The Clinton campaign has bungled its defense of former Secretary of State Hillary Clinton’s role in the 2010 approval of the controversial Uranium One-ARMZ deal by the Committee on Foreign Investment in the United States (CFIUS) that gave the Russian government majority control of the company that owns 20 percent of America’s uranium deposits.
By attempting to downplay the role the Department of State played in approving the Uranium One-ARMZ transaction which financially benefited Uranium One executives who had contributed millions of dollars to the Clinton Foundation, the Clinton campaign has, instead, unwittingly put itself on the defensive again. Now, it must explain why it has not called on those executives to publicly release all communications related to that transaction—information in their possession which they have the legal right to release—to the public and the media to confirm that Clinton’s description of the transaction are accurate.
In a statement issued on April 23, Hillary for America spokesperson Brian Fallon responded to the New York Times article that reported in the details of the deal first revealed in Peter Schweizer’s book, Clinton Cash, which was published by HarperCollins on Tuesday.
“The Times fails to accurately describe the process, ignoring the fact that the State Department was just one of nine agencies involved in the U.S. government’s review of the sale of Uranium One. In addition to the fact that Hillary Clinton herself did not have a role in the State Department’s review of the deal, the Department itself was just one player — and not even a major one — in the C.F.I.U.S. process,” Fallon told the Medium.
“It is the Treasury Department that serves as the lead agency in all C.F.I.U.S. matters, and seven other U.S. agencies besides State — including the Departments of Justice, Energy and Commerce — sit on the panel. To the extent a deal like the sale of Uranium One could be said to raise any national security concerns, both the Departments of Defense and Homeland Security also sit on the panel, and would have been party to the overall approval,” (emphasis added), Fallon said.
The Clinton campaign’s response was featured at the recently launched “Correct the Record” website, a project of American Bridge 21st Century, “a progressive research and communications” political action committee closely tied to the Clinton campaign whose purpose is to specifically counter the points made in the Clinton Cash book.
One problem with this “correction” of the record is that it is fails to accurately use the Treasury Department’s own terminology, as found in its 2008 “regulations pertaining to mergers, acquisitions, and takeovers by foreign persons” regarding the designation of “lead agency” in the CFIUS process.
The Foreign Investment and National Security Act of 2007 (FINSA), which established the statutory authority for CFIUS, named the Secretary of the Treasury as the chairman of the nine member interagency committee, whose charter is to review all foreign acquisitions of or investments in American companies with assets considered critical to American national security, but Treasury is not designated as “the lead agency” by statute or regulation in any of the cases reviewed by CFIUS.
The 2008 regulations promulgated by the Department of Treasury which establish the guidelines for the CFIUS review and approval process (Federal Register Vol. 73, No. 226, November 21, 2008, pages 70702-70728), make it clear that in each case it reviews, the Secretary of the Treasury, as Chairperson of the Committee, may select a “lead agency” from among all seven of the cabinet departments (including Treasury) and two federal agencies represented on the board.
The term lead agency means an agency designated by the Chairperson of the Committee [the Secretary of Treasury] to have primary responsibility, on behalf of the Committee, for the specific activity for which the Chairperson designates it as lead agency, including all or a portion of a review, an investigation, or the negotiation or monitoring of a mitigation agreement or condition.
On its website, the Treasury Department says it is “Committee Chair,” not “lead agency”:
During the review period, CFIUS members, through the Department of the Treasury as Committee Chair, may request additional information from the parties. (emphasis added)
As a practical matter, however, despite this error by Clinton campaign spokesperson Fallon in the use of terminology distinguishing between Treasury as Chair of the committee and the “lead agency,” the term “lead agency” is used to refer to Treasury by CFIUS and counsel representing parties to “covered transactions” reviewed by CFIUS.
That’s where the Clinton defense stumbles for the second time.
Spokesperson Fallon’s statement that “[t]o the extent a deal like the sale of Uranium One could be said to raise any national security concerns, both the Departments of Defense and Homeland Security also sit on the panel, and would have been party to the overall approval,” again misleads on the CFIUS process.
A legal source familiar with the CFIUS process tells Breitbart News that in complex cases such as the 2010 Uranium One-ARMZ transaction (ARMZ is a wholly owned subsidiary of Rosatom, the nuclear energy conglomerate owned entirely by the Russian government) in which multiple agencies have an interest (such as the Nuclear Regulatory Commission, the State Department, Homeland Security, and the Department of Defense), Treasury appoints one or more “co-lead agencies” two-thirds of the time.
In its review of the 2010 Uranium One-ARMZ transaction (CFIUS Case No. 10-40), since the company being acquired owned 20 percent of America’s uranium deposits, the Treasury Department as chair (using the statutory term, or “lead agency” using the term of practice), would almost certainly have appointed State, Defense, or Homeland Security as “lead agency” (using the statutory term, or “co-lead agency” using the term of practice.)
If CFIUS determines the proposed acquisition is not in the interest of America’s national security, it can reject the deal, require specific mitigation actions, or forward the decision to the President for his final determination. In 2010, according to the annual report it submitted to Congress, CFIUS reviewed 93 deals, approved 81, and did not forward any to the President for his final determination.
CFIUS, citing confidentiality, refuses to identify the lead agency or “co-lead agencies” on the Uranium One-ARMZ transaction, leaving the public to speculate whether the State Department may or may not have been one of the “co-lead agencies.” deal.
When Breitbart News asked State and Treasury to inform us of the name of the lead agency in the Uranium One-ARMZ transaction, they claimed the law prohibited them from sharing any information about the case.
As Breitbart News reported on Monday:
“I will decline to comment,” a spokesperson for the Treasury Department told Breitbart News on Monday.
“By law, information filed with CFIUS may not be disclosed by CFIUS to the public. Accordingly, the Department does not comment on information relating to specific CFIUS cases, including whether or not certain parties have filed notices for review,” the spokesperson added. (emphasis added)
A spokesperson for the State Department also responded to Breitbart News on Monday.
“By law, information filed with CFIUS may not be disclosed by CFIUS to the public. Accordingly, we cannot comment on specific transactions, including whether or not certain parties have filed notices for CFIUS review,” the spokesperson said. (emphasis added)
A close examination of the law and the regulations, however, suggests that while CFIUS cannot share details of the information provided by the companies involved in the case to the public (though it can provide it to Congress and duly authorized committees of Congress), the law does not appear to prevent the release of the name of the “lead agency” or “co-lead agencies” named by the Secretary of Treasury in the case.
The relevant law and regulations are included below:
From the 2008 regulations:
(a) Any information or documentary material filed with the Committee pursuant to this part, including information or documentary material filed pursuant to Section 800.401 (f) shall be exempt from disclosure under 5 U.S.C. 552 and no such information or documentary material may be made public, except as may be relevant to any administrative or judicial action or proceeding. Nothing in this part shall be construed to prevent disclosure to either House of Congress or to any duly authorized committee or subcommittee of the Congress, in accordance with subsections (b) (3) and (g) (2) (A) of section 721 [of the Defense Production Act of the 1950, as amended by FINSA].
Here’s the relevant portion of the 2007 FINSA law:
Subsection of section 721 (g)(2)(A):
(2) APPLICATION OF CONFIDENTIALITY PROVISIONS.—
(A) IN GENERAL.—The disclosure of information under this subsection shall be consistent with the requirements of subsection (c). Members of Congress and staff of either House of Congress or any committee of Congress, shall be subject to the same limitations on disclosure of information as are applicable under subsection (c).
(B) PROPRIETARY INFORMATION.—Proprietary information which can be associated with a particular party to a covered transaction shall be furnished in accordance with subparagraph (A) only to a committee of Congress, and only when the committee provides assurances of confidentiality, unless such party otherwise consents in writing to such disclosure.
Legal sources familiar with the CFIUS process, however, tell Breitbart News that Treasury has not budged on the issue of what it will disclose about any CFIUS case in 15 years. This policy seems to be more “by practice” than by law, however.
Both State and Treasury are conflating the information specific to the details of the transaction — proprietary information submitted by ARMZ and Uranium One covered by the confidentiality aspects of the law — with the process of the review and approval of the transaction — information which does not appear to be governed by the confidentiality requirements of the law.
There is limited case law on the application of FINSA to the CFIUS process, but in a 2014 decision (Ralls v CFIUS), the U.S. Court of Appeals for the District of Columbia Circuit decided against current CFIUS disclosure practices as it related to a mitigation action required by CFIUS ina case involving an American company, owned by a Chinese company, that purchased four wind farms in Oregon.
As the national security team of the prestigious Bryan Cave law firm wrote in July 2014:
The Court’s decision, if not revised or reversed, could increase the transparency of the CFIUS process by requiring the President to provide notice of any intent to suspend or prohibit a covered transaction, provide access to the unclassified evidence on which the president’s action is based, and provide a meaningful opportunity to rebut that evidence. (emphasis added)
Breitbart News posed several additional process questions about the 2010 Uranium One-ARMZ transaction to both Treasury and State which both departments refused to answer, the most notable being this one:
Can you confirm or deny whether Secretary of State Clinton disclosed to the CFIUS panel members that executives and shareholders of Uranium One had made significant financial donations to the Clinton Foundation?
By refusing to reveal details of the CFIUS process which should be known to the public, specifically the name of the “lead agency” or “co-lead agencies” signed to the review and approval of the 2010 Uranium One-ARMZ transaction, the State Department and Treasury Department are, in effect, functioning as public relations branches of the Hillary Clinton for President Campaign, responsible for damage control.
While the law limits the details that may be disclosed to the public by CFIUS or Congress about any specific case, it does not in any way prohibit the parties to the transaction from releasing all communications related to their CFIUS approved transactions, legal sources familiar with the CFIUS process tell Breitbart News.
In other words, the attorneys who represented Uranium One and ARMZ, or executives with Uranium One or ARMZ, could release any details of the case, including those questions posed by Breitbart News to Treasury and State at any time.
Significantly, the Clinton campaign has not called on Uranium One, ARMZ, or any of its current or former executives, including former Chairman Ian Telfer, the man who contributed more than $2.3 million to the Clinton Foundation between 2009 and 2013, to publicly release all communications on the 2010 CFIUS review and approval process to the public.
Until all the details of the process surrounding the 2010 CFIUS review and approval of the Uranium One-ARMZ transaction are fully disclosed to the public, Hillary Clinton will remain on the defensive.