Uranium Diplomacy:The US Double-Standard in Kazakhstan and Iran

By Allen Ruff and Steve Horn*

[This is a slightly revised version of  "Uranium Double-Standard: The U.S., Kazakhstan and Iran," that originally appeared at Nation of Change. It is the second installment of an ongoing series on U.S. involvement in Kazakhstan. The first originally appeared at Truthout and is also available here.]

Iran’s alleged “nuclear threat” has taken center stage among diplomats, military men, and politicians in Washington, Tel Aviv, and the West at-large.

Despite the fact that investigative journalists Seymour Hersh, Gareth Porter and others have meticulously documented the fact that Iran, in fact, poses no nuclear threat at all, the Obama Administration and the U.S. Congress have laid down multiple rounds of harsh sanctions as a means to “deter” Iran from reaching its “nuclear capacity.”

The most recent round featured a call to boycott Iran’s oil industry by President Obama.

While rhetorical attention remains focused on Iran’s “threat”, there is an “elephant in the room”: Kazakhstan’s booming uranium mining and expanding nuclear industry --  a massive effort involving U.S. multinational corporations and an authoritarian regime increasingly tied to Washington.

Double standards have long reigned supreme in U.S. foreign policy. Few examples illustrate that better than the contrast between Washington’s stance toward the nuclear ambitions of Iran and Kazakhstan.

The  Seoul Dog and Pony Show

Seoul Nuclear Summitry: Obama and  Kazakhstan's Nazarbayev (c.) have a laugh as Russia's Dimitry Medvedev (r.) looks on.

The alleged Iranian “threat” was a central concern at the Nuclear Security Summit, which occurred in Seoul, South Korea between March 26-27.

Notables attending the conference included the likes of U.S. President Barack Obama, Israeli Deputy Prime Minister, Dan Meridor; Canadian Prime Minister Stephen Harper, Russian outgoing President Dmitry Medvedev, Chinese President Hu Jintao, South Korean President Lee Myung-bak, and British Prime Minister Nick Clegg, to name several.

Noticeably absent were representatives from Iran, though the country received the brunt of criticism from many of the attendees at what amounted to a dog and pony show in Seoul.

Speaking at the Summit, Obama stated, "There is time to solve this diplomatically, but time is short. Iran's leaders must understand that there is no escaping the choice before it. Iran must act with the seriousness and sense of urgency that this moment demands. Iran must meet its obligations."

One notable uranium-developing powerhouse in no way viewed as a “threat” by the 53 world leaders assembled at Seoul was Kazakhstan, the resource-rich former Soviet republic strategically located at the center of the Asian heartland.

A country four times the size of the state of Texas, the Central Asia giant now serves as a key thoroughfare for what the Pentagon and U.S. geo-strategic planners refer to as the Northern Distribution Network (NDN), the main route equipping US/NATO forces in Afghanistan.

Kazakhstan’s self-proclaimed “president for life” --  Nursultan Nazarbayev – played a highly visible role at Seoul and joined Obama in a bilateral meeting, as well as a photo op.

As the Summit started, the New York Times published a public relations piece by Nazarbayev, fittingly titled, “What Iran Can Learn From Kazakhstan.” Noting his country’s post-Soviet efforts at nuclear weapons disarmament, the Kazakh leader informed his readers that his country “…chose building peaceful alliances and prosperity over fear and suspicion…”

The cynicism in Nazarbayev’s rhetoric could not have been missed by those familiar with a country where no true opposition parties, critical media or free trade unions are allowed, where protections under the law are virtually absent; and bribery and corruption rule.

Just days prior to the appearance of Nazarabyev’s Times piece, Amnesty International examined events in the aftermath of the December 2011 massacre of striking oil workers in Zhanaozen. Appearing a 100 days after that dark day, the  report found the government’s investigation into the events “inadequate.” Amnesty noted, “There have been numerous reports of widespread torture and other ill-treatment of those detained by security forces in the aftermath of the violence and investigations into these allegations do not to date appear to be thorough and impartial.”

A striking oil worker at Zhanaozen, one of many massacred on December 16, 2011

In an effort to counterbalance the influence of neighboring Russia and China, and concerned with Nazarbayev’s importance as a supportive ally in regard to nearby Afghanistan and Iran, US officials have often extended lip service praise for slow-in coming cosmetic social and political reforms as Nazarabyev consolidated his hold of what amounts to a one party monopoly on all the levers of power.

Numerous major human rights monitors, including Human Rights Watch, Freedom House and Amnesty International have long cited Kazakhstan for violations of international protocols regarding workers’ rights, the freedom of assembly and dissent, the state control of the media system at all levels, the routine repression of opposition political parties and candidates, the absence of due process under the law, the impunity of the police, ubiquitous torture, and the limited rights of those accused, detained, prisoners and the lawyers who defend them; and state violence, in general. The mistreatment of immigrants, the exploitation of child labor and human trafficking in the country have also been cited.

Kazakh media remain subject to legal restrictions, prohibitive libel and defamation judgments, self-censorship, harassment, and pressures from partisan owners and politicians. When Kazakhstan assumed the chairmanship of the Organization for Security and Cooperation in Europe (OSCE) in 2010, the government pledged to improve human rights practices and increase media freedom. The level of press freedom nevertheless declined during the year, as a restrictive internet law passed in 2009 was used to intimidate bloggers and block websites, two independent newspapers were closed, and a journalist remained in jail.

The final report regarding country’s 2010 OSCE chairmanship concluded that the Nazarbayev government introduced no positive changes in regard to its own human rights record, as was promised at the beginning of its OSCE tenure. The report stated that the regime had actually displayed disrespect for its international obligations in regard to human rights.

Despite documentation of such regularized abuses, representatives of the regime centered at the country’s newly constructed showcase capital, the “mini-Dubai” at Astana, have regularly been well received by Washington.

Nazarabyev's "Mini-Dubai" at Astana

Kazakh Nukes

Well-known for its massive quantity of Caspian Sea oil and natural gas resources, massive quantity of Caspian Sea oil and natural gas resources Kazakhstan is also a growing nuclear power, possessing roughly 15-percent of the world’s known uranium supply and producing roughly one-third of the current global supply, according to the World Nuclear Association. Bypassing Australia and Canada last year, it currently is the world’s largest producer of the nuclear fuel source.

Kazakhstan’s nuclear industry extends from the mining, processing and export of uranium to the construction of nuclear reactors.  Closely tied to both Canadian and U.S. mega energy corporations, it seemingly poses no concern for Washington. Unlike Iran, no one seems to be calling for sanctions or regime change despite the repressive nature of Nazarbayev’s regime. Business is business and U.S. strategic interest trumps all.

A bit of recent nuclear industry business history is in order.

In October 2006, the Japanese multinational corporation Toshiba -- of television- and computer-manufacturing fame -- purchased a 77-percent majority share in Westinghouse Electric for a mere $5.4 billion. The other two companies involved in the buyout were Japan’s IHI Corporation, as well as the U.S. multinational Shaw Group.

Less than a year later, in July 2007, Kazakhstan’s state owned company KazAtomProm paid $486.3 million for a 10-percent of Toshiba’s stake in the jointly owned corporation, meaning it now owns 7.7-percent of Westinghouse.

“The deal,” explained nuclear industry analyst and consultant, Dan Yurman, “would give Toshiba access to Kazakhstan's uranium at a time when increased demand has tripled prices of the nuclear fuel ingredient in the past year. It would give Kazatomprom access to Toshiba's uranium processing technology and its sales channels.”

The transaction infuriated close observers of the global nuclear industry who cited human rights concerns and the dictatorial, kleptocratic nature of the Nazarbayev regime that “won” yet another rigged election in January, 2012 held amidst the ongoing repression following the state crackdown at Zhanaozen.

Clinton and Nazarbayev: East Meets Westinghouse

The nature of wheelings and dealings under Nazarbayev was fully displayed in an earlier nuclear deal that preceded, but was directly connected to the Westinghouse purchase -  a 2005 transaction between the Kazakh state-owned KazAtomProm and a Canadian energy entrepreneur, facilitated by none other than the former U.S. President Bill Clinton.

In 2005, Clinton, then (and still) head of the newly-formed Clinton Foundation, helped Canadian business mogul Frank Giustra make the nuclear deal of a lifetime.

According to the New York Times, Clinton facilitated a trip in September that year for the two of them to visit Nazarbayev in Almaty, Kazakhstan. Two days later Giustra “signed preliminary agreements giving it the right to buy interests in three uranium projects controlled by Kazakhstan’s state-owned uranium agency, Kazatomprom.”

Clinton and Nazarbayev: "Let's Make a Deal"?

The deal needed Nazarbayev’s go-ahead to assure final approval. With Clinton at his side, Giustra received it. As the Times piece described it, “The monster deal stunned the mining industry, turning an unknown shell company (UrAsia Energy Ltd.) into one of the world’s largest uranium producers in a transaction ultimately worth tens of millions of dollars to Mr. Giustra.” 

Giustra obtained a stake in the mines for $450 million, “the largest initial public offering in the history of Canada’s Venture Exchange.” In appreciation for his role as internediary, Giustra made a “philanthropic gift” to the former President’s  Foundation totaling $131.1 milliion.

Clinton and Canadian uranium mogul pal, Frank Giustra

It gets better. “In February 2007, a company called Uranium One agreed to pay $3.1 billion to acquire (the shell company) UrAsia. Mr. Giustra, a director and major shareholder in UrAsia, would be paid $7.05 per share for a company that just two years earlier was trading at 10 cents per share,” the New York Times story explained. That same month, the then president of KazAtomProm, Moukhtar Dzhakishev, paid a special visit to Clinton’s Chappaqua, NY abode.

The reason for the visit? The Times provides the answer: “Mr. Dzhakishev said he wanted to discuss Kazakhstan’s intention — not publicly known at the time — to buy a 10 percent stake in Westinghouse, a United States supplier of nuclear technology.”   

Roughly two years after the deal was cut, Dzhakishev was sent packing to a high security penitentiary for 14 years, accused by Nazarbayev’s investigators, Bloomberg reported, of “embezzling state shares in uranium deposits, including one co-owned by Canada’s Uranium One.” (Uranium One, of course, was the company that purchased Giustra’s UrAsia Energy Ltd.)

The arrest was made by the KNB, the Kazakhstani successor to the Soviet-era KGB. Many believe -- including leaders from the opposition Azat Party -- that the arrest was politically motivated.

Everyone walked away a winner in this one, other than Dzhakishev.

In exchange for his patronage, Nazarbayev received Clinton’s praise for “opening up the social and political life” of Kazakhstan. The ex-president and former leader of the “free world” proceeded to endorse the dictator in his bid to become the chair of the Organization for Security and Co-operation in Europe (OSCE), the body mandated to monitor arms control, human rights, freedom of the press, and fair elections across the Global North.

Eleven months prior to the 2005 deal, then U.S. Sen. Hillary Clinton (D-NY) co-signed a letter to the U.S. State Department she now heads sounding “alarm bells” regarding Nazarbayev’s earlier bid to head the OSCE. The letter found Kazakhstan’s bid unacceptable and cited “serious corruption,” cancelled elections and government control of the media. This

The only honest way to describe the situation: insider wheeling and dealing of epic proportions for Clinton, Giustra, and the Nazarbayev clique, with Dzhakishev ending up on the rotten end of this deal.

The Fukushima Connection

No story about the nuclear industry would be complete without a mention of the spring 2011 Fukushima Daiichi nuclear disaster. This tale, too, would be incomplete without pointing to the connections between U.S. geopolitical maneuvering, the Iranian “nuclear” threat, the “benevolent” Kazakhstani nuclear industry, and what is now a wasteland in Fukushima.

In the days after Japan’s nuclear disaster, investigative journalist Greg Palast connected some of the dots  by revealing that, “One of the reactors dancing with death at Fukushima Station 1 was built by Toshiba. Toshiba was also an architect of the emergency diesel system.”

Such back-up power generators were part the “seismic qualification” (SQ) test requirements that all nuclear power plants must pass. Yet, meeting SQ qualifications is expensive, so, as Palast explained, “The most inexpensive way to meet your SQ is to lie.” Stone and Webster, the nuclear unit of The Shaw Group, did just that for Fukushima Daiichi.

Shaw, as mentioned, owns a 20-percent stake in Westinghouse, KazAtomProm owns a 7.7-percent stake in it, while Toshiba owns a 69.3-percent stake.

Kazakhstan continues to experience its own nuclear tragedy in the area around Semipalatinsk, (Semey), formerly the center of Soviet-era nuclear weapons tests. A still unknown, but massive number of inhabitants of this northeastern Kazakh region continue to suffer and die from leukemia, other cancers, and horrific birth defects caused by high levels of radiation.

“Already, the thyroid cancer rate in the east and north of Kazakhstan is twice as high as in the rest of the country, and other cancers such as breast, have higher rates,” explained The Ecologist in an August 2011 article.

This, then, raises the question: Who or what poses the nuclear threat? Nuclear energy, nuclear armament, and uranium enrichment in of themselves, or solely Iran’s “nuclear ambitions”?

History Repeating Itself?: Iran’s Once Benevolent Nuclear Industry

Iran hasn’t always been deemed a “nuclear threat” by U.S. policymakers.

Long before U.S. geopolitical planning elites deemed Iran’s nuclear program a “threat,” its development was encouraged, in the 1970s during the closing years of Shah Reza Pahlavi’s dictatorship. None other than former U.S. Vice President Dick Cheney, former Secretary of Defense Donald Rumsfeld, and former Deputy Secretary of Defense Paul Wolfowitz, all three at the time holding held high-level national security positions under President Gerald Ford, promoted the effort.

The scenario was best unpacked in an article appearing in the The Washington Post in March 2005. Dafna Linzer wrote of the deal:

“Ford's team endorsed Iranian plans to build a massive nuclear energy industry, but also worked hard to complete a multibillion-dollar deal that would have given Tehran control of large quantities of plutonium and enriched uranium -- the two pathways to a nuclear bomb. Either can be shaped into the core of a nuclear warhead, and obtaining one or the other is generally considered the most significant obstacle to would-be weapons builders.

Iran, a U.S. ally then, had deep pockets and close ties to Washington. U.S. companies, including Westinghouse and General Electric, scrambled to do business there.

            (Snip)

“After balking initially, President Gerald R. Ford signed a directive in 1976 offering Tehran the chance to buy and operate a U.S.-built reprocessing facility for extracting plutonium from nuclear reactor fuel.”

(Snip)

“The U.S.-Iran deal was shelved when the shah was toppled in the 1979 revolution that led to the taking of American hostages and severing of diplomatic relations.”

Linzer went on to explain that U.S. companies, led by Westinghouse, stood to gain $6.4 billion from the sale of six to eight nuclear reactors and parts.

It all connects. Westinghouse today is co-owned by Toshiba, The Shaw Group, and  Kazakhstan’s uranium giant, KazAtomProm. Basically the same corporate interests eyeing Iran’s nuclear development under the US-backed Shah’s currently have their hands in Kazakhstan’s nuclear industry today.

Hypocrisy and the Looming Attack on Iran

With rapidity, the build-up for an attack on Iran progresses.

In response to a U.S. threat to sanction Iran’s oil industry, in late-December 2011 the Iranian government threatened to shut down the Strait of Hormuz, the strategic “choke point”  for oil passing passing from the Persian Gulf.

Soon after, U.S. Joint Chiefs of Staff Chairman Gen. Martin Dempsey told CBS’ Face the Nation that, “[Iran] has invested in capabilities that could, in fact, for a period of time block the Strait of Hormuz. We’ve invested in capabilities to ensure that if that happens, we can defeat that.”

Three weeks on, the U.S. Navy announced the deployment of a floating "forward operating base" “mothership” south of Iran, aboard the USS Ponce. “Navy documents indicate that it could be headed to the Persian Gulf, where Iran has threatened to block the Strait of Hormuz, a crucial shipping route for much of the world’s oil supply,” explained The Washington Post. The ship will manned with active-duty Navy SEAL commandos.

In the midst of the Hormuz snafu, investigative reporter Mark Perry published a groundbreaking exposé, revealing that agents from Israel’s foreign intelligence service, Mossad, had been posing as U.S. spies in Pakistan to recruit members of the terrorist organization Jundallah to fight a covert war against Iran, presumably with the blessing of the U.S. government. Jundallah is a State Department designated terrorist organization.

Perry also broke a story on March 28, uncovering the fact that Israel -- again, almost certainly with U.S. blessing -- procured an air base in Azerbaijan, Iran’s northern neighbor located to the southwest of Kazakhstan, across the Caspian sea. He referred to this as “Israel’s Secret Staging Ground.”

This development is a logical one, given that Azerbaijan has already been the home site of a secretive U.S. Central Operations Command (CENTCOM)/Blackwater Worldwide (now known as Academi and, previously, as Xe Services) forward operating base as part of the broader Caspian Guard Initiative for years. Jeremy Scahill explained the Initiative in his book “Blackwater: The Rise of the World’s Most Powerful Mercenary Army.” He wrote,

"Beginning in July 2004, Blackwater forces were contracted to work in the heart of the oil- and gas-rich Caspian Sea region, where they would quietly train a force modeled after the Navy SEALs and establish a base just north of the Iranian border," Scahill wrote.

"Blackwater would be tasked with establishing and training an elite ... force modeled after the U.S. Navy SEALs that would ultimately protect the interests of the United States and its allies in a hostile region ... [serving] a dual purpose: protecting the West's new profitable oil and gas exploitation in a region historically dominated by Russia and Iran, and possibly laying the groundwork for an important forward operating base in an attack against Iran," he continued.

More recently, The New Yorker magazine’s  Seymour Hersh, writing on “Our Men in Iran?,” revealed that the U.S. Joint Special Operations Command (JSOC) has been training another U.S. designated terrorist organization, the Mujahideen-e Khalq (MEK), since 2005. The training has occurred at the Department of Energy’s Nevada-based National Nuclear Security Administration headquarters.

Hersh and others have suggested that the MEK and others, including Mossad have been responsible for the spate of assassinations of Iranian nuclear scientists over the past several years. They also portend a dark future, if these series of events proceed in their logical and rather predictable order.

The alleged Iranian “nuclear threat” has become a pretext for regime change in Tehran, a desired goal of U.S. strategic planners and allies in Tel Aviv ever since the overthrow of the U.S.-backed Shah Mohammad Reza Pahlavi in 1979.

The real concern since then for the U.S. has been control over the flow of increasingly valuable strategic sources of energy -- oil, gas, and uranium -- that propel corporate state interests in the region. Kazakhstan’s Nazarbayev will remain a strategic ally regardless of the brutality of his regime, as long as he keeps in line.

As Franklin Delano Roosevelt once said in regard to Nicaragua’s U.S.-backed dictator Anastasio Somoza García, "Somoza may be a son of a bitch, but he's our son of a bitch."

The same, it appears, could be said about Kazakhstan’s Nazarbayev as the U.S. moves toward desired regime change in Iran.

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*Allen Ruff received his Ph.D. in U.S. History from the University of Wisconsin-Madison. He's written on the history of the American Left, local history and has published one novel. Schooled by decades of activist experience, his primary work now centers on opposition to U.S. interventions in the Middle East and elsewhere. He hosts a weekly a public affairs program on WORT, 89.9fm in Madison, WI, where he currently lives.

*Steve Horn is a researcher and writer at DeSmogBlog. He is also a freelance investigative journalist. Follow him on Twitter at @Steve_Horn1022.