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: highly coveted deposits of uranium that could fuel
nuclear reactors around the world. And Mr. Giustra was in hot pursuit
of an exclusive deal to tap them.
Unlike more established competitors, Mr. 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 Mr. Giustra on his luxuriously appointed 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.
Mr. Nazarbayev walked away from the table with a propaganda coup,
after Mr. Clinton expressed enthusiastic support for the Kazakh
leader's bid to head an international organization that monitors
elections and supports democracy. Mr. Clinton's public declaration
undercut both American foreign policy and sharp criticism of
Kazakhstan's poor human rights record by, among others, Mr.
Clinton's wife, Senator Hillary Rodham Clinton of New York.
Within two days, corporate records show that Mr. Giustra also came up
a winner when his 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 Mr.
Giustra, analysts said.
Just months after the Kazakh pact was finalized, Mr. Clinton's
charitable foundation received its own windfall: a $31.3 million
donation from Mr. Giustra that had remained a secret until he
acknowledged it last month. The gift, combined with Mr. Giustra's
more recent and public pledge to give the William J. Clinton
Foundation an additional $100 million, secured Mr. Giustra a place in
Mr. Clinton's inner circle, an exclusive club of wealthy
entrepreneurs in which friendship with the former president has its
Mr. 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 Mr. Giustra traveled with
Mr. Clinton to Kazakhstan, India and China to see first-hand the
philanthropic work done by his foundation.
A spokesman for Mr. Clinton said the former president knew that Mr.
Giustra had mining interests in Kazakhstan but was unaware of "any
particular efforts" and did nothing to help. Mr. Giustra said he was
there as an "observer only" and there was "no discussion" of
the deal with Mr. Nazarbayev or Mr. Clinton.
But Moukhtar Dzhakishev, president of Kazatomprom, said in an
interview that Mr. Giustra did discuss it, directly with the Kazakh
president, and that his friendship with Mr. Clinton "of course made
an impression." Mr. Dzhakishev added that Kazatomprom chose to form
a partnership with Mr. Giustra's company based solely on the merits
of its offer.
After The Times told Mr. Giustra that others said he had discussed the
deal with Mr. Nazarbayev, Mr. Giustra responded that he "may well
have mentioned my general interest in the Kazakhstan mining business
to him, but I did not discuss the ongoing" efforts.
As Mrs. Clinton's presidential campaign has intensified, Mr. Clinton
has begun severing financial ties with Ronald W. Burkle, the
supermarket magnate, and Vinod Gupta, the chairman of InfoUSA, to
avoid any conflicts of interest. Those two men have harnessed the
former president's clout to expand their businesses while making the
Clintons rich through partnership and consulting
Mr. Clinton has vowed to continue raising money for his foundation if
Mrs. Clinton is elected president, maintaining his connections with a
wide network of philanthropic partners.
Mr. Giustra said that while his friendship with the former president
"may have elevated my profile in the news media, it has not directly
affected any of my business transactions."
Mining colleagues and analysts agree it has not hurt. Neil MacDonald,
the chief executive of a Canadian merchant bank that specializes in
mining deals, said Mr. Giustra's financial success was partly due to
a "fantastic network" crowned by Mr. Clinton. "That's a very
solid relationship for him," Mr. MacDonald said. "I'm sure
it's very much a two-way relationship because that's the way Frank
Mr. Giustra made his fortune in mining ventures as a broker on the
Vancouver Stock Exchange, raising billions of dollars and developing a
loyal following of investors. Just as the mining sector collapsed, Mr.
Giustra, a lifelong film buff, founded the Lion's Gate Entertainment
Corporation in 1997. But he sold the studio in 2003 and returned to
Mr. Giustra foresaw a bull market in gold and began investing in mines
in Argentina, Australia and Mexico. He turned a $20 million shell
company into a powerhouse that, after a $2.4 billion merger with
Goldcorp Inc., became Canada's second-largest gold company.
With a net worth estimated in the hundreds of millions of dollars, Mr.
Giustra began looking for ways to put his wealth to good use. Meeting
Mr. Clinton, and learning about the work his foundation was doing on
issues like AIDS treatment in poor countries, "changed my life,"
Mr. Giustra told The Vancouver Sun.
The two men were introduced in June 2005 at a fund-raiser for tsunami
victims at Mr. Giustra's Vancouver home and hit it off right away.
They share a love of history, geopolitics and music - Mr. Giustra
plays the trumpet to Mr. Clinton's saxophone. Soon the dapper
Canadian was a regular at Mr. Clinton's side, as they flew around
the world aboard Mr. Giustra's plane.
Philanthropy may have become his passion, but Mr. Giustra, now 50, was
still hunting for ways to make money.
Exploding demand for energy had helped revitalize the nuclear power
industry, and uranium, the raw material for reactor fuel, was about to
become a hot commodity. In late 2004, Mr. Giustra began talking to
investors, and put together a company that would eventually be called
UrAsia Energy Ltd.
Kazakhstan, which has about one-fifth of the world's uranium
reserves, was the place to be. But with plenty of suitors, Kazatomprom
could be picky about its partners.
"Everyone was asking Kazatomprom to the dance," said Fadi Shadid,
a senior stock analyst covering the uranium industry for Friedman
Billings Ramsey, an investment bank. "A second-tier junior player
like UrAsia - you'd need all the help you could get."
The Cameco Corporation, the world's largest uranium producer, was
already a partner of Kazatomprom. But when Cameco expressed interest
in the properties Mr. Giustra was already eying, the government's
response was lukewarm. "The signals we were getting was, you've
got your hands full," said Gerald W. Grandey, Cameco president.
For Cameco, it took five years to "build the right connections" in
Kazakhstan, Mr. Grandey said. UrAsia did not have that luxury.
Profitability depended on striking before the price of uranium
"Timing was everything," said Sergey Kurzin, a Russian-born
businessman whose London-based company was brought into the deal by
UrAsia because of his connections in Kazakhstan. Even with those
connections, Mr. Kurzin said, it took four months to arrange a meeting
In August 2005, records show, the company sent an engineering
consultant to Kazakhstan to assess the uranium properties. Less than
four weeks later, Mr. Giustra arrived with Mr. Clinton.
Mr. Dzhakishev, the Kazatomprom chief, said an aide to Mr. Nazarbayev
informed him that Mr. Giustra talked with Mr. Nazarbayev about the
deal during the visit. "And when our president asked Giustra,
'What do you do?' he said, 'I'm trying to do business with
Kazatomprom,' " Mr. Dzhakishev said. He added that Mr. Nazarbayev
replied, "Very good, go to it."
Mr. Clinton's Kazakhstan visit, the only one of his post-presidency,
appears to have been arranged hastily. The United States Embassy got
last-minute notice that the president would be making "a private
visit," said a State Department official, who said he was not
authorized to speak on the record.
The publicly stated reason for the visit was to announce a Clinton
Foundation agreement that enabled the government to buy discounted
AIDS drugs. But during a news conference, Mr. Clinton wandered into
delicate territory by commending Mr. Nazarbayev for "opening up the
social and political life of your country."
In a statement Kazakhstan would highlight in news releases, Mr.
Clinton declared that he hoped it would achieve a top objective:
leading the Organization for Security and Cooperation in Europe, which
would confer legitimacy on Mr. Nazarbayev's government.
"I think it's time for that to happen, it's an important step,
and I'm glad you're willing to undertake it," Mr. Clinton
Mr. Clinton's praise was odd, given that the United States did not
support Mr. Nazarbayev's bid. (Late last year, Kazakhstan finally
won the chance to lead the security organization for one year, despite
concerns raised by the Bush administration.) Moreover, Mr. Clinton's
wife, who sits on a Congressional commission with oversight of such
matters, had also voiced skepticism.
Eleven months before Mr. Clinton's statement, Mrs. Clinton co-signed
a commission letter to the State Department that sounded "alarm
bells" about the prospect that Kazakhstan might head the group. The
letter stated that Kazakhstan's bid "would not be acceptable,"
citing "serious corruption," canceled elections and government
control of the news media.
In a written statement to The Times, Mr. Clinton's spokesman said
the former president saw "no contradiction" between his statements
in Kazakhstan and the position of Mrs. Clinton, who said through a
spokeswoman, "Senator Clinton's position on Kazakhstan remains
Noting that the former president also met with opposition leaders in
Almaty, Mr. Clinton's spokesman said he was only "seeking to
suggest that a commitment to political openness and to fair elections
would reflect well on Kazakhstan's efforts to chair the
But Robert Herman, who worked for the State Department in the Clinton
administration and is now at Freedom House, a human rights group, said
the former president's statement amounted to an endorsement of
Kazakhstan's readiness to lead the group, a position he called
"He was either going off his brief or he was sadly mistaken," Mr.
Herman said. "There was nothing in the record to suggest that they
really wanted to move forward on democratic reform."
Indeed, in December 2005, Mr. Nazarbayev won another election, which
the security organization itself said was marred by an "atmosphere
of intimidation" and "ballot-box stuffing."
After Mr. Nazarbayev won with 91 percent of the vote, Mr. Clinton sent
his congratulations. "Recognizing that your work has received an
excellent grade is one of the most important rewards in life," Mr.
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, Mr. Clinton honored Mr.
Nazarbayev by inviting him to his annual philanthropic conference.
Within 48 hours of Mr. Clinton's departure from Almaty on Sept. 7,
Mr. Giustra got his deal. UrAsia signed two memorandums of
understanding that paved the way for the company to become partners
with Kazatomprom in three mines.
The 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
Mr. Giustra challenged the notion that UrAsia needed to court
Kazatomprom's favor to seal the deal, contending that the government
agency's approval was not required.
But Mr. Dzhakishev, analysts and Mr. Kurzin, one of Mr. Giustra's
own investors, said that approval was necessary. Mr. Dzhakishev, who
said that the deal was almost done when Mr. Clinton arrived, said that
Kazatomprom was impressed with the sum Mr. Giustra was willing to pay
and his record of attracting investors. He said Mr. Nazarbayev himself
ultimately signed off on the transaction.
Longtime market watchers were confounded. Kazatomprom's choice of
UrAsia was a "mystery," said Gene Clark, the chief executive of
Trade Tech, a uranium industry newsletter.
"UrAsia was able to jump-start the whole process somehow," Mr.
Clark said. The company became a "major uranium producer when it
didn't even exist before."
Records show that Mr. Giustra donated the $31.3 million to the Clinton
Foundation in the months that followed in 2006, but neither he nor a
spokesman for Mr. Clinton would say exactly when.
In September 2006, Mr. Giustra co-produced a gala 60th birthday for
Mr. Clinton that featured stars like Jon Bon Jovi and raised about $21
million for the Clinton Foundation.
In February 2007, a company called Uranium One agreed to pay $3.1
billion to acquire UrAsia. Mr. 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, Mr. Dzhakishev, the Kazatomprom chief, said he
traveled to Chappaqua, N.Y., to meet with Mr. Clinton at his home. Mr.
Dzhakishev said Mr. Giustra arranged the three-hour meeting. Mr.
Dzhakishev said he wanted to discuss Kazakhstan's intention - not
publicly known at the time - to buy a 10 percent stake in
Westinghouse, a United States supplier of nuclear technology.
Nearly a year earlier, Mr. Clinton had advised Dubai on how to handle
the political furor after one of that nation's companies attempted
to take over several American ports. Mrs. Clinton was among those on
Capitol Hill who raised the national security concerns that helped
kill the deal.
Mr. Dzhakishev said he was worried the proposed Westinghouse
investment could face similar objections. Mr. Clinton told him that he
would not lobby for him, but Mr. Dzhakishev came away pleased by the
chance to promote his nation's proposal to a former president.
Mr. Clinton "said this was very important for America," said Mr.
Dzhakishev, who added that Mr. Giustra was present at Mr. Clinton's
Both Mr. Clinton and Mr. Giustra at first denied that any such meeting
occurred. Mr. Giustra also denied ever arranging for Kazakh officials
to meet with Mr. Clinton. Wednesday, after The Times told them that
others said a meeting, in Mr. 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," Mr. 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." Mr. Giustra said
the meeting "escaped my memory until you raised it."
Wednesday, Mr. Clinton's spokesman, Ben Yarrow, issued what he
called a "correction," saying: "Today, Mr. Giustra told our
office that in February 2007, he brought Mr. Dzhakishev from
Kazatomprom to meet with President Clinton to discuss the future of
Mr. Yarrow said his earlier denial was based on the former
president's records, which he said "show a Feb. 27 meeting with Mr.
Giustra; no other attendees are listed."
Mr. Dzhakishev said he had a vivid memory of his Chappaqua visit, and
a souvenir to prove it: a photograph of himself with the former
"I hung up the photograph of us and people ask me if I met with
Clinton and I say, Yes, I met with Clinton," he said, smiling
David L. Stern and
Margot Williams contributed reporting.
This site contains copyrighted material the use of which has not always been specifically authorized by the copyright owner. We are making such material available in our efforts to advance understanding of environmental, political, human rights, economic, democracy, scientific, and social justice issues, etc. We believe this constitutes a 'fair use' of any such copyrighted material as provided for in section 107 of the US Copyright Law. In accordance with Title 17 U.S.C. Section 107, the material on this site is distributed without profit to those who have expressed a prior interest in receiving the included information for research and educational purposes. For more information go to: http://www.law.cornell.edu/uscode/17/107.shtml. If you wish to use copyrighted material from this site for purposes of your own that go beyond 'fair use', you must obtain permission from the copyright owner.