U.S.-Saudi Nuclear Talks Prompt Deeper Probe by House Democrats

(Bloomberg) -- A House committee is deepening its investigation into what it describes as ongoing White House efforts to "rush" the transfer of highly sensitive U.S. nuclear technology to Saudi Arabia, a move some experts argue could lead to a nuclear arms race in the Middle East.

An "interim staff report" released Tuesday by the chairman of the Democratic-led Committee on Oversight and Reform says the panel has obtained additional documents bolstering earlier whistle-blower concerns about potential illegalities and conflicts of interest facing top White House aides -- including former National Security Adviser Michael Flynn -- as they and outside groups pushed for the nuclear initiative.

"Within the United States, strong private commercial interests have been pressing aggressively for the transfer of highly sensitive nuclear technology to Saudi Arabia -- a potential risk to U.S. national security absent adequate safeguards," the report says.

"These commercial entities stand to reap billions of dollars through contracts associated with constructing and operating nuclear facilities in Saudi Arabia -- and apparently have been in close and repeated contact with President Trump and his administration to the present day,” it continues.

Central Role

The nuclear negotiations and concerns about the risks they present highlight the central role Saudi Arabia has played in President Donald Trump administration’s foreign policy priorities, particularly given the White House’s focus on isolating the kingdom’s regional rival, Iran. Saudi Arabia was the first country the president visited after taking office and Trump has touted what he calls more than $100 billion in arms sales to the kingdom.

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

Despite heightened tensions over the Saudi-led war in Yemen and accusations that Crown Prince Mohammed bin Salman ordered the killing last year of Washington Post columnist Jamal Khashoggi, Trump and his top advisers have said that broader ties between the long-time allies should not be put at risk.

As a result, the recent strains haven’t stopped the administration from negotiating with the Saudis under "Section 123" of the Atomic Energy Act, which imposes stringent controls on the export of U.S. technology to a foreign country that could be used to create nuclear weapons, including non-proliferation requirements.

White House Meeting

As recently as Feb. 12 Trump met with nuclear power developers at the White House to discuss sharing nuclear technology with Saudi Arabia and other countries.

The White House meeting included representatives from a range of nuclear developers, including NuScale Power LLC, TerraPower LLC, Westinghouse Electric Co. LLC and General Electric Co, as well as suppliers Centrus Energy Corp. and Lightbridge Corp. and other companies. It was initiated by Jack Keane, a retired Army general and the co-founder of IP3 International, a company that has advocated American nuclear power development in the Middle East, according to two people familiar with the session.

All of those activities are now coming under increased scrutiny.

New Scrutiny

Under new Democratic chairman Elijah Cummings of Maryland, the Oversight committee says it will deepen its investigation into the U.S.-Saudi nuclear effort, an inquiry that until Democrats took control of the House in January was run by Republicans. The committee says it will seek interviews with key personnel involved with promoting the plan, along with additional documents from the White House, and departments of Commerce, Defense, Energy, State, and Treasury, the Joint Chiefs of Staff, and the CIA.

More information also is being requested from private-sector commercial entities involved in the effort, including IP3, the Flynn Intel Group, ACU Strategies and Colony NorthStar.

Technology Transfers

The committee’s announcement coincides with rising bipartisan concerns over the U.S.-Saudi relationship in general and, more specifically, about whether nuclear technology transfer would add to an already unstable Middle East. Tension has centered on whether a nuclear technology sharing agreement would strictly prohibit Saudi Arabia from enriching and reprocessing spent fuel, which could be used in weapons production -- the so-called "gold standard" provisions embedded in past deals.

Such worries for some were exacerbated last year when Crown Prince Mohammed proclaimed, "Without a doubt, if Iran developed a nuclear bomb, we will follow suit as soon as possible."

Nonetheless, Saudi officials have said any nuclear energy program would be for peaceful purposes.

Also damaging to the administration’s effort has been the murder, at the Saudi consulate in Istanbul, of Khashoggi, a Saudi insider-turned-critic who lived in Virginia. There’s also rising bipartisan frustration over how the the White House has so far ignored a 120-day deadline for a report on Khashoggi’s killing requested by the Senate Foreign Relations Committee.

In its report Tuesday, the Oversight committee discusses Flynn, the former national security adviser who pleaded guilty to making false and fraudulent statements to the FBI. He has been linked to IP3 and was accused of failing to disclose private travel and meetings tied to a plan by Russia and Saudi Arabia to build nuclear plants while seeking a government security clearance.

The report also raises issue surrounding a key proponent of this effort, Tom Barrack, the founder and head of Colony Capital Inc. who has been a Trump confidant and chairman of his inaugural committee. Barrack last week apologized for appearing to dismiss the Khashoggi killing by saying “whatever happened in Saudi Arabia, the atrocities in America are equal or worse to the atrocities in Saudi Arabia.”

The committee says much of its renewed focus comes from credible information provided by “multiple whistleblowers” who came forward and had evidence backing them up.

"The committee also received documents bolstering the whistleblowers accounts, showing repeated communications between IP3 officials and Trump administration officials," including, it says, those "underscoring the central role played by Mr. Barrack and his associates in promoting the IP3 nuclear plan to the White House."

"The whistleblowers provided a snapshot of events at the beginning of the Trump administration, but it is limited," according to the report.

The report says the president’s son-in-law Jared Kushner and Energy Secretary Rick Perry remain directly involved in talks. Perry has been pressing ahead with efforts to strike a deal that would allow U.S. companies such as Westinghouse Electric Co. to build nuclear reactors in Saudi Arabia and elsewhere overseas.

The Oversight committee report states that these efforts come amid reports that Saudi Arabia "is refusing to agree to prohibitions on enriching uranium and processing plutonium similar to those agreed to by other countries in the region."

"Further investigation is needed to determine whether the actions being pursued by the Trump administration are in the national security interests of the United States, or, rather, serve those who stand to gain financially as a result of this potential change to U.S. Foreign policy," states the report.

--With assistance from Jennifer A. Dlouhy and Ari Natter.

To contact the reporter on this story: Billy House in Washington at bhouse5@bloomberg.net

To contact the editors responsible for this story: Kevin Whitelaw at kwhitelaw@bloomberg.net, Bill Faries, Joe Sobczyk

©2019 Bloomberg L.P.