Bill Clinton on the Caspian
Jo Becker and Dale Van Natta at The New York Times weigh in today with a first-rate investigative piece on how deals are really done on the Caspian. It's on a no-name (at least on the Caspian) Canadian entrepreneur called Frank Giustra who bagged a huge uranium deal in Kazakhstan in 2005, then two years later sold his previously miniscule mining company for $3 billion. How? It helped that Giustra walked into Kazakhstan President Nursultan Nazarbayev's door with former President Bill Clinton. It's a troubling account, made more so since both Clinton and Giustra make what could be innocent meetings and deals appear like something more by denying the details until confronted with evidence otherwise.Labels: bill clinton, Caspian, giustra, Kazakhstan, Nazarbayev, uranium
2 Comments:
Steve,
You're too good for innuendo, and you're not so naive to think that this doesn't happen in Washington as much as Almaty.
Giustra may have been a no-name, but he wasn't a nobody, as the NY Times article noted. He was already a hugely successful businessman, in mining and other ventures:
"Mr. Giustra made his fortune in mining ventures as a broker on the Vancouver Stock Exchange, raising billions of dollars and developing a loyal following of investors. Just as the mining sector collapsed, Mr. Giustra, a lifelong film buff, founded the Lion’s Gate Entertainment Corporation in 1997. But he sold the studio in 2003 and returned to mining.
"Giustra foresaw a bull market in gold and began investing in mines in Argentina, Australia and Mexico. He turned a $20 million shell company into a powerhouse that, after a $2.4 billion merger with Goldcorp Inc., became Canada’s second-largest gold company."
It's wrong to suggest that there is something fishy about him selling "his previously miniscule mining company for $3 billion." That company was clearly a shell company (maybe his first foray into uranium, I don't know). But there was nothing miniscule about Giustra's fortune, before or after 2005. And that's what businessmen the world over do -- find value and then sell it for profit -- sometimes steep and quick profit.
I agree, it seems unseemly that an influential pol (Clinton) and businessman (Giustra) would walk into a president's office and walk out with a great deal. But you are wrong to suggest that deals like that really happen more in Central Asia than anywhere else -- we have a huge lobbying industry in Washington (where pols go to make fortunes) and businessfolks employ them to boost their fortunes by wooing key pols all the time.
I had a different couple of take-aways from this article: 1) Kazakhstan is clearly "discovered" when a foreign businessman can turn a multi-billion profit in such a short period and it doesn't make headlines in KZ; it used to be that even tiny investments got major play in the local papers; now a guy sneaks in and out with scarcely a mention (and it never would have come up were it not for the Clinton connection) 2) Giustra must have been an incredibly quiet and cagey operator to go so unnoticed, given the level that he was operating at.
Welcome back Tacitus. I apologize for replying tardily.
My takeaway from the deal is as stated -- that if one wants to get the big deals in the former Soviet Union, this is how it's done. I don't suggest that lobbyists do not procure insider contracts in the U.S., especially since that's what Iraq has been all about. But this blog is about the former Soviet Union. I'm explaining to readers, many whom either already do or hope to do, what business is all about in that part of the world. Giustra's way in is instructive.
As far as who Giustra is or what his accomplishments are at home, that is relevant in this case only to the degree that he is friendly with Bill Clinton, in my opinion. His miniscule company was simply not on the same playing field with genuine mining concerns. Was there something in addition to Clinton that caught the Kazakhs' attention? Perhaps.
As for what appears in local newspapers, I have no memory of insider deals getting routine big play, certainly not the real dope on how they happened. Many wish it were that easy to ferret out such information. That reporting on this deal was as you suggest -- meaning not a mention -- speaks volumes about the capability and openness of the papers.
Finally, if the deal is ordinary, as you seem to suggest, why did both Giustra and Clinton deny key details until confronted with the undeniable facts?
The answer, to my eye, is that it was not a straight-forward business arrangement.
Thanks for the as usual provocative comment and best, Steve
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