I had no idea.

Photographer: Pete Marovich/Bloomberg

Hillary Did Nothing Wrong, Tried to Hide It

Leonid Bershidsky is a Bloomberg View columnist. He was the founding editor of the Russian business daily Vedomosti and founded the opinion website Slon.ru.
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The New York Times is probably making a mountain out of a molehill by wondering whether Hillary Clinton helped Russia's state-owned nuclear energy company, Rosatom, buy U.S.-based uranium mining assets when she was secretary of state. Even so, her sneakiness in not disclosing donations from investors in the acquired company is disturbing.

The uranium deal's background is commercial rather than political. Sergei Kirienko, Rosatom's chief executive and once Russia's youngest prime minister (he presided over the country's 1998 debt default), has long worried about the nuclear fuel company's raw materials supply. Russia's uranium industry, inherited from the Soviet Union, was saddled with inefficient mines and high extraction costs. The market price of uranium collapsed in 2007:

Price per pound of uranium concentrate (U308)
Source: Bloomberg

 That drove ARMZ, the production arm of Rosatom and one of the world's biggest suppliers of the fuel, into losses. In 2013, the last year for which an ARMZ annual report is available, it was still losing money and complaining about the cost of production. The only way for Kirienko to solve the problem was to secure assets outside Russia, in places such as Australia, Kazakhstan, Namibia and Tanzania.

Uranium One had good Kazakh assets with a low production cost. In 2010, the year ARMZ acquired it on behalf of Rosatom, Kazakhstan provided all of the company's $326.9 million in revenue. Its U.S. plant at Willow Creek, Wyoming, didn't produce any uranium that year or in 2009. 

Although uranium is a strategic material, there was nothing strategic about that nonproducing facility from the U.S. government's point of view. That must be the biggest reason the review of the deal by government agencies, including the State Department under Clinton, went so smoothly. 

No doubt, in today's toxic "cool war" climate, the acquisition of anything at all on U.S. soil by a Russian state company would invite scrutiny. Even now, spite would be the only reason to deny Rosatom the chance to acquire Willow Creek's Canadian owner. According to the U.S. Energy Information Administration, the plant has a production capacity of 1.3 million pounds of uranium concentrate a year, about 4.4 percent of total U.S. production capacity. Uranium One is developing two more U.S. sites, but they haven't come online yet. If required, Rosatom would probably have divested Uranium One's U.S. business without even looking back.

It's probably wrong on principle to allow foreign state-owned companies to buy up assets in the U.S. or any other country. There's always the suspicion that such companies operate in the interests of the states that own them. Both Russian and Chinese state firms are routinely used as foreign policy tools, especially in markets where they have a strong position. Rosatom, however, could not have played any such role in the U.S. after acquiring Uranium One, and it still can't after consolidating 100 percent of its shares in 2013. So Clinton and her State Department underlings who signed off on the deal are blameless in this matter.

What's more troubling about the situation is that Clinton failed to disclose, as she had promised to do when she joined the State Department, a number of big contributions to Bill Clinton's foundation. New York Times reporters Jo Becker and Mike McIntire had to go through Canadian tax records to track down these donations from a number of Uranium One investors.

One can only guess at the reasons the contributions, totaling millions of dollars, were kept quiet, but perhaps the idea was to avoid precisely the kind of story the New York Times produced, hinting at a Clinton family interest in helping a businessman friend. Frank Giustra, a founder of the company that became Uranium One and a big donor to the foundation, is indeed friendly with Bill Clinton. They even traveled to Kazakhstan together when Giustra's company acquired its interest in uranium mines there. And Rosatom did pay a 30 percent premium to the market price of Uranium One shares.

The Uranium One donations are not the only ones Clinton family charities have failed to disclose. Reuters is reporting Thursday that the Clinton Foundation and the Clinton Health Access Initiative are planning to refile several annual tax returns after the news organization pointed out errors in how foreign government donations were reported. Specifically, the charities reported zero such donations in 2010, 2011 and 2012 while continuing to receive tens of millions of dollars from foreign governments. 

Add to this the recent revelations that Hillary Clinton ran her own e-mail server at home, which enabled her to pick and choose which missives she would submit to the State Department, and questions about presidential candidate Clinton's honesty will inevitably arise.

She has probably done nothing wrong in this case: The Uranium One deal was not a danger to U.S. interests; the foreign money went toward worthy goals and doesn't appear to have influenced any U.S. policy decisions. And Clinton's full e-mail records probably didn't contain dispatches to the Russian or Chinese intelligence services. Yet she was clearly worried about the optics of some of the things she and her husband were doing and tried to keep them out of the public eye. As is usual in such cases, the coverup drew her more unwanted attention than her actions warranted. 

You would have thought Hillary had learned that lesson -- and what it might do to a would-be presidential career -- close up, from her husband: Bill "I did not have sexual relations with that woman" Clinton.  

This column does not necessarily reflect the opinion of Bloomberg View's editorial board or Bloomberg LP, its owners and investors.

To contact the author on this story:
Leonid Bershidsky at lbershidsky@bloomberg.net

To contact the editor on this story:
Marc Champion at mchampion7@bloomberg.net