Legal Analysis of Uranium One Deal - Everything Was Well Within Standard Practices
https://lawfareblog.com/unpacking-uranium-one-hype-and-law
...Uranium One and Rosatom
Uranium One is a uranium mining and processing compay headquartered in Toronto. It has mining operations all over the world, including Canada, the United States, South Africa, Australia and Kazakhstan (these last are some of the biggest uranium mines in the world). The operations in the United States (in Wyoming) mine a volume of uranium that is roughly 20% of the annual American production. It is that production (reasonably considered a potential issue of national security interest) that caused Uranium One to come to the attention of the CFIUS.
In 2010 a Russian company, ARMZ Uranium Holding, purchased a 51% interest in Uranium One. ARMZ was, at the time, a subsidiary of Rosatom—the Russian State Atomic Energy Corporation (a non-profit appendage of the government). It is fair, then, to say that the 2010 transaction involved the purchase of a controlling interest in Uranium One by the Russian government. The transaction is said to have valued Uranium One at more than $1 billion. (Since that time, ARMZ has been extinguished in corporate reorganization and Rosatom purchased the remaining 49% of Uranium One, so today Rosatom owns the entire company directly.) In addition to approval from CFIUS, the Russian purchase required (and received) approval from Canadian, South African, and Kazakh authorities.
To secure approval from CFIUS, Rosatom is reported to have promised to retain the Uranium One corporate management and corporate structure, not breaking up the company. In addition, the mining licenses would remain with U.S. subsidiaries controlled by U.S. persons. In addition, the Nuclear Regulatory Commission reviewed the transaction and gave its approval (emphasis added below):
NRC’s review of the transfer of control request determined that the U.S. subsidiaries will remain the licensees, will remain qualified to conduct the uranium recovery operations, and will continue to have the equipment, facilities, and procedures necessary to protect public health and safety and to minimize danger to life or property. The review also determined that the licensees will maintain adequate financial surety for eventual decommissioning of the sites. Neither Uranium One nor ARMZ holds an NRC export license, so no uranium produced at either facility may be exported .
By all reports, there was little controversy over the transaction (which occurred during President Obama's "reset" with Russia). Still, it is fair to say that the degree of scrutiny of this transaction seems less than the 2009 proposed purchase of a gold mine by Chinese interests —which was ultimately withdrawn in light of CFIUS objections.
Takeaways
What can we glean from all this?
- It is unlikely that Secretary Clinton personally participated in the transaction. Her assistant secretary says she did not intervene , and given the nature of the transaction and the apparent lack of controversy, that is a plausible scenario. I can see no reason to doubt his account.
- The structure of CFIUS is such that no one agency can control the outcome of the consideration. Here it appears that the entire committee and the NRC were all satisfied with the mitigation put in place. It is a very far stretch to lay this result at State's doorstep—the vigorous objection of any of the security-minded agencies would likely have derailed the transaction, but none, evidently was forthcoming. I have no doubt that State favored the sale—but that is likely the position it would take today under Secretary Rex Tillerson and was surely the position it would have taken under Secretaries Colin Powell, Condoleeza Rice and John Kerry. State has a strong institutional bias in favor of accommodating foreign investment in the United States. Here, it seems clear that the Pentagon and DHS did not object either.
- The inherent bias of the process is to approve transactions, with mitigation if needed. Intervention and blocking are rare and require more than a single agency to be activated. Put another way, no single agency has a veto on the transaction—the transaction goes forward unless a substantial majority of CFIUS is motivated by grave concerns to block it. So the most accurate way to characterize this case is that State, along with all the other agencies, declined to recommend a presidential veto.
- Uranium One's licenses are for mining and extraction, not for export. This makes the claim that we "gave away" 20% of America's uranium fairly hyperbolic. The expectation, in light of the NRC's assessment, would have been that the uranium mined would be marketed in America (with the profits going to Russia).
- It is, however, true, that the mining rights to 20% of American uranium are now held by a Russian state agency. That is troubling (and had it been me, I would have tried to generate opposition to the sale). It isn't a "give away," but it is the case that Rusatom has de jure and de facto legal rights that can be exercised to limit production if it wishes to do so.
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Ah, typical of a marxist globalist. Letting a country like Russia have 20% of our uranium is insanity and criminal
Well, since that didn't happen, we're all good.
So tell us the up side to having our uranium being controlled by Russia? It helps us how?
They don't control 20% of our uranium! They own 20% of production capacity!
And that is good because?
They don't own the uranium! They only thing they own is the capacity to mine 20% of uranium found in the US. They don't own 20% our uranium supply! Just look at it this way, before 2013 it was owned by Canada so by your logic some foreign country has ALWAYS owned 20% of the US uranium supply....what's so good about that then?
Canada is an ally. Russia isn't. So why is it a good thing to have the Russians enriching themselves over our uranium supply?
The Trumpsters continue to pound away at Hillary...if this continues I wouldn't be surprised if before long..they will finally succeed in getting her impeached!
Donald Trump campaigned on, and in fact still babbles over and over that
"Clinton gave away our uranium"
There isn't a truthful word in that sentence.
He’s worried about having enough uranium to increase our nuclear arsenal tenfold.
No, just in prison where she belongs
Well, either way-- if the Republicans are successful in their efforts, I bet that by the end of the year Hillary will be removed from office.
Why woould you bother to post this? a "legal analysis" from a blog published by a journalist without a law degreee about issues not in dispute? Of course, the Secretary of State has the legal power to approve the sale. T
This is, of course, ,SOP arguing for Clinton apologists, setting up a strawman to argue against while ingoring the real issues.
Sean, I think you know better.
Clinton and the State Dept had no unilateral ability to approve the deal. The fact is that the deal wasnt even controversial at the time. The Russians cannot access the US uranium, therefore it wasn't given to them. The uranium cannot leave the US. This is one of the silliest pieces of crap to come from the right wing frantics in a while. Well, at least since last week.
Paul Rosenzweig is an accomplished writer and speaker with a national reputation in cyber security and homeland security. Mr. Rosenzweig is the founder of Red Branch Consulting PLLC, a homeland security consulting company, and a Senior Advisor to The Chertoff Group. Mr. Rosenzweig formerly served as Deputy Assistant Secretary for Policy in the Department of Homeland Security. He is a Professorial Lecturer in Law at George Washington University and a Visiting Fellow at The Heritage Foundation. He is an advisor to and former member of the American Bar Association Standing Committee on Law and National Security and a Contributing Editor of the Lawfare blog. In 2011 he was a Carnegie Fellow in National Security Journalism at the Medill School of Journalism, Northwestern University, where he now serves as an Adjunct Lecturer.
Mr. Rosenzweig is a cum laude graduate of the University of Chicago Law School. He has an M.S. in Chemical Oceanography from the Scripps Institution of Oceanography, University of California at San Diego and a B.A from Haverford College. Following graduation from law school he served as a law clerk to the Honorable R. Lanier Anderson, III of the United States Court of Appeals for the Eleventh Circuit.
I thought this blog post was written by the blogger without a law degree. My bad.
Though the substantive objections still stand.
And those were what, exactly?
That Russian oligarchs have control of any US uranium. I thought the left hated Russian oligarchs. I guess all they need do to be liked by the left is make huge donations to the Clinton foundation and pay Bill half a mil.
No, they merely own a Canadian holding company......much like US investors might have control in a foreign company which does multinational work. Pretty much all the significant mining companies are really holding corps with lots of foreign subsidiaries and investors from all over the world.
The more relevant facts are that all the mining company subsidiaries of Uranium One with US licenses are US-based companies and none have an NRC export license for the uranium. And contrary to the claims made by T-baggers and other RWNJs, Clinton took no role in the approval process......the State Dept was just one of nine agencies on the CFI and the deal was separately approved by the NRC. Had Clinton decided to get personally involved and order her agency to reject the deal (contrary to its own findings), all that would have done is kicked up the final review to the White House which would have rejected such blatantly political manipulation of the State Dept.
Moreover the RWNJs who wring their little hands over this deal are apparently unaware that the US currently gets about 90% of its uranium from foreign sources like Canada and other former Soviet states including Russia. So the Russians now own about 1/5th of the 10% which is US-sourced annually......ie 2% of our annual consumption. We easily buy 15 times that much each year of uranium which was mined in Russia and other former Soviet states. So why aren't you folks whining about that?
In other words you have no problem enriching Russians as long as they give money to Bill and Hillary.
I'm sure you'll be able to explain how the Clintons were "enriched" by an investment transition which they had no role in. And if can can do that it's solely because they've made their tax returns public.......unlike the celebrity apprentice in the WH.
Maybe you need to whine about why the private US nuclear energy industry buys so much of its uranium from Russia and other countries? Or at least explain why you oppose the free market?
Bill got 500k and the foundation which is the Clinton's travel and expense slush fund got even more. Read the IRS 990 for the foundation sometime.
Sorry but speaking fees have nothing to do with the issue nor did any donations to the Clinton Foundation charity, as the State Dept IG found.
It's also pretty hard for there to be a quid pro quo when there was no quid to begin with and no way for there to be any kind of quo. I'm actually kind of surprised to see that you fell for this nutty right-wing conspiracy theory. You seemed a bit saner at NV.
It's not conspiracy. Read the IRS 990. Look at the total employees of the foundation then look at the travel expenditures and then the note at the end of the form that tells that the Clintons must travel by charter or first class. Do the math.
It works like the old three martini lunch game only donors pick up the tab. Bill wants to play golf in AZ so he calls a buddy about donating to the foundation. He charters a flight and he is off to a donor meeting on the first tee.
The Clintons supposedly left the white house broke but are now worth millions. With 500k a pop speaking fees to Russian oligarchs it doesn't take long does it?
Feel free to whine to the IRS about how a former President and first lady should fly coach.
.
Apparently there are lots of people all over the world who highly value what the Clintons have to say. Dubya doesn't have that problem at all....he makes his money by selling his fingerpaints. And I seriously doubt that anyone has ever paid good money to hear Trump stroke his own ego while babbling incoherently about stuff he knows nothing about. Oh wait.....some folks did pay thousands to hear him speak. I think those were the folks he called "marks" who bought into his Trump U scam.
Especially when it buys access to power. Still won't look at the millions spent by the foundation for travel? Foreign governments paying for the Clinton's lifestyle.
Would you be so forgiving if it were Trump giving a speech in Russia for 500k?
Perhaps, but neither Clinton holds any office nor is likely to do so again yet they still command exceptional speaking fees. People all over the world highly value what they have to say.......unlike any of the dimwits in the GOP.
Which are?
Really? The foundation is laying off and donations are going down.
That would be the straw man that Russia got 20% of US Uranium which is completely false.
The fact is this investment deal (not any sort of selling actual uranium) was approved because the US was trying to "reset" Russian relations with the US at the time. It was a show of good faith in an attempt to stop the Kremlin from using US support for global democracies that Putin saw as attempts to overthrow him which in response he was reigniting the cold war which the US didn't want. Sadly, it's now too late, the cold war had been restarted and Americans better wake up to that fact or enjoy the knife in the back that Putin is slowly sliding in via new weaponized propaganda methods. Watch "Putin's Revenge", a Frontline special on PBS.
the State Dept had no unilateral ability to approve the dea
There's that strawman again.
fact is that the deal wasnt even controversial at the time.
Did you read the story the Hill broke last week? Kinda blows that argument out of the water doesn't it?
Russians cannot access the US uranium, therefore it wasn't given to them.
They own it and that gives them significant control of the market. You might want to look into why Obama's own officials says this is a concern.
This is one of the silliest pieces of crap '
I guess you've gone full ostrich, and want to keep your head in the sand and ignore all the blatant corruption. I can't blame you, I would imagine the Pre Clinton John would be ashamed at the shilling you've been reduced to doing for a corporate tool whose made millions for herself by selling access to the henchmen of dictators. Are you happy you sound like a p.r. man from Standard Oil during the Gilded Age?
The right wing track record for uncovering true scandal among the Clintons and Obama is almost non-existent.
We get "outrage" and a lot of insinuendos and chase your tail down the rabbit hole bs. Most the time.
Hillary Clinton just lost to Donald trump, the second worst presidential candidate in history. Think st about that and then claim she's untouched by scandal.
As jonah Goldberg wrote,
"The Clintons will always abuse, exploit, deceive, and make fools of their biggest fans and friends, the press, the public, and even each other."
Most of America has caught on to that. Maybe someday you will too,
I would never say that Clinton is scandal free. I would say that right wing medias efforts to pin something on her have been success free.
My own personal belief is that there is always a level of corruption and scandal in politics. There is a lot of money involved and available, and "deals" to be made. Hillary has shown too much love for the dough, in my opinion, particularly with the Goldman-Sachs $250,000 speeches. But she's no different from many others that will come before and after. This nation is awash in unprosecuted white collar criminals.
If Trump had been able to keep his mouth shut, he might have been able to continue on with his criminal enterprises. But he couldn't and he has people on his trail now that will nail him. If not during his presidency, then shortly after.
The crux of it is Clinton would have helped the American people more as president than Trump will. In fact, that pos should resign tomorrow. He is morally , ethically and psychologically unfit to be president of the United States.
LOL. That holding company owns 1/5th of the 10% domestic uranium which the US buys annually. We buy 30 times that much from mines in Russia and other former Soviet states. Overall we get about 90% of our annual consumption from foreign sources.
Moreover none of Uranium One's subsidiaries with a US mining license has an export license, so it all stays in the US anyway. Plus the reality is that spot prices for U308 are way down and thus US-based mining is way down, so to claim that a holding company which provides 2% of our annual consumption has "significant control of the market" is just laughably wrong.
If you insist on continuing to post cogent fact filled comments heads may start to explode around here.
Yeah, but when did facts ever stop a nutty right wing conspiracy theory? I thought this one had been debunked long ago but I guess they're even more bullet proof than zombies.
Claims of Clinton-Russia Uranium Collusion Are A Real Empty Barrel
Hillary Clinton is back in the news. But the reason is a big nothing burger.
In a 2015 book, Breitbart News editor Peter Schweizer claimed that donations to the Clinton Foundation were behind the Obama administration’s approval of the 2010 sale of a Canadian mining company to a Russian state-controlled firm. The sale gave Russia control of a large swath of American uranium interests.
And by large, we really mean small.
The allegations are back in the news after a report in The Hill last week claimed, citing anonymous sources, that at the time U.S. officials were weighing whether to approve the deal, the FBI was investigating evidence of bribery, kickbacks, extortion and money laundering by Russian nuclear industry officials designed to help further Russian President Vladimir Putin's commercial nuclear ambitions inside the United States.
The Hill article was seized on by right-wing media ― and the president ― as evidence backing up a conspiracy theory that they've pushed amid the investigations into Russia's efforts to swing the presidential election to Donald Trump. The real collusion scandal, they claim, involves Russia and Hillary Clinton. The implication of the piece is that the FBI investigation should have been known to those who approved the deal in question.
Clinton's State Department and several government agencies on the Committee on Foreign Investment in the United States unanimously approved the 2010 partial sale of Canadian mining company Uranium One to the Russian nuclear giant Rosatom, supposedly giving Moscow control of more than 20% of America’s uranium supply.
Obama and Clinton colluding to hand over 20% America’s strategic uranium to the Russians? On cue, Fox News gabber Sean Hannity said this could be "the biggest scandal" in American history.
But here's the thing ― by 20%, we really mean almost zero.
Those U.S. facilities obtained by Russia produce almost nothing. The uranium deposits are of relatively poor grade and are too costly to compete on the uranium market. But the facilities do have good milling capacity to process ore, if anyone gives it to them, which hasn’t happened in about 10 years. Theoretically, they could process 20% of our ore, but that will never happen. Uranium One couldn’t give these facilities away.
Besides, Russia can’t export any uranium they produce in the U.S. They do not possess a Nuclear Regulatory Commission export license.
The real reason Russia wanted this deal was to give Rosatom’s subsidiary Uranium One's very profitable uranium mines in Kazakhstan ― the single largest producer of commercial uranium in the world.
Then, in 2011, the administration approved a Rosatom subsidiary to sell commercial uranium to U.S. nuclear power plants in partnership with the U.S. Enrichment Corporation. Up until then, Russia had been limited to selling our nuclear power plants uranium reprocessed from old Soviet nuclear weapons under the 1990s Megatons to Megawatts peace program. Nothing strange here, either. Finally, in 2013, Russia obtained 100% interest in Uranium One.
Rather than take action against this deal, the Department of Justice just continued investigating the matter for years, essentially leaving the American public, Congress, the secretary of state and the administration in the dark about more Russian meddling in the United States, this time involving nuclear.
Candidate Trump jumped on this issue during the 2016 campaign trail last year, but as secretary of state, Clinton was not involved in the committee review and never intervened on the matter, and there were several other agencies involved in the recommendation.
It is still not clear why no one at the FBI alerted the Obama administration to the Russian kickbacks, extortion threats and money laundering before these decisions were made. One theory is that the United States was still seeking to "reset" its relationship with Russia and was also trying to get Putin on board with our Iran nuclear deal. But in the end, this Russian deal just wasn’t that important and had no national security ramifications.
As Jeffrey Lewis, a nuclear nonproliferation expert at the Middlebury Institute, described it, Russia’s purchase of the company "had as much of an impact on national security as it would have if they set the money on fire. That’s probably why (all the U.S. agencies involved) approved it."
The key to this issue’s resurgence this week is that Hillary Clinton was secretary of state at the time, Bill Clinton was getting lucrative speaking fees in Russia, and Russian money was finding its way to the Clinton Foundation, although the amount turns out to be small . However, even if there was no wrongdoing on the part of the administration or the Clintons , and no national security reason for anyone to oppose this deal, some still want to make it another Benghazi.
As a scandal, this issue lacks relevance since Clinton is now a private citizen and Russian meddling in our 2016 election has become a bigger issue. In fact, all the attention now being paid to the uranium deal now seems to have more to do with Robert Mueller’s present investigation than with Clinton.
The political ramifications aside, what is the reality of our uranium supplies, and how much does Russian meddling affect them?
Short answer – not at all.
There’s lots and lots of uranium in the world, and more keeps being discovered. Just look at the 2017 AAPG EMD Committee Report that covers uranium, other nuclear minerals and rare earth elements .
According to the lead author, Michael Campbell at I2M Associates , "we are awash in uranium, not to mention all energy minerals – oil, coal and especially natural gas.” (Disclosure: I am a member of that committee and a co-author of the report.)
This is especially true in North America, which contains the highest-grade uranium deposits in the world . The Athabasca Basin of Saskatchewan is known as the "Saudi Arabia of Uranium."
Which is critical since we need to double nuclear power to address climate change and replace coal, even as we ramp up renewables. We also need to provide an extra 300 billion kWhs each year to charge the 100-million-plus fleet of fully electric vehicles America needs by 2040 to have any chance of putting a real dent in our petroleum use.
So yes, North America is essentially uranium-independent . And no, this Russian deal had, and will have, no impact, aside from showing that the FBI is lax in its prosecution of Russians who break our laws, and lax in alerting us to their meddling in time to do anything about it.
Dr. James Conca is an expert on energy, nuclear and dirty bombs, a planetary geologist, and a professional speaker. Follow him on Twitter @jimconca and see his book at Amazon.com
“Hillary Clinton gave them 20 percent of our uranium — gave Russia for a big payment.”
— Donald Trump, campaign rally, Oct. 25, 2016
https://www.washingtonpost.com/news/fact-checker/wp/2016/10/26/the-facts-behind-trumps-repeated-claim-about-hillary-clintons-role-in-the-russian-uranium-deal/?utm_term=.f68cb9ad9390