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Memo undercuts Hillary story on controversial Russian uranium deal, Clinton Foundationby Raphael Williams
Election 2016#Election2016

WATCH:  Raffi Williams connect the dots between Russia, a uranium deal and the Clinton Foundation.

When Hillary Clinton was questioned about a deal that gave Russia increased sway over uranium markets, the former Secretary of State and now Democratic presidential nominee said she had no reason to intervene in the decision and didn't even know the Clinton Foundation was being enriched by its beneficiaries.

"I was not personally involved because that wasn't something the Secretary of State did," Clinton told WMUR a New Hampshire TV station in June 2015, the lone time she has addressed the controversy that first surfaced a year ago.

Moscow 'flexes muscles'

State Department officials in Fall 2009 -- a year before the United States approved the deal -- obtained an internal strategy document from Russia's nuclear energy firm, Rosatom, that warned about Moscow's intentions as it "flexes muscles" in uranium markets.

In one cable sent to Clinton, U.S. officials in Brussels warned Russia was about to strong-arm U.S. ally Ukraine into a deal for "long-term supply of nuclear fuel" that could "shut" the U.S. company Westinghouse out of the market and extend Moscow's influence over Europe.

"The strategy paper... is consistent with Russia's efforts to dominate the gas supply market in Europe."

-- Cable from U.S. representatives in Brussels

"The strategy paper reflects concerns raised by industry reps and Ukrainian diplomats the past few months and is consistent with Russia's efforts to dominate the gas supply market in Europe," the cable from U.S. representatives in the European Union's capital city warned.


Westinghouse expansion in Eastern Europe

Greater control over nuclear power plant fuel in European markets could make European nations more reliant on natural gas exports at the heart of Russia's economy, the career diplomats worried.

And if Rosatom succeeded, the American nuclear company Westinghouse might not be able to expand as it hoped in Eastern Europe, they added.


Deal approved by CFIUS

Clinton campaign officials declined to discuss the memo, but she has vowed to end foreign donations to the Clinton Foundation if elected president.

At issue is the 2010 sale of Uranium One to Rosatom. Uranium One controls one-fifth of uranium mined in the United States and the Rosatom deal had to be approved by the Committee on Foreign Investments in the United States (CFIUS), which is made up of nine voting members, including the Secretary of State.


Sounding the alarm over deal

When the review process was taking place, Sen. John Barrasso (R-WY) sounded alarms that the deal "would give the Russian government control over a sizable portion of America's uranium production capacity."

Five other Republican members of Congress, led by Rep. Peter King, R-N.Y., wrote that the deal "would pose great potential harm to the national security of the United States."

Despite warnings from her own diplomats and the lawmakers, Clinton did not use her position on the CFISUS to stop the deal.

Clear warning from diplomats

In a presidential race where classified cables and private emails have dominated so much discussion, the two-page non-classified memo has hardly caused a stir in public.

But it lays out a clear warning from career U.S. officials about why expanding Russia's control of uranium markets was bad for the United States and for its allies in Europe.

"I have never seen a diplomatic cable that had as stark a description of one energy company trying to cheat."

Fred Fleitz, Center for Security Policy

Intelligence analysts differ on how important the cable should have been to then-Secretary Clinton.

Fred Fleitz, a former CIA analyst now with the conservative Center for Security Policy, says the cable shows "an effort by Russia to increase its influence over Ukraine."


"This is an unclassified informational cable of a kind that is routinely sent by our diplomats."

Former CIA clandestine officer Brian Fairchild

Brian Fairchild, a former CIA clandestine service officer, told Circa that "at the unclassified level, the cable is nothing special."

'A statutory obligation to act'

But a former U.S. ambassador to the European Union, C. Boyden Gray, told Circa that Clinton and the entire Obama administration should have been more vigilant in keeping Russia from getting any more leverage over uranium and energy markets.

"She had a statutory obligation to act, and she acts through inaction -- and Russia wins," Gray said in an interview. "What they've given Russia is a foothold, a big entrée into cornering the uranium markets and tipping the entire balance of the energy world."


"The Russians should be back on their hind legs and instead they continue to take advantage of us."

C. Boyden Gray

Gray said with low petroleum prices, control of uranium isn't important to everyday Americans. But over time, the energy landscape will likely change and Russia's increased leverage over the gas and nuclear markets will hurt American interests.

"The Russians should be back on their hind legs, and instead they continue to take advantage of us," he said.

Herbst: U.S. should be helping Ukraine

Former U.S. Ambassador to Ukraine John Herbst echoed Gray, telling Circa: "It is not in Ukraine's interest to be beholden to Russia for nuclear energy.

"It is very much in our interest that Ukraine be able to pursue an independent policy. So for the U.S. to help Ukraine to help free itself from dependence on Russia in the nuclear field is a no brainer."

The Clinton Foundation connection

While the CFIUS deliberations were taking place, people who stood to profit from the Uranium One sale donated more than $2.6 million to the Clinton Foundation.

Also, Renaissance Capital, an investment bank with connections to the Russian government, paid former President Bill Clinton $500,000 to deliver a speech -- more than his usual fee.

Even before the sale was under consideration, the Clinton Foundation received $31.3 million in donations from one person, Frank Giustra, who stood to benefit from the sale. 

C. Boyden Gray: Hillary Clinton should have recused herself

Some of those donations were not properly disclosed at the time. Bill Clinton also helped Guistra, who was once owned a company that merged with Uranium One, secure valuable uranium mining rights in Kazakhstan.

C. Boyden Gray, who also served as chief White House counsel during the first Bush administration, said Hillary Clinton should either have fulfilled her statutory duty or recused herself from a decision, because her husband's financial interests created a personal conflict of interest.


'Clear violation of ethics'

"I think it is a smoking gun," Gray said. "By not acting, she helped. And the only way she could have avoided criminal liability was to recuse herself, which she did not. I think it is a clear violation of ethics statutes."