the FBI was led by director Robert Mueller, the special counsel who investigated whether Trump had colluded with Russia. The case against Russia’s subsidiary, Tenam, was centered in Maryland, where the U.S. attorney was Rod Rosenstein—President Trump’s deputy attorney general through most of Mueller’s Trump–Russia investigation.

  Thanks to Campbell’s work, the FBI was able to understand and monitor the racketeering enterprise almost from the start. By mid-May 2010, it could already prove the scheme and three separate extortionate payments Mikerin had squeezed out of the informant.

  Keeping Congress in the Dark

  Meanwhile, congressional opposition to Russia’s potential acquisition of American uranium resources began to stir. As Peter Schweizer noted in Clinton Cash,32 four senior House members steeped in national-security issues—Peter King (R., N.Y.), Ileana Ros-Lehtinen (R., Fla.), Spencer Bachus (R., Ala.), and Howard McKeon (R. Calif.)—voiced grave concerns, pointing out that Rosatom had helped Iran, America’s sworn enemy, build its Bushehr nuclear reactor. The members concluded that “the take-over of essential US nuclear resources by a government-owned Russian agency … would not advance the national security interests of the United States.” Republican senator John Barrasso objected to Kremlin control of uranium assets in his state of Wyoming, warning of Russia’s “disturbing record of supporting nuclear programs in countries that are openly hostile to the United States, specifically Iran and Venezuela.” The House began moving a bill “expressing disfavor of the Congress” regarding Obama’s revival of the nuclear-cooperation agreement Bush had abandoned.

  Clearly, in this atmosphere, disclosure of the racketeering enterprise that Rosatom’s American subsidiary was, at that very moment, carrying out would have been the death knell of the asset transfer to Russia. It would also likely have ended the “reset” initiative in which Obama and Clinton were deeply invested—an agenda that contemplated Kremlin-friendly deals on nuclear-arms control and accommodation of the nuclear program of Russia’s ally, Iran. Nothing, however, would be allowed to disturb the reset. It appears that no disclosure of Russia’s racketeering and strong-arming was made to CFIUS or to Congress—not by Secretary Clinton, not by Attorney General Holder, and certainly not by President Obama. In October 2010, CFIUS gave its blessing to Rosatom’s acquisition of Uranium One.

  A Sweetheart Plea Helps the Case Disappear

  Even though the FBI had an informant collecting damning information, and had a prosecutable case against Mikerin by early 2010, the extortion racket against American energy companies was permitted to continue into the summer of 2014. It was only then that, finally, Mikerin and his confederates were arrested. Why then? Months earlier, in March 2014, Russia annexed Crimea. Putin also began massing forces on the Ukrainian border, coordinating and conducting attacks, ultimately taking control of territory. Clearly, the pie-in-the-sky Obama reset was dead. Furthermore, the prosecution of Mikerin’s racketeering scheme had been so delayed that the Justice Department risked losing the ability to charge the 2009 felonies because of the five-year statute of limitations on most federal crimes.

  Still, a lid needed to be kept on the case. It would have made for an epic Obama administration scandal, and a body blow to Hillary Clinton’s presidential hopes, if in the midst of Russia’s 2014 aggression, public attention had been drawn to the failure, four years earlier, to prosecute a national-security case in order to protect Russia’s takeover of U.S. nuclear assets … in a transaction that had significant ramifications for Clinton Foundation investors.

  And lo and behold: The case disappeared without fanfare, much less a public trial. Think about that: The investigation of Russian racketeering in the American energy sector was the kind of spectacular success over which the FBI and Justice Department typically do a bells-’n’-whistles victory lap: the big self-congratulatory press conference followed by the media-intensive prosecutions—and, of course, more press conferences.

  Here … crickets.

  The Justice Department and FBI had little to say when Mikerin and his co-conspirators were arrested. They quietly negotiated guilty pleas that were announced just before Labor Day. It was arranged that Mikerin would be sentenced just before Christmas. All under the radar.

  How desperate was the Obama Justice Department to plead the case out? Mikerin was arrested on a complaint describing a racketeering scheme that stretched back to 2004 and included extortion, fraud, and money laundering. Yet he was permitted to plead guilty to a single count of money-laundering conspiracy.

  E
xcept it was not really money-laundering conspiracy.

  Under federal law, that crime carries a penalty of up to twenty years’ imprisonment, not only for conspiracy but for each act of money laundering.33 But Mikerin was not made to plead guilty to this charge. He was permitted to plead guilty to an offense charged under the catch-all federal conspiracy provision, Section 371, which criminalizes agreements to commit any crime against the United States—an offense carrying a penalty of zero to five years’ imprisonment.34

  The Justice Department instructs prosecutors that when Congress has given a federal offense its own conspiracy provision with a heightened punishment (as it has for money laundering, racketeering, narcotics trafficking, and other serious crimes), they may not charge a section 371 conspiracy. That statute is for less serious conspiracy cases. To invoke it for money laundering caps the sentence way below Congress’s intent for that behavior. It signals to the court that the prosecutor does not regard the offense as major.

  Yet, that is exactly what Rosenstein’s office did, in a plea agreement his prosecutors co-signed with attorneys from the Justice Department’s Fraud Section—then run by Andrew Weissmann, later Mueller’s top deputy in the Trump–Russia investigation.35

  As we’ll see at many junctures, it’s a small world.

  Mikerin thus faced no RICO charges, no extortion or fraud charges. The plea agreement is careful not to mention any of the extortions in 2009 and 2010, before CFIUS approved Rosatom’s acquisition of U.S. uranium stock. Mikerin just had to plead guilty to a nominal “money laundering” conspiracy charge. Insulated from Congress’s prescribed money-laundering sentence, he got a term of just four years’ imprisonment. The deal was a steal for him. It also spared the Obama administration a full public airing of the facts.36

  Democrats Never Bought the Rigged Election Nonsense