Two of President Trump’s closest advisers pushed hard for a firm trying to circumvent the safeguards meant to keep Saudi Arabia from building a nuclear weapon.
That’s one of the many conclusions of a year-long investigation by the House Oversight Committee, which found that Former National Security Adviser Michael Flynn and former inaugural committee chair Tom Barrack worked to enrich themselves and their colleagues in the nuclear energy sector. A centerpiece of the effort: helping American companies land contracts in Saudi Arabia—at least in one case, without the guardrails needed to keep the Saudis from making weapons-grade nuclear fuel.
Flynn and Barrack used their relationships with the White House—as well as with officials from Saudi Arabia, the United Arab Emirates, and Russia—to advance their personal interests and the interests of executives at the nuclear firm IP3. The CEO of the firm, Admiral Mike Hewitt, began working with Flynn and Barrack in the fall of 2016 in an attempt to influence the incoming Trump administration’s Saudi Arabia policy, according to the House Oversight report. The effort drew in a host of other officials in the Trump administration, including Trump’s son-in-law Jared Kushner.
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“The Trump Administration has virtually obliterated the lines normally separating government policymaking from corporate and foreign interests,” the report states. “Documents show the Administration’s willingness to let private parties with close ties to the President wield outsized influence over U.S. policy towards Saudi Arabia.”
Barrack is currently being scrutinized in New York for his lobbying work and investigators have asked him about his work related to the Saudi nuclear deal, according to a New York Times report from Sunday. Flynn, who left the administration in February 2017, is awaiting sentencing after being indicted by Special Counsel Robert Mueller’s office and pleading guilty to charges of lying to the FBI.
The committee said in its report that Trump officials and advisers, including Flynn and Barrack, attempted to help fast-track a plan whereby the U.S. and Saudi Arabia would agree to cooperate on nuclear energy and firms like IP3 could clinch contracts to develop Riyadh’s reactors. IP3 and other U.S. nuclear energy companies were looking for a way to get the industry back on even ground after years of decline and they saw Saudi Arabia as their way forward.
But despite IP3’s connections in high places, many in the nuclear sector feared something was amiss. Industry executives with companies like Westinghouse, one of the only companies with the ability to export technology to Saudi, originally threw their support behind IP3, though they worried about the firm’s “questionable reputation,” calling it the “Theranos of the nuclear industry,” according to the communications obtained by the House oversight committee and quoted in the report.
Part of the industry’s concern over IP3 derived from the firm’s campaign to convince the administration to consider signing a nuclear deal with Saudi Arabia that did not require the country to adhere to the so-called “gold standard.”
The term—first coined in January 2009 when the U.S. signed a deal with the United Arab Emirates—requires a foreign government to commit to forgoing enriching and processing plutonium, which can be used to make fuel for reactors but also nuclear weapons.
In his travels across the Middle East with Flynn in 2015, IP3 CEO Hewitt became aware that Saudi Arabia, in its search for tenders to build nuclear reactors, did not want to subscribe to America’s “gold standard” policy. The argument from Riyadh was that the country did not want to adhere to the strictest of nuclear safeguards in perpetuity if Iran, its regional foe, would one day be able to build up its nuclear program, according to two senior administration officials who spoke to The Daily Beast.
That’s when Hewitt and IP3 started looking for a way to convince the Trump administration to sign a deal with Saudi Arabia that allowed Riyadh some wiggle room.
“IP3 boasted of ‘unique access’ to President Trump and senior White House officials, disparaged growing bipartisan congressional efforts to limit the transfer of nuclear technology to Saudi Arabia, and characterized the ‘Gold Standard’ of prohibiting Saudi Arabia from enriching uranium for weapons as an obstacle to be ‘overcome,’” the report said.
In April of 2017, Hewitt emailed White House and Department of Energy officials a paper that advocated against requiring Saudi Arabia to agree to the gold standard.
“Gold Standard has slowly killed our leverage and cooperating with the U.S. has been diminished,” Hewitt wrote in an email in April 2017, according to the report.
IP3 wasn’t just lobbying the American government in pursuit of a Saudi deal. The company also leaned on Flynn and Barrack to gain access to the halls of power in the Kremlin and in Riyadh.
The House oversight report said that in 2015 and 2016 “Flynn informed his business partners about upcoming interactions with officials in Russia and the Middle East —including Russian President Vladimir Putin and then-Deputy Crown Prince Mohammed Bin Salman, known as MBS—and offered to use these contacts to further IP3’s business.”
In December of 2016, just days before President Trump’s inauguration, IP3 executives traveled to Saudi Arabia and used their connections to Flynn to float the idea of U.S. companies transferring technology to the country and to solicit a $120 million investment from MBS in exchange for a 10-percent stake in IP3.
At the same time IP3 was using its relationship with Flynn to get ahead, KT McFarland, Flynn’s deputy, introduced the firm to Barrack. Going forward IP3 relied heavily on the intervention of Barrack to win over the Trump administration, according to the oversight report.
Barrack, for his part, pushed the IP3 plan—while also seeking “powerful positions within the Administration—including Special Envoy to the Middle East and Ambassador to the United Arab Emirates,” the report said.
In May 2016, before then-candidate Trump had clinched the Republican nomination, Barrack shared a draft of the candidate’s first major energy speech with a middleman, businessman Rashid al-Malik, who then passed it along to Saudi and Emirati officials to “coordinate pro-Gulf language,” the report said.
Following an exchange with foreign campaign officials, Barrack emailed a draft of the speech to former campaign chairman Paul Manafort, saying “We should partner with our Gulf Allies to draft a comprehensive economic security strategy as well as materially assist in their diversification efforts.”
Neither Barrack nor al-Malik appeared as registered lobbyists in the Department of Justice’s Foreign Agents Registration Act (FARA) database, the report said.
In the days leading up to Trump’s inaugural, Barrack and IP3 concocted a convoluted idea—known as the Middle East Marshall Plan—that brought in Russia and Middle Eastern countries to help the U.S. build nuclear power plants in the region. Draft materials for the plan, circulated to multiple different Trump officials, included a decision memo entitled “A Marshall Plan for the Middle East” and had a signature line for “Donald J. Trump,” according to the oversight report.
In February 2017 Barrack sent a text to Jared Kushner about setting up a meeting so he could brief the president’s son-in-law.
“I think this could be a great arrow in the quiver of your Middle East arrows,” Barrack wrote to Kushner. Several months later, on March 14, 2017, according to correspondence obtained by the committee, Barrack and employees of his company Colony NorthStar met with President Trump about the plan.
As part of that push, Barrack and IP3 put together an idea to partner with Saudi Arabia’s Public Investment Fund and UAE capital to acquire Westinghouse—a company in the consortium that was, in cooperation with IP3, bidding for a contract in the country. Westinghouse is one of the only nuclear energy companies in the U.S. with the ability to export technology abroad.
Barrack briefed members of the administration about the plan, including Kushner, according to the report. In August 2017, Kushner sent an email to an IP3 adviser saying: “‘Met them today and am trying to gather the interagency assessment of the importance, impact and national security considerations both domestically and internationally.’”
Barrack and IP3 attempted to pull in financial firms Blackstone and Apollo Global Management to help in their attempt to acquire Westinghouse, but the entire effort eventually fell apart. Brookfield Asset Management—a firm that bought the Kushner Company 666 Fifth Avenue building—eventually acquired the nuclear energy company.
The original Middle East Marshall plan, as put forward by Barrack and IP3, eventually fell through and by early 2018, IP3 was also on the outs of the American consortium that had come together to coordinate a bid for Saudi Arabia. Westinghouse terminated its agreement with IP3, telling industry partners that the firm’s “actions may create a faulty assumption that IP3 is in charge.”
Today, IP3 is pursuing a cooperation deal with South Korea in an attempt to find work in the Saudi nuclear industry, as first reported by The Daily Beast. According to the report, IP3 plans on partnering with Korean state-run energy firms.
The IP3-Korea plan would potentially allow for Riyadh to bypass entering into a gold standard agreement, raising concerns among officials in the Trump administration that it will have little leverage in ensuring Saudi Arabia adheres to certain nuclear safeguards.
It appears the other American consortium has moved forward in their attempts to clinch contracts. The Daily Beast reported that the Trump administration had signed at least seven authorizations that allowed U.S. companies to share information with Saudi Arabia about their plans to help the country develop its nuclear sector. Those authorizations, two of them doled out following the murder of Washington Post columnist Jamal Khashoggi, have been held from public view.
Over the past year the committee has investigated the Trump administration’s relationship to Saudi Arabia and Crown Prince Mohammed Bin Salman. In particular, committee investigators zeroed in on and the development of a plan for American companies to help Riyadh reduce its dependence on oil and to develop its nuclear sector. The committee released an interim report in February that relied heavily on White House whistleblower testimony. In that report, the committee said IP3 had developed a proposal for Saudi Arabia that was “not a business plan” but rather “a scheme for these generals to make some money.” IP3 refutes that claim.
“IP3 has focused for over three years on the national security importance of being the country of choice for the peaceful, safe and secure development of nuclear power,” the firm told The Daily Beast in a previous statement.
A Republican rebuttal to the committee’s interim report, released last week, said the committee’s evidence “does not show that the Trump Administration acted inappropriately in the proposed transfer of nuclear energy technology to Saudi Arabia,” according to a statement by Rep. Jim Jordan (R-OH).
Since February, the oversight committee has obtained more than 60,000 pages of documents. The documents reveal new information about Flynn and Barrack’s involvement in the Saudi nuclear plan, according to the committee.
