Published on Nov. 18, 2020; last updated on Jan. 20, 2021.
Donald Trump has never been known for his visionary foreign policy and yet his presidency will leave the world transformed. In an age of disinformation, the precise nature of the changes he has brought about in global affairs can be elusive, particularly when those changes have resulted from his administration’s clandestine negotiations with Russian officials and businessmen. While America has been focused on the ways in which the Kremlin interfered to support Trump in the 2016 election, too little attention has been paid to what Moscow intended to get out of a Trump presidency or indeed what they got.
From the earliest days of the campaign right up until the present day, Trump and his associates have tried to conduct foreign policy through the genre they know best: the business deal. Since they didn’t use the usual government channels for foreign affairs, unless we have official investigations we won’t know exactly what transpired in these dealings. But there is one area — nuclear energy — in which it seems clear that Russia stands to benefit from these transactions at the expense not only of US interests, but also those of Ukraine and of global nonproliferation more generally. This could present serious challenges to any attempts the Biden administration might make to reconstruct a stable nonproliferation regime.
The impetus for Trump 2016 campaign associates and Trump administration officials to make nuclear energy deals has come in large part from the interest of the Gulf states, particularly Saudi Arabia, in nuclear power. And the lure of Saudi billions has created financial incentives that have eclipsed non-proliferation concerns. For example, Americans in Trump’s inner circle sought Saudi funding for ambitious programs building nuclear reactors across the Middle East. But Russia has ended up being awarded many of these Middle Eastern contracts. And it seems that the Trump administration may have given away, through its inept dealings, significant U.S. leverage in the nuclear energy sector.
An examination of two separate sets of negotiations reveals distinct forms of corruption and geopolitical risk involved in Trump associates’ nuclear energy deals. The first, led by Trump’s first National Security Advisor Michael Flynn, but also implicating other members of Trump’s inner circle, involved openly courting Russia to participate in a nuclear energy deal that would likely further Russian interests at the expense of Ukraine’s. The second, which involved an attempt to purchase nuclear company Westinghouse, was led by Trump’s close associate and former Middle East adviser, Tom Barrack. It didn’t explicitly include Russia, but it was thwarted by Jared Kushner for unknown reasons, and it now appears that Russia may have secretly been a chief beneficiary of the alternative deal that was ultimately made.
This series of negotiations has both nuclear security and broader geopolitical implications, which could be particularly dire for Ukraine, with whom Russia remains locked in conflict. These activities could also be consequential for the rebalancing of power in the Middle East, perhaps even more broadly. And they may have created serious national security vulnerabilities for the United States.
Even aside from these nuclear energy deals, international nuclear security has already been profoundly shaken by a few stamps of Trump’s foot. That includes his withdrawal from three international arrangements — the Joint Comprehensive Plan of Action (JCPOA) for Iran’s nuclear program, the Intermediate-Range Nuclear Forces Treaty (INF) with Russia, and the Open Skies Treaty that permitted verification of nuclear agreements — as well as his potential withdrawal from the U.S. Bilateral Agreement for Peaceful Nuclear Cooperation. These extraordinary steps have collectively transformed the nuclear landscape. In June of this year he even threatened to restart nuclear testing.
These were mostly reactive moves with serious risks, not the product of some hidden cunning strategy. When I consulted nuclear security expert Professor Graham Allison (who was involved in developing programs for decommissioning weapons at the end of the Cold War), he was unambiguous: “While the specifics among them differ, the net effect of these actions has been to increase the risk of nuclear proliferation and even war.”
But it may turn out to be just as consequential that since 2016, Trump and his team have treated the international nuclear order as if it were cheap real estate in a former Soviet republic: rich in opportunities for deals, liberatingly deficient in enforceable laws and norms. Their secret bargaining over nuclear security has compounded the damage done by Trump’s highly visible unraveling of non-proliferation agreements.
Dispensing with International Regulations
The initial efforts by members of the Trump administration to strike a lucrative nuclear deal were reportedly made by General Michael Flynn. These were detailed in report by the House Committee on Oversight and Reform under the late Elijah Cummings, in July 2019, entitled “Corporate and Foreign Interests Behind White House Push to Transfer U.S. Nuclear Technology to Saudi Arabia” (see also Feb. 2019 interim report). It exposed a concerted attempt by Trump administration officials to broker nuclear power deals in the Middle East, commenting that the attempt “virtually obliterated the lines normally separating government policymaking from corporate and foreign interests.”
The Cummings report exposed several attempts by Trump associates to get Saudi financial backing for a plan that involved building nuclear power plants in a block of Middle Eastern countries deemed potentially friendly to the interests of the United States and Israel. This effort involved several senior former military and intelligence officials. The plan was generally referred to, rather ambitiously, as the “Marshall Plan for the Middle East.” In exchange for funding the initiative, the Saudis would get nuclear technologies, bypassing the requirements of the U.S. Atomic Energy Act, which requires the conclusion of a “123 Agreement” establishing a legal framework for peaceful nuclear cooperation prior to the transfer of any nuclear technology. It has now turned out to be the case that the Saudis are likely not simply interested in a civilian nuclear power program. Crown Prince of Saudi Arabia Mohammed bin Salman (MBS) – the country’s de facto ruler – has been explicit about the fact that he would develop nuclear weapons if Iran were to do the same. Saudi Arabia is reported to have begun manufacturing yellowcake, which would be a further step on the road to achieving this objective, though the initial report has not been confirmed.
Michael Flynn, who reportedly brought the proposal for a Saudi-backed initiative to Trump while serving as his national security adviser, lacked the necessary experience in business, diplomacy, and nuclear energy. But he had already been working with two companies which were dedicated to putting together a US-led consortium to build reactors in the Middle East. From April 2015 until June 2016 Flynn had been negotiating in a private capacity with a company established by Alex Copson called ACU Strategic Partners LLC.*
Flynn already had a reputation (born out by his book, The Field of Flight) for obsessive Islamophobia and seems to have found a good match in Copson who allegedly spoke of “recoloniz[ing] the Middle East.” Their consortium would employ Russia’s Rosoboron (a company that protects Russia’s defense-related exports and imports and is currently under US sanctions) to supply “total regional security,” and Atomstroy, another Russian company, to build some of the reactors. Russia would also have been responsible for disposing of the spent fuel, which otherwise could be turned into weapons-grade material if diverted from permitted uses. This of course would require U.S. sanctions on Russia to be lifted. But according to the whistleblower who approached Cummings, Copson also envisaged placing U.S. troops in the Arab countries in which they were working (whose people were apparently described in “highly derogatory terms” by Copson) to “defend the installations” and, it seems, provide a pretext for establishing a U.S. troop presence in the region.
Flynn’s own ambitions may not have extended beyond “containing” Iran with a balance of potential nuclear forces in the region, but in June of that year, Flynn reportedly visited both Israel and Egypt on ACU’s behalf, seeing a particular urgency in persuading Egypt not to sign a nuclear power deal with Russia alone. He needed to keep possibility of the larger deal alive.
According to the Cummings report, in 2016, Flynn also began talks with a company called IP3/Ironbridge, which had been founded by retired General Keith Alexander and whose CEO was retired Rear Admiral Mike Hewitt. IP3 deny that Flynn was ever a paid adviser. Flynn apparently hoped to engineer deals that would benefit IP3 and ACU, and boasted of being able to leverage upcoming meetings with Putin and officials in the Middle East to strike a mutually beneficial deal. An alliance of Middle Eastern countries with the US would fund the project and Israel would benefit from the cheaper electricity it generated.
ACU has denied these reports and the whistleblower’s allegations. Other news reports describe ACU associates splitting in mid-2016 to form IP3 as a separate venture that would substitute China for Russia as the foreign partner (and “later shifted to an all-American approach”) and with Flynn moving over to IP3 after the split.
In early January 2017, Flynn found himself in a much stronger position. As Trump’s national security adviser he had direct access to the president and his administration and hence – he believed – the ability to persuade them to loosen restrictions on nuclear energy technologies. He held talks with Steve Bannon, Jared Kushner, Tom Barrack and others about the nuclear project.
The incoming Trump administration, apparently absent any advice from non-proliferation experts, made clear that it would not hold the Saudis to the “gold standard” on non-proliferation measures expected of other states – namely, an obligation to forego uranium enrichment and plutonium reprocessing, the two pathways to making fissile material for a nuclear weapon – particularly whilst Iran, with its pre-existing uranium enrichment program, was in their view not sufficiently constrained. (In reality, the JCPOA had significantly constrained Iran’s civil nuclear program, and no transfer of nuclear technology from the U.S. was permitted). The very willingness of an administration to make ad hoc concessions like these changes the nuclear landscape. But Trump administration officials clearly lacked concern about proliferation.
The Role of Energy in Russia’s Hybrid Warfare in Ukraine
All energy deals have complex geopolitical implications, but those that involve Russia have an added dimension: they play a role in Russia’s hybrid warfare, supporting Russia’s military goals with non-military strategies including strategic investments. What the Trump administration did understand was that any nuclear power deal with Russia would have to benefit Moscow by furthering its geopolitical goals, even if this was at Ukraine’s expense.
In the 1990s and 2000s, Russia often suspended or threatened to suspend essential gas supplies in order to bully Ukraine politically. Although Ukraine has now managed to become independent of Russia for its gas supply, it still depends on billions in revenue from Gazprom, Russia’s state gas company, from providing a route for Russia’s gas exports to Europe.
But in electricity production, Ukraine has one great strength: nuclear power. Although the Ukrainian energy industry may be best known in the United States for the Chernobyl disaster under the Soviets, the state-owned company Turboatom, located in the eastern Ukrainian city of Kharkiv (also known as Kharkov), is one of the most respected turbine construction companies in the world and a serious competitor to Russia’s Rosatom in that field. However, most of Ukraine’s own reactors are still Soviet built VVER-1000s and until recently only Russia could produce the fuel they require. In 2014, Ukraine’s entire nuclear fuel supply came from Russia.
But U.S. company Westinghouse also succeeded in producing the fuel Ukraine needed and by 2016 was reportedly able to supply 40% for the country. Russia therefore had a special interest in Westinghouse. Between 2014 and 2016 the Russian Main Intelligence Directorate (known as the GRU) conspired to hack Westinghouse, but was caught, and GRU officers were charged in the United States. Westinghouse, then owned by Toshiba, was close to bankruptcy. So Russia would have had a very strong strategic interest in knowing about and perhaps intervening in any buyout.
Russia’s desire to control Ukraine through energy dominance has found support in the Trump White House. It was clear to the Trump team during the 2016 presidential campaign that Russia wanted the lifting of sanctions imposed over its 2014 invasion of Ukraine, without giving up any control of Ukrainian territory. Trump and his senior campaign officials seemed to have little or no concerns with this position in theory.
During the campaign and transition various figures had suggested their own idiosyncratic solutions to the Ukraine problem. Paul Manafort, Rick Gates, and Konstantin Kilimnik (a Russian intelligence agent, according to the report produced by the Senate Select Committee on Intelligence) put together a proposal that according to Mueller’s report “was about a peace plan for Ukraine that Manafort has since acknowledged was a ‘backdoor’ means for Russia to control eastern Ukraine.” Former Ukrainian president Viktor Yanukovych played a central role in it and apparently wanted to be elected head of an independent republic in eastern Donbas, which even Manafort in retrospect claims to think was slightly crazy. Felix Sater, the Russian-American involved in one of Trump’s attempts to build a Trump Tower in Moscow, and Michael Cohen, Trump’s personal lawyer and fixer, took their own plan to Trump, but it went nowhere.
On ACU’s part, Copson had factored in the need to mollify Ukraine if sanctions were lifted. In November 2016, ACU drew up far-fetched plans for potential Trump-Putin negotiations which included essentially inducing Ukraine “to support lifting US and EU sanctions on Russia” by offering Ukrainian company Turboatom “an unprecedented industrial contract to provide turbine generators valued at $45 billion for the project’s Middle East reactors.” ACU has told the author that their project has always required Saudi Arabia to sign a 123 civil nuclear cooperation agreement with the U.S. government and is purposefully designed to counteract and reduce risks of nuclear weapons proliferation. (ACU’s description of its project can be found on its website here.)
On January 12th, 2017, the Washington Post disclosed that Flynn had spoken privately with Russian Ambassador Kislyak on December 29th, the day that the Obama administration announced sanctions against Russia. This set in motion a series of events in which Flynn’s remaining in the administration would quickly become untenable. The Russians meanwhile forged ahead with talks involving other actors representing the administration.
On January 16th, 2017, Kirill Dmitriev, CEO of the Russia Direct Investment Fund, the sovereign wealth fund set up to create partnerships with the sovereign wealth funds of other countries, met with Erik Prince in the Seychelles but was apparently ultimately uninterested in working with him. Dmitriev instead found an easier mark. Trump’s son-in-law and incoming White House Senior Adviser Jared Kushner was politically inexperienced, desperately needing to impress his father-in-law, and deeply in debt owing to his disastrous purchase of 666 Fifth Avenue in New York City. As soon as he returned to the United States, Dmitriev tried to arrange an introduction and reportedly established a close relationship with Kushner. MBS also made a point of getting close to Kushner, as did UAE Ambassador Yousef Al Otaiba. These relationships may be a key to what transpired in the nuclear power sector, but they were conducted privately, without mediation by or advice from foreign service professionals, so we know little about them.
The Complexity of Business Deals with Oligarchs
No one would call the Kushners naifs when it comes to potentially deceptive business practices. But even though Jared Kushner is a senior adviser to the president of the United States as well as a businessman, it’s unlikely that he has sufficient awareness of the tradecraft of Russian oligarchs who employ their investment strategies to serve Putin’s ends. Many non-Russians are surprised by the ultimate nature of the deal they’ve entered into with their Russian partners, or indeed by the fact that business partners they thought were non-Russian are in fact Russian. Who knows what disinformation Kushner’s new friends may have fed him in the absence of mediation by the State Department and U.S. intelligence professionals.
Disinformation, including hiding the Kremlin’s role, is perhaps the best known aspect of Russia’s hybrid warfare, and this tradecraft applies to their energy interests. In December 2016, for instance, Putin’s ally Igor Sechin purportedly sold a 19.5% stake in his oil company, Rosneft, to Qatar’s sovereign wealth fund, called Qatar Investment Authority or QIA, and commodity trader, Glencore. This was lauded as proof of Russia’s economic strength and abiding appeal to foreign investors in spite of sanctions. In 2018 it was discovered that Russian state bank VTB had largely financed the acquisition.
That rank deception wasn’t unprecedented. When Rosatom was contracted to build a reactor in Finland in 2014, there were concerns in Europe about the leverage Russia would gain in the region, so a deal was signed that guaranteed a 60% European ownership requirement. In 2015, the Finnish government discovered that Russia’s largest bank, Sberbank, had made arrangements to covertly fund 9% of the deal through a Croatian registered construction company with Russian owners.
These are glimpses of the techniques, often also associated with organized crime, that Russia has used to gain and leverage control in the energy sector. An earlier episode provided warnings of the broad shape such operations might take. In 1999, the Romanian government decided to privatize an aluminum company called ALRO Slatina which was also one of the biggest energy traders in Romania. Two Russians, Alexander Krasner and Vitali Machitski, both of whom had made their fortunes from Russia’s privatization deals, wanted to take over the business but knew that Romanians would be wary of selling to Russians. So they used as a front the business of an American, Alan Kestenbaum. (Keep his name in mind for events that transpire with Westinghouse later.)
The two Russians hired a US consultancy firm, Tendler-Beretz LLC, to help them associate the buy-out publicly with the United States. Tendler-Beretz in turn suggested hiring a highly prominent Israeli lawyer, Meir Rosenne (formerly the Israeli ambassador to France and the United States) who was fluent in Romanian. Between them they hatched a plan referred to as the Vostok Project.
Rosenne went to Bucharest for meetings with the Romanian state ownership fund (APAPS). Court documents disclose that “the meeting with the chairman of APAPS and the Israeli ambassador revealed a preference for US Jews to obtain control of the aluminium plants because they understood the mentality of East Europeans.” So Tendler-Beretz persuaded Krasner and Machitski to buy up shares in ALRO using an American Company owned by Hal Beretz’s son-in-law. And so Alan Kestenbaum’s company, Marco International Corp. (MIC) eventually became the owner of ALRO.
Kestenbaum had founded Marco International in 1985 with seed capital from Beretz, his father-in-law. He ran it until 2001, overseeing its expansion internationally and establishing offices across Asia and in Moscow. In 2000, under the name aluminium.com, the company created an Internet exchange for Russian metal exporters. Prior to this, Kestenbaum, like Krasner, had worked for Marc Rich, notorious fugitive from justice (after being indicted for multiple financial crimes) and founder of commodity trading company Glencore.
In 2007 Glencore merged with Oleg Deripaska’s RUSAL, and Victor Vekselberg and Len Blavatnik’s SUAL, to form United Company RUSAL. None of these business deals were simple affairs. The “aluminium wars” which came about as a result of the privatizations in formerly socialist countries in the late 1990s were notoriously brutal. The whole sector was rife with criminal gang activity. Russian billionaire Roman Abramovich has claimed he had to be persuaded to invest in that area of business in 2000 because “every three days someone was getting murdered.”
Kestenbaum, however, managed to keep a low profile. He is now the owner and CEO of Canadian steel company Stelco, the only locally listed steel company in a Canadian market dominated by foreigners, including Roman Abramovich’s EVRAZ Group. He has maintained his focus on investing in core areas pursued by Russian oligarchs.
The overall strategic aim of the Vostok Project, however, was greater than the ALRO deal. According to court documents,
The “strategic objective” was defined as the creation of a vertically integrated operation that would give the men power over everything from a plant producing raw materials (eg SC Alum SA which Machitski’s enterprises acquired), to a power plant, and a plant producing primary products (ALRO) to a plant for manufacturing products out of the primary products (Alprom of Romania). The plan also detailed the participants and their strategy including lobbying people in positions of political influence, the head of consulting banks and the state privatization agency.
The motivation for organized crime to gain control over every part of the supply and manufacturing cycle is clear: no outsider can hold the whole process ransom by controlling a part of it. Even without achieving the full objective, each step toward that level of control can be significant. This scale of ambition, controlling the vertical structure of an industry, is something coordinated state oligarchs are uniquely equipped to achieve.
The vertically integrated structure of the nuclear power business includes the stages of uranium mining, enriching uranium to create fuel, building and maintaining reactors, recycling spent fuel to make new fuel, and (the crucial step for having weapons-grade nuclear materials) reprocessing plutonium. So we need to keep a careful eye on each of these stages to see who has control over the nuclear cycle in any given state.
On paper it might appear that Russia, alongside China, is now dominating the field of nuclear energy by building reactors. But Cheryl Rofer, a nuclear scientist retired from Los Alamos, who follows their deals closely told me that “Russia has pushed its reactors to other countries, often sweetening the deal with offers of financing. Nuclear technology is one of Russia’s few manufacturing exports. Many countries have been approached but the number of Russian reactors being built is small.” In this sector, as in others, Russia in fact exercises influence and retains leverage through non-conventional and sometimes invisible means.
Russia and the United States Nuclear Industry
It’s only relatively recently that the public and private U.S. institutions have begun to examine seriously the intricate financial network that lies behind and links Russian nuclear business dealings in the United States. Public perception of these dealings has been dominated by the false Uranium One conspiracy theory. This distraction has diverted attention from the extent to which Russia has established a strong foothold in the US nuclear industry in a way that suggests an aspiration to vertical control.
The grain of truth in the Uranium One story is that in 2010 Canadian company Uranium One, which was responsible for mining 20% of the currently licensed uranium in the United States, made an agreement with JSC Atomredmetzoloto, or ARMZ, the mining arm of Rosatom, giving them a controlling stake (51%). In 2013 Rosatom acquired full ownership. Uranium One continues to mine approximately 10% of that licensed in-situ uranium.
The United States also relies, both for civilian utilities and defense purposes, on nuclear fuel supplied by Russian subsidiary of Rosatom called Techsnabexport (TENEX). No U.S. uranium enrichment facilities are currently in operation. The U.S. company, Centrus has a new centrifuge design but it will likely be over a decade before it goes into action.
Nor does the United States currently have a company that builds commercial nuclear reactors. The only U.S. company now aiming to construct them is Bill Gates’s TerraPower, which is working on what will likely be the next generation of reactors, small modular reactors (SMRs), but again these won’t be commercially viable for a decade. Commercial nuclear reactors were previously designed and built by US company Westinghouse. But on March 24, 2017, Westinghouse declared Chapter 11 bankruptcy. The sale of that company naturally has serious national security implications. But the story of the sale and of the role that the Trump administration played in it raises many questions.
Trump’s friend and adviser, Tom Barrack, seized on the opportunity presented by the Westinghouse bankruptcy to put together a new version of the Marshall Plan for the Middle East, producing his own document setting out the details. In his March 2017 white paper, Barrack refers to the plan interchangeably as the “Trump Marshall Plan” and the “Trump Plan.” The July 2019 House Oversight and Reform Committee report details the ambitious deal Barrack tried to put together to purchase Westinghouse. Barrack had permission from the highest levels at the White House for a US-led consortium involving Colony Capital, IP3, and financial firms Blackstone and Apollo. Barrack assured Blackstone CEO Steve Schwartzman,
Our GCC [Gulf Cooperation Council] allies in Saudi Arabia and the UAE have committed to invest in the Westinghouse acquisition and are willing to concurrently lock in Westinghouse as the primary partner on the 30+ reactors expected to be constructed in their countries in the coming decade.
IP3 officials were very optimistic. President Trump and Jared Kushner had met with MBS on March 14, and IP3 boasted that this meeting prepared the way for a “partnership to acquire Westinghouse between IP3 and Saudi Arabia.” They eagerly arranged meetings with officials in the administration to promote the plan, including then-CIA Director Mike Pompeo, Director of the National Economic Council Gary Cohn, and top National Security Council (NSC) Staff officials. They also briefed Jared Kushner.
But in January, 2018 it was announced that Canadian company, Brookfield Business Partners, a subsidiary of investing giant Brookfield Asset Management, would purchase Westinghouse. And Westinghouse promptly and unilaterally decided to sever ties with IP3. ProPublica discovered that Kushner was the one who prevented the IP3-led deal from happening, reporting that Kushner “wanted to table the nuclear question in favor of simpler alliance-building measures with the Saudis, centered on Trump’s visit in May, according to a person familiar with the discussions.”
The Westinghouse sale went through on August 1, 2018. Three days later it was announced that Brookfield Properties, another subsidiary of Brookfield Asset Management that had just purchased Westinghouse, would buy Jared Kushner out of his catastrophic real estate deal involving 666 Fifth Avenue.
Who Owns Westinghouse?
The Westinghouse purchase was naturally considered an extremely sensitive deal, deserving scrutiny by the Committee on Foreign Investment in the United States (CFIUS), which at the time included Steve Mnuchin, Rex Tillerson, Jeff Sessions, Wilbur Ross and Dan Coats. The committee approved the transaction but with a Nuclear Regulatory Committee (NRC) Requirements Notice forbidding transfer of their licenses and insisting on compliance with all applicable statutory and regulatory requirements. But the NRC filing submitted to CFIUS is fairly thin. It tells us that Westinghouse would be “ultimately controlled” by Brookfield Asset Management, but little about the money behind the deal. According to their 2018 20-F annual report, BBU acquired 44% of the company, while having a 100% voting interest, having put in $405m of equity totaling $920m, with the balance coming from “institutional partners.” The rest of the purchase price was funded with approximately $3b of long-term debt financing. The sources of the equity and financing aren’t disclosed.
Immediately prior to the Westinghouse sale, prominent foreign policy experts Thomas Duesterberg and William Schneider wrote an article expressing serious concerns about the opacity, saying:
In a world of rapidly increasing nuclear proliferation and growing strategic challenges from China and Russia, U.S. authorities should take a closer look at the fate of Westinghouse. Without such scrutiny, the company will likely be acquired by Brookfield Asset Management, a highly successful Canadian property management and development firm with scant experience in industry, let alone nuclear power. What’s more, Brookfield has no obligation to address geopolitical problems such as nuclear proliferation.
Naturally, the agreement made with CFIUS constrains what Westinghouse, under its new ownership, can do and is intended to keep sensitive technologies in the United States. But such agreements can’t constrain what companies choose not to do, decisions that can be just as consequential. Westinghouse chose not to build nuclear reactors anymore, an area in which it had run into serious commercial trouble and would need to lobby for government support. Delays and cost overruns at their Vogtle plant in Georgia and two cancellations at another U.S. site in fact led to the bankruptcy. This deprived US-led efforts such as IP3 of a vendor and left the field clear for other competitors such as Rosatom, which had already started talks with the Saudis about building their reactors in June of 2017.
Unlike U.S. vendors, Chinese and Russian companies don’t insist on compliance with the exacting non-proliferation standards that the United States demands (in the form of 123 Agreements). The UAE, whose first nuclear reactor (built by South Korean company KEPCO) recently went into action in Baraka, chose to comply with the US “gold standard.” But as mentioned, in early August this year, it was reported that Saudi Arabia had started to manufacture yellowcake, the first step in uranium enrichment. Even if those reports prove untrue, the Saudis are widely regarded as having that aspiration. Paul Dorfman, founder of the Nuclear Consulting Group, told me
The tense geopolitical environment makes nuclear power an even more controversial issue in the Middle East than elsewhere, and it seems clear that there’s been a general and potentially dangerous weakening of nuclear non-proliferation measures in the region.
Close ally of MBS and MBZ, Egypt’s President Abdel Fattah al-Sisi, was also proud to announce progress on his Rosatom-built power plant in El Dabaa.
But we also shouldn’t overlook the strategic significance of Westinghouse in Ukraine. Poroshenko had previously promised the company a majority share of the market in nuclear fuel. In June 2018, the Westinghouse CEO, José Guttierez, was reportedly surprised that Poroshenko went back on his word and awarded them far fewer contracts, leaving them with a minority share. Poroshenko is no longer in power, but Brookfield and whoever its “institutional partners” are who bought Westinghouse still have significant control over this source of Ukraine’s nuclear fuel and therefore leverage in Kyiv’s relations with Russia.
In 2019, Guttierez was replaced as CEO by Patrick Fragman, who previously worked for French company Alstom and was Vice Chairman of the Alstom Atomenergomash joint venture between Alstom and Rosatom. On September 30th of this year, Fragman negotiated a new deal, still awarding Westinghouse only two further contracts. When I spoke to Guttierez on the phone he didn’t want to comment on any matters involving the Brookfield takeover of Westinghouse, the reshaping of the company, or their position in the global market.
So who are Brookfield Business Partners, or BBU? They are a Bermuda-based LLP, one of the partners in the extremely opaque Brookfield financial group. The registered owner, I discovered, is Alan Kestenbaum. The very Alan Kestenbaum who was at the center of the Vostok Project, apparently using his then company, Marco International LLC as a front for the Russians. This clearly raises the question of whether CFIUS overlooked a potentially significant Russian investment in one of America’s most important nuclear assets. An alternative explanation is that Kestenbaum may have been fronting for the Russians in the Vostok Project, but was not connected with Russians in the Westinghouse deal. When he made a bid for the Carolina Panthers in 2018 there were concerns about his rumored connections to Russian mining interests, but as far as we know they were not substantiated.
Open Questions about the Nuclear Industry, National Security, and Non-Proliferation
There are now three questions we need to ask. First, did the Trump administration in the end take actions, through the Westinghouse purchase or otherwise, that helped Russia retain its grip on Ukraine by controlling its nuclear energy?
Second, and most importantly for U.S. national security interests, did the Trump administration permit Russia to gain excessive influence over the nuclear fuel cycle in the United States?
Third, in failing to negotiate any new multilateral non-proliferation measures, while weakening further the already declining U.S. position in this sector, has the Trump administration deprived the United States of leverage in international negotiations over the spread of nuclear power and nuclear technologies, just as countries across the Middle East are embracing these technologies at an alarming rate?
Voices on the left and the right are denouncing the idea that the United States should be the sole international arbiter of arms control, non-proliferation, and other such global problems. Part of the right embraces American isolationism and “America first.” On the left, the catastrophic wars begun by the Bush administration in the Middle East have persuaded many that the United States is the mightiest and among the most inhumane states in the world and must be tamed. But the world is becoming increasingly dangerous, as the effects of global warming make themselves felt and commitments to international safety protocols and to arms-control agreements are being weakened. Every country has a moral responsibility to act to address proliferation while the world also pursues energy alternatives that address climate change. And if a future America is to embrace this moral duty, to act on the basis of its most humane values, it shouldn’t be surrendering its capacity to do so by allowing Putin and others to make fools of us in the new hybrid warfare we’ve barely begun to understand. This is not about being the aggressor, a position from which America is rightly retreating. It starts with having leaders who don’t make hollow claims about recognizing the importance of global goals like nonproliferation while allowing self-interested business deals to determine policy. The Biden administration will undoubtedly discover hidden obstacles that have been created by four years of this approach.
Editor’s note: The text of this article has been updated and a footnote added.
* Update on Dec. 1, 2020: The original article stated that this relationship lasted until June 2016. However, according to the whistleblower, Flynn and Copson communicated about progress on the deal on Inauguration Day, Jan. 20, 2017. ACU’s Thomas Cochran denied the existence of this correspondence in a letter to Cummings; Cummings replied to Copson that he was not satisfied by the denial. In addition, Cummings produced a timeline which included the following entry: “On November 16, 2016, Alex Copson, the managing partner of ACU, and ACU Counsel Donald Gross circulated a briefing memo entitled ‘TRUMP/PUTIN ME Marshall plan CONCEPT.’ It stated that ‘ACU team members [are] highly engaged with key Trump Admin members.'”