Trump Ally Tom Barrack Backed Saudi Nuclear Goals, House Panel Finds
Thomas Barrack Jr. speaks during the Milken Institute Global Conference in Beverly Hills, California, U.S. (Photographer: Patrick T. Fallon/Bloomberg) 

Trump Ally Tom Barrack Backed Saudi Nuclear Goals, House Panel Finds

(Bloomberg) -- Thomas Barrack Jr., a top fundraiser and confidant of President Donald Trump, urged the administration to sell Saudi Arabia nuclear technology without restrictions designed to prevent the kingdom from developing nuclear weapons, according to a report released by House Democrats Monday.

Barrack, founder and chairman of Colony Capital Inc., along with IP3 International, a consortium seeking to build nuclear reactors in Saudi Arabia, wielded “outsized influence” to in an effort to promote the energy technology transfer without barring the the Saudi’s from reprocessing or enriching spent fuel for nuclear weapons, the House Oversight Committee report found.

The Trump administration is considering approving a nuclear-sharing deal with Saudi Arabia that would ease those prohibitions that had scuttled past negotiations during the Obama administration, Bloomberg News reported in December 2017.

“With regard to Saudi Arabia, the Trump Administration has virtually obliterated the lines normally separating government policy making from corporate and foreign interests,” said the report, which was prepared for Oversight Committee Chairman Elijah Cummings, a Maryland Democrat who was the object of several derisive tweets by the president in recent days.

The report was based on 60,000 pages of new documents the committee obtained that “raise serious questions about whether the White House is willing to place the potential profits of the president’s friends above the national security of the American people and the universal objective of preventing the spread of nuclear weapons,” according to the report.

Officials from IP3 International “had unprecedented access to the highest levels of the Trump Administration,” including meeting directly with Trump, as well as the president’s adviser and son-in-law Jared Kushner, former chief economic adviser Gary Cohn, and six cabinet secretaries, according to the report.

A spokesman for Barrack, Owen Blicksilver, said Barrack has never held a position in the administration and has been cooperating with the committee’s investigation.

“Mr. Barrack’s engagement in investment and business development throughout the Middle East for the purpose of better aligned Middle East and U.S. objectives are well known, as are his more than four decades of respected relationships throughout the region,” Blicksilver said. “Mr. Barrack’s consistent attempts to bridge the divide of tolerance and understanding between these two great cultures is etched in the annals of time. This is not political it is essential.”

The White House didn’t respond to a request for comment.

Barrack, who was chairman of Trump’s inaugural committee, began communicating with IP3 just days before the swearing in of the president in January 2017. Barrack planned to purchase bankrupt nuclear power reactor manufacturer Westinghouse Electric Co. and his company and IP3 discussed plans to join with the Saudi Public Investment Fund and other Middle East financial interests to bid for the company, the report said.

“IP3 officials met with Senior Adviser to the President Jared Kushner and briefed him on their plan for Westinghouse to be acquired through foreign investments. Mr. Kushner expressed that he planned to convene senior-level interagency meetings to discuss IP3’s proposal and Westinghouse,” the report said.

Ultimately the bid for Westinghouse was unsuccessful, the report said.

In a statement, IP3 said the conclusions of the report were based on “an arbitrary and contrived story that doesn’t reflect the reality that occurred.”

“There are definitive rules for and strong oversight over the transfer of nuclear energy technology to foreign nations,” the company said.

The report said Barrack also negotiated directly with Trump and other White House officials to seek powerful appointments -- including as Special Envoy to the Middle East and Ambassador to the United Arab Emirates -- while promoting the interests of U.S. corporations seeking to profit from the transfer of nuclear technology to Saudi Arabia and while “advocating on behalf of foreign interests” seeking to obtain U.S. nuclear energy technology.

A Republican staff report released July 22 said that the committee has found no evidence of impropriety. The report said the government’s review of proposed Middle East nuclear sales is following legally required procedures and the Trump administration “has not skirted requirements for congressional notification” about technology transfers to the Saudis.

The New York Times reported Monday that Barrack has been interviewed by federal agents probing whether he or others properly disclosed efforts to allegedly influence American policy on behalf of or at the direction of foreign governments or entities to the Justice Department. He has not been accused of wrongdoing.

Williston Speech

According to the report by House Democrats, an energy speech given by Trump in 2016 was altered to include “pro-Middle East language” after Barrack shared a draft of the speech with Saudi and Emirati officials. Trump read the speech at the Williston Basin Petroleum Conference in Bismarck, North Dakota in May 2016, though the committee’s report said it was unknown if Trump was aware it had been circulated to foreign officials in the Middle East.

The Democratic report comes as the Trump administration continues to negotiate with Saudi Arabia for a deal to share U.S. nuclear reactor technology -- talks that have drawn an investigation from a federal watchdog following complaints from lawmakers they were being held “in an opaque manner.”

A sharing agreement with Saudi Arabia could give a lifeline to U.S. companies such as Westinghouse, which have been hit hard by a downturn in the construction of nuclear power plants. But they have faced bipartisan criticism from congressional critics after reports that Trump administration wouldn’t seek the “Gold Standard” under Section 123 of the Atomic Energy Act to prohibit the Saudis from enriching nuclear fuel into weapons-grade material -- activities linked to the proliferation of nuclear weapons.

In emails to other industry officials, IP3 called the gold standard an “obstacle” to be overcome, and industry executives reported that IP3 complained the gold standard was a “total roadblock” that “killed our leverage,” according to the Democratic report.

The Saudis have been talking for years about their desire to move beyond oil for domestic needs and sought bids from Russia, China, South Korea and France.

Those pushing for U.S. participation argue that allowing any of those countries, especially Russia or China, to build the plants poses a geopolitical risk that also will include fewer safeguards against proliferation than if done by a U.S. company. They note that the U.S. has pacts with many countries that are short of the so-called gold standard and, done properly, a deal with the Saudis would lift the moribund American nuclear power industry, minimize the risk of the spread of nuclear weapons and safeguard allies in the region.

A previous probe by the House Oversight Committee looked at looked at possible conflicts of interest by Michael Flynn for championing nuclear power sales to the Saudis as an adviser for a private company and then advocating the idea during his brief stint as President Donald Trump‘s first national security adviser.

Flynn was fired less than a month after taking office in 2017 for lying about conversations with Russia’s ambassador to Washington that took place weeks before Trump’s inauguration. He later pleaded guilty to a felony charge of lying to the FBI about those discussions.

©2019 Bloomberg L.P.

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